The Panic of 1907, also known as the 1907 Bankers' Panic or Knickerbocker Crisis, was a financial crisis that took place in the United States over a three-week period starting in mid-October, when the New York Stock Exchange suddenly fell almost 50% from its peak the previous year. The panic occurred during a time of economic recession, and there were numerous runs affecting banks and trust companies. The 1907 panic eventually spread throughout the nation when many state and local banks and businesses entered bankruptcy. The primary causes of the run included a retraction of market liquidity by a number of New York City banks and a loss of confidence among depositors, exacerbated by unregulated side bets at bucket shops.
The curb outside the New York Stock Exchange's building, where panic began.
Headquarters of the Knickerbocker Trust Company at the northwest corner of Fifth Avenue and 34th Street
J.P. Morgan, the dominant banker in New York City.
Floor of the New York Stock Exchange (pictured in 1908)
A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and many recessions coincided with these panics. Other situations that are often called financial crises include stock market crashes and the bursting of other financial bubbles, currency crises, and sovereign defaults. Financial crises directly result in a loss of paper wealth but do not necessarily result in significant changes in the real economy.
Black Friday, 9 May 1873, Vienna Stock Exchange. The Panic of 1873 and Long Depression followed.
Declining consumer spending
The Roman denarius was debased over time.
Philip II of Spain defaulted four times on Spain's debt.