The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Panic of 1907

  • Jon R. Moen
  • Ellis Tallman
Reference work entry


The Bank Panic of 1907 was the final banking crisis of the National Banking Era (1863–1913); it was significant in that it led to the Federal Reserve Act. The panic began when the spectacular attempt by F. Augustus Heinze to corner the stock of United Copper Company collapsed on 16 October 1907. The collapse revealed the extensive links of Heinze to another notorious financier in the New York City banking community, Charles F. Morse, a man O. M. W. Sprague (1910, p. 248) describes as having ‘an extreme character, even by American speculative standards’. Solvency concerns led to a series of bank runs at several national banks controlled by the two men. Yet the turmoil surrounding the Heinze collapse did not produce a systemic panic in New York, because the New York Clearinghouse took prompt corrective actions on the member institutions.


Bank Panic of 1907 Central banking Federal Reserve Act National Banking Era 

JEL Classifications

This is a preview of subscription content, log in to check access.


  1. van Cleveland, H.B., and T. Huertas. 1985. Citi bank 1812–1970. Cambridge, MA: Harvard University Press.Google Scholar
  2. Moen, J., and E. Tallman. 1992. The Bank Panic of 1907: The role of the trust companies. Journal of Economic History 52: 611–630.CrossRefGoogle Scholar
  3. Sprague, O. 1910. History of crises under the National Banking Era. National Monetary Commission. Washington, DC: Government Printing Office.Google Scholar
  4. Woodlock, T. 1908. The stock exchange and the money market. Reprinted from The Currency Problem and the Present Financial Situation. New York: Columbia University Press.Google Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Jon R. Moen
    • 1
  • Ellis Tallman
  1. 1.