Oct 22, 2010

Panic of 1907

(Wikipedia) The Panic of 1907, also known as the 1907 Bankers' Panic, was a financial crisis that occurred in the United States when its stock market fell close to 50 percent from its peak the previous year. Panic occurred during a time of economic recession, when there were numerous runs on banks and trust companies. The 1907 panic eventually spread throughout the nation, and many state and local banks and businesses entered into bankruptcy. Primary causes of the run included a retraction of market liquidity by a number of New York City banks, a loss of confidence among depositors, and the absence of a statutory lender of last resort. Continued

Photo: "A crowd forms on Wall Street during the Bankers Panic of 1907" (New York Public Library).