Wall Street_The Financial Panic of 1907: Running from History. We still have not learned our lessons!

Panic of 1907 - Cartoon of Theodore Roosevelt attacking Wall Street.

The trigger of the Panic of 1907 was speculators attempting to corner the copper market. While buying up shares of companies with copper holdings in Montana, they discovered that the shares they purchased had been used as collateral for other purchases. The two leading speculators had used funds they borrowed from the Knickerbocker Trust Company to pay for their shares. When it became known that Knickerbocker had provided their funding, the bank run ensued.

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Can we learn about future financial crises from those of the past? Our researchers consider economic models to compare the recession of 2008 to the panics of 1873 and 1884, the Barings Crisis of 1890, the subsequent panics of 1893 and 1896, the panic of 1907, and the real estate crash of 1921.

Today in Allegheny County History - On Oct. 23, 1907, the Pittsburgh Stock Exchange closed for a three-month period due to the Panic of 1907, a financial crisis that occurred when the New York Stock Exchange fell almost 50% from its peak in 1906. There were numerous runs on banks and trust companies, and many state and local banks and businesses entered bankruptcy.

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