One of the most influential shapers of New York City’s history is Wall Street. The economic, social, demographic, and political impact the banking industry has had on New York City is undeniable in its scope and power. However, Wall Street itself is influenced by men who have harnessed and bridled it throughout its textured history. The consolidation of financial power is almost always a harbinger for the rise or fall of New York’s future, and no event was more exemplary of this effect than the little-known Panic of 1907, and no man amassed so much power from it than J.P. Morgan.
The commonly known story of the Panic of 1907 is that in October of 1907 an attempt by F. Augustus Heinze, an overzealous Wall Street banker, to corner the copper market led to a run on many major banks. The effects of the run caused a panic that reverberated throughout Wall Street, New York City banks and ultimately, many of the US banking and manufacturing industries. At the height of the Panic, J.P. Morgan stepped in to aid the banking community and quell the massive drop in bank reserves and market collapse. He was touted by many Americans as a true patriot and selfless beacon of financial hope for the country. But, to those who rigidly examined his actions, he was a monster who fed off the demise of economic destruction.
In 1906, harbingers of the encroaching crisis went unnoticed. The US economy was fantastic, and threat of a panic was the last thing on the minds of Americans, especially New Yorkers. It could even be said that the reason for the crash was the fact that the market was too good the previous year. US credit was so strong in 1906 that an estimated sum of $500,000,000 was borrowed by Wall Street banks from European markets in order for corporations to seize opportunities of leveraged buyouts and mass consolidation throughout the year.