In the months preceding the panic, the stock market was shaky at best; banks and securities firms were contending with major liquidity problems. By mid-October, Wall Street was paralyzed; for days, there were runs on several large banks. Millions of dollars were withdrawn, and banks closed their doors. New York City was on the brink of bankruptcy. By , there was a severe but short-lived recession.

The man who saved the day was J. Morgan, who brought together leading financiers and banks to bail out the ailing market. That was all in the days before a centralized banking system — and the Federal Reserve — were created to prevent widespread financial catastrophes.

Sean Carr, director of Corporate Innovation Programs at the Darden Graduate School of Business Administration at the University of Virginia, co-authored The Panic of Lessons Learned from the Market's Perfect Storm , with Darden Dean Robert Bruner.

Panic of J.P. Morgan Saves the Day

Carr talks with Robert Siegel. Panic erupts outside the U. Subtreasury Building in New York in October Reprinted by permission Brown Brothers, Sterling PA Pierpont Morgan played a major role in staving off the panic of As Oakleigh Thorne was opening the doors to the Trust Company of America on Thursday morning, October 24, J.

Pierpont Morgan was boarding a Union Club brougham drawn by a white horse, which would take him to his offices at 23 Wall Street. By this time people throughout the city had already seen Morgan's picture on the front pages of many newspapers, which had proclaimed him the city's savior. Herbert Satterlee, Morgan's son-in-law, was traveling in the brougham with Pierpont, and he provided a vivid description of the atmosphere surrounding the titan that morning:.

People literally filled the streets at the corner of Wall Street and Broad in lower Manhattan. As Morgan descended from the carriage and hurried up the steps of J. When he arrived inside, his office was thronged with men desperate to borrow money.

Morgan went directly to his private office where he began a conference with George Baker, James Stillman, and several other bank and trust company officials. While Morgan conferred with his lieutenants, dozens of vehicles were parking outside the Federal Subtreasury building not far away on Wall Street. After a late-night meeting with Morgan's partner, George Perkins, Treasury Secretary George B.

Throughout the morning on Thursday men carried bags and boxes of gold and satchels of greenbacks from the federal vaults at the Subtreasury to the various banks approved by Cortelyou. The panic, however, had already spread further.

An acute shortage of money had occurred on the New York Stock Exchange, and brokers were intensely anxious.

Panic of - Wikipedia

Yet sometime later in the morning a bid was made for 60 percent and still no money was offered. An already tight money market was now further strained by the trust companies pulling their cash out of the market. With money so scarce, prices on the Exchange were headed into a tailspin. Thomas, the president of New York's Stock Exchange, and one of his assistants came over to the Corner in a state of great excitement.

When he arrived, the offices of J. Morgan, we will have to close the Stock Exchange.

Thomas then explained that unless a significant amount of money was offered on the stock exchange in a very short time, a large number of failures would result. Morgan said he would take immediate steps to arrange a loan, and he sent Thomas back to the Exchange.

The situation only seemed to get more desperate with each passing moment. The city's bankers started to arrive around 2 p. This would be literally a moment of reckoning.

When the bank presidents had finally gathered at the Corner, Morgan explained the situation to them. Within minutes, word of the new "money pool" buoyed the Street, as Perkins later observed:.

When the money hit the market at 2: The New York Times reported that money brokers scrambled wildly for the funds as fast as borrowers names could be written down, adding that for the first time in 10 days the mood on the trading floor was cheerful.

The members had joined in yelling, "What's the matter with Morgan? After the market close, scores of men crowded in front of J. Morgan and Perkins finally left their offices to head uptown. As they started to leave the building, the normally reticent Morgan approached a throng of reporters.

Straightening up and squaring his shoulders, he said slowly and earnestly, "If people will keep their money in the banks, everything will be all right. Morgan's efforts had kept the Stock Exchange open on Thursday, October 24, but his victory there had not been decisive. Copyright c by Robert F. Bruner and Sean D.

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Back Releases and Statements Photos and Logos Fact Sheet PDF Media Relations Contacts. Back Careers at NPR Search Jobs Culture Applying Interns Fellows Digital. Lessons from Wall Street's 'Panic of ' Listen. Lessons from Wall Street's 'Panic of '. August 28, 4: Heard on All Things Considered. August 28, Within minutes, word of the new "money pool" buoyed the Street, as Perkins later observed: Our outer office at this moment was filled with brokers awaiting the result of the conference.

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