Non-fiction: Statement on the Financial Panic of 1907

Overview
J. P. Morgan's 1907 public statement on the financial panic explains how he and a small group of prominent bankers responded to the acute market stress that erupted in October of that year. The statement outlines the collapse of confidence that began with runs on trust companies and quickened when a major trust failed, triggering a wave of bank and trust withdrawals, contracting credit, and sharply falling asset prices. Morgan presents himself as an intermediary who helped assemble the resources and coordination necessary to stop a spreading collapse and to reassure depositors and investors.
The tone of the statement is explanatory and defensive: it seeks to set out the sequence of events, the practical steps taken, and the rationale for private action in the absence of a formal public lender of last resort. The emphasis is on prompt, organized intervention to supply liquidity, prop up key institutions, and restore orderly functioning to money and credit markets.

Actions Taken
Morgan describes convening meetings of the leading bankers, trust officers, and clearinghouse officials in New York, where they assessed immediate needs and agreed on coordinated responses. Those responses centered on pooling available capital, arranging emergency loans and credit lines to troubled banks and trust companies, and endorsing measures that would prevent runs and stabilize deposits. Moral suasion and reputational backing by leading institutions were used to persuade counterparties to continue clearing operations and to stem panic. The statement stresses that these actions were aimed at preventing disorderly sales of securities and preserving confidence in the payments system.
The statement also describes strategic interventions in particular institutions and markets when necessary. Morgan and his associates helped organize or underwrite transactions that reassured creditors and provided immediate liquidity. They coordinated with clearinghouses and, where possible, with the Treasury to secure gold and to stabilize the supply of currency. The account emphasizes improvisation and pragmatic problem solving: decisions were made quickly, often behind closed doors, with a focus on preventing contagion rather than on preserving the profits of any one firm.

Impact and Legacy
Morgan's account presents the 1907 interventions as successful in halting the cascade of failures and in restoring a measure of normalcy to New York's financial markets. The public statement became a primary source for contemporaries and later historians trying to understand how a private banking syndicate could function as an ad hoc stabilizer when no formal central bank existed. The episode underscored both the strengths and the risks of relying on concentrated private power to manage systemic crises.
At the same time, the statement and the events it describes provoked unease about the concentration of influence in the hands of a few private financiers and fueled political momentum for reform. Debates about the propriety of private rescues and the need for a public lender of last resort contributed to the creation of the Federal Reserve System a few years later. For modern readers and scholars, Morgan's statement remains an essential document that illuminates crisis management practices before central banking reform, the mechanics of emergency liquidity provision, and the tensions between private initiative and public accountability in financial stability.