Part 1 Chapter 7 Panic Summary and Analysis

Despite the warning signs, there is a stock market panic in October 1907. Pierpont is attending a religious convention in Richmond, Virginia when the panic occurs. Pierpont, flooded by telegrams, finally returns to New York early to deal with the panic. The panic results in massive selling of trust stocks and runs on banks as people try to withdraw their deposits. Morgan puts together a deal that keeps most of the brokerage houses solvent and keeps the New York Stock Exchange from closing. The panic of 1907 results in many changes in attitude in government. Pierpont Morgan negotiates many deals to save the brokerage houses and many businesses. Government begins to call for regulation of the stock exchange. The Federal Reserve System is created to deal with and prevent these panic situations.

The election of William Howard Taft as...