What was the Wright panic?
The Wright Panic was a financial crisis that occurred in the United States in 1907 and was named after J. Edward Wright, a stock market speculator. The panic was characterized by a financial downturn that lasted for several weeks and led to the collapse of many banks and financial institutions.
What happened
The crisis was sparked by several factors, including a panic in the copper market, the failed attempt by F. Augustus Heinze to corner the market on United Copper Company, and the manipulation of the stock prices of the Knickerbocker Trust Company by its president, Charles T. Barney.
As a result of these events, there was a run on the banks and many people withdrew their money, leading to a shortage of cash and a decrease in liquidity. The government was forced to intervene and provide support to the failing banks in order to prevent a complete collapse of the financial system.
The Wright Panic was significant because it led to the creation of the Federal Reserve System in 1913, which was established in part to prevent future financial crises. The crisis also highlighted the need for greater regulation and oversight of financial markets and served as a warning of the dangers of unchecked speculation and manipulation.
Conclusion
In conclusion, the Wright Panic was a significant event in the history of the United States financial system, and its effects are still felt today. It serves as a reminder of the importance of responsible financial practices and the need for regulatory measures to prevent similar crises from occurring in the future.