The Panic of 1907, 2nd Edition

Introduction

The past is never dead. It’s not even past.

—William Faulkner¹

The Panic of 1907 stands out among history’s financial and economic disturbances. Over a century later, this crisis seems so small—its epicenter was short and intense—but it rippled nationally and internationally for years. The economic damage of the Panic was “extremely severe,” according to economists Milton Friedman and Anna Schwartz.² It strained the fabric of societies, producing distress, dislocation, and even revolution. Its political impact was massive, triggering and accelerating the final push to establish the U.S. Federal Reserve System, after years of ineffectual debate. It fundamentally changed public attitudes about government intervention into markets and economic affairs. It highlighted the role of human agency in the turn of events. The wrangling of powerful personalities such as J. Pierpont Morgan, Elbert Gary, Henry Frick, Theodore Roosevelt, Woodrow Wilson, and William Jennings Bryan exposed the diversity of ideologies and motivations that would roil the U.S. political economy throughout the twentieth century. Ranked among pivotal events of the age, the Panic of 1907 ushered out an old guard and its orthodoxy, to be replaced by a new generation of leaders who held new notions.

However, memories are short. Eclipsed by two world wars, the Great Depression, the halting emergence of a new global economic order, and a string of crises in the early twenty‐first century, the events of ...