A financial crisis in the United States during which the New York Stock Exchange fell almost 50% in one year. The collapse of the Knickerbocker Trust, an event engineered by rival banks, triggered the crisis. The public lost confidence in all financial institutions, and bank runs became commonplace. The crisis came to an end after the federal government provided a subsidy of $30 million to the banks and J.P. Morgan and others developed deals that restored public confidence. The panic of 1907 led eventually to the development of the Federal Reserve System.