How Contagious Was the Panic of 1907? New Evidence from Trust Company Stocks

Caroline Fohlin and Zhikun Lu

AEA Papers and Proceedings, 2021, vol. 111, 514-19

Abstract: Using a new dataset of all NYC trust company stocks, we study the impact of the Panic of 1907 and the ensuing cash infusion by JP Morgan and the Treasury. Using synthetic controls, we find that three "troubled" trusts performed far worse than the other trusts, whose valuations rebounded within a year. Moreover, trust companies connected to "money trust" banks maintained higher valuation than independents and rebounded much faster. The desire to prevent panic from spreading from infected trusts to financial institutions in his purview could explain Morgan's rapid intervention to stem the contagion.

JEL-codes: D22 G01 G23 N11 N21 N81 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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DOI: 10.1257/pandp.20211097

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