Though such was emphatically not the case, perception trumped reality and a run on the trust ensued.Īs the trust scrambled to meet its depositors’ demands, JP Morgan both directly and indirectly pulled out the supports and credit lines to the Knickerbocker Trust, which subsequently collapsed. The past relationship led the general public to believe that the trust might also be in danger of insolvency. That relationship had long been severed by mid-1907, but facts were not to get in the way of a good story. Morse and Heinze had had a prior association with the third largest trust company in the country: the Knickerbocker Trust. And the fall of these men had another, surprising, effect, as well. The two investors were bankrupted, and so were the banks they controlled – one in Montana and the other in New York. Morse and Heinze attempted to squeeze those short sellers out of their positions, but failed, and UC’s share price slumped from $60 to $10 in a matter of days. United Copper, a company of which two successful investors by the name of Morse and Heinze were majority owners, was likewise affected, and came under pressure from short sellers. The consequences of any given piece of legislation really begins to hit home from 12 to 24 months after passage, so in the fall of 1907 the economy at large caught the Hepburn flu.

When the act became law in the summer of 1906, the railroad stocks (which were at that time a very large component of the market) began to tank. That act allowed the Interstate commerce commission to set price controls on rail rates. markets when the Hepburn Act was passed in Congress and signed into law. The damage amounted to between $350 and $500 million.Īlso in 1906, a financial earthquake hit U.S. Gas lines burst, and four square miles – nearly half of the entire city – burned in what at the time was one of the country’s greatest catastrophes. In 1906, an earthquake hit the city of San Francisco. The interview is preceded by an introduction drawn from David McAlvany’s commentary in his July 21, 2009, McAlvany Weekly Commentary podcast at. over the past year in particular, and since 1913 in general.

If you haven’t been able to read the book, you’ll find this interview essential for understanding what has been going on in the U.S. His book The Creature from Jekyll Island was first published in 1994, and its insights are more vital now than ever. The following interview was conducted by David McAlvany on July 28, 2009, and contains crucial information on the Federal Reserve System by the man who literally wrote the book on the subject: G.

Creature from jekyl island