1907 – 1908
The Panic of 1907 was the first major financial crisis to plague the U.S. in the 1900s, the last recession having been back in the 1890s. The Panic of 1907 was actually a severe monetary contraction that manifested itself as a recession. Many people lost jobs, many businesses went out of business, and many financial institutions were challenged by the panic.
What brought on the panic was when a run on Knickerbocker Trust Company deposits caused a monetary contraction. This occurred on October 22, 1907, and was the incident that was to blame for the panic. The lack of confidence is really what drove the recession home.
As you can see, confidence plays a huge role in preventing recession. And when consumers, money holders, and laborers lose that confidence, runs are started, and things turn bad for the economy. Confidence is imperative to any economy