What If J.P. Morgan Didn’t Save 1907?
A Case for an Austrian American Financial System.
The Panic of 1907 is remembered as the crisis J.P. Morgan personally resolved. But had he stepped back and allowed the storm to run its natural course, the United States might have emerged with a very different financial philosophy—one far closer to Austrian economics than to the centralized system we know today. In that alternate history, the rallying cry of the American public could easily have become: “Don’t trust a Trust.”
When Knickerbocker Trust collapsed in October 1907, it exposed the underlying truth: the trust companies were leveraged, opaque, and dangerously under-reserved. These institutions—lightly regulated and aggressively speculative—had stretched public confidence beyond its limits. Morgan’s intervention softened the blow, but also shielded the system from the full consequences of its own excesses. Without his bailout, the failures would have been deeper, more visible, and far more instructive.
A complete liquidation would have forced Americans to confront the core problem: the banking sector’s freedom to expand credit without matching reserves. Rather than viewing the crisis as a failure of “private coordination,” the public would have seen it as a failure of overextended trusts gaming the system. The political lesson would not be “create a central bank to rescue them,” but “stop them from creating instability in the first place.” A national distrust of trusts—both the institutions themselves and the shadowy credit structures behind them—would have ignited a push for tighter discipline, not a centralized rescuer.
This outcome aligns directly with Austrian principles. Hard money, full transparency, and direct consequences for misallocated capital would have come to define American finance. Banks that misjudged risk would fail; those that kept adequate reserves would survive. Credit expansion would be constrained naturally by market discipline rather than sustained artificially by a lender of last resort. The public, having watched unreserved trusts implode, would demand a system where money was backed by reality, not by confidence games. “Don’t trust a Trust” would evolve from a chant into a philosophy: trust institutions anchored in hard money, not those floating on leverage.
Without the short-term rescue Morgan provided, the political momentum that led to the Federal Reserve Act of 1913 would likely have collapsed. The argument for a central bank depended on the idea that private actors could not stabilize the system; ironically, it was Morgan’s success that proved it. In a scenario where the crisis burned hotter and more openly, the public would have pushed for preventing credit excess, not nationalizing its consequences. The Fed might never have been born—or, if created at all, would have been a far narrower, gold-constrained clearinghouse rather than a discretionary engine of monetary expansion.
Over the long term, America would have evolved toward a decentralized, market-disciplined financial structure. No fiat currency. No moral hazard. No artificially amplified boom-bust cycles. A system where the currency’s purchasing power endured and where financial institutions survived only by earning actual trust—not by receiving it automatically.
In short, if J.P. Morgan had not stepped in during 1907, the United States might have embraced a harder, sounder, more Austrian financial order. The crisis would have taught the country a simple, lasting truth:
You don’t trust a Trust. You trust sound money.
“More Seymour, More”
Financial Performance of Steak 'n Shake Since Accepting Bitcoin
Overview of Bitcoin Adoption
Start Date: Steak 'n Shake began accepting Bitcoin payments on May 16, 2025.
Payment Method: The chain uses the Lightning Network for Bitcoin transactions.
Impact on Sales
Sales Increase: Since adopting Bitcoin, Steak 'n Shake reported a 10.7% increase in same-store sales in the second quarter of 2025.
Cost Savings: The chain saved approximately 50% in processing fees by accepting Bitcoin instead of traditional credit card payments.
Strategic Initiatives
Bitcoin Rewards Program: The introduction of the Bitcoin Burger allows customers to earn $5 in Bitcoin when they purchase specific meals. This initiative aims to integrate Bitcoin into everyday spending.
Strategic Bitcoin Reserve: Steak 'n Shake has created a Strategic Bitcoin Reserve, funneling all Bitcoin payments into a corporate treasury, signaling a commitment to Bitcoin as a long-term asset.
Market Position
Competitive Edge: The chain's innovative approach has positioned it as a leader in integrating cryptocurrency into the fast-food industry, attracting attention from both Bitcoin enthusiasts and traditional customers.
Conclusion
Steak 'n Shake's financial performance has improved since it started accepting Bitcoin, with significant increases in sales and cost savings. The company's strategic initiatives reflect a strong commitment to integrating Bitcoin into its business model.
