The 1907 United States financial panic that led to the creation of the Federal Reserve was called the Panic of 1907.
The crisis began after an attempt to corner the shares of United Copper Company failed. The effort helped trigger runs on banks and trust companies, especially institutions connected to speculators. As depositors demanded cash, the financial system faced a severe liquidity shortage because the United States had no modern central bank.
Financier J. P. Morgan helped organize private rescue efforts, persuading banks and trust companies to provide funds and arranging support for threatened institutions. The emergency response reduced the immediate danger, but it also demonstrated how dependent the country was on one private banker during a crisis.
The panic encouraged monetary reform. The Aldrich–Vreeland Act of 1908 was an interim measure, and the Federal Reserve Act of 1913 created the Federal Reserve System. The panic therefore links a stock-market shock to a lasting institutional change.