The 1907 U.S. financial crisis that led to reforms after a banking panic was called the Panic of 1907.
The crisis began after an unsuccessful attempt to corner the stock of United Copper Company. When associated trust companies faced withdrawals, confidence spread into the banking system. The Knickerbocker Trust Company, then one of New York’s largest trust companies, suspended operations on October 22, 1907.
Without a U.S. central bank, private financiers played a critical stabilizing role. J. P. Morgan helped organize emergency lending and persuaded banks and trust companies to provide liquidity. The New York Stock Exchange also faced severe strain, and interest rates rose dramatically.
The panic helped convince policymakers that the United States needed a more systematic lender of last resort. The Aldrich–Vreeland Act of 1908 created emergency currency provisions and established the National Monetary Commission. Its work contributed to the Federal Reserve Act of 1913, although the Federal Reserve was not created directly by the panic itself.