The first major U.S. stock-market crash of the twentieth century, in October 1907, is commonly called the Panic of 1907.
The panic began after an unsuccessful attempt to corner the stock of United Copper Company. The failure damaged confidence in trust companies, and depositors rushed to withdraw funds from institutions they considered vulnerable.
J. Pierpont Morgan coordinated private support for banks and the New York Stock Exchange, using his influence and financial resources to stabilize the system. The episode exposed the weakness of relying on private financiers during a nationwide banking emergency.
The panic helped build political support for monetary and banking reform. The Federal Reserve System was created in 1913, five years later, partly in response to the instability revealed by the crisis. The Panic of 1907 therefore links a market crash to the institutional origins of modern U.S. central banking.