The 1907 US financial panic that caused a major stock-market crash was the Panic of 1907.
The crisis began after a failed attempt to corner the shares of United Copper Company. The failure damaged confidence in the Knickerbocker Trust Company, prompting a run and spreading fear through other financial institutions. The New York Stock Exchange then suffered a sharp decline as investors sought cash.
J. P. Morgan organized private support for threatened banks and trust companies because the United States had no modern central bank. His intervention helped stabilize the system, but the episode also showed how dependent financial markets were on one powerful private financier.
The Panic of 1907 directly influenced the creation of the Federal Reserve System. Congress established the Federal Reserve in 1913, giving the country a central institution intended to provide liquidity and reduce the danger of similar banking panics.