The severe U.S. financial crisis of 1907 was called the Panic of 1907.
The panic began after a failed attempt to corner the stock of United Copper Company in October 1907. The failure damaged confidence in the Knickerbocker Trust Company, which experienced a run and suspended operations. Other banks and trust companies then faced withdrawals as depositors and investors sought cash.
J. P. Morgan organized private support for the banking system and helped coordinate emergency lending. The crisis exposed the United States’ lack of a central bank able to provide liquidity during a financial emergency. The U.S. Treasury also supplied funds to ease pressure on the banking system.
The Panic of 1907 became an important reason for creating the Federal Reserve System in 1913. It should not be confused with the separate Panic of 1893 or the Wall Street Crash of 1929.