The U.S. financial panic that began with the 1907 stock-market crash was called the Panic of 1907. It was a major banking crisis that threatened the stability of the American financial system.
The panic intensified in October 1907 after an unsuccessful attempt to corner the shares of United Copper Company. When the scheme failed, depositors rushed to withdraw money from banks and trust companies connected to the participants. The crisis spread as confidence weakened and institutions struggled to obtain cash.
Financier J. P. Morgan organized private support to help stabilize important banks and prevent a broader collapse. The episode exposed weaknesses in the U.S. banking system, which lacked a central bank able to act as an emergency lender.
The panic helped build political support for financial reform. Several years later, the Federal Reserve System was created in 1913. The event is sometimes confused with the Panic of 1893, another severe U.S. financial crisis caused by different conditions.