The U.S. financial panic of 1907, which caused a severe stock-market decline, was called the Panic of 1907.
The crisis began in October 1907 after an unsuccessful attempt to corner shares of United Copper Company. When the scheme failed, depositors withdrew money from banks connected to the speculators, spreading fear through the financial system. Trust companies, which were less regulated than commercial banks, faced especially heavy withdrawals.
The panic intensified when the Knickerbocker Trust Company in New York collapsed. J. P. Morgan organized emergency lending and persuaded banks to provide funds, helping prevent a wider banking failure. The New York Stock Exchange also suffered a sharp decline as credit tightened and investors sold assets.
The Panic of 1907 is often linked to the creation of the Federal Reserve System in 1913. The Federal Reserve was designed partly to provide a more reliable lender of last resort. It is distinct from the Panic of 1893 and the Panic of 1873, which were earlier crises with different immediate causes.