Which 1907 crisis led to the creation of the United States Federal Reserve system?

The Panic of 1907 led to the creation of the United States Federal Reserve system.

The crisis began after a failed attempt to corner the shares of United Copper Company. When the plan collapsed, depositors rushed to withdraw money from related trust companies, spreading fear through New York’s financial system. The panic threatened banks and businesses and caused a severe contraction in credit.

Financier J. P. Morgan organized private-sector support, including efforts to stabilize threatened institutions. His intervention helped prevent an even wider collapse, but the episode demonstrated how dependent the United States was on individual financiers because it lacked a modern central bank.

The Aldrich–Vreeland Act of 1908 created emergency currency provisions and established the National Monetary Commission. After further debate, Congress passed the Federal Reserve Act in 1913, creating the Federal Reserve System. The central bank therefore emerged several years after the panic, as a direct institutional response to lessons from it.