The 1907 crisis that helped lead to the creation of the U.S. Federal Reserve was the Panic of 1907.
The panic began after a failed attempt to corner the stock of United Copper Company. The failure damaged confidence in a network of banks and trust companies connected to the scheme. Depositors rushed to withdraw money, producing bank runs and a severe liquidity shortage in New York.
The United States had no central bank at the time. Financier J. P. Morgan organized private support, persuaded banks to cooperate, and helped stabilize the financial system. The episode convinced many policymakers that the country needed a lender of last resort and a more elastic currency system.
The Federal Reserve was not created immediately: Congress established it in 1913 after the National Monetary Commission studied possible reforms. The Panic of 1907 therefore influenced the Fed’s creation rather than being directly caused by it.