Which 1907 crisis prompted the creation of the U.S. Federal Reserve?

The Panic of 1907 was the U.S. crisis that helped prompt the creation of the Federal Reserve System.

The panic began after a failed attempt to corner the stock of United Copper Company. Runs spread to trust companies, and the collapse of the Knickerbocker Trust Company intensified fear in New York. With no U.S. central bank operating at the time, financier J. P. Morgan organized emergency support for the banking system.

The episode exposed weaknesses in the U.S. financial structure, including the absence of a dependable lender of last resort. In response, Congress created the National Monetary Commission, whose work contributed to the Federal Reserve Act of 1913.

The crisis is distinct from the 1929 crash. The 1907 panic was a banking and liquidity crisis, while the Federal Reserve later became a central institution during the 1929–1930s collapse.