Which 1907 panic helped inspire the creation of the U.S. Federal Reserve?

The Panic of 1907 helped inspire the creation of the U.S. Federal Reserve.

The crisis began after an unsuccessful attempt to corner the shares of United Copper Company. When the scheme collapsed, depositors withdrew funds from related banks and trust companies. The panic spread through financial markets, causing a severe liquidity shortage and a run on the Knickerbocker Trust Company in New York.

The United States had no central bank at the time. Financier J. P. Morgan organized private support, persuaded banks to provide funds, and helped stabilize the system. His intervention demonstrated both the power and the limits of relying on one private individual during a national crisis.

The National Monetary Commission studied the weaknesses exposed by the panic. Its work contributed to the Federal Reserve Act of 1913, which created a permanent central banking framework.