Which 1907 panic prompted the creation of the United States Federal Reserve?

The Panic of 1907 prompted the creation of the United States Federal Reserve.

The panic began after a failed attempt to corner the shares of United Copper Company helped trigger runs on banks and trust companies. The instability spread through financial markets, and the Knickerbocker Trust Company in New York collapsed in October 1907.

At the time, the United States had no central bank capable of supplying emergency liquidity. Financier J. P. Morgan organized private support for threatened institutions and helped stabilize the banking system. The episode convinced many policymakers that a more permanent mechanism was needed.

Congress created the National Monetary Commission to study reform, and the Federal Reserve Act followed in 1913. The Federal Reserve was therefore not created during the 1929 crash. The 1907 panic is also distinct from the earlier Panic of 1893 and the long depression associated with the Panic of 1873.