The 1907 U.S. financial crisis was the Panic of 1907, which ended after J. Pierpont Morgan organized a private rescue of banks and trust companies.
The panic began in October 1907 after an unsuccessful attempt to corner the stock of United Copper Company. When the scheme failed, depositors withdrew funds from linked banks and trust companies. The withdrawals spread through New York's financial system, which had no modern central bank to provide emergency liquidity.
Morgan gathered bankers in his library and helped arrange loans, mergers, and deposits to prevent the collapse of important institutions. The crisis also affected the New York Stock Exchange and led to severe restrictions on credit.
The Panic of 1907 helped persuade U.S. policymakers that the country needed a permanent lender of last resort. The Federal Reserve System was created in 1913. It is often confused with the Panic of 1893, another major U.S. banking crisis, but the two occurred fourteen years apart.