The 1907 U.S. financial crisis was the Panic of 1907. It began after a failed attempt to corner the stock of United Copper Company triggered runs on banks and trust companies.
The crisis intensified in October when depositors withdrew funds from institutions connected to the Knickerbocker Trust Company. J. P. Morgan, then one of the country’s most powerful financiers, gathered bankers in New York and helped arrange emergency lending and support. The rescue stabilized the banking system, but it also showed how dependent the United States was on a private individual during a financial emergency.
The panic was an important political background to the creation of the Federal Reserve System in 1913. The Federal Reserve later became the United States’ central bank and lender of last resort. A common error is to call Morgan the head of the Federal Reserve during the panic; the Federal Reserve did not yet exist.