The 1907 U.S. financial panic that prompted the creation of the Federal Reserve six years later was the Panic of 1907.
The crisis began in October 1907 after an attempt to corner shares of United Copper Company failed. Depositors then withdrew money from several trust companies, especially the Knickerbocker Trust Company in New York. The withdrawals created a wider banking panic.
Financier J. Pierpont Morgan organized private support for threatened institutions and helped persuade banks to provide emergency funds. The episode showed how dependent the United States was on individual financiers because it had no central bank.
Congress responded by creating the National Monetary Commission. Its work helped lead to the Federal Reserve Act of 1913. The Panic of 1907 is sometimes called the Knickerbocker Panic, but that name describes the crisis's best-known institution rather than a separate event.