Which 1907 US financial panic prompted the creation of the Federal Reserve System?

The Panic of 1907 was the US financial crisis that prompted the creation of the Federal Reserve System.

The panic began in October 1907 after an unsuccessful attempt to corner shares of United Copper Company triggered runs on trust companies in New York. Knickerbocker Trust, then one of the city’s largest trust companies, failed after depositors demanded cash.

Financier J. P. Morgan organized private support for banks and trust companies, helping prevent a wider collapse. The episode exposed the weakness of a banking system without a permanent central bank or elastic currency.

Congress responded by creating the National Monetary Commission. Its work contributed to the Federal Reserve Act of 1913. The panic is sometimes confused with the stock-market crashes of 1929, but it occurred more than two decades earlier.