The 1907 U.S. stock-market crash and banking crisis was the Panic of 1907, which helped lead to creation of the Federal Reserve System. The crisis began after a failed attempt to corner the stock of United Copper Company triggered runs on banks connected to the speculators.
Confidence deteriorated in October 1907, especially after the Knickerbocker Trust Company failed. Depositors withdrew money from trust companies, and the panic spread through the financial system. Financier J. P. Morgan organized private support to stabilize banks and prevent a wider collapse. His intervention demonstrated how dependent the United States was on individual financiers during emergencies.
Congress later established the National Monetary Commission to study banking reform. That work contributed to the Federal Reserve Act of 1913 and the Federal Reserve System's launch in 1914. The panic therefore did not create the Federal Reserve immediately, but it was a decisive reason for establishing a permanent central banking structure.