The 1907 U.S. stock-market panic that prompted the creation of the Federal Reserve System was the Panic of 1907.
The panic began after an unsuccessful attempt to corner the stock of United Copper Company. The failure of firms connected with the scheme triggered withdrawals from trust companies, particularly the Knickerbocker Trust Company in New York.
J. Pierpont Morgan organized emergency support for banks and brokerages, helping prevent a broader collapse. The episode demonstrated that the United States lacked a permanent central bank capable of acting as a lender of last resort.
Congress created the National Monetary Commission in response. Its work contributed to the Federal Reserve Act of 1913, which established the Federal Reserve System. The Fed therefore followed the panic by several years rather than being created during it.