Which U.S. bank failure in 1907 helped prompt the creation of the Federal Reserve?

The Knickerbocker Trust Company’s failure in 1907 helped prompt the creation of the Federal Reserve.

A failed attempt to corner United Copper Company shares triggered a run on Knickerbocker Trust, then one of New York’s largest trust companies. The institution suspended operations on October 22, 1907, worsening public fear and spreading withdrawals.

J. P. Morgan organized private support for banks and trust companies, while the U.S. Treasury supplied additional liquidity. The crisis eventually eased, but it exposed the United States’ lack of a central bank able to act as lender of last resort.

Congress created the National Monetary Commission to study reform. Its work contributed to the Federal Reserve Act of 1913, establishing the Federal Reserve System. Morgan helped contain the panic, but he did not create the Federal Reserve himself.