New York City was the main center of the Panic of 1907, a banking crisis that prompted reform.
The panic began after a failed attempt to corner the shares of United Copper Company. When the scheme collapsed, depositors rushed to withdraw money from connected banks and trust companies. Trust companies were less tightly regulated than commercial banks, and doubts about their reserves quickly spread through New York’s financial system.
Financier J. Pierpont Morgan organized private support, pledged funds, and pressed banks to cooperate. His intervention helped prevent a complete collapse, but the episode showed that the United States lacked a central bank able to act as a reliable lender of last resort.
Congress responded by creating the National Monetary Commission. Its work contributed to the Federal Reserve Act of 1913 and the establishment of the Federal Reserve System. The Panic of 1907 was therefore a stock-market and banking crisis whose institutional legacy reached far beyond Wall Street.