The 1907 banking panic centered on New York City and helped lead to creation of the Federal Reserve System.
The crisis began after a failed attempt to corner the stock of United Copper Company. Depositors then rushed to withdraw money from banks and trust companies connected to the speculators, producing a dangerous liquidity shortage in New York’s financial system.
Financier J. P. Morgan organized private support and persuaded banks to provide emergency assistance. His intervention helped prevent a broader collapse, but the episode exposed the United States’ lack of a formal central bank capable of acting as lender of last resort.
Congress responded by creating the National Monetary Commission. Its work contributed to the Federal Reserve Act of 1913, which established the Federal Reserve System.