The U.S. financial panic in 1907 that caused bank runs and helped inspire the Federal Reserve was the Panic of 1907.
The crisis began in October 1907 after an unsuccessful attempt to corner the stock of United Copper Company. The failure damaged confidence in trust companies, which were less regulated than commercial banks. Depositors rushed to withdraw their money, producing severe liquidity shortages in New York and other financial centers.
Banker J. P. Morgan helped organize private support for threatened institutions and arranged emergency financing. The episode demonstrated that the United States lacked a permanent central bank capable of acting as a lender of last resort.
Congress later established the Federal Reserve System in 1913. The Panic of 1907 is sometimes confused with the Panic of 1893, another major U.S. financial crisis, but the 1907 episode was the immediate crisis that preceded the Federal Reserve’s creation.