The Panic of 1907 was the U.S. financial panic that nearly caused the New York Stock Exchange to close.
The crisis began after an unsuccessful attempt to corner the stock of United Copper Company. Depositors then withdrew money from banks and trust companies connected to the speculators, spreading fear through New York’s financial system.
J. P. Morgan organized private bankers to provide emergency liquidity and prevent a wider collapse. The Treasury also supplied funds, but the episode exposed the weakness of a banking system without a central bank.
The panic helped create political support for the Federal Reserve System, which Congress established in 1913. It is sometimes confused with the Panic of 1893, another severe U.S. financial crisis, but the 1907 episode was the immediate precursor to the Federal Reserve’s creation.