The Panic of 1907 helped prompt the creation of the Federal Reserve System.
The panic began after a failed attempt to corner the stock of United Copper Company. Problems spread through trust companies and banks, while depositors rushed to withdraw money. The New York Stock Exchange fell sharply, and credit became difficult to obtain.
Financier J. P. Morgan organized private support for the banking system, helping prevent an even wider collapse. His intervention demonstrated how heavily the United States depended on a single private financier during a financial emergency.
The crisis encouraged political leaders to seek a permanent central banking mechanism. The Aldrich–Vreeland Act of 1908 created emergency currency arrangements, and the Federal Reserve Act of 1913 established the Federal Reserve System. The panic therefore preceded the Fed by six years, rather than occurring after its creation.