Which U.S. stock-market crash of 1907 prompted the creation of the Federal Reserve?

The Panic of 1907 was the U.S. stock-market and banking crisis that helped prompt creation of the Federal Reserve.

The panic began after a failed attempt to corner the stock of United Copper Company. The collapse spread to brokerage firms and trust companies, producing bank runs and a severe liquidity shortage. The New York Stock Exchange also experienced a major fall, and financial institutions struggled to obtain cash.

Financier J. P. Morgan organized private support for the banking system and helped coordinate emergency lending. His intervention demonstrated how dependent the United States was on an individual private banker during a national crisis.

Congress responded by creating the National Monetary Commission, which studied banking systems abroad and helped shape later reforms. The Federal Reserve Act was passed in 1913, establishing the Federal Reserve System. The panic therefore did not create the Fed immediately, but it was a major political and institutional cause of its creation.