The Panic of 1907 was the U.S. financial crisis that occurred in 1907 and helped lead to the creation of the Federal Reserve.
The panic began after an unsuccessful attempt to corner the stock of United Copper Company. Depositors then withdrew money from banks connected to the speculators, and fear spread through trust companies and financial markets. The New York Stock Exchange also experienced a sharp decline.
J. P. Morgan organized private support for banks and trust companies, acting as a crisis manager when the United States had no central bank. His intervention helped stabilize the system, but the episode exposed the weaknesses of relying on one powerful financier.
The National Monetary Commission studied the crisis and influenced banking reform. The Federal Reserve System was created in 1913 by the Federal Reserve Act. The panic therefore connected a stock-market disturbance with a major institutional change in U.S. finance.