Panic of 1901

The Panic of 1901 was the first on the , caused in part by struggles between E. H. Harriman, Jacob Schiff, and J. P. Morgan/James J. Hill for the financial control of the Northern Pacific Railway. The stock cornering was orchestrated by James Stillman and William Rockefeller's First National City Bank financed with Standard Oil money. After reaching a compromise, the moguls formed the Northern Securities Company. As a result of the panic, thousands of small investors were ruined.

One of the key players in this was Harriman who "by 1898…was chairman of the executive committee of the Union Pacific and he ruled without dissent. But he speculated heavily with Union Pacific holdings, and his attempt to monopolize the Chicago rail market led to the Panic of 1901." Harriman's opponent in the struggle for Northern Pacific was James J. Hill, who had allied himself with financier J.P. Morgan. ll

One of the causes of this stock market crash was Harriman's effort to gain control of Northern Pacific by buying up its stock. The panic began when the market crashed during that afternoon in May 8.. Investors did not see it coming, but by 1:00pm, the decline in the market was beginning to show. First came the gradual decline in Burlington stock. It had been high all morning but suddenly a sharp weakness came about. Prices of stocks such as St. Paul, Missouri Pacific, and Union Pacific began to fall. Soon enough the whole market was drowning. Investors that had once held on tightly to their stocks were selling out of pure panic. Others caught on and an overwhelming cry of "Sell! Sell! Sell!" was heard throughout the floor of the . During the selling, a rumor spread among traders that Arthur Housman, broker for J.P. Morgan, had died. Housman, the head of A.A. Housman & Company, was brought to the floor of the to assure traders that J.P. Morgan was still doing business.

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