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Harriman vs. Hill

Wall Street’s Great Railroad War

Larry Haeg

Publication Year: 2013

In 1901, the Northern Pacific was an unlikely prize: a twice-bankrupt construction of the federal government, it was a two-bit railroad (literally—five years back, its stock traded for twenty-five cents a share). But it was also a key to connecting eastern markets through Chicago to the rising West. Two titans of American railroads set their sights on it: James J. Hill, head of the Great Northern and largest individual shareholder of the Northern Pacific, and Edward Harriman, head of the Union Pacific and the Southern Pacific. The subsequent contest was unprecedented in the history of American enterprise, pitting not only Hill against Harriman but also Big Oil against Big Steel and J. P. Morgan against the Rockefellers, with a supporting cast of enough wealthy investors to fill the ballroom of the Waldorf Astoria.

The story, told here in full for the first time, transports us to the New York Stock Exchange during the unfolding of the earliest modern-day stock market panic. Harriman vs. Hill re-creates the drama of four tumultuous days in May 1901, when the common stock of the Northern Pacific rocketed from one hundred ten dollars a share to one thousand in a mere seventeen hours of trading—the result of an inadvertent “corner” caused by the opposing forces. Panic followed and then, in short order, a calamity for the “shorts,” a compromise, the near-collapse of Wall Street brokerages and banks, the most precipitous decline ever in American stock values, and the fastest recovery. Larry Haeg brings to life the ensuing stalemate and truce, which led to the forming of a holding company, briefly the biggest railroad combine in American history, and the U.S. Supreme Court ruling against the deal, launching the reputation of Justice Oliver Wendell Holmes as the “great dissenter” and President Theodore Roosevelt as the “trust buster.” The forces of competition and combination, unfettered growth, government regulation, and corporate ambition—all the elements of American business at its best and worst—come into play in the account of this epic battle, whose effects echo through our economy to this day.

Published by: University of Minnesota Press


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p. 1-1

Title Page, Copyright, Dedication, Quotes

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pp. 2-9


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pp. ix-x

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pp. xi-xiv

The seed for this book was planted more than a half-century ago by my father, who had the wisdom to bring American history into our home. He subscribed to American Heritage, the hardcover monthly, many of which now are stacked forlornly in used bookstores but are still unsurpassed for their vivid style and broad appeal. ...

Dramatis Personae

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pp. xv-xvi

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Introduction: A Railroad World

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pp. 1-9

In the spring of 1901 the two most powerful men in America’s railroads, then the nation’s dominant industry, got into a climactic fight for control of two pivotal western railroads, first the Chicago, Burlington & Quincy and then the Northern Pacific. The winner (if there was one) could be known, in the way newspapers spoke in those days, as railroad king of the world. ...

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1. Mr. Morgan and Mr. Hill

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pp. 10-40

It was two minutes before 10 a.m. and the trading floor of the New York Stock Exchange—“magnetic pole of the modern industrial world”—was ready to erupt, again. Chairman McPherson Kennedy, gavel in hand, stepped to the rostrum. He gazed out over a three-story expanse of fourteen thousand square feet, a cathedral of commerce designed to evoke the Italian Renaissance ...

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2. Mr. Harriman and Mr. Schiff

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pp. 41-64

If you walked this April 3 morning a block west from the House of Morgan on Wall Street, took a right on Broadway, and strode another block and a half north, you would come to Henry Baldwin Hyde’s Equitable Life Assurance Society building at 120 Broadway, a stately ten-story office tower of gray Quincy granite in the ornate French second-empire style with mansard roof. ...

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3. The End of the “Days of Small Things”

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pp. 65-86

In just two years Edward Harriman had done what many, including J. P. Morgan and James J. Hill, thought impossible. He took control of and refinanced the federal government’s foreclosed Union Pacific and began rebuilding large portions of its track and operations. It was a sort of secular fulfillment of Isaiah 40:4, “The uneven ground shall become level, ...

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4. The Battle for the Burlington

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pp. 87-96

The evening of Saturday, February 9, 1901, Stuyvesant Fish was in many ways at the peak of his career. He had been president of the Illinois Central Railway Company for fourteen very successful years. Patrician, a bit smug and self-absorbed, he presided over an elegant black tie dinner celebrating the fiftieth anniversary of America’s first land grant railroad. ...

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5. “Peacemakers” Arming for Combat

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pp. 97-127

What were Harriman and Schiff doing while Hill maneuvered? They watched the Burlington start the year at $140, close over $150 on March 11, over $160 on March 16, over $170 on March 29, and well over $180 on April 3, the day Morgan departed for Europe. Hill and Morgan assumed Harriman was preoccupied with buying the Southern Pacific. ...

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6. “The Weak Link in Your Chain”

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pp. 128-138

Monday morning, April 29, 1901, hundreds of members of the New York Stock Exchange led by President Keppler marched in two columns five blocks south down New Street from their shuttered building on Broad, through the east entrance of the New York Produce Exchange at 2 Stone Street, up a short, narrow stairway on the south side, ...

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7. The Consequences of a “Hostile Act”

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pp. 139-159

On Wednesday, May 1, the day Morgan is thought to have arrived in Aix, the New York Stock Exchange went crazy again for Union Pacific common. It opened up nearly two points. Then it rose in a cyclone of bid and ask; with frantic, sweaty mobs of traders swaying, waving, screaming, pushing. Up and up, rocketing nine points in just minutes. ...

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8. Decision at Temple Emanu-El

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pp. 160-180

Saturday morning, May 4, dawned clear and crisp in Manhattan. It would be a very pleasant morning to walk to the synagogue. Jacob and Therese Schiff, in their Sabbath best, left their Fifth Avenue home facing Central Park and began their customary stroll down the thirty-one “short” blocks to their synagogue Temple Emanu-El at Fifth Avenue and Forty-Third Street. ...

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9. “Hell Is Empty and All the Devils Are Here”

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pp. 181-217

The gavel came down. A roar erupted. A great, brawling, sweaty mob of traders stormed the Northern Pacific trading post on the floor of the Exchange Wednesday morning, May 8. Nipper common opened at 155. Three hundred shares quickly traded at 159. Ninety-five hundred at 160. A thousand at 165. Two thousand at 170. ...

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10. Northern Insecurities

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pp. 218-233

John Pierpont Morgan had left New York thirty-two days earlier, on April 3, dreaming of rare art and thermal baths. Now he was stewing in Paris. While he was dozing under hot towels after massages in Aix, Harriman and Schiff were trying to steal “his” railroad. ...

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11. The “Big Stick”

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pp. 234-249

It was the afternoon of Wednesday, October 2, 1901 and J. P. Morgan settled in his seat at Trinity Church at the corner of Bush and Gough in San Francisco. He thumbed through his hymnal and prepared to worship God. Every three years over the past two decades he had dutifully set aside his business affairs, no matter how weighty and urgent, ...

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12. A Thunderbolt Out of the Blue

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pp. 250-271

It was the afternoon of Wednesday, February 19, 1902, and Hill was coughing and sneezing and ached all over. He had always been vulnerable to deep bronchial chest colds. Now he was in bed with a bad one and felt lousy. From his bedroom on the second floor of his 36,000-square-foot Richardson Romanesque hulk of red sandstone on Summit Avenue, ...

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13. Great Cases and Bad Law

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pp. 272-282

The previous quarter century the railroad empire of James J. Hill had grown from 656 miles of track in central and western Minnesota in 1880 to 19,263 miles across sixteen states and territories, and included one of the world’s largest fleets of ocean steamships on the Great Lakes and the Pacific. ...

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Epilogue: The Last Corner

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pp. 283-294

After the U.S. Supreme Court broke up Northern Securities James J. Hill said, “I’ve still got the railroads, haven’t I?” It was true, he did, and they were as profitable as ever, for the time being at least. The court’s decision, in a way, changed nothing; it had about as much effect, said one writer to Hill, as a straw of wheat in front of a train. ...

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pp. 295-296

The author is grateful for the discerning editorial eye of Pieter Martin, and the guidance of Kristian Tvedten and Laura Westlund of the University of Minnesota Press; copy editor Jean Brady and proofreader Robert Frame; Margaret Bresnahan for help at the Morgan Library in New York; ...


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pp. 297-302


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pp. 303-350


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pp. 351-364


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pp. 365-376

E-ISBN-13: 9781452939889
E-ISBN-10: 1452939888
Print-ISBN-13: 9780816683642

Page Count: 384
Publication Year: 2013