Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-08-20
MORGAN CALLED TO TIME

According to W. G. Nicolas. the Wall
street writer. highly interesting
and hitherto unpublished incident of
the famous Northern Pacific corner
Is being told in Wall street for
the first time. 1t Is cred!bly fathered and
sounds like a true story. N-teiis Of the
msnner In which Mr.. ]. p. Morgan, then in
th.: very zenith of his fame and power, was
brought to a sharp realizing sense Of his
helplessness in the face of a combination of
giee ntic London banking interests. The
corner was under full Roadway on the New
York stock exchange and in the contest for
&C ntrol Northern Pacific had been run up
from: Sis share to $1,000 share and half
way back Wall street was In q panic and
ruin confronted half the members Of the
exchange. The Morgan-Hill party and tho
Harriman-Schin party had possibly 100000
shares bought which the sellers could not
deliver. great many men. some OF them
multi-millionaires. had sold themselves into
a hole and were willing to pay any price
TO- release. The stock advanced 100 points
between sales. One Of Mr.. Hilrs trusted
iieutenants and a director of Northern Pa
cifc could not Withstand the temptation
and let go his holding Of 15.oo0 shares at q
profit Of $2O00OO0. This Is the only i'm
portant case of desertion which occurred
during that memorable. battle. The desert
e. Is to this day in coventry on account OF
his action.
Mr.. Morgan was touring the continent
during the early part Of this exciting Pc
Rod. He was summoned hastily to Paris
and from there jumped to London. There
he learned that the privilege Dealers had
sold calls" on Northern Pacific to an enor-
nous amount-many hundred thousand
shares in the aggregate. Not being &C
quainted with the New York situation they
could not conceive of the possibility Of q
corner. and had entered into contracts with
utter recklessness. They had literally lift
ed the lid-taken off the limit. The London
privilege dealers include large number OF
very rich and influential men. Their con-
ncctions are with the strongest banking
houses in the city and therefore in the
world. They have what in political par
larce would be called an invinc.ble pull.
They have reduced the selling of puts and
calls to an exact science. 1t is their habit
to protect the mselves when the market goes
against them by selling or buying stocks
against which they issue privileges. In this
case it was impossible to buy Northern Pa
cific after the corner developed. for the rea-
son that nobody would contract to sell them
the shares The result was they found
themselves hopelessly in the gap and stood
to lose tens Of millions of dollars. the
Mount depending entirely on how high the
corner might force the price on the New
York stock exchange.
Ruin stared them in the face. In New
York they had begun to talk about set
Element price. it having appeared that a
dea dlock existed between the opposing fac
tons. Neither SIDE however. was quite
sure of it's position and consequently there
was an indisposition to agree upon a figure
a. which open trades might be settled: The
Hill Morgan party was especially stubborn.
believing 1t had the advantage and could
drag out more stock II 1t held up the price.
1t was at this tuncture that Mr.. Morgan
arrived in London He had no interest per-
sonally in the put and call" situation
there. Neither he nor his close friends had
bought or sold Northern Pacific calls"
His natural prejudice. however. was against
the men who had committed themselves
biindly against his property and he was for
putting the screws on There was talk or
marking up the quotation to $50 and peg
ging it there. That would have meant the