New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-05-09
FAMOUS PANIC RECALLED
Just Ten Years Since Northern
Pacific Went to 81. 900 a Share.
NOT FORGOTTEN ON STREET
Prompt Measures of Relief That
We're Taken to Keep Broker
age Houses Above Water.

Were Taken to Keep Broker
age Houses Above Water.
Ten wears ago to-day occurred the North
srn Pacific panic. which made May g. 1901,
. date long TO be remembered IN the history
of IN. New York stock market Northern
Pacific. which in May 1895, had sold as low
az IS cents a share, touched sl.oc0 share
on that day, while the general list suffered
uneyampled declines In all the stress no
stock Exchange house vas compelled 20
suspend. but II measures OF relief had not
been taken in the course Of the day many
! failures would have been announced.
The origin OF the panic is still fresh in
the recollection OF Wall Street The HILL
| Morgan interests, controlling the Northern
/ Pacific and Great Northern. after having
[ been In negotiation with the dominant In
terests In the Chicago. Milwaukee & st.
/ Paul turned 70 the Chicago. Burlington &
! Quincy. which few weeks before the panic
was purchased by the Northern Pacific and
the Great Northern Jointly. giving them
/ their own line from the Great Lakes 20
/ Chicago.
The Union Pacific party headed by the
late z. r. Hartman and the banking house
OF Kuhn, Loeb & Co. viewing this opera
ton dangerous 20 the Union Pacific.
quietly began 10 buy Northern Pacific stock
both here and abroad with the idea Of Sc
curing control and thus putting the Union
Pacific IN the position of controlling the
Burlington Jointly with the Hill-Morgan
| partys Great Northern.
( In the early days Of MAY the dealings in
Northern Pacific became so large as 70 Gre
ate the belief that some development OF
! importance 10 the property being
planned. although II was not until the very
eve 81 the panic that IL became commonly
known that the rapid rise OF its price re-
fected determined competition between two
powerful financial groups for the control Of
the property.
When the Burlington vas acquired North
ern Pacific was selling at around par. and
/ on its advance later. which was popularity
believed 10 be unwarranted by actual condl-
tons. a heavy short interest in the stock
was created.
On May Northern Pacific opened a,
$50 and rose rapidly 10 10. then broke 70
lij. It's fall causing great apprehension,
which brought heavy selling OF other stocks.
and its late rally 20 lsO not easing the
alarm. The initial advance Of . points vas
apparently due 10 short covering. and
rumor had II that John W. Gates then
leading figure in the Street, was snort 3D..
CO.. shares.
Northern Pacific opened on May with
sales Of 200 shares at 10. Then came sales
OF 90 shares al rs. 800 at $50. 200 Al 10, 800
at 100 cash. The quotations then ran up 20
225. 2sO, 300 400 60, back 70 so. then TO
90 and by II o'clock 70 1000. Total sales
Of the stock for the day were not more
than 1900 shares, in spite OF the terrif1c
demand for little stock could be borrowed
for delivery a. any price.
BY noon little relief came IN the an
nouncement from Kuhn, Loeb q Co am
J. y Morgan & Go. that they would
not require deliveries OF Northern Pa
clfc for twenty-tour hours. Other houses
issued similar notices. and the Stock TX
change Clearing House gave notice that
transactions in Northern Pacific common
would be "ex Clearing House" until further
notice The banks under the lead OF the late
/ = d. Tappen raised a. fund OF about sAvp
900. which was lent in the market on call at
from 90 per cent at the outset to per cent
at the close Of the session.
These measures which raised hope IN the
minds OF the brokers. served 10 some eA-
tent TO quiet the market, which had become
thoroughly demoraized. stocks OF all sorts
having been thrown overheard by panic
stricken holders and By operators short or
Northern Pacific. who We're obliged 20 raise
funds at whatever sacrifice 20 cover their
Northern Pacific commitments. The most
violent break was IN Delaware & Hudson,
which fell on half a dozen transactions
from l63 TO lo5. recovering 10 80 before the
day was over. Among the other severe
declines we're 34i- points in Atchison. 81
In Manhattan. IS I'm Union Pacific, "a IN
Consolidated Gas q IN Steel common and
27ia I'm St Paul
Late in the day Kuhn. Loeb & Co an
nounced that those short 10 them OF North
ern Pacific VINO could not deliver the stock
could settle at $50 and ]. P. Morgan & Co.
although they issued no similar statement.
let IL be known unofically that they would
accept the same rate in settlement That
ouieted the situation. and on the next day.
May 10. Northern Pacific after going TO
2oJ closed at 80. and the general list ad-
vanced.
4 few Gay. later the contending parties
agreed that Mr. Morgan. who was iu
Europe during the panic period should le
permitted 10 name the Northern Pacific
board. and five men chosen by him became
directors. an equal number OF old members
retiring. Kuhn, Loeb s Co. it developed.
had bought ma jority OF the total stock OF
the road. 100000 preferred and 100000
common. but J. +. Morgan & CO.. through
holding a majority Of the common stock,
finally proved 10 be In control Of the prop
erty. the preferred stock being retired on
January l. 1902. Later came the formation
OF the Northern Securities Company, in
which the Union Pacific party were heavy
stockholders through their enormous hold
incs Of Northern Pacific.