The New York herald., 1922-04-21

at the synagogue. schiff instructed hin,
not to execute the order ana said tina.
he (SchifD would be responsible. |.
then knew that matters were in a seri-
Gus way and that the whole object OF
our work might be lost -
Schiff. Hartman knew. had made a
great mistake. Had he himself, as KEN
nan assumes. been we'll enough to go
down town and fad Schiff himself. his
influence and his arguments might have
overcome the bankers belief that it was
unnecessary to invest any more money
in the stock. Some time on Sunday. May
5. Robert Bacon received from J. p.
Morgan a cablegram authorizing him to
buy 100000 shares of Northern Pacific
common. and Immediately the Hill-Mor-
gan forces took the field. Before Tues
day night they were in possession OF
10000 shares, the price running up to
14sa. Both sides ceased buying. the
Hill-Morgan alliance confident of safety
in their majority of the common stock
the. Schiff-Harriman combination bank
ing on control through the knowledge
that in owning a considerable majority
Of the preferred they had majority OF
all the stock. both preferred and COM
mon. even though they had only
minority OF the common. Hartman HIM
self. it may be said. was not confident
about this. but Schiff and James Still
man maintained the position.
Utter Ruin Avoided.
Even when the giants stopped contend
ing Northern Pacific continued to adj
vance by leaps and bounds. simply be-
cause everybody wanted it. while few
brokers had It for sale. Scores of specu-
lators had gone short with the expecta-
ton that the bottom would fall out
quickly, and when the price continued to
go up and they had TO make their de-
iiveries they We're in desperation. Money
was scarce and hard to get. and in order
to escape involuntary bankruptcy scores
OF brokers were forced to sell their other
stocks at ruinous prices and use the pro-
ceeds in buying Northern Pacific. This
eventually brought on one OF the worst
panics Wall Street had ever known. As
early as the morning of Wednesday,
May s. II was seen that disaster was Inn
pending. When the storm broke next
day Northern Pacific common sold up to
1000 a share. while United States Steel
had sunk from 46 to "a: Santa Fe from
rs to AZ: Delaware and Hudson from
1863 to 105. Call money was up to 60
per cent. and little could be had even at
tnaL exOTDltdnt rate DtiOFe HoOu tldt
day nearly half the brokerage houses
In Wall Street were technically insolvent
simply because they could neither buy
nor borrow the Northern Pacific's shares
they had sold short. The utter ruin OF
many firms was avoided and a degree OF
stability insured when Schif and Bacon
met and agreed to let the shorts" out at
$50 a share.
Mr.. Harriman's biographer insists
that while the panic was largely. IL not
wholly. accidental, and the result OF
wild and irrational speculation on the
part OF the general public. nevertheless
II was Robert Bacon. not Kuhn. Loeb &
Co.. who bid up the stock and brought
about the corner. AS regards control OF
the railroad the situation remained vir.
tualy unchanged. and In the end Harri-
man gained large participation in the di-
rection OF the company, though Hill con-
tinued as its head and presiding genius.
Mr.. Kennan's life story of Hartman.
In two volumes. Is. at the same time.
thrillingly interesting history of the great
business struggles ofthe thirty years be-
tween 1880 and 1910. in which Mr.. Har-
riman played SO vital a part.