The New York herald., 1922-04-21
Morgan-Hill Alliance Pitted
Against Jacob H. Schiff
and Hartman.
SCHIFF AWAY AT CRISIS
George Remnants Book Shows
Dramatic Twists of Fortune
in Titanic Struggle.

The inside story of the great North
ern Pacific panic of May 8. 1901. which
came near to smashing half the brok-
erage concerns of the city and sending
all Wall Street on the rocks. is au-
thoritatiyely told for the first time by
George kennan in his biography Of
l.. II. Hartman, issuing to-day from
the presses of the Houghton Miffiin
Company.
The conflict of financial giants
Morgan and Hill on the one side and
Schiff and Hartman on the other
ended in partial victory for the Nor
gan Hill alliance because Jacob Fl.
Schiff, worshipping in his synagogue,
could not be reached by Hartman at
crucial moment; and when Schin was
reached by subordinate, who had not
Harrimans dynamic power Of over
turning any obstacle, he took the
wrong view of the situation. Every
one of the figures of that titanic
struggle, so dramatically told by Mr..
kennan. is dead.
The fight for control OF the Northern
Pacific Railroad grew out OF previous
fight for control of the Burlington
Hartman against Hill. with Hill win
ming. When Hartman discovered that
the Burlington had been captured and
taken into the camp of the enemy (J.
Pierrepont Morgan had. ere this, warned
James j. Hill ito look out for that little
fellow, Harriman"). he determined to
make a sudden surprise attack on that
camp itself. He had lost the Chicago,
Burlington and Quincy but there was
nothing to prevent him from seizing the
Northern Pacific by secretly buying
ma aiority Of its capital stock. He would
then control not only that company bnt
the half interest that 1t had just ac-
uuired in the Burlington. II he sue
ceeded he could make Hill accept almost
any terms he saw fit to impose. The
empire builder of the Northwest. elated
over the Burlington victory and utterly
unsuspicious OF the forthcoming raid
against Northern Pacific stock. sailed
for Italy even while Schiff and Harri-
man were swiftly and secretly carrying
out their plan TO get control OF the
Northern Pacific by buying more than
half of its capital stock. When they
began buying early In April Northern
Pacific common stood at 1o2. with 101
for the preferred. II soon rose to l3l
for the common and 100 for the pre-
ferrcd.
Hin Races From Seattle.
- 4. .... ~. .~oc,,Iat;on u-a q pot 70
garded as anything extraordinary. and
even the Northern Pacific people sold
stock to take advantage of what they
regarded as an absurdly high price.
Hirs friends even sold unsuspectingly
TO brokers who were buying for Kuhn.
Loeb & Co. The Northern Pacific Com
pany sold its own stock. Morgan q Co..
curiously oblivious to the significance OF
this stock movement. sold 10000 shares
that came into their hands in one day
in the ordinary course OF business
Toward the last of April. Hill. In Seattle.
took alarm over the enormous transac-
tions and rapid advance In price and
struck for the East by special train
with the right OF way over anything that
moved on rails. He went at once to see
Schiff, who admitted that control OF
Hills system was sought. Hill said
enough stock could not be bought.
THAT may be-" replied Schiff, but
we've got lot Of II. You secretly bought
the Chicago. Burlington Quincy and
refused to give US fair share: now
we're going to see IL we can't get share
by purchasing controlling interest In
the Northern Pacific
Hin went at once TO the Morgan Of
fices and asked Robert Bacon. In COM
rnand there. TO cable to the head OF the
house. then in Italy, asking for author
ity to go into the market and buy 10000
shares OF Northern Pacific stock. pref
erably common. The cablegram was
sent to Morgan after the close of the
Stock Exchange on Saturday. May !.
AS regards that crucial day. Mr.. Har-
iiman, In a memorandum now made
public BY the blographer. tells this
story:
.. was at home ILL., We had
somewhat over s42.00o.o00 of the pre-
ferred shares OF the Northern Pacific.
or clear majority OF that Issue, and
somewhat over s37.0o0.coo of the COM
mon shares. which lacked being a ma
jority OF the common by about 10000
shares. But VIC had a majority OF the
entire capital stock. as represented BY
both the common ard the preferred
shares. and I had been confidently adj
vised. and was convinced. that this
holding was sufficient TO enable us to
ConlFol tFt company. AHN
fact THAI tho Northern Pacific could on
the first of January following retire the
preferred shares. of which we had a
majority. bothered me somewhat. and |
fet that we ought not 10 leave open
TO them any chance Of retiring our
preferred stock and leaving US with
minority interest in the moa
stock.
schif mt Synagogue.
II made up my mind that We should
have a majority of the common shares,
and on that morning | called up Hei-
shcimcr lone or the partners In the
firm OF Kuhn. Loeb g. Coz and gave
him an ordc- 70 buy. at the marke..
1000 shares OF Northern Pacific com.
mon for my account. lie said 'All
right and o. dealings that day in
Northern Pacific common ,shares con-
tinucd TO be very heavy, | felt THAI
como what might had control of
Northern Pacific common stock and all,
"On Monday. the 6th Of May. North
crn Pacific came strong from Londol
and opened with n burst of activity Ia
the street. and having had no confirma-
purchase OF tho 5000 shares OF North
ern Pacific which had ordered on
Saturday morning. 7 called Hensheimer
up and asked hIm why ! had gotten no
report Of the execution OF my order.
lie told mo that before giving out the
order hc had TO reach Schiff, who was