The New York herald., 1922-04-21
HARRIMAN'S STORY
GIVEN FROM INSIDE
Ks
Biography Tells Start of
Northern Pacific Panic
of 1901 for First Time.
CONFLICT OF GIANTS
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 3, 1901. which
came near to smashing half the brok-
all Wall Street on the rocks. is au-
thoritatively told for the first time by
George Kennan in his biography OF
L. III. 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 a
crucial moment; and when Schiff was
reached by subordinate. who had not
Harriman's 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 81.
Pierrepont Morgan had. ere this. warned
James ]. Hill ito look out for that little
fellow, Harriman"). he determined to
make n sudden surprise attack on that
camp itself He had lost the Chicago,
Burlington and Quin,y. but there was
nothing to prevent him from seizing the
Northern Pacific by secretly buying
majority OF its capital stock. He would
then control not only that company, bnt
the half interest that it had just ac-
auircd i'm 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 raio
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 102. with 1Ol
for the preferred. IL soon rose to Isl
for the common and 109 for the pre-
ferrcd.
Hill Races From Seattle.
Up TO then the speculation was not re-
garded as anything extraordinary. and
even the Northern Pacific people sold
stock TO take advantage of what they
regarded as an absurdly high price.
Hilrs friends even sold unsuspectingly
TO brokers who were buying for Kuhn.
Loeb & Co. The Northern Pacific Com
pany sold its own stock. Morgan & 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 traneac-
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 a fair share: now
we're going to sec II we can't get share
by purchasing controlling interest III
the Northern Pacific"
Hin went at once to the Morgan Of
fIces and asked Robert Bacon. In COM
inand there, 10 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
crably common. The cablegram was
sent to Morgan after the close of the
Stock Exchange on Saturday. May l..
AS regards that crucial day, Mr.. Har-
iiman In memorandum now made
public by the biographer. tells this
story:
.. was at home ILL., We had
somewhat over a2.001.o0o of the pre-
ferred shares OF the Northern Pacific,
or a clear majority of that Issue, and
somewhat over SS7. 100000 of the COM
mon shares, which lacked being ma
1orlty OF the common By about 10000
shares. But we 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 10 enable US 10
control the company. Nevertheless. tho
fact THAI the Northern Pacific could OH
the first of January following retire the
preferred shares, OF which we had "A
majority, bothered me somewhat. and
felt that we ought not 10 leave open
10 them any chance of retiring our
preferred stock and leaving us with
minority interest In the comm n
schin mt Synagogue.
~ made up my mind that we shouid
have a majority of the common shares
and on that morning ! called up Helm
shcimer Zone or the partners in the
firm OF Kuhn. Loeb g. Col and gave
him an ordc- 20 buy. at the marke..
1000 shares OF Northern Pacific com
mon for my account. IL said 'Ail
right and a. dealings that day III
Northern Pacific common .shares con.
tinucd 10 be very heavy. | felt tha'.
come what might. I had control of
Northern Pacific. common stock and all.
ION Monday. the sth Of May. North
crn Pacific came strong from Londol
and opened with burst OF activity IN
the street. and having had no conflrma-
tion from Kuhn. Loeb 4 co. OF the
purchase OF tho 1000 shares OF NORTH
ern Pacific which had ordered on
Saturday morning. called Heinshelmer
up and asked HIM why I had gotten no
report Of the execution Of my order.