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Harriman vs. Hill

Wall Street’s Great Railroad War

2013
Author:

Larry Haeg

Harriman vs. Hill

The two most powerful men in the nation’s dominant industry battle for control of the Northern Pacific Railway, forever changing the landscape of American business

In 1901, two titans of American railroads set their sights on the Northern Pacific. The subsequent battle was unprecedented in the history of American enterprise, pitting not only James J. Hill against Edward Harriman but also Big Oil against Big Steel and J. P. Morgan against the Rockefellers, with a supporting cast of enough wealthy investors to fill the Waldorf Astoria’s ballroom.

I first read about the Northern Pacific Corner when I was ten years old. When I opened my office on January 1, 1962, I put on the wall a framed copy of the New York Times of May 10, 1901, describing the fateful prior day. Larry Haeg now tells the full story, and I enjoyed every word of it.

Warren Buffett

In 1901, the Northern Pacific was an unlikely prize: a twice-bankrupt construction of the federal government, it was a two-bit railroad (literally—five years back, its stock traded for twenty-five cents a share). But it was also a key to connecting eastern markets through Chicago to the rising West. Two titans of American railroads set their sights on it: James J. Hill, head of the Great Northern and largest individual shareholder of the Northern Pacific, and Edward Harriman, head of the Union Pacific and the Southern Pacific. The subsequent contest was unprecedented in the history of American enterprise, pitting not only Hill against Harriman but also Big Oil against Big Steel and J. P. Morgan against the Rockefellers, with a supporting cast of enough wealthy investors to fill the ballroom of the Waldorf Astoria.

The story, told here in full for the first time, transports us to the New York Stock Exchange during the unfolding of the earliest modern-day stock market panic. Harriman vs. Hill re-creates the drama of four tumultuous days in May 1901, when the common stock of the Northern Pacific rocketed from one hundred ten dollars a share to one thousand in a mere seventeen hours of trading—the result of an inadvertent “corner” caused by the opposing forces. Panic followed and then, in short order, a calamity for the “shorts,” a compromise, the near-collapse of Wall Street brokerages and banks, the most precipitous decline ever in American stock values, and the fastest recovery. Larry Haeg brings to life the ensuing stalemate and truce, which led to the forming of a holding company, briefly the biggest railroad combine in American history, and the U.S. Supreme Court ruling against the deal, launching the reputation of Justice Oliver Wendell Holmes as the “great dissenter” and President Theodore Roosevelt as the “trust buster.”

The forces of competition and combination, unfettered growth, government regulation, and corporate ambition—all the elements of American business at its best and worst—come into play in the account of this epic battle, whose effects echo through our economy to this day.

Harriman vs. Hill

Larry Haeg is former executive vice president of corporate communications for Wells Fargo & Company and a former broadcast journalist.

Harriman vs. Hill

I first read about the Northern Pacific Corner when I was ten years old. When I opened my office on January 1, 1962, I put on the wall a framed copy of the New York Times of May 10, 1901, describing the fateful prior day. Larry Haeg now tells the full story, and I enjoyed every word of it.

Warren Buffett

This book is a page-turner. Even for the reader that knows what is about to happen, Larry Haeg is able to convey a sense of excitement about the events’ unfolding.

H. Roger Grant, author of Railroads and the American People

Harriman vs. Hill is a fascinating read. It treats an important episode in business and financial history, fleshes it out in more detail than any previous author has done, and covers the ground in an engaging style. Haeg’s approach is original and clever in the best sense of the word.

Maury Klein, author of Union Pacific

Illuminating Gilded Age tale about a two-bit railroad that suddenly became an irresistible prize for the likes of J.P. Morgan and J.D. Rockefeller to fight over, then was absorbed into the first trust Teddy Roosevelt busted.

American History Magazine

His rapid-fire retelling of events together with colorful descriptions of the principals and the time period will hold the interest of railroad enthusiasts as well as students of business history.

Library Journal

Haeg, former vice president of communications for Wells Fargo, writes economic history as if it were a novel and draws readers along complicated financial twists and makes them like it.

Red Wing Republican Eagle

This book is narrative history at its best.

EH.net

Mr. Haeg conveys a vivid picture of the Gilded Age in splendor and in turmoil.

The Wall Street Journal

This book is an excellent and enlightening read that virtually anyone with curiosity and interest in rail history will benefit from and enjoy owning.

Model Railroad News

At last, someone has written one of the extremely rare well-balanced narratives about the history of America’s railroads and the pioneer entrepreneurs who built them.

Washington Times

The author is a master storyteller as he transports his readers back in time to the trading floor of the New York stock Exchange or to business meetings aboard Morgan’s yacht as the events played out.

Michigan Railfan

Haeg’s account of the Great Railroad War is impeccable. The research is careful and thorough, and the writing is superb. This book is a must-read for anyone interested in American business and financial history.

The Journal of Economic History

Middle West Review

This book is unusually well written and lively.

Great Plains Quarterly

Haeg brilliantly evokes the rococo texture of Wall Street at the end of the Gilded Age. He describes vivid personalities and the arcane workings of stock trading in luxuriant detail. Haeg has made a complicated and important story accessible of all.

Journal of American Culture

Harriman vs. Hill

Contents

Preface
Acknowledgments
Dramatis Personae, 1901
Introduction: A Railroad World

1. Mr. Morgan and Mr. Hill
2. Mr. Harriman and Mr. Schiff
3. The End of the “Days of Small Things”
4. The Battle for the Burlington
5. “Peacemakers” Arming for Combat
6. “The Weak Link in Your Chain”
7. The Consequences of a “Hostile Act”
8. Decision at Temple Emanu-El
9. “Hell is Empty and All the Devils are Here”
10. Northern Insecurities
11. The “Big Stick”
12. A Thunderbolt out of the Blue
13. Great Cases and Bad Law

Epilogue: The Last Corner

Appendixes:
Associate Justice Holmes Dissent
1901 Railroads
1901 Wall Street Primer

Notes
Bibliography
Index