Harriman vs. Hill: Wall Street's Great Railroad War Paperback Author: | Language: English | ISBN:
0816683654 | Format: PDF, EPUB
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- Paperback
- ISBN-10: 0816683654
- ISBN-13: 978-0816683659
Larry Haeg's book "Harriman vs. Hill: Wall Street's Great Railroad War," describes an event that has been largely forgotten in American business history. The event was a fight between the titular protagonists, and their financiers, for control of Northern Pacific Railway. Haeg, formerly an executive vice president of corporate communications for Wells Fargo & Company and a broadcast journalist, decided to write this story when he was unable to find a "full-length account of this story."
Publisher University of Minnesota Press introduces the book thusly: "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." It is important to put the events into historical context, however, so Haeg begins with an introduction of the "railroad world" of 1901, when they were near the pinnacle of their power and influence. After a list of "dramatis personae," he introduces the principles of the story: James Jerome Hill and John Pierpont Morgan on one side, and Edward Henry Harriman and Jacob Henry Schiff on the other. Haeg spends 54 pages fleshing out these four individuals, which allows the reader to get to know what motivated their actions in the upcoming story.
Harriman, concerned about linking his Union Pacific to Chicago and the eastern railroads, initially attempts to acquire the Chicago, Burlington & Quincy. Hill, Morgan and CB&Q president Charles Perkins thwart this, as CB&Q is sold to GN and NP for $215 million in bonds and scrip. In response, Harriman, backed by financier Schiff, begins to surreptitiously acquire Northern Pacific stock.
Larry Haeg brings to life an era when Wall Street was the wild west and regulation was nonexistent. The giants of finance and industry dominated the stage like never before or after. The great railroad war arises out of the the strategic dilemma faced by both Harriman's Union Pacific and Hill's Great Northern. The eastern terminus of the Union Pacific is St. Louis and the eastern terminus of the the Great Northern is St. Paul. In order to efficiently bring grain from the west and trade to and from China both needed access to the the great railroad hub of Chicago. That access could be provided by the Chicago, Burlington and Quincy which was controlled by the Northern Pacific. Each fears that control by the other would lock them out of Chicago.
Harriman starts the war by quietly gobbling up common and preferred shares of Northern Pacific though his banker Jacob Schiff of Kuhn Loeb. Hill seeing the activity in Northern Pacific starts buying too through his banker, J.P. Morgan. The war is on. Soon more stock is bought than can actually be delivered because short sellers seeing the rise in Northern Pacific stock come in and short the stock. A corner, where no deliveries can be made, ensues driving the stock of Northern Pacific up from $110 a share to an astounding $1000 a share in two days. Realizing a corner had taken place, Schiff and Morgan agree to settle at $150 a share and Northern Pacific drops precipitously to $150 a share.
The titans then settle there dispute with a three way merger bringing the railroads under the roof of a newly formed holding company, Northern Securities controlled by Hill and Harriman's Union Pacific.
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