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Quote of the Day
“If you have to ask how much it costs, you can’t afford it.”
-J.P Morgan, who on this day in 1901 began a battle for control of Northern Pacific Railroad – A battle that would lead to one of the wildest days in stock market history:
April 24th – This Day in Stock Market History
April 24th, 1901 – On a day that the New York Times described as; “the most phenomenal day that Wall Street has yet seen“, volume on the New York Stock Exchange shatters records.
But it was not so much the volume of all stocks, but only one in particular, Union Pacific, that made this day so notable.
On this day, 662,000 shares of Union Pacific are traded – a volume that represented one-third of the entire daily volume for the NYSE and two thirds of all shares outstanding for the company!
Something is going on behind the scenes with railroad stocks, but investors are not sure what it is…
In 2 weeks it would become apparent that E.H. Harriman and J.P Morgan are fighting for control of Northern Pacific Railroad and attempting to corner the stock. The buying would lead to one of the wildest days in NYSE history on May 9th, 1901 when Northern Pacific stock vaults from 160 to 1,000 in just hours.
In what would become known as the “Panic of 1901”, two of Wall Street’s heavyweights went toe-to-toe in an attempt to gain the majority of shares in Northern Pacific.
E.H Harriman would make a surprise raid and attempt to accumulate enough shares to gain control of Northern Pacific. However, James Hill and J.P Morgan would quickly be tipped off of his efforts, and responded by ordering the purchase of as many Northern Pacific shares as could be found.
The panic is one of my personal favorite Wall Street history stories. It is said that James Hill (An ally of J.P Morgan and fellow railroad tycoon) set a new cross country speed record on his train to get back to New York from out west for the fight. Private trains were sent across the United States to buy the smallest of Northern Pacific lot sizes. One train was sent to Buffalo, NY for an investor selling just a few shares!
If you want to read more on the battle, and the subsequent panic, Chapter 8 of Panic on Wall Street is appropriately named “The Struggle of the Titans”, and describes this saga in great detail.
Best April 24th in Dow Jones Industrial Average History
1916 – Up 2.40%, 2.04 points.
Worst April 24th in Dow Jones Industrial Average History
1987 – Down 2.00%, 45.7 points.