The 1901 U.S. market crash that followed a struggle for control of Northern Pacific Railway was the Panic of 1901.
The crisis began during a battle between rival investor groups associated with E. H. Harriman and James J. Hill on one side and J. P. Morgan and James J. Hill’s allies on the other, with Edward H. Harriman seeking influence over Northern Pacific. Heavy buying drove the railroad’s shares to extraordinary levels before a sudden reversal.
On May 9, 1901, Northern Pacific shares plunged, producing severe losses for speculators and spreading fear through the New York market. The episode was brief compared with later depressions, but it exposed the danger of concentrated control battles and speculative leverage.
The Panic of 1901 is easily confused with the Panic of 1907. The earlier panic centered on one railroad-control contest, whereas 1907 involved trust-company runs and a broader banking crisis.