The 1901 U.S. stock-market collapse after the Northern Pacific Railway corner was called the Panic of 1901.
The crisis centered on a battle for control of the Northern Pacific Railway. Investors led by James J. Hill and J. P. Morgan competed with E. H. Harriman’s group, and speculation drove Northern Pacific shares sharply higher. On May 8, 1901, the stock suddenly reversed, leaving traders who had sold shares short unable to obtain them except at extreme prices.
The corner temporarily pushed Northern Pacific above $1,000 per share. When the squeeze ended, prices across the New York Stock Exchange fell sharply. The disturbance damaged investor confidence and contributed to the formation of Northern Securities, a railroad holding company later challenged by the U.S. government.
The Panic of 1901 is distinct from the Panic of 1907, which began with a failed United Copper speculation and a trust-company run. Both crises involved concentrated speculation, but the 1901 episode was especially associated with a railroad-share corner and short selling.