The 1901 U.S. market panic caused by the attempted corner of Northern Pacific Railway shares was the Panic of 1901.
The struggle centered on control of Northern Pacific Railway. Investor E. H. Harriman sought to acquire enough shares to control the company, while financier James J. Hill and J. P. Morgan supported a competing interest. On May 9, 1901, Northern Pacific shares rose dramatically as buyers attempted to obtain the limited supply of stock.
The corner trapped short sellers, who had sold shares they did not own and then found it difficult to buy them back. Trading became chaotic, and the stock’s extraordinary rise was followed by a sharp collapse. The panic spread to other securities and caused heavy losses for investors, although it was relatively brief compared with later nationwide financial crises.
The event is often confused with the Panic of 1907 because both occurred in the United States and involved financial-market stress. They were separate episodes six years apart. The 1901 panic grew chiefly from a railroad-control battle, whereas the 1907 panic involved banking instability and helped motivate later financial reforms.