The Panic of 1901 was the first major U.S. stock-market crash of the 20th century and followed the 1901 Northern Pacific corner.
The crisis began with a struggle for control of the Northern Pacific Railway. Investors led by E. H. Harriman and James J. Hill competed with interests associated with J. P. Morgan and Jacob Schiff. Speculators bought shares aggressively, and a shortage of stock available for trading produced extreme price movements.
On May 9, 1901, Northern Pacific shares plunged after the corner unraveled. The shock spread to other railway securities and caused substantial losses on the New York Stock Exchange. The episode demonstrated how concentrated ownership and speculative trading could destabilize the broader market.
The Panic of 1901 is sometimes confused with the Panic of 1907, which produced a much wider banking emergency and helped motivate later U.S. financial reforms. The 1901 event was primarily a securities-market crisis connected to a railway-control battle.