The Panic of 1901 was the U.S. stock-market crash linked to a battle for control of the Northern Pacific Railway.
The struggle involved prominent financiers Edward Harriman and James J. Hill on one side and J. P. Morgan and James Speyer on the other. Investors aggressively bought Northern Pacific shares, driving the price sharply higher. When the buying contest ended, the stock price plunged, leaving short sellers unable to obtain shares and causing intense disruption on the New York Stock Exchange.
The episode was unusual because it centered on a single railroad share rather than a broad collapse that began with widespread bank failures. Northern Pacific’s preferred and common shares became extremely volatile, and the resulting losses damaged confidence in other railway securities.
The panic did not produce a depression on the scale of 1893. However, it highlighted the power of railroad combinations and financial syndicates. The later Panic of 1907 was a separate crisis and had different immediate causes, although both events exposed weaknesses in the U.S. financial system.