The 1901 U.S. stock-market panic began with a fight for control of the Northern Pacific Railway.
The contest involved financier E. H. Harriman and interests associated with J. P. Morgan and James J. Hill. Investors drove Northern Pacific shares sharply higher as the struggle intensified. On May 9, 1901, the stock price collapsed, producing a severe market disturbance on the New York Stock Exchange.
The panic was worsened by the fact that many traders had purchased shares on margin. When prices reversed, they faced demands for additional cash and rushed to sell other securities. The episode demonstrated how concentrated speculation in one major company could spread stress throughout the wider market.
The Panic of 1901 was brief compared with the long downturn that followed the Panic of 1893. It is also separate from the Panic of 1907, which involved a later banking crisis and helped motivate reforms that eventually led to creation of the Federal Reserve System in 1913.