The two most powerful men in the nation’s dominant industry, Edward H. Harriman and James J. Hill, got into a fight in 1901 for control of the nation’s western railroads. The battle also pitted the Rockefellers versus J. P. Morgan, “Big Oil versus Big Steel,” and the nation’s two largest banks, First National and City National. The two sides fought over a government-chartered northern “transcontinental” railroad that became the key to control of Chicago and Pacific trade with emerging markets in Asia. In the span of only seventeen hours in four days in May 1901 its stock rocketed from $110 a s ... More

The two most powerful men in the nation’s dominant industry, Edward H. Harriman and James J. Hill, got into a fight in 1901 for control of the nation’s western railroads. The battle also pitted the Rockefellers versus J. P. Morgan, “Big Oil versus Big Steel,” and the nation’s two largest banks, First National and City National. The two sides fought over a government-chartered northern “transcontinental” railroad that became the key to control of Chicago and Pacific trade with emerging markets in Asia. In the span of only seventeen hours in four days in May 1901 its stock rocketed from $110 a share to $1,000, the result of an inadvertent “corner” in its shares by the opposing forces. It resulted in a calamity for the “shorts” before a compromise was reached, the near collapse of Wall Street, the most precipitous decline ever in American stock values, and the fastest recovery. The stalemate led to the creation of a holding company, briefly the largest railroad combine in American history, which the U.S. Supreme Court narrowly declared unconstitutional. The ruling launched the reputations of Justice Oliver Wendell Holmes as the “great dissenter” and President Theodore Roosevelt as the “trust buster.” The court ruling energized the so-called “progressive’ movement, strengthened enforcement of the Sherman Act as the “first effort to control the economy at large,” and led to stifling government regulation that crippled America’s railroads for seven decades.