Post by hermannmaier0 on Oct 11, 2005 9:22:13 GMT -6
By: jcline
11 Oct 2005, 11:00 AM EDT
Msg. 263759 of 263773
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Old, but memorabe........
Then in May, Northern Pacific stock shot up so fast it seemed to levitate. Hill, who had
been beguiled by Bacons beauty, was troubled by bad dreams. Asleep in his private
railroad car in Seattle, he was visited by “a dark complected angel" who warned of
trouble in New York. Hill raced clear across America to Wall Street. May 4th, he alerted
Bacon to what he saw catastrophe in the making. They called Pierpont, now in
Aix-les-bains, and awaited instructions.
At this point, the Harriman-Schiff forces 40,000 shares short of majority control of the
Northern Pacific. That Saturday morning, Harriman orders Kuhn, Loeb to buy back the
needed stock, but Jacob Schiff was attending services at Tempe Emanu-el, and the
order never got executed. The lapse was fateful, for the next day, Pierpont told Bacon
to purchase 150,000 shares at any price. That Monday morning, Morgan brokers fanned
out across the Exchange floor, and the insane trading in Northern Pacific ensued.
The jumps in the stock were staggering. On Tuesday , May 7th, the stock closed at over
$143--a gain of 70 points in three days. the next day , it shot up 200 points. This was a
corner, a bloody trap for speculators. Speculators kept "shorting " the stock--that is
selling borrowed shares in the belief that the bubble would pop and enable them to buy
back the shares at a cheaper price. Instead, the Northern pacific geyser keep rising,
forcing them to liquidate shares of other companies to pay for their borrowed Northern Pacific shares. Hence, the problem was generalized to the entire stock market.
By Wednesday, almost every stock on the exchange was crashing, with money sucked
From the rest of the list to feed the spectacularly surging Northern Pacific. Then came Thursday, May 9th, and the biggest market crash in a century. Northern Pacific zoomed Up as much as 200 or 300 points a trade, finally hitting 1000. Then it dropped 400 points on a single trade. The exchange was a scene of wild pandemonium as speculators found it impossible to locate certificates to cover short sales. The New York Times reported "Brokers acted like insane men.....Big men lightly threw little men aside, and the little men, fairly crying with indignation, jumped anew into the fray, using hand and arms, elbows, feet, -anything to gain their point. .... To the speculators in the distant gallery of Produce exchange it was something incomprehensible, almost demonic--- this struggle, this Babel of voices, these wild eyed excited brokers, selling and buying, buying and selling."
When the brokers appeared with Northern Pacific certificates, they were clawed by men
Who feared they would be ruined without them. One broker hired a train from Albany,
Just to deliver one certificate of five hundred shares. Amid this free for all, Pierpont
Morgan regained control of the Northern Pacific, but at a price of full blown panic. It was the madly destructive act of a egotist bent on winning at any cost. The carnage ended
With a new Morgan partner, George Perkins, acting with Schiff and Harriman, announced that the short sellers would be allowed to buy up shares at $150 a share. Had the action not been taken, more than half the brokerage houses on Wall Street would have gone belly up.
...excerpt taken from...."The House of Morgan", by Ron Chernow
11 Oct 2005, 11:00 AM EDT
Msg. 263759 of 263773
Jump to msg. #
Old, but memorabe........
Then in May, Northern Pacific stock shot up so fast it seemed to levitate. Hill, who had
been beguiled by Bacons beauty, was troubled by bad dreams. Asleep in his private
railroad car in Seattle, he was visited by “a dark complected angel" who warned of
trouble in New York. Hill raced clear across America to Wall Street. May 4th, he alerted
Bacon to what he saw catastrophe in the making. They called Pierpont, now in
Aix-les-bains, and awaited instructions.
At this point, the Harriman-Schiff forces 40,000 shares short of majority control of the
Northern Pacific. That Saturday morning, Harriman orders Kuhn, Loeb to buy back the
needed stock, but Jacob Schiff was attending services at Tempe Emanu-el, and the
order never got executed. The lapse was fateful, for the next day, Pierpont told Bacon
to purchase 150,000 shares at any price. That Monday morning, Morgan brokers fanned
out across the Exchange floor, and the insane trading in Northern Pacific ensued.
The jumps in the stock were staggering. On Tuesday , May 7th, the stock closed at over
$143--a gain of 70 points in three days. the next day , it shot up 200 points. This was a
corner, a bloody trap for speculators. Speculators kept "shorting " the stock--that is
selling borrowed shares in the belief that the bubble would pop and enable them to buy
back the shares at a cheaper price. Instead, the Northern pacific geyser keep rising,
forcing them to liquidate shares of other companies to pay for their borrowed Northern Pacific shares. Hence, the problem was generalized to the entire stock market.
By Wednesday, almost every stock on the exchange was crashing, with money sucked
From the rest of the list to feed the spectacularly surging Northern Pacific. Then came Thursday, May 9th, and the biggest market crash in a century. Northern Pacific zoomed Up as much as 200 or 300 points a trade, finally hitting 1000. Then it dropped 400 points on a single trade. The exchange was a scene of wild pandemonium as speculators found it impossible to locate certificates to cover short sales. The New York Times reported "Brokers acted like insane men.....Big men lightly threw little men aside, and the little men, fairly crying with indignation, jumped anew into the fray, using hand and arms, elbows, feet, -anything to gain their point. .... To the speculators in the distant gallery of Produce exchange it was something incomprehensible, almost demonic--- this struggle, this Babel of voices, these wild eyed excited brokers, selling and buying, buying and selling."
When the brokers appeared with Northern Pacific certificates, they were clawed by men
Who feared they would be ruined without them. One broker hired a train from Albany,
Just to deliver one certificate of five hundred shares. Amid this free for all, Pierpont
Morgan regained control of the Northern Pacific, but at a price of full blown panic. It was the madly destructive act of a egotist bent on winning at any cost. The carnage ended
With a new Morgan partner, George Perkins, acting with Schiff and Harriman, announced that the short sellers would be allowed to buy up shares at $150 a share. Had the action not been taken, more than half the brokerage houses on Wall Street would have gone belly up.
...excerpt taken from...."The House of Morgan", by Ron Chernow
