9 May 1901: A fight over Northern Pacific triggers the Panic of 1901
In early May 1901 Edward Harriman and the J.P. Morgan and James Hill camp battled for control of the Northern Pacific Railway, buying up so many shares that short sellers could not cover. On May 9 Northern Pacific stock briefly hit $1,000 while the rest of the market crashed as speculators sold everything else to raise cash. The rivals soon made peace and the market recovered.
The lesson: Short sellers face unlimited losses; when a squeeze starts, everything else gets sold to pay for it.
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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