f Oregon. When, therefore, the Northern Pacific
began a little later to build into territory in Oregon and Washington
which the Union Pacific regarded as a part of its own preserves, much
bad feeling was engendered between the two interests. Matters were
brought to a climax in the spring of 1901 when the Harriman people
suddenly made the discovery that the Hill-Morgan combination had been
quietly buying control of the valuable Chicago, Burlington and Quincy
Railroad, which operated a vast system west and northwest of Chicago,
penetrated as far into the Union Pacific main-line territory as Denver,
and connected at the north with the eastern terminals of both the Great
Northern and Northern Pacific systems. This move meant but one thing to
Harriman: the Hill-Morgan interests were trying to surround the
Union Pacific and make it powerless, just as the Southern Pacific had
attempted to do many years before.

Harriman now played one of his bold strokes. He immediately began to
purchase Northern Pacific stock in the open market in order to secure
control of that property. It was well known that while the Hill-Morgan
alliance dominated the Northern Pacific, it did not actually own a
majority of the stock, and to secure this majority was Harriman's
purpose. This move would effectually check the invasion of the Union
Pacific territory by giving the Harriman interests a voice in the
control of the Chicago, Burlington and Quincy.

The price of Northern Pacific common stock soared day after day until on
May 9, 1901, it sold at $1000 a share, and a momentary panic ensued. At
the time Morgan was on the ocean and could not be reached. His partners
were apparently not equal to the emergency. But Harriman was. When the
panic reached its height, both interests had purchased far more than a
majority of Northern Pacific stock--in contracts for future delivery.
It was seen that to insist on the delivery of shares which did not exist
would not only bankrupt every "short" speculator, large and small, but
would undoubtedly bring all Wall Street tumbling down like a house of
cards. So, in the midst of the excitement, the two interests reached a
compromise.

The outcome was the formation of the Northern Securities Company with a
capital of $400,000,000, nearly all of which was issued to acquire the
capital stocks of the Northern Pacific and Great Northern railroads.
All the properties, including the Burlington, thus came under the joint
contr