Because of his imperial lifestyle and personality—and perhaps also because of the herd instincts of journalists —J. P. Morgan in the first decade of this century seemed to many the only important investment banker in the country. Certainly today he is the only one of that era who is still a household name. But of course there were many others of considerable importance on Wall Street, including George F. Baker of the First National Bank and James Stillman of the National City. (In later years these two institutions merged to form today’s giant Citibank.)

But most on Wall Street would have agreed that if Morgan had an equal, it was Jacob Schiff, senior partner of Kuhn, Loeb and Company. Like Morgan, Schiff came from an old and affluent family, but from a different country and a different religion. Born in Frank-furt-am-Main, Germany, on January 10, 1847, Schiff could trace his Jewish ancestry back to the 137Os. Also like Morgan, Schiff never had any doubt what he wanted to do in life. In 1875 he moved permanently to New York and became a partner in Kuhn, Loeb, soon marrying Therese Loeb, the senior partner’s daughter. Within a few years he was running the firm and doing much profitable international business with his extensive connections in Europe.

In the 1880s and 1890s he, again like Morgan, was heavily involved in reorganizing railroads, giving them a rational capital structure and seeing that management adhered to the new standards of conduct. Schiff was much more interested in the minutiae of railroading than Morgan, and in 1898 Kuhn, Loeb reorganized the Union Pacific Railroad. Morgan was not involved because he did not trust E. H. Harriman, its leading stockholder, but Schiff thought he discerned a real railroad man, and he was right. Harriman may not have been Morgan’s idea of a gentleman, but he was a genius at running railroads and soon turned the nearly derelict Union Pacific into one of the most profitable railroads in the country.

In 1901 James J. Hill, who controlled the Great Northern Railroad and was the largest stockholder in the Northern Pacific, used the latter to seize control of the Chicago, Burlington and Quincy, a smaller road that threatened the Union Pacific’s territory. When Hill refused to address Harriman’s concerns, Harriman determined to get control of the Burlington by seizing control of the Northern Pacific. Morgan was Hill’s banker, so an attack on Hill was a direct attack on Morgan. Before long Schiff had quietly purchased a majority of the preferred stock (which had equal voting rights) in Northern Pacific and held enough common stock to have an overall majority. Morgan and Hill had been caught napping.

Morgan was in Europe and received a frantic cable asking for authority to buy 150,000 common shares of Northern Pacific at the opening of the market on Monday morning, May 6, 1901. If Hill could get a majority