for the consolidation of the Northern Pacific and the Great Northern.
Nothing came of that idea until Morgan stepped in. The “Colossus of Wall
Street,” or “Jupiter” as some called him, offered his plan of reorganization
to remedy the serious financial straits in which the Northern Pacific found
itself after the panic of 1893. Since he also wanted cooperation between the
lines, a “permanent alliance” of the two roads was agreed to in 1896. Hill
was now working with Morgan instead of Kuhn, Loeb, and the Schiff-Hill
friendship quickly cooled. On Hill’s initiative it was renewed later but not
before Kuhn, Loeb had allied itself with Hill’s archrival in the Northwest,
Edward H. Harriman.^40
In the meantime, Schiff had undertaken the reorganization of the
Union Pacific. A reorganization committee of 1893 that included Morgan
had attempted to solve problems of solvency and indebtedness, but it gave
up the seemingly hopeless task less than two years later. When Kuhn, Loeb
was asked to direct the reorganization, Schiff withheld consent until he
cleared the matter with Morgan. Banking ethics frowned on attempts to
wean clients from another firm, or as Schiff once put it, he wouldn’t do
anything that looked “as if we attempted to play in Morgan’s backyard.”
Moreover, a note of awe and fear always tinged his regard for Morgan’s
power, and he preferred to behave as a respectful junior rather than a brash
interloper. An early biography of Harriman by George Kennan, who con-
sulted Schiff before publication, told of Schiff’s meeting with Morgan. The
latter stated emphatically that he wanted nothing further to do with the
Union Pacific and that Schiff was free to proceed as he pleased. Kennan
and others have pointed out that Morgan’s failure to see the potential of
the that line proved to be a grave miscalculation.^41
Schiff formed a reorganization committee that included the National
City Bank and thus Rockefeller money, but he assumed the all-consuming
task of hands-on manager. “He could conceive financial transactions of gi-
gantic lines,” a partner and intimate friend observed, “but at the same time,
no business detail escaped his attention.” Always one who had difficulty in
delegating authority, Schiff sacrificed his vacation pending reorganization
lest his responsibilities to his fellow committeemen be overlooked. A year
later his reorganization plan faced serious obstacles. Rumor had it that
Morgan had undergone a change of heart and was causing the problems.
Again Schiff called at 23 Wall Street, and again Morgan disclaimed any
interest. Shortly thereafter, Morgan came up with the name of the culprit,
Edward Harriman. The latter openly admitted to Schiff that he had
blocked Kuhn, Loeb’s plan. He intended to reorganize the Union Pacific
himself, he said, because he wanted to add the railroad to his other lines.
Willing to cooperate with Schiff, he stated that his price was the chairman-
ship of the railroad. Since Harriman enjoyed easy access to credit reserves
that surpassed Kuhn, Loeb’s, Schiff compromised. He put Harriman on
14 Jacob H. Schiff