There was probably never a time in the history of railway enterprises when there were more schemes and negotiations with reference to the rearrangement of the railway map than are going on now….
The combinations proposed are of extraordinary importance. Under whatever names and in whatever legal forms they may be brought about, the purpose is to concentrate railway power in few hands for the double purpose of securing stability and perhaps advance in railway rates with resulting profits for those who hold railway securities.
—Wall Street Journal, January 3 and 9, 1901
The America to which Harriman returned from Alaska was a new world hurrying to be born. “The decade from 1896 to 1906,” enthused banker Henry Morgenthau, “was the period of the most gigantic expansion of business in all American history…. In that decade the slowly fertilized economic resources of the United States suddenly yielded a bewildering crop of industries…. All these swift growths demanded money: money for new plants—money for expansion—money for working capital. The cry everywhere was for money—more money—and yet more money.” 1
The bankers were happy to furnish the money at enormous profits to themselves. Even young Morgenthau caught his breath at the largesse of his chosen profession. Once he marveled to Stillman at the generous return on a transaction and was told in a tone of gentle rebuke, “You don't understand what profits we are in the habit of making.” 2
So much had happened so fast that observers despaired of keeping a perspective on events. Half a century of wrenching industrial development was hurtling toward the climax of its first phase. Machines replaced manual labor as the dominant source of productivity. The output of goods and services soared as the factory system superseded the home shop. Machines also moved onto the farm, enabling fewer people to produce more food. Large factories and plants in growing cities lured millions of people from the farm and from overseas with the promise of jobs. By 1900 the nation had 160 cities with a population of twenty-