Roger Lowenstein reviews the book "Harriman vs. Hill"

Takeover wars seem to have lost their sizzle. What happened to the battles of corporate goliaths? Where have they gone, those swaggering deal makers? "Harriman vs. Hill" is a corporate dust-up that takes us back to the beginning of the 20th century, when tycoons who traveled by private rail merrily raided each other's empires while the world around them cringed. 

The title characters—Edward Harriman and James J. Hill —though today strangely forgotten, were among the most powerful railroad barons in the country. Their respective bankers— Jacob Schiff and J.P. Morgan Sr.—were the very captains of Wall Street. 

At the time, railroads were America's most important industry, and moguls dreamed of controlling a westward route connecting Chicago to the Pacific Northwest. Yet few suspected that the mother of all battles was to commence when, in the spring of 1901, the stock of Northern Pacific, a down-at-heel road connecting St. Paul, Minn., to Portland, Ore., mysteriously began to rise.

Buffett: I like history. I like financial history particularly. I used to read everything in sight on that. Sometimes I ask the students, for example, about the Northern Pacific Corner. These are MBAs from prestigious ... They don't know about it. But it's useful to realize how extraordinary things can happen occaisionally. But I was talking to Alan Greenspan about it and he knew all about it. He could practically give it to me hour by hour. There's some advantages to knowing, you should know financial history.

WB: In 1962 I put seven items on the office wall. I made photocopies of pages from financial history. In the Northern Pacific Corner, they both bought more than 50% of the stock, each, and both really wanted it. Interesting things happened. 

CM: To the shorts. 

WB: 170 to 1000 per share trading for cash because the shorts needed it. A brewer in Troy NY committed suicide by diving in hot beer because of margin call. How impossible for $170 stock to go to$1000? Those seven days I put up on wall, life in financial markets has no relation to Sigma’s. If everyone who operated in financial markets operated without standard [error], they’d be better off. 

CM: Well sure, it has created a lot of false confidence. Fat tails. In Solomon meetings we’d roll our eyes when risk control people were talking.