"Don’t sell America short!” (or “Don’t sell the United States short!") is a famous Wall Street. phrase. It means to hold stock in the United States—whatever dips that there are, the value of the United States will increase in the long run.
The phrase has been attributed to legendary New York financier John Pierpont ("J. P.") Morgan (1837-1913), but early citations appear to credit James J. Hill (1838-1916), who founded the Great Northern Railway and helped to develop much of the American Northwest. Both Morgan and Hill were business partners, and the phrase could have appeared in 1901, when Northern Pacific had a “short squeeze.”
Wikipedia: J. P. Morgan
John Pierpont Morgan (April 17, 1837 – March 31, 1913) was an American financier, banker, philanthropist, and art collector who dominated corporate finance and industrial consolidation during his time. In 1892 Morgan arranged the merger of Edison General Electric and Thompson-Houston Electric Company to form General Electric. After financing the creation of the Federal Steel Company he merged the Carnegie Steel Company and several other steel and iron businesses to form the United States Steel Corporation in 1901. He bequeathed much of his large art collection to the Metropolitan Museum of Art in New York City and to the Wadsworth Atheneum of Hartford, Connecticut. He died in Rome, Italy, in 1913 at the age of 75, leaving his fortune and business to his son, Jack Pierpont Morgan.
Wikiquote: J. P. Morgan
John Pierpont Morgan (1837-04-17 – 1913-03-31) was an American financier, banker, philanthropist and art collector who dominated corporate finance and industrial consolidation during his time.
Remember, my son, that any man who is a bear on the future of this country will go broke.
Wikipedia: James J. Hill
James Jerome Hill (September 16, 1838 – May 29, 1916), was a noted Canadian-American railroad executive. He was the chief executive officer of a family of lines headed by the Great Northern Railway, which served a substantial area of the Upper Midwest, the northern Great Plains, and Pacific Northwest. Because of the size of this region and the economic dominance exerted by the Hill lines, Hill became known during his lifetime as the Empire Builder.
The Northern Pacific and the “short squeeze” of 1901
With 1901 and the start of the new century, James Hill now had control of both the Great Northern Railroad (which he had renamed the StPM&M), and the Northern Pacific (which he had obtained with the help of his friend J. P. Morgan, when that railroad went bankrupt in the depression of the mid-1890s). Hill also wanted control of the Chicago, Burlington and Quincy railroad because of its Midwestern lines and access to Chicago. Unfortunately for Hill, Union Pacific Railroad, the biggest competitor of Great Northern and Northern Pacific, also wanted control of Chicago, Burlington, and Quincy. Although Great Northern and Northern Pacific were backed by J. P. Morgan and James J. Hill, the Union Pacific was backed not only by its president, Edward H. Harriman, but by the extremely powerful William Rockefeller.
Quietly, Harriman began buying stock in Northern Pacific with the intention of gaining control of Chicago, Burlington, and Quincy. He was within 40,000 shares of control when Hill learned of Harriman’s activities and quickly contacted J. P. Morgan, who was on vacation in Europe at the time. Morgan, acting on behalf of his friend, ordered his men to buy everything they could get their hands on.
The result was chaos on Wall Street. Northern Pacific stock was forced up to $1,000 per share. Many speculators, who had sold Northern Pacific “short” in the anticipation of a drop in the railroad’s price, faced ruin. The threat of a real economic panic loomed. Neither side could win a distinct advantage, and the parties soon realized that a truce would have to be called. The winners of that truce were Hill and Morgan, who immediately formed the Northern Securities Company with the aim of tying together their three major rail lines. Unfortunately for the Hill-Morgan alliance, on the same day they formed the Northern Securities Company, President William McKinley was assassinated, placing Theodore Roosevelt—the “trust-buster"—in the office of President.
Yale Book of Quotations
edited by Fred R. Shapiro
New Haven, CT: Yale University Press
J. P. Morgan
U.S. financier, 1837-1913
Don’t sell American short.
Quoted in N.Y. Times, 27 Aug. 1925. Burton E. Stevenson, Home Book of Quotations, stated the following: “J. PIERPONT MORGAN, Quoted by his son in talk at the Chicago Club, 10 Dec. 1908. J. P. Morgan was paraphrasing his father, Junius Spencer Morgan, who is credited with the injunction, ‘Never sell a bear on the United States.’”
Money and Investments
by Montgomery Rollins
Boston, MA: Dana Ester & Company
The advice once given by a merchant of broad experience to a young man who thought, during 1893, that the commercial world had no bright future, “never to sell the United States short” was most sound. That young man held on to his goods and chattels and saw values exceed what they even had been before.
27 February 1908, Raleigh Herald (Beckley, WV) pg. 3, cols. 4-5:
In the Manufacturers’ Record of January 2 Mr. Charles A. Moore, president of Manning Maxwell & Moore, the great machinery builders and handlers, discussing the outlook for the future said: “I have never found if profitable to sell the United States short.” This same sentiment was expressed several years ago to a correspondent to the Manufacturer’s Record by Mr. Henry M. Flagler, who being asked his views of the future, suggested that every man of ability who would “keep his head above the financial waters and hot on the growth of the country would inevitably succeed.”
And it has been said that the father of Mr. J. P. Morgan once said to the latter: “The pessimists may win for a time, but in the long run the growth of the country will always beat them.”
13 September 1914, Fort Worth (TX) Star-Telegram, “‘Don’t Sell America Short,’ Warns James J. Hill,” pg. 12:
Wasn’t it “Jim” Hill who said to the scaremongers: “The man who sells the United States short is a damned fool?”
27 October 1916, New Smyrna News (New Smyrna Beach, FL), pg. 6, col. 1:
James J. Hill once said, in referring to pessimists and knockers in general, “The man who sells the United States ‘short’ is a damphool.”
5 February 1917, Albert Lea (MN) Evening Tribune, pg. 2, col. 1:
The late James J. Hill at one time said: “The man who sells the United States ‘short’ is a fool.” This will apply equally as well to the fellow who goes ‘short’ on Albert Lea or Freeborn county.
Index for Volume Two
(April, 1918 to April, 1919)
Cleveland, OH: The Mailbag Publishing Company
Pg. 40 (May 1918):
Jim Hill said “The man who sells the United States short is a d----d fool.”
27 August 1925, New York (NY) Times, pg. 12 ad:
“Don’t Sell America Short”—But Morgan never meant one always should be “long”
SINCE the late J. Pierpont Morgan uttered his famous “Don’t Sell America Short,” some twenty years or more ago, American business has multiplied and re-multiplied in proving his prophecy sound.
(Lord & Thomas Advertising—ed.)
New York City • Banking/Finance/Insurance • (0) Comments • Friday, May 09, 2008 • Permalink