Fifty years in Wall Street
and resolved to let Drew remain. The Boston party was with him, but to
keep up the appearance of what had been formerly determined, the new
board was to be elected ostensibly without Drew, and a vacancy created
afterwards by which he could be chosen in the board. This method of
whipping the Devil around the stump was adopted to put public opinion
off its guard, and help to forward Vanderbilt’s purposes of
consolidation. The election scheme was successfully effected, but the
ruse, though well conceived, fell far short of accomplishing its
designs.
There were wheels within wheels during this speculative deal. Drew and
Vanderbilt entered into a secret alliance to exclude the Boston party,
who was Vanderbilt’s ally. The new board was elected, leaving Drew out.
This was a surprise to Wall Street, but a greater surprise was in store
for it when a vacancy was created the next day, and Drew was re-elected
to the Erie Board of Directors. The Street was confused and confounded,
and at a loss to know how to act, and the Boston party was groping
around to find out where it stood. Frank Work was elected to the Erie
Board in the Vanderbilt interest. A pool was then formed to put up Erie,
as it was in a very depressed condition. Drew was to manage the pool and
manipulate the market.
The proposed plan for consolidating with the Vanderbilt interests failed
because the Erie people said that the great railroad king would only
consent to give them one-third of the earnings, while they contributed
more than half to the pool. So, when this scheme collapsed, Vanderbilt
went on the speculative war path, and determined to snatch Erie from the
hands of the Ring in the way he had obtained Hudson. He began his
operations about the middle of February, 1868, and pursued his policy in
the courts for the purpose of limiting the apparently unlimited supply
of Erie stock.
In the leasing process above referred to with the Buffalo, Bradford &
Pittsburgh, the Erie clique added $140,000 a year to its income.
Mr. Work got an additional injunction to prevent Erie from issuing stock
in addition to the 251,058 shares which had appeared in the previous
report of the road, and forbidding a guarantee by Erie of the bonds of
any other road, and Drew was further restrained from any transactions in
Erie until he should return the 68,000 shares of capital stock to the
treasury.
It will thus be seen that Vanderbilt had taken very rigid measures to
“tie up” the hands of the veteran speculator.
The case was set down for hearing in the court of the immaculate Judge
Barnard, on the 10th of March. When Vanderbilt thought he had everything
fixed to force Drew to ruin himself by the return of these shares, which
would enable Vanderbilt to effect his “corner,” he was checkmated by a
counter injunction issued in the interest of the Erie people by Judge
Balcom, of Binghamton, which stayed all proceedings in Barnard’s court.
Richard Schell then applied to Judge Ingraham and got out another
injunction in the interest of the Vanderbilt party, staying all
proceedings before Judge Balcom.
In the meantime the Erie directors were busy preparing their new issue
of stock, despite the injunctions, in order that the bulls of the
Vanderbilt party might be generously fed with Erie when the opportunity
should arrive.
The Executive Committee of Erie resolved to issue bonds for
improvements, extensions and steel rails. The bonds were convertible
into stock at not less than 72½. Five millions of these were
manufactured by the Erie paper mill and printing press, to be exchanged
for Vanderbilt’s good, solid cash.
A great difficulty presented itself at this juncture, which, even to the
majority of clever speculators, would have been insurmountable. The
genius of “Jim” Fisk was called in to cut the Gordian knot. The
certificates of the new Erie shares were in the hands of the secretary
of the company, but he was enjoined from issuing them. They had been
made out on Saturday night. On Monday the secretary directed a
messenger, in the Erie office in West street, to take the books
containing the certificates to the transfer office in Pine street. The
messenger took the books and walked out. He was hardly a minute absent
when he returned, apparently frightened, without the books. He stated
that Mr. Fisk, who had been standing at the door, took the books from
him, and ran away with them!
The certificates were then where no injunction could molest them. The
next day the convertible bonds were found upon the secretary’s desk. In
a day or two afterwards the certificates appeared in Wall Street. An
order was obtained from Judge Gilbert enjoining all the previous orders
of that legal luminary, Judge Barnard. Mr. Drew then threw 50,000 shares
of Erie stock on the market. The boldness of the operation threw the
Vanderbilt brokers off their guard, for it never struck them for a
moment that Drew would risk contempt of court, and use the new issue of
Erie in the face of an injunction, so they eagerly devoured the fresh
bait before they got time to examine the quality of it or suspect its
origin.
Erie had opened at 80, and advanced to 83. When the facts became known
the stock broke, and declined to 71; but under heavy purchases by the
Vanderbilt party, soon recovered to 78. The “corner,” however, was
broken by the large blocks which Drew had thrown on the market, and
Vanderbilt was signally defeated, and had a narrow escape from being
completely swamped. The corner proved a boomerang to Vanderbilt. In his
wrath he again applied to the courts. As the result, the Erie clique
were obliged to fly and take refuge in Jersey City. Drew crossed the
ferry heavily loaded with a big carpet bag, which contained seven
millions, which had recently changed hands from Vanderbilt to himself in
the cornering operation.
Gould and Fisk decamped by different routes. When the party had taken
refuge in “Fort” Taylor (Taylor’s Hotel), safe from the laws of New
York, they determined that no papers should be served upon them, and
gave strict orders to the host that they would not receive anything in
the shape of letters or notes. Communications of all kinds were
prohibited except through persons well known to the clique, and the
waiters at the hotel were strictly enjoined to observe this rule, on
pain of being discharged.
While Vanderbilt was working hard to reach the refugees through the
courts, the Legislature and his detectives, he discovered a method of
communicating with Drew in spite of the precautions with which the
latter was surrounded. The Commodore’s scheme would have done honor to a
first-class Nihilist of the present day. He instructed a person in his
service to play temporary detective, to go to the Taylor Hotel in the
garb of a commercial traveler from the Far West, and to watch the
movements of Drew, so as to get a note slipped into his hand in a way
that he would be certain to read it.
The amateur detective watched for a day or two, and saw that his only
chance of success was when Drew was at lunch, and that the person who
waited on him must hand him the note. He saw the waiter, and told him
what he wanted, and that when he should be discharged the Commodore
would find him a better place.
The waiter agreed to hand Mr. Drew the note. Drew was enraged, sent for
the host, and the waiter was instantly discharged, only to enter
Vanderbilt’s service, according to agreement, at much higher
remuneration. The note of the Commodore, however, had the desired
effect. What that note contained, probably, nobody but Vanderbilt and
Drew ever knew. Though the friends of Drew attempted to frighten him
from going by arousing his suspicions of being kidnapped, he came over
to New York on the following Sunday and had an interview with the
Commodore. The matter was fixed up between them, and while Gould and
Fisk were fighting Vanderbilt tooth and nail at Albany, and Gould was
arrested and arraigned for contempt of court and other high crimes and
misdemeanors in the eyes of the Vanderbilt lawyers, Drew was left
unmolested to pursue the even tenor of his way.
As treasurer of Erie, however, Drew took an active part in the progress
of legislative matters. He was the first to see that Senator Mattoon,
who was chiefly instrumental in organizing the Investigating Committee,
wanted tangible recognition of his services before the Committee made
its report. He thought he was using Mattoon, but the Senator used him,
and gave his casting vote in favor of Vanderbilt, whom he used also,
after the most approved method of Albany legislators. Mattoon was also
found on the winning side at the end of the legislative farce, when the
bill in favor of the Erie clique and its over-issue of stock was passed,
and no doubt got his fair share of the half million with which Drew
fortified Gould from the Erie treasury when this gentleman went to
Albany to conduct the war in the Legislature against Vanderbilt
concerning the extra issue of Erie stock.
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CHAPTER XVI.
DREW AND THE ERIE “CORNERS.”
A HARMONIOUS UNDERSTANDING WITH THE COMMODORE.—HOW THE COMPROMISE WAS
EFFECTED.—AN INTERESTING INTERVIEW WITH FISK AND GOULD IN THE
COMMODORE’S BED-ROOM.—HOW RICHARD SCHELL RAISED THE WIND FOR THE
COMMODORE.—DREW’S SHARE OF THE SPOILS.—HE TRIES TO RETIRE FROM WALL
STREET, BUT CAN’T.—THE SETTLEMENT COST ERIE NINE MILLIONS.—GOULD AND
FISK “WATER” ERIE AGAIN, TO THE EXTENT OF TWENTY-THREE MILLIONS, BUT
LEAVE DREW OUT.-“UNCLE DANIEL” RETURNS TO THE STREET.—HE IS
INVEIGLED INTO A BLIND POOL BY GOULD AND FISK, LOSES A MILLION AND
RETREATS FROM THE POOL.—HE THEN OPERATES ALONE ON THE “SHORT” SIDE
AND THROWS AWAY MILLIONS.—HE TRIES PRAYER, BUT IT “AVAILETH
NOT.”-“IT’S NO USE, BROTHER, THE MARKET STILL GOES UP.”—PRAYING AND
WATCHING THE TICKER.—HOPELESSLY “CORNERED” AND RUINED BY HIS FORMER
PUPILS AND PARTNERS.
About the middle of April Drew emerged from his retreat in Jersey City,
and appeared openly in Wall Street, apparently without any fear of
arrest. Other members of the Erie clique had gone through the formality
of purging their contempt of court, but had not made their peace with
the Commodore, and things went forward without any special interruption
or excitement until July, when a settlement was made with Vanderbilt.
It was agreed that the Commodore should be relieved of 50,000 shares of
Erie stock at 70, for which he was to receive $2,500,000 in cash, and
$1,250,000 in bonds of the Boston, Hartford & Erie at 80. It was further
stipulated that he was to receive $1,000,000 for the privilege of
calling on him at any time within four months for the remaining 50,000
shares of Erie at 70. He was allotted two seats in the Erie Board of
Directors. All suits between the two high contending parties were to be
dismissed and all offenses whatsoever relating to the case, in the
language of the law, were to be condoned.
The manner in which the compromise was effected is not the least
interesting part of the famous deal in Erie. Some time after Drew had
got through his famous Sunday evening interview with the Commodore,
paving the way for his partners, by weeping and showing other
manifestations of deep contrition on account of his inglorious flight to
Jersey City, Gould and Fisk came over early one morning to see the
Commodore at his residence in Washington Place. Fisk told the story of
meeting the Commodore with great unction, in his bold, brazen and lively
manner. “Gould wanted to wait,” said Fisk, “until the Commodore should
have time to get out of bed, but I rang the bell, and when the door was