Erie War
Encyclopedia
The Erie War was a 19th century conflict between American financiers for control of the Erie Railroad
, which operated in several American states and connected New York to Chicago.
Between 1866-1868 Daniel Drew
conspired along with James Fisk
and Jay Gould
to issue fraudulent Erie Railroad stock, thus "watering down
" the stock, of which Cornelius Vanderbilt
bought a large quantity. Vanderbilt lost more than $7 million in his attempt to gain control, although Gould later returned most of the money. Vanderbilt conceded control of the railroad to the trio. They were involved with the corrupt Tammany Hall
political party machine, and made Boss Tweed
a director of the Erie Railroad. Tweed (who later died in prison for embezzlement or fraud), in return arranged favourable New York legislation for them.
But in 1870, Fisk and Gould betrayed Drew, again manipulating the Erie Railroad stock price and causing him to lose $1.5 million. The Panic of 1873
cost him still more, and by 1876, Drew filed for bankruptcy
, with debts exceeding a million dollars and no viable assets. He died in 1879, dependent on his son for support.
Gould eventually gained the advantage in the conflict, but he had to relinquish control in 1872-73, following his loss of $1 million worth of Erie Railroad stock to the British con-man Lord Gordon-Gordon
. Public opinion was also hostile to him because of his involvement in the 1869 gold-rigging scandal
.
Erie Railroad
The Erie Railroad was a railroad that operated in New York State, New Jersey, Pennsylvania, Ohio, Indiana, and Illinois, originally connecting New York City with Lake Erie...
, which operated in several American states and connected New York to Chicago.
Between 1866-1868 Daniel Drew
Daniel Drew
-Biography:He was born in Carmel, New York.Drew was poorly educated. His father died when Daniel was fifteen years old. Drew enlisted and drilled, but because he enlisted too late, never fought in the War of 1812. After the war, he started a successful cattle-driving business. In 1823, he married...
conspired along with James Fisk
James Fisk (financier)
James Fisk, Jr. —known variously as "Big Jim," "Diamond Jim," and "Jubilee Jim"—was an American stock broker and corporate executive.-Early life and career:...
and Jay Gould
Jay Gould
Jason "Jay" Gould was a leading American railroad developer and speculator. He has long been vilified as an archetypal robber baron, whose successes made him the ninth richest American in history. Condé Nast Portfolio ranked Gould as the 8th worst American CEO of all time...
to issue fraudulent Erie Railroad stock, thus "watering down
Watered stock
Watered stock is an asset with an artificially-inflated value. The term is most commonly used to refer to a form of securities fraud common under older corporate laws that placed a heavy emphasis upon the par value of stock.- Origin of term :...
" the stock, of which Cornelius Vanderbilt
Cornelius Vanderbilt
Cornelius Vanderbilt , also known by the sobriquet Commodore, was an American entrepreneur who built his wealth in shipping and railroads. He was also the patriarch of the Vanderbilt family and one of the richest Americans in history...
bought a large quantity. Vanderbilt lost more than $7 million in his attempt to gain control, although Gould later returned most of the money. Vanderbilt conceded control of the railroad to the trio. They were involved with the corrupt Tammany Hall
Tammany Hall
Tammany Hall, also known as the Society of St. Tammany, the Sons of St. Tammany, or the Columbian Order, was a New York political organization founded in 1786 and incorporated on May 12, 1789 as the Tammany Society...
political party machine, and made Boss Tweed
Boss Tweed
William Magear Tweed – often erroneously referred to as William Marcy Tweed , and widely known as "Boss" Tweed – was an American politician most notable for being the "boss" of Tammany Hall, the Democratic Party political machine that played a major role in the politics of 19th century...
a director of the Erie Railroad. Tweed (who later died in prison for embezzlement or fraud), in return arranged favourable New York legislation for them.
But in 1870, Fisk and Gould betrayed Drew, again manipulating the Erie Railroad stock price and causing him to lose $1.5 million. The Panic of 1873
Panic of 1873
The Panic of 1873 triggered a severe international economic depression in both Europe and the United States that lasted until 1879, and even longer in some countries. The depression was known as the Great Depression until the 1930s, but is now known as the Long Depression...
cost him still more, and by 1876, Drew filed for bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
, with debts exceeding a million dollars and no viable assets. He died in 1879, dependent on his son for support.
Gould eventually gained the advantage in the conflict, but he had to relinquish control in 1872-73, following his loss of $1 million worth of Erie Railroad stock to the British con-man Lord Gordon-Gordon
Lord Gordon-Gordon
Lord Gordon-Gordon, also known as Lord Gordon Gordon, Lord Glencairn and The Hon. Mr. Herbert Hamilton was a British fraud and impostor, responsible for one of the greatest swindles in the 19th century United States. He swindled $1 million from Jay Gould, who was fighting for control of the Erie...
. Public opinion was also hostile to him because of his involvement in the 1869 gold-rigging scandal
Black Friday (1869)
Black Friday, September 24, 1869 also known as the Fisk/Gould scandal, was a financial panic in the United States caused by two speculators’ efforts to corner the gold market on the New York Gold Exchange. It was one of several scandals that rocked the presidency of Ulysses S. Grant...
.