Daniel Drew (1797–1879) stock trader and speculator

Born in Carmel, New York, Drew became the best-known and most feared stock trader of his era. Possessing no formal education, he joined the army to serve in the War of 1812 in order to receive a $100 payment for those who enlisted. He took the money and became a cattle drover and horse trader. He developed a reputation for delivering cattle that had been fed excessive amounts of water to make them look fat. The term watered stock was used to describe the condition, and the term carried over to the stock market to mean stock that had been seriously diluted.

Using money supplied by Henry Astor, Drew expanded his operations to the west and became one of the first drovers to herd cattle across the Allegheny Mountains. In 1834, he entered the steamboat business and became a competitor of Cornelius VANDERBILT, with whom he would battle again in later years. In 1844, he moved to Wall Street, opening the firm of Drew, Robinson, & Co., where he began a career of stock manipulation and speculation. In 1853, he became involved with the ERIE RAILROAD. By 1857, he had become a director of the Erie and was widely known for manipulating its stock. But he was a loser in a classic confrontation with Cornelius Vanderbilt in the manipulation of shares of the Harlem Railroad in 1864.

One of the first traders to use public deception to his own advantage, Drew became famous for his notorious “handkerchief trick,” whereby he “accidentally” dropped a handkerchief in a New York club with stock tips contained inside. Traders picked it up and read them, thinking they had become privy to his trading secrets when they were actually being manipulated by him.

Drew engaged in the infamous “Erie Wars” with Jay GOULD and Jim FISK against Cornelius Vanderbilt to gain control of the railroad between 1866 and 1868. Along with his two allies, he managed to swindle Vanderbilt out of several million dollars by dumping newly printed shares of the Erie on the market despite a court order. After 1870, his luck failed him after being duped by Gould and Fisk, who sold Erie stock in England in a plan to foil him; he lost more than a million dollars. As a result, he became bankrupt in 1876.

Although widely reputed to be a curmudgeon and barely literate, Drew donated money for a seminary in New Jersey, which subsequently became Drew University. He died in 1879, still remembered as one of the most feared stock traders and manipulators of his era.

Further reading

• Adams, Charles F., and Henry Adams. Chapters of Erie and other Essays. Boston: James R. Osgood, 1871. 
• Browder, Clifford. The Money Game in Old New York: Daniel Drew and His Times. Lexington: University Press of Kentucky, 1986. 
• White, Brouck. The Book of Daniel Drew. New York: Citadel Press, 1980.