Daniel Drew (July 29, 1797 – September 18, 1879) was an American businessman, steamship and railroad developer, and

financier An investor is a person who allocates financial capital with the expectation of a future return (profit) or to gain an advantage (interest). Through this allocated capital most of the time the investor purchases some species of property. Typ ...

. Summarizing his life, Henry Clews wrote: "Of all the great operators of Wall Street ... Daniel Drew furnishes the most remarkable instance of immense and long-continued success, followed by utter failure and hopeless bankruptcy".

Biography

Drew was born in Carmel, New York, in the family of Gilbert Drew and Catherine Muckleworth. He was poorly educated and saw hardship after his father, who owned a small cattle farm, died when Daniel was fifteen years old. Drew enlisted in the US Army during the

War of 1812 The War of 1812 (18 June 1812 – 17 February 1815) was fought by the United States, United States of America and its Indigenous peoples of the Americas, indigenous allies against the United Kingdom of Great Britain and Ireland, United Kingdom ...

but he did not see combat. After the war, he spent some time with a traveling zoo and then built a successful cattle-droving business. In 1820, he moved to New York City, where he established himself at the

Bull's Head Tavern Bull's Head Tavern was an establishment located on Bowery, a street in Manhattan, New York City. History The tavern opened around 1750. It was initially used as recruitment centerfor Loyalists fighting for the British in the American Revolution ...

in the Bowery, a place frequented by drovers and butchers doing business in the city. While running the tavern, he formed a partnership with two other drovers, buying cattle from neighboring counties and bringing them to New York for sale.McCabe Jr., James D., ''Great Fortunes and How They Were Made'', Trillarden
In 1823, he married Roxanna Mead. In 1834, he entered the

steamboat A steamboat is a boat that is marine propulsion, propelled primarily by marine steam engine, steam power, typically driving propellers or Paddle steamer, paddlewheels. Steamboats sometimes use the ship prefix, prefix designation SS, S.S. or S/S ...

business, purchasing a share of a boat operating on the

Hudson River The Hudson River is a river that flows from north to south primarily through eastern New York. It originates in the Adirondack Mountains of Upstate New York and flows southward through the Hudson Valley to the New York Harbor between New ...

. Competing with

Cornelius Vanderbilt Cornelius Vanderbilt (May 27, 1794 – January 4, 1877), nicknamed "the Commodore", was an American business magnate who built his wealth in railroads and shipping. After working with his father's business, Vanderbilt worked his way into lead ...

against the

Hudson River Steamboat Association The Hudson River Steamboat Association was a cartel that operated passenger steamboats on the Hudson River in the U.S. state of New York from 1832 to 1843. It successfully monopolized passenger steamboat traffic on the river between New York City ...

, he ran numerous profitable lines outside of

New York City New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...

. Around this time, Drew began to speculate in stocks. He founded the

brokerage firm A broker is a person or firm who arranges transactions between a buyer and a seller for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither role should be conf ...

of Drew, Robinson & Company in 1844, which dissolved a decade later with the death of his partner. After the firm's dissolution, he continued to work in the brokerage business as an independent operator. In 1857, Drew became a member of the board of directors of the

Erie Railroad The Erie Railroad was a railroad that operated in the northeastern United States, originally connecting New York City — more specifically Jersey City, New Jersey, where Erie's Pavonia Terminal, long demolished, used to stand — with Lake Erie ...

and used his position to manipulate the railroad stock price. He joined forces with Vanderbilt to rescue the Erie from bankruptcy, and also became a director of the

New York and Harlem Railroad The New York and Harlem Railroad (now the Metro-North Railroad's Harlem Line) was one of the first railroads in the United States, and was the world's first street railway. Designed by John Stephenson, it was opened in stages between 1832 and 18 ...

, where he collaborated again with Vanderbilt to prop up that company's finances. In 1864, Drew once again struggled with Vanderbilt, speculating on the stock of the New York and Harlem. Drew was selling the stock short, but Vanderbilt and his associates bought every share he sold, ultimately causing the stock price to rise from 90 to 285 in five months. Drew lost $500,000. In 1866 to 1868, Drew engaged in the

Erie War The Erie War was a 19th-century conflict between American financiers for control of the Erie Railway Company, which owned and operated the Erie Railroad. Built with public funds raised by taxation and on land donated by public officials and priva ...

, in which Drew conspired along with fellow directors James Fisk and

Jay Gould Jason Gould (; May 27, 1836 – December 2, 1892) was an American railroad magnate and financial speculator who is generally identified as one of the robber barons of the Gilded Age. His sharp and often unscrupulous business practices made hi ...

to issue stock to keep Vanderbilt from gaining control of the Erie Railroad. Vanderbilt, unaware of the increase in outstanding shares, kept buying Erie stock and sustained heavy losses, eventually conceding control of the railroad to the trio. In 1870, Fisk and Gould betrayed Drew, manipulating the stock price of the Erie Railroad and causing him to lose $1.5 million (Fisk was killed in January 1872 by a jealous rival over a mistress; Gould himself would later be swindled out of $1,000,000 worth of Erie railroad stock and never controlled the Erie Railroad). The

Panic of 1873 The Panic of 1873 was a financial crisis that triggered an economic depression in Europe and North America that lasted from 1873 to 1877 or 1879 in France and in Britain. In Britain, the Panic started two decades of stagnation known as the " ...

cost him still more, and by 1876, Drew filed for

bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debto ...

, with debts exceeding a million dollars and no viable assets. He died in 1879, dependent on his son for support.

Legacy

Daniel Drew left behind a controversial legacy, but few written records. Many details about his life come from Bouck White's 1910 ''Book of Daniel Drew.'' White, a socialist activist, claimed to have "found" Drew's journal, publishing it as an autobiography. Drew biographer Clifford Browder has called the book "an enduring fake." Daniel Drew's son also contested the authenticity of the work when it was published. In the introduction to White's 1915 ''Letters from Prison: Socialism a Spiritual Sunrise,'' the editor similarly notes that ''The book of Daniel Drew'' was "a work from his hite'spen" and "a freely rendered biography of Daniel Drew." Despite having been established as a forgery, many details and inaccurate quotes from ''The Book of Daniel Drew'' are still mistakenly regarded as factual. The longevity of the work's influence is also in part due to the 1937 film adaptation of the book. The film, The Toast of New York, starred Edward Arnold,

Cary Grant Cary Grant (born Archibald Alec Leach; January 18, 1904November 29, 1986) was an English-American actor. He was known for his Mid-Atlantic accent, debonair demeanor, light-hearted approach to acting, and sense of comic timing. He was one of ...

Frances Farmer Frances Elena Farmer (September 19, 1913August 1, 1970) was an American actress and television hostess. She appeared in over a dozen feature films over the course of her career, though she garnered notoriety for sensationalized accounts of her l ...

, and

Jack Oakie Jack Oakie (born Lewis Delaney Offield; November 12, 1903 – January 23, 1978) was an American actor, starring mostly in films, but also working on stage, radio and television. He portrayed Napaloni in Chaplin's '' The Great Dictator'' (19 ...

. Details of Drew's life may be gleaned from other sources. At the zenith of his career as a financier, his personal fortune was estimated at $13 million and he was respectfully called "Uncle Daniel" on Wall Street. Drew's business tactics caused him to often be vilified, however, with White claiming that newspapers depicted Drew as "one of the curses of the market for years past. If he has now received such a blow as will result in his being driven from the Street altogether, no one will be sorry for him," and "he holds the honest people of the world to be a pack of fools." A devout

Methodist Methodism, also called the Methodist movement, is a group of historically related denominations of Protestant Christianity whose origins, doctrine and practice derive from the life and teachings of John Wesley. George Whitefield and John's ...

, Drew built churches in

Port Jervis, New York Port Jervis is a city located at the confluence of the Neversink and Delaware rivers in western Orange County, New York, United States, north of the Delaware Water Gap. Its population was 8,775 at the 2020 census. The communities of Deerpark, ...

, Carmel, and

Brewster, New York Brewster is a village and the principal settlement within the town of Southeast in Putnam County, New York. Its population was 2,390 at the time of the 2010 census. The village, which is the most densely populated portion of the county, was nam ...

. He also contributed to the founding of Drew Theological Seminary in

Madison, New Jersey Madison is a borough in Morris County, in the U.S. state of New Jersey. As of the 2020 United States census, the population was 16,937. Located along the Morris & Essex Lines, it is noted for Madison's historic railroad station becoming on ...

, which is now part of

Drew University Drew University is a private university in Madison, New Jersey. Drew has been nicknamed the "University in the Forest" because of its wooded campus. As of fall 2020, more than 2,200 students were pursuing degrees at the university's three scho ...

, and Drew Seminary for Young Ladies in his home town of Carmel (which burnt down and closed in 1904). Drew Street, in eastern

Baltimore, Maryland Baltimore ( , locally: or ) is the List of municipalities in Maryland, most populous city in the U.S. state of Maryland, fourth most populous city in the Mid-Atlantic (United States), Mid-Atlantic, and List of United States cities by popula ...

, is reportedly named after him due to Drew's involvement as an investor in the Baltimore Canton Company, which owned and developed much of the area through the early 1900s. Drew is popularly credited with introducing what would be called "

watered stock Watered stock is an asset with an artificially- inflated value. The term most commonly refers to a form of securities fraud in which a company issues stock to someone before receiving at least the par value in payment.Dodd, David L. ''Stock Waterin ...

" to the

Wall Street Wall Street is an eight-block-long street in the Financial District of Lower Manhattan in New York City. It runs between Broadway in the west to South Street and the East River in the east. The term "Wall Street" has become a metonym for t ...

, to describe company

shares In financial markets, a share is a unit of equity ownership in the capital stock of a corporation, and can refer to units of mutual funds, limited partnerships, and real estate investment trusts. Share capital refers to all of the shares of an ...

that were issued by false means including counterfeit

stock certificate In corporate law, a stock certificate (also known as certificate of stock or share certificate) is a legal document that certifies the legal interest (a bundle of several legal rights) of ownership of a specific number of shares (or, under Ar ...

s and unauthorized stock release, resulting in a dilution of ownership. The term came from his time in the

livestock Livestock are the domesticated animals raised in an agricultural setting to provide labor and produce diversified products for consumption such as meat, eggs, milk, fur, leather, and wool. The term is sometimes used to refer solely to animals ...

business, when he would have his cattle lick salt and drink water before selling them, to increase their weight. The watered stock tactic was used in the

of the 1860s, when Drew along with James Fisk and

blocked arch rival

from getting ownership of the

. Drew biographer Clifford Browder warns that "not all the Uncle Daniel stories should be believed," and many stories about his business tactics - especially those recounted by White - should be read with skepticism.

Quotations

Daniel Drew is famously credited with an expression that describes the nature of

short selling In finance, being short in an asset means investing in such a way that the investor will profit if the value of the asset falls. This is the opposite of a more conventional "long" position, where the investor will profit if the value of the ...

: "He who sells what isn't his'n, must buy it back or go to pris'n."

References

{{DEFAULTSORT:Drew, Daniel 1797 births 1879 deaths People from Carmel, New York 19th-century American railroad executives Erie Railroad Bankruptcy in the United States

Biography

Legacy

Quotations

See also

References