Sunday, January 13, 2013

42. Robber Barons of Yore: Dan Drew

            Erie Railway stock jiggled in the market.  It leaped, dipped, bounced, fell flat on its face, picked itself up, soared, hovered, did little dances.  Every time it went up a bit, the bears were skewered; every time it went down a bit, the bulls were gouged.  Wall Street greenhorns were mystified, the old hands smiled; Uncle Daniel was up to his tricks.

Daniel Drew            Every morning at eleven the Old Bear arrived in a one-horse chaise at 15 William Street, the offices of Groesbeck & Company, his broker.  Lean, drab, stooped, his square face pinched with wrinkles and whisker-fringed, he had the air of a country parson or, some thought, a dishonest Honest Abe Lincoln.  Though most Wall Streeters could not imagine him as having ever been young, his gray eyes gleamed with vitality and cunning.  Passing through the busy outer rooms, he closeted himself in a small, snug room in back where callers flocked all day: “Grosy” and his clerks, messengers, directors of the Erie Railway, some big bug of the Street, or occasionally a fund-raising Methodist uneasy in the money-ridden atmosphere of Wall Street.  When the door opened, clouds of cigar smoke emanated, and Uncle Daniel could be seen on a sofa, legs crossed, or in winter with his feet stretched out to a fire.  At times he emerged to check stock prices on the ticker tape -- said to be the first such device on Wall Street -- which his broker had installed there especially for him, after which he retreated again to his snug little den.  In that cozy back room at Groesbeck’s, bear raids were launched, pools formed, corners schemed.  When news came of a slick coup succeeding, a hen-cackle laugh erupted that had given the occupant another name: the Merry Old Gentleman of Wall Street.

            “I got to be a millionaire afore I knowed it hardly,” the farm boy turned cattle drover turned steamboat operator turned financier once told a reporter; indeed, money just stuck to his fingers.  And he was rich in nicknames, too: Uncle Daniel, the Old Bear, Ursa Major, the Deacon, and among those he had diddled in the market – sore losers, he insisted -- various unprintable epithets.  But he liked “Uncle Daniel”; plain and homey, it fit him like a wrinkled old coat.  With his drab clothes and unschooled, twangy speech, he knew he came off as rural and quaint.  When dealing with upstarts new to the Street, he played it to the hilt.

            In these years after the Civil War Uncle Daniel’s chief endeavors were intimately entwined with the fortunes of the New York & Erie Railroad – or rather, the Erie Railway, in which guise the old New York & Erie, hopelessly insolvent and moribund, had been resurrected through the intricate miracles of receivership.  Marvelously, the new Erie’s operations were guided by the very spirits who had presided, mournfully but profitably, over the demise of the old.  As a longtime member of the board and the most inside insider, Dan Drew, known also as the Speculative Director, knew more about Erie than anyone; speculators dogged him for tips.

            “Them there Ayrie sheers,” he announced one day on the Street, “are a-sellin’ for more’n they’re wuth.  It costs a heap naow to run a railroad.  Coal an’ iron has riz, so has men.  Whar are dividends a-comin’ from?  You boys better not be too fond o’ your sheers.”

            Some speculators thought he was bluffing, but most of them rushed to sell.  When the stock dropped, Uncle Daniel, having sold it short, made a scoop in the market.

            Suddenly fresh rumors hit the Street:  Erie would soon pay a dividend; some distinguished European capitalists – the Duke of Salamanca, the Marquis of  Something-or-Other – were coming to New York to kick Uncle Daniel off the board.  The old man looked worried; speculators bought, the stock soared.  In the back room at Groesbeck’s, Uncle Daniel’s keen gray eyes twinkled out of crow’s-feet; having bought cheap, he could sell dear: another scoop in the market.  No duke arrived, no marquis; the railroad paid no dividend.  But at the annual election in October Uncle Daniel got himself reelected to the board.  Not for anything would he part from his golden-egg-laying goose.  Meanwhile a saying had been coined on the Street:  “Dan’l says ‘up’ – Erie goes up.  Dan’l says ‘down’ – Erie goes down.  Dan’l says ‘wiggle-waggle’ – it bobs both ways!”

            “Naow sonny,” Dan Drew told a natty young lawyer who had recovered a hefty sum for him at a fee he thought just a bit pricey, “as you have got some money, you oughter go into the market and buy some stock.  Buy Ayrie, it’s low and safe, very safe.  Be advised by an old friend of your father’s.  Naow sonny, do as I say.”

            Swayed by this fatherly advice, the young man bought some Erie, saw it decline, and learned too late that Drew himself had been selling him the stock.  Indeed, Wall Street was full of stories of how Uncle Daniel had caught operators both big and small, as well as greenhorns like the lawyer, in his web of wiles, yet with his cunningly benign appearance, the old man had never been given his comeuppance.  Like many a victim before him, the young lawyer may well have vowed that, the next time he saw Drew, he would plant a fist in his quaint rustic face.  But if he did encounter him, the Old Bear would have seemed so homespun, so charmingly quaint, that the rage would have whiffled out of him.  How could a young man assault his elder, especially one who looked so kindly?  So for all his cunning misdeeds on the Street, year after year Uncle Daniel remained immune to physical rebuke.
            But the story was also told how Uncle Daniel, on leaving the Erie office once, had changed the combination of a safe.  The next morning a clerk came to his home saying they needed to open it, what was the combination?  He had set it, he said, at the letters that spelled “door.”  An hour later the same clerk returned; they had tried it, the safe wouldn’t open.

            “Door!” Uncle Daniel insisted.  “A house door, a barn door, any blamed kind of a door!”

            They tried again, it still wouldn’t open.  Exasperated, Drew went to the office himself, opened it  with ease.

            “There, sonnies, jest like I said:  D-O-A-R-E!”

            This story ran the rounds of Wall Street; clerks snickered, brokers guffawed.  When his son informed him how the rest of the world spelled “door,” Uncle Daniel was chagrinned.  From then on he gave more and more money to the Methodists to fund schools, a female seminary, the Drew Professorship of Greek.

             Even while engaging in Wall Street shenanigans, this homespun semiliterate whose handwriting was illegible, and who spoke with a rustic twang, was building and operating the most luxurious steamboats in the world: floating palaces designed in egalitarian America to give Everyman (and Everywoman) luxury hitherto reserved for the princely castes of the Old World.  No expense was spared in their furnishings, which included ebony and satinwood paneling, grand saloons in the "Pompeian" or "Alhambric" style, Corinthian columns, mahogany balustrades, satin damask chairs, and bronze statuettes.   Not only were they sumptuous and swift, but plying from New York to Albany they ran so smoothly that passengers were unaware of any motion.  Speed-obsessed Americans flocked to the trains, but for comfort and ease they took the boats, enjoyed a fine meal in a dining room rivaling the best restaurants in the city, followed by a good night's sleep in a cabin, and in the morning, if their schedule permitted, a leisurely breakfast before leaving the boat.  Meanwhile railroad passengers were jolted constantly and, before the advent of the dining car, were allowed limited time at periodic stops for a hasty meal in a greasy spoon.

 The Daniel Drew, a day boat, made quite a splash -- literally and otherwise -- when it 
appeared in 1860, beat a rival in a race, and was proclaimed the fastest boat in America.

The stateroom saloon of the Isaac Newton, a floating palace named for Drew's partner 
in steamboating.  A night boat, with staterooms opening off the saloon.  (Saloon: a large 
cabin available to passengers for social purposes.  No liquor here, only gentility, though 
all the boats had a bar elsewhere.)  In democratic America there were also palace hotels
 and, in time, palace railway cars likewise available to the public.

            Every Sunday, spruced up in a cinder-black suit, the steamboat operator and financier  worshipped with his wife at Saint Paul’s, a marbled mass of Methodism on Fourth Avenue at Twenty-second Street, where he bowed his head in prayer and twanged out good old hymns.  At prayer meetings and love feasts he became again the boy of fourteen who from a sulfurous preacher had heard the hot crackle of hell and leaped into the arms of Jesus.  Often he would tell again the story of that first conversion, or relate how back in his days as proprietor of the Bull’s Head Tavern, the city’s cattle market, when he had backslidden and drifted from the means of grace, a farmer asked him to look at some cattle. 

            Driving out of the city in a gig, they had hitched the horse under a whitewood tree and walked over to the cattle in a pasture.  Suddenly black clouds smirched the sky, thunder rumbled.  Hightailing it back to the gig, they got in, saw a blinding flash, then nothing.  They came to sprawled on the ground, unscathed, the horse lying dead in its harness.  “What a lucky escape!” said the farmer, but Dan Drew knew better.  God had warned him with the fire of lightning: Dan, you’d better mend your ways.

            When, after telling these stories, he stood up, his features wet with tears, and implored God’s mercy, veteran preachers and penitents, themselves teary, discerned the true coin of repentance, the bitter conviction of sin. 

            But when a Methodist minister, a close friend of long standing, urged him to give up Wall Street and devote his fortune to the service of God, Drew replied honestly, “I cain’t.  It ain’t for the money but the game.  I love to fight, to win.  I must have excitement, or I should die.”  Which worried the minister no little; for his old friend he sent hot prayers to heaven.

            Yet even for the godly, the fruits of Mammon had their uses.  When the Methodists planned to celebrate the Church’s hundredth year in America – a time for great awakenings and massive gifts – church leaders decided to approach Brother Drew.  Tact would be required, since in matters of giving he was known to have a mind of his own.  Asked once by the Chamber of Commerce to help sustain the market in a panic, he was said to have replied, “Gents, I’d luff to, but I’ve sporn as much money as I kin.”  And at a meeting of church trustees seeking funds to finish a chapel, when a fellow trustee had suddenly addressed him, “Brother Drew, I put it to your conscience: can’t you give us ten thousand dollars?,” he had answered flatly, “No!”  Decidedly, tact was in order.

            When the bewhiskered trio of notables called on the prospective benefactor at his Union Square mansion, he received them in a modest, kindly way.  And when they asked discreetly, hopefully, what offering he was minded to give, he replied without hesitation that he would give two hundred fifty thousand dollars for a new theological seminary, and another quarter million to endow it.

            The committee gasped; never before had a living donor offered such largess.  They showered thanks on their benefactor, and promised that the seminary would train young men to spread terror to the haunts of wickedness, bring the Word to benighted heathen the world over, and glorify the Church.  Of course it would be named for him.

            After the committee left, over and over again the old man whispered to himself, “The Drew Theological Seminary ... ”  He felt like clean sheets.

            The next day, in the back room at Groesbeck’s, where a grate of coal glowed in the fireplace, the Old Bear slouched down in a chair with his feet propped up on the mantel, and smiled his crinkly smile.  The last several years had been juicy.  He had skinned both bulls and bears, kept Erie stock dancing to his fiddle, and promised lavishly to found a theological seminary.  All his eggs had two yolks.

Source note:  The posts entitled Robber Barons of Yore are based on my unpublished fiction and therefore are slightly fictionalized, but they adhere closely to historical fact.  All the Drew quotes in this post, for instance, are taken from contemporary accounts; none is invented by me.  A full account of  Drew is found in my out-of-print biography, The Money Game in Old New York: Daniel Drew and His Times (University Press of Kentucky, 1986), available used online.  Bouck White's Book of Daniel purports to be a memoir by Drew, but really is a pastiche of secondary sources put together with completely fictionalized material; caveat emptor.  In Drew University's short bibliography for the university's history, my work, the only book-length treatment of Drew, is conspicuous by its absence.  Even today they can't face up to the fact that their generous founder was a bit of a rascal on Wall Street.

(c)  2013  Clifford Browder