Some background:
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Going "short of Harlem" became synonymous with abject poverty.
There was about 250,000 shares outstanding when Vanderbilt began his campaign but Drew could use convertible bonds to expand the total amount of common stock which he, Gould, and Fisk promptly did.
By the time the dust cleared, Vanderbilt had over 200,000 Erie shares and Drew, Fisk, and Gould still had the Erie and $7m of Vanderbilt's money.
Vanderbilt then went to New York State Court to stop Drew from freely issuing stock. This prompted Drew, Fisk, and Gould to flee to New Jersey.
Finally a deal was made to settle the Erie War. Drew was anxious to get back to New York City and went to Vanderbilt without telling Fisk and Gould. Fisk and Gould later found out and entered the negotiations themselves. Vanderbilt got about $3.5m in cash and $1.25m in bonds of Boston, Hartford, and Erie (this Railroad's board had been on the Erie board). Fisk and Gould end up with the bankrupt Erie Railroad.
The Reforms Due to the "Erie Wars"
Drew's freely dumping loads of Erie stock on the exchanges without warning prompted the New York Stock Exchange to adopt a disclosure rule. Firms had to register with the NYSE and the exchange had to be informed in advance of large issues of stocks. There were to be no more surprises. In addition, the officers of firms listed on the NYSE could not be short on their own stock!
Good Luck To Each And All
Curly
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