To: Curlton Latts who wrote (22467 ) 7/9/1999 5:19:00 PM From: Curlton Latts Respond to
Final word on "going short of Harlem"New York & Harlem – Vanderbilt became a director of the RR in 1857 after an initial small investment and did not take an active part in the affairs of the RR. The Harlem was the only RR to enter Manhattan from the North and East. It crossed the Harlem River at 135th Street and then went south through Manhattan along Fourth (later Park) Avenue to 26th Street where it connected to its horse car lines. It was built on the east side of the Hudson and inland because the original builders figured that they could never compete with the steamboat traffic along the Hudson itself! First Stock Corner : Dec. 1862 Harlem directors applied for permission to lay rails down Broadway south of Union Square to the Battery. (This would have been a horse car line.) The line was approved by the City government in April 1863. Daniel Drew, a director of the NY&H then conspired with City officials to withdraw their approval in a scheme to sell the NY&H stock short. Vanderbilt learned of the scheme and began to purchase all the stock that came on the market and all the short sales. By August 1863 the stock hit $179 and Vanderbilt and his group controlled it all – the entire stock capitalization of the company, $4,217,100. The politicians then reversed their reversal and re-approved the extension of Harlem down Broadway. Second Stock Corner : Because of legal entanglements the NY&H needed a bill passed by the NY State Legislature to given the NY&H corporation the authority to do the construction. The Bill was introduced early in 1864. Once again Daniel Drew and others hatched a short selling scheme on the NY&H stock. They conspired with state legislators to defeat the bill to drive down the price of the stock. And, once again, Vanderbilt and his group – who were short of cash – pooled their resources and began buying up the NY&H stock. By the end of April, 1864 the stock hit $235 and Vanderbilt and his group had bought the equivalent of the entire capitalization and some 27,000 shares besides. Scores of legislators were financially ruined.
