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Daniel Drju always tried to work on - large, whether it be trade in cattle, management of the steamship companies or stock market game. And everywhere he tried to squeeze out a maximum of incomes of the business, without being confused at all in a choice of means for this purpose. However, it has not done it good, and Drju has finished life in poverty, having lost to new generation of speculators.
Daniel Drju was born in 1797 in Karmele, small town near to New York. Its father was the farmer, and young Drju, hardly having learnt to go, has started to help the father. So about speech formation did not go. However the boy grew active enough and sharp. In 1813 father Drju has died, and there was a question on how it to provide the existence. The exit of Daniel has found quickly: it has gone to army instead of other person, having received for it $100.
In English - the American war 1812 - 1813 to participate to it it was not necessary: it has spent three months of service to forte Gansevurt in Nju - Jersey. After school of life of Danielu again it was necessary to attend to search of profitable business. First it was arranged in vagrant circus, but soon to it possibility much the best earnings has turned up.
at that time to America there was a new wave of immigrants. New York - the largest port at East coast - promptly grew. Requirements of its inhabitants grew also: the city became one of the heavy users of meat and skins. However the basic pastures have been located far behind its limits. Transport has been developed poorly, the railways only started to build, and about transportation on them the speech cattle did not go. So animals were transported under the own steam. In this profitable business of Daniel also has dared to be engaged, the blessing of experience of management of herd to it was not to occupy.
at first it was arranged with the driver. However subsequently, borrowing money at acquaintances and using own means, he only bought cattle, and already hired workers forwarded it to New York. Its business went successfully enough, but it was one of many who earned on it money. The case has helped it to get acquainted with Henrys Astors rich and rather influential person. It was possible to extend the influence on agricultural states to the credits received from Astor, Danielu: Ohio, Kentucky and Illinois. The road therefrom occupied more time, but also the cattle there could be bought more cheaply.
business grew, and Drju already preferred to lend to other drivers, and itself was engaged in cattle sale in New York. He even has bought the house in the city centre in which has created an original stock exchange on trade in cattle.
at the same time at all scope of the business he did not hesitate to be engaged and a small cheating - in direct and figurative sense. It has become famous for that before sale gave to cattle salt owing to what animals drank much and as a result looked more thickly and weighed it is more. It is indicative that the cattle on - anglijski is called stock - in the same way, as well as the action. It is considered, what exactly Drju became the author of the exchange term “ razvodnenie actions “ (watering stock), thus its tricks on “ razvodneniju cattle “ sounded in English in the same way. However, this term to it have attributed at the time of its gamble at a stock exchange. For now Drju has decided to replace the employment which has bored it.
In 1834 he has decided to be switched to more serious business, the blessing by this time possessed big enough capital in some hundreds thousand dollars. From transportation of cattle it has passed to transportation of people. Carriages by water were the most mass at that time in New York, perhaps. This sphere one of the richest people of America strongly supervised Kornelius Vanderbilt. However, the competition did not frighten Drju. Its first ship went from Albany to New York. Thus thanks to low costs it managed to lower fare for passengers with vanderbiltovskih $3 to $1. However, here again Drju did not refuse doubtful cunnings. For expansion of influence he actively bought controlling interests of the navigable companies. Becoming as a result at the head of board of directors, it supposed write-off of courts for the far-fetched reasons, qualifying insignificant breakages as catastrophic. Subsequently he sold these vessels at the symbolical price of the own company. When shareholders got to the bottom of an essence of such transactions, he already had time to get rid of corresponding actions.
but passenger transportations by the ships were gradually forced out by more perspective railway branch. And after the main competitor Vanderbiltom there has directed the stops and Daniel Drju.
In 1844 it has taken part in company Drew creation, Robinson and Co., and after death of partner Drju became its sovereign owner. By this time of Drju already possessed the capital at a rate of $1 million So to perform speculative operations in stock market to it it was easy enough. And the market was young: New York Stock and Exchange Board, predecessor New York Stock Exchange, has been created in 1817. Share price speculation for the fall, " was a distinctive feature of Drju from the majority of other speculators; bear “ game, counter to the bulls who have grown hateful to it and cows.
one of the largest transactions of Drju has begun in 1853. It bought up share of company Erie Railroad owning rather perspective road around Great Lakes. By 1857 Drju already was its largest shareholder. Thus it began to use the position in the unscrpulous purposes: Drju became the first “ the speculative director “. That is, using the position, he could spend more intelligent gamble with actions Erie Railroad.
One of such cases became a joke. Once Drju went in crew with the young banker. From pockets of Drju the pieces of paper similar to orders to brokers with instructions on purchase of actions Erie Railroad suddenly got enough sleep. The young banker, knowing about a position of Drju, has immediately bought a package from five thousand actions and has advised to make it to the friends. Stock quotes grew until on the market there was no Drju. It just should get rid of them, and thus it has found buyers. Quotations for two days have sharply fallen off that meant for the banker loss $20 thousand However, there was it a bit later for now in plans of Drju there were more ambitious projects.
by 1864 Drju already was large enough player to compete with any figures of Uoll - strit. Its capital by this time was estimated in $4 million
And the destiny has again reduced it with Vanderbiltom. He, as well as Kornelius, owned actions of the railway Harlem. Management has decided to increase extent of a line that was the correct decision, from the point of view of shareholders. However Drju has decided to remain “ a bear “. Using communications in the government, he has decided to buy a temporary interdiction for building in NYC Common Council. Still before the decision became known, Drju has taken of a short position. Officials have similarly arrived also.
quotations have fallen, and the profit of Drju was estimated in millions - after all he has been absolutely assured of actions of the authorities. However Korneliusa the situation did not arrange. It lost money as put on growth of actions. To lose it did not gather. Kornelius has increased the capital for purchase of these actions to $5 million, and at the same time and has bought up NYC Common Council. Drju, of course, counted on cancellation of an interdiction and growth of quotations, but manipulations of Korneliusa have forced the market to grow earlier, than Drju has had time to cover the short sales. The price of actions has flied up from $90 to $285, and total losses of Drju have made $1,5 million which have flowed in a pocket of Korneliusa.
Since then Drju has acquired that for such scale operations broad support from outside - both money, and communications is necessary to it. The case has soon turned up to test this new approach. Drju new operation has become history as “ war for Erie “.
Vanderbilt wanted to buy Erie Railroad for expansion of the railway empire. However the treasurer of road there was Drju. In its plans company sale did not appear. Remembering, what terrible force was represented by Kornelius, Drju has united with two large speculators of that time - Fisky and Gouldom (see “ Money “ #9). Together they have decided to resist to absorption, and at the same time and to play on fall against Vanderbilta.
For $3 million own money of Drju has bought 58 thousand actions Erie Railroad though objectively they cost more. However, he bought not in the market, and itself printed as the treasurer of the railway. It has made Drju and its partners owners of a controlling stock that did not allow Korneliusu to buy road. Simultaneously Drju has sold these actions in the market, having caused a collapse of the price from $90 to $58 for the action.
Vanderbilt has united with the largest Boston bankers and has continued to take shares. However a controlling stock to it to collect again it was not possible. Drju has printed 50 thousand more actions, and the price has fallen off from $83 to $71 for the action. As a result of Drju with partners there was the owner of road, moreover and $7 million Korneliusa. Last has begun legal prosecution of swindlers as they printed actions without the corresponding permission of board of directors. Further action reminded the insurgent with shooting and payoff of numerous courts. Fisk and Gould have surrendered, having returned Vanderbiltu $6 million Rest, on hearings, Drju who managed to reconcile with Korneliusom has got. It is necessary to notice that after that case NYSE has obliged the companies to register at it all share issues.
the cheerful old gentleman
In 1868 has forgotten treachery of the former partners of Drju. They have started the new fraud ordinary investors, instead of the largest magnates should become which victim. Have conceived to play on market fall. The situation piquancy consisted that that autumn position in economy was very good: crops were record, and a turnover of goods of the railways big. Coming to power of the president of the Grant that was estimated as positive event Besides, prepared.
however partners have found a gap in all this well-being. They have simultaneously put all money in different banks - Drju has started up on it $4 million According to the law banks have postponed 25 % from this sum as reserves. In the meantime Drju and others were engaged in short sale. Having sold enough actions, they have simultaneously addressed in banks for the deposits. As a result, having given almost all cash, banks have started to take away urgently back the loans. More precisely, that money which they gave to brokers on margin maintenance. Rates have flied up to 160 % annual. Seeing this situation, investors preferred to sell actions as sufficient own capital for payment of actions without attraction of extra means at them was not. The market has failed. The wave of non-payments has got chain reaction and has swept on all country. Many companies have been ruined, but Drju was at top of the riches: at it was $16 million
Unfortunately, it was not possible to fix success to it. Having offered a fair share on charity, Drju continued to speculate. At that time it named “ the cheerful old gentleman with Uoll - strit “. Actually gamble 70 - the summer old man any more did not bring profit. It has lost a grasp, and the market collapse in 1873 has finished it definitively. Drju declared itself the bankrupt and remained it should even more $1 million Three years lived on material aid of the son, and in 1879 has died in poverty.