The Erie War was a 19th century conflict between American financiers for control of the Erie Railroad, which operated in several American states and connected New York to Chicago.[1]
Between 1866-1868 Daniel Drew conspired along with James Fisk and Jay Gould to issue fraudulent Erie Railroad stock, thus "watering down" the stock, of which Cornelius Vanderbilt bought a large quantity. Vanderbilt lost more than $7 million in his attempt to gain control, although Gould later returned most of the money. Vanderbilt conceded control of the railroad to the trio. They were involved with the corrupt Tammany Hall political party machine, and made Boss Tweed a director of the Erie Railroad. Tweed (who later died in prison for embezzlement or fraud), in return arranged favourable New York legislation for them.
But in 1870, Fisk and Gould betrayed Drew, again manipulating the Erie Railroad stock price and causing him to lose $1.5 million. The Panic of 1873 cost him still more, and by 1876, Drew filed for bankruptcy, with debts exceeding a million dollars and no viable assets. He died in 1879, dependent on his son for support.
Gould eventually gained the advantage in the conflict, but he had to relinquish control in 1872-73, following his loss of $1 million worth of Erie Railroad stock to the British con-man Lord Gordon-Gordon. Public opinion was also hostile to him because of his involvement in the 1869 gold-rigging scandal.