“WATERING STOCK”

Dominion, Volume 24, Issue 288, 1 September 1931, Page 14

“WATERING STOCK”

' Drover’s Slim Trick DEAL IN CATTLE ■ «* A drover's trick gave rise to the term "to water stock,’’ meaning to incrcase-in nominal amount the stock or capital of a trading company ,by the creation of fictitious stock. The drover was Daniel Drew, who, later, with Cornelius "Vanderbilt, dominated Wall Street in the ’fifties and early ’sixties. Robert. Irving ''arshow tells the story in "The Story of Wajl Street,’’ as follows:— "Daniel Drew had been a great success as a drover. His dealings in cattle had been profitable, and it was not ’ on B before he became the leader in that business in New York’s butcher trade. Driver- down the Harlem Valley on day with a, herd of cattle, he came upon an idea thiic helped to’make him wealthy, and added n racy expression to the Wall Street vocabulary. , J "Henry Astor. John Jacobs brother, was one'of the largest butchers in New York, and an important customer tor drovers. Drew had not been very successful in Selling to him. because Astor wanted fat cattle, and Daniel’s cattle, like himself, were lank and lean, bojigat cheaply and starved. Crossing lhe Harlem. Daniel put up for the night. “When all the cattle boys were asleep Drew went out to the drove in the pasture and emptied sacks of salt on the ground. By morning the cattle were choked for water. In the meantime word was sent to Harry Astor that Drew was on his way with some prime cattle, and to meet him

at noon. “Not a drop of water did the cattle get until they reached the Bull s Head tavern, and shortly before Astor arrived. Then they were let loose; the salt nau if)oi»c its work, and they sucked up the water like sponges. By the time Astor came out to look a plump lot of cattle were there to meet him. “Astor tried to bide his enthusiasm, hut Drew got three cents ) a lb. for • -attle that weighed up exceedingly we.L Wall Street took the term ’watered stock rora this drover’s trick.”