Final answer:
Erie workers James Fisk and Jay Gould issued new shares of the Erie Railroad to dilute the value of Cornelius Vanderbilt's stock, as part of their defense against his consolidation efforts.
Step-by-step explanation:
During the struggle for control of the Erie Railway Company from 1866 to 1868, Erie workers James Fisk and Jay Gould engaged in a notorious battle against Cornelius Vanderbilt. To decrease the value of Vanderbilt's stock, they issued new shares of the Erie Railroad, which diluted the value of the stock and made it less expensive for them to purchase back from Vanderbilt, considerably weakening his financial grip on the company. This was a part of their strategy to maintain control over the Erie Railway and fend off Vanderbilt's consolidation efforts, which involved combining several smaller rail lines to create large, powerful railroad corporations, exemplified by his formation of the New York Central Railroad Company.
During the struggle for control of the Erie Railway Company from 1866 to 1868, James Fisk and Jay Gould, Erie workers, employed a notorious strategy against Cornelius Vanderbilt. Seeking to diminish the value of Vanderbilt's stock, they issued new shares of the Erie Railroad, a practice known as "watering the stock." This tactic diluted the value of existing shares, making it more affordable for Fisk and Gould to repurchase the stock from Vanderbilt, thereby weakening his financial influence on the company.
Their actions were part of a larger strategy to thwart Vanderbilt's consolidation efforts, which involved amalgamating smaller rail lines into powerful railroad corporations. Vanderbilt's efforts included the creation of the New York Central Railroad Company. Fisk and Gould's maneuvers, although controversial, allowed them to maintain control over the Erie Railway and resist Vanderbilt's attempts at railroad consolidation during this period.