TH E
M O B I L I ER
C RE D I T
A M E R IC A
OF
I TS
O RIG IN
I TS
C O N STRUCTI N G TH E
AND
W O RK
H I S T O RY
OF
O
A
UN I N
P C I F I C R A I L RO A D
A N D T H E R E L ATIO N O F
M E M B E RS O F C ONG RE SS
BY
J
THE R E W I TH
C RA W F O R D
.
B O STO N
C
.
W
.
C A L K IN S
CO
I
8 80
.
,
PUB L IS HE RS
’
n
E tered
o in g
ac c rd
C
I n th e
offi
Ac t
to
W
.
.
of
th e
Pu
ss o r
rar a
C
.
on g
re s s,
in
CA L KI NS
Lib i n
ce o f
C
W
.
of
C
on g
CA L K m s
th e
CO
re ss ,
at
CO
y ear
1
.
Was hin g ton
B os r o n
'
.
,
880, b y
.
,
D
.
C
.
PR E F A C E
In
.
pre e nti n g th i s b oo k t the publ i c the autho r h
lea r
b n le d by th h p th a t i t m ig ht i n a m ea ur e
aw ay mu c h o f th m i und er s ta nd i n g tha t h
al way
exi te d regard i ng the object and a omp li shm e n t s f
th e C re d i t M ob ili er F o r year i t h
bee n re ei ve d
a s a fact beyond d i pute th at th wo rk of th i c o r
p a ti on w on e f fraud pon t he Governm e nt a nd
t he p e op le o f th i c oun try It h
bee n talke d ab ou t
by al mo t e very one I t h bee n c omm e n te d upon i n
p ress and befo re the public un ti l it nam e h
th
bec om e a fa m i liar s ound i n al mo st e very ho u e ho l d i n
t h e land I n al l t hi s c on trov ersy th ere h
bee n one
un iform op i n i on n d th at p i n i on h bee n e n tertai ned
al mo s t una ni mou ly by the th e publ ic
N o t le s w
t h e u tho r at n ti m e i mp re e d w i th th i s sam e
ge nera l i dea He i n c ommon w i th nearly all o th ers
bel ie v e d th at th o se w h h d carrie d n t h i wo rk had
u sed th ei r pow er a nd i n fl ue n ce to grow ric h at the
ex p e n e o f th e g ov e rnm e nt A h rea d th re po rt
wh ic h ha d bee n ubm i tte d to Congre by the m
ti ll mo re firm ly d id h fi nd
f i nv e tiga t i on
m itt
s
o
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1 8 4399
co
e
,
vL
P
REF AC E
.
that op i n i on i mpre s s e d upon h i s m i nd
A ca r efu l
read i n g of the te s ti mony upon wh ic h thos e re po r ts
were ba sed led to th e c onv i c ti on th a t a n al most fa tal
err o r h ad bee n c omm it te d a nd tha t th e j udgm e nt
wh ic h h ad bee n re ndered by th e publi c w as one not
suppo rte d by th e ev i de nc e and wh i c h wou l d n eve r
have bee n p ronoun ce d h ad a n Oppo r tun i ty bee n gi ve n
Th e j ud icial i nv es
fo r th e c on s i d era t i on o f th e t ruth
tig a ti o ns th a t h av e bee n a c c o r d e d by th e c ou r ts h a v e
don e mu c h t o re mov e t h e doub t s o f m any a nd to
gi v e a clearer i n sight i nto th e t ru e relati ons o f th e
mo s t gigant i c ac h ie ve m e nt o f th e p re s e nt ce ntu ry
Ti m e h ad i n a great m ea su re overc om e th e feeli ng
agai n s t th e C re d i t M o bil ier b ut du ri ng t h e p a s t fe w
mon t h s th e i ntere s t h a s re v i ve d and th e publi c w ere
a n xi ou s to k now th e tr u th Th e objec t o f th i s b o o k
i s to fu r n i s h th at i n fo rm a t i on
H ow w ell th at object
Th e
h as bee n acc omp li sh e d t h e publ i c mu s t j udge
a u tho r h as atte mp te d t o d eal i mp artially to gi v e cre d i t
on ly wh ere i t i s d ue a nd ce nsu re on ly wh ere m eri te d
Th e wo r k i s no t d e s ig n e d a s a po l i t i cal wo rk i n a ny
s e n se ;
th e great ble s s i ng s th at h av e accru e d to th e
n ati on th r oug h th e c on s tru c t i on o f th at great h ighway
h ave carried t h e w o rk o f t h e C re d i t M obi lier ab ove
and beyond th e sph ere o f po l i t ic s a nd i t i s hop e d th a t
wh e n th e t ru th shall be c om e k nown th e publi c w i ll
not al on e c omp re he nd b ut app ro ve tha t wo rk
.
,
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J
Oc t
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1 5 , 1 880
.
.
B
.
C
.
C O NTE NTS
.
I
.
TH E
II
TH E A CT
OF
.
I N CO RPO RA TI O N
III
TH E UN I O N
TH E A M E S
C O NTRAC T
A ND
V
TH E A SS I G N M E NT
E
A SS I G N M NT
D I FF I C U LT I E S
OF
D I S AG R E EME NT
l
8
3
55
.
C O N STR U CT I O N
V II
TH E
4
.
VI
TH E
2
.
S E VE N TR U ST E E S
To
7
.
PA C I F I C RA I LR O A D C O M PA NY
IV
1
73
.
W ITH M R
.
M C COM B
88
v
iii
CO N T E NT S
.
V III
.
.
TH E POLL AN D CO M M ITTE E
121
IX
D E F E NC E
OF
OAKE S
AME S
1 86
X
TH E
.
OF CE N SU R
.
E
21
XI
T H E C RE D IT MOBI L I ER
0F
4
.
TO -D A Y
2 20
TH E C R E D I T M O B I L I E R
OF
A M E RI
I
THE
OR I G I N
OF
CA
.
.
TH E
C OM PA N Y?
OM E
eight years ago the cou n try was startled
S by the a nn ou n cement o f the grossest corruption
in our n a tio n al legislature arising o u t O f the buildi n g
and which i n volved
o f the U n io n Pacifi c R a ilroad
the n a mes O f m any O f the mos t prominent m en in
Co n gress —me n whose reputation had before been
abov e suspicion —men whose re cord had always
been spotl e ss The news c a me with terrible force
—
upon the commu n ity T he time that O f a presi
dential election —w as o ne well calculated to add
force to the calamity that had seem i ngly overtaken
The name O f Credit Mobilier u n
o u r country
til then almost unknown and unh e ard o f except
among a fe w now came into most wonderful promi
n e n c e and to this d a y though spok e n Of by every
has rem a ined a mystery T he name with its
o ne
forei g n sound was one well calculated to raise
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C REDI T M O BI L IER
TH E
10
additio n a l alarm and was one which p oliti cian s
could h a n dle with ease to instil into th e m i n ds o f the
people ideas O f great corruptio n Why S hould such
a n ame be selected if the pur p oses of that cor p ora
tio n were ho n orable a n d they who wi shed to use
it lost n o opportunity Of doing so ; and yet it is safe
to say that no t o n e in a thousand o f those W h o dwelt
u pon the i n famy o f the Credit Mobilier had the
fai n test conce p tio n o f what it really was what were
its objects o what it had accomplished B ut that
could not deter them i n their argument ; they knew
its p urposes were no t ho n est a n d that was e n ough
for th e m I t was as the Cloud small at first but
soon the tempest that arose was su ffi cient to destroy
all that came withi n ts reach R e p utations which
had been towers O f strength were sudde n ly over
whelmed an d covered with infamy ; they wh o had
bee n the leaders o f p ubli c o p i n ion a n d O f public
morals were swept away i n the maelstrom o f publi c
co n demnatio n n ever agai n to regai n their position
S O great was that co n dem n atio n by the p eo p le O f
the acts of these me n that i n an evil mome n t they
sought to regain their lost positions by denying al l
co n nection with o interest i n the Credit Mobilier ;
not stopping to co n sider whether th at connectio n w as
good or ev i l but liste n ing o n ly to the clamors O f
the prese n t they sought to shield themselves behind
the armor of their hitherto u n questio n ed word ; but
alas ! when revelatio n came and that word was
foun d to be false the last defence was go n e a n d
they fell Y ears have passed but still those n am e s
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OF
A M ER I C A
I I
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have bee n enshrouded by the mystery in which they
had fallen Time has indeed cleared away much Of
the superstition that was created ; but the people as
a mass remain in ignorance O f the r eal O bject a n d
workings o f the Credit Mobilier What w a s it ?
What did it accomplish
These are questions that
are daily and hourly asked by the many L et th e m
but go o u t beyond the Missouri upo n the G reat
American D esert Of a score of years ago an d behold
the mighty empire that has sprung into existe n ce
there ; behol d the towns an d cities teeming with
popul a tion fa rms that supply the world with bre a d
homes p rovided with every comfort and luxury f
life ; behold o n every side the school houses where
C hildre n grow up amid the influence f popular edu
cat i on and as they behold this happy contented and
enlightened people strong i n their love Of freedom
and equality firm i n th e ir fa ith a nd all e giance to
—
their country there they may see some Of the e
s u l ts that have bee n accomplished through the i nfl u
ence and ins trum e ntality O f those who guided and
I
n
a
word
the
Credit
o e n e d the Credit Mobilier
g y
Mobilier and the Un ion Pacific R ailroad Company
were o n e and the same The men who governed
the o ne governed the other Wh a tever w a s done
und e r the name O f Credit Mobilier m a y not be
known to the world in its true light but we hope
that the fa cts conc e rning it m a y be made to appear
upon a perusal Of this work I t is not o u i mte n
tion to accus e o a pologize for a ny one but only
t o set forth as C learly as we can the history O f the
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T HE
1 2
C REDI T M O B I L I ER
Credit Mobilier O f America and its connection with
the building o f the Unio n Pacific R ailroad and the
relatio n o f members O f Congress with it
The excitement o f the past is gone i n a great
measure and the p eople of the present are p repared
to fa r more impartially judge Of the merits o r the
evils o f its operation and to decide whether the
actions Of those men were right o r wrong That
any crim e was ever committed was not a n ecessary
conclusion to be drawn from the revelations that
have been m ade public Time and time only ca n
e ff ectually C lear away the C louds O f suspicion that
hav e s o long hung over many a once honored name
and only the impartial judgment Of history c a n give
complete vindication to those who have been a c
cused
A n ew generatio n is fast appearing upo n
the are n a Of life which will be p repared to judge
without the feelings o f prejudice that h a ve and may
long co n tinue to control public opinion
O nly a short time ago there appeared in th e pr e ss
throughout the country a statement by the sons of
C k s Ames in relation to the a s s o c a t n O f their
father with the Credit Mobilier which in connection
with th e present political campaign has c e ntred
upon this m a tt e r an int e rest before unfelt and has
cre a ted an a lmost univ e rsal desire n the p a rt of th e
public to know more con cerning the history Of that
corporation W a s it a work as th e y allege Of such
Was
so
l
a
rgely
beneficial
to
th
e
e t im p
t
?
t
anc
g
country that inste a d Of the odium a nd disgrace th a t
was cast upon its princip a l C haracter a monum e nt
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OF
A M ERI CA
1
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3
hould be erected to his memory by a grateful
people ? NO fact is or ca n be made more plain
tha n that no ma n h a d so much to d o with the success
O f the building Of the Union Pacific R ailro ad a s did
TO his wonderful e xertions to the
O akes Ames
gre a t sacrifices which he mad e is due the building
of that road He assumed the responsibility and
shirked no t the ordeal through which he passed
The road was completed the whole cou n try was
benefited and the union O f our states made more
strong than ever befor e ; but to O a kes Ames the
result was disastrous in the extr e me H e was cen
sured by the Congress o f which he w a s a memb e r
and the disgrace which was placed u po n him e nded
h i s life i n a few sho rt months
A proper study O f the Credit Mob i lier will make
n e cessary a consideration of the circumstances which
called it into existence ; and to d this we shall be
compelled to go over the history Of the building Of
the Union Pacific R ailroad The Credit Mobilier
as it cam e into prominence was the construction
company that took the contract for bu i lding the ro a d
O wing to the same parties b e ing the stockholders in
the ro a d and the stockholders in the Credit Mobilier
it could not well t a ke the contract direct from the
R ailroad Company but the contracts came through
the inte e nt o n o f a third party All this will be
seen in the p a ges which fo l l ow a nd ne e d not be fur
ther a lluded to here Upon the org a ni za tion Of the
Union Pacific R a ilroad Company under the act of
Congress Of 1 8 6 2 and as amended by act Of
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TH E
4
C REDI T
M OB
I L IER
Congress in 1 8 64 an attempt had been made by that
company to construct the road which e ffort p roved
to be a failure not only b ecause O f the lack Of con
fi d e n c e wh i ch the public ha d in the scheme and
refus a l to invest in the bonds and stock Of the
company but their own lack of m e ans and the
r e sponsibilities which such construction cast upon
those who un dertook it I t was impossible for the
company to Obtain any individual to take a contract
a s no o n e w a s willing to shoulder so great an Obli
I
t
w
a
s
therefore
n
ecessary
that
a ti o n a s he must
g
means be used by which there could be
s ome
a combination O f capit a l and at the same time a limit
to the liability O f losses I t was therefore deter
mined to use the influence O f a construction com
pany Questions Of course arose as to the leg a lity
Of the proceedings as cont e mplated but under th e
instruction and advice O f the most eminent couns e l
in the world the plan as carried o u t was com
m e n c e d carr i ed o n and finished
The Cr e dit Mobilier O f America which was the
n ame adopted for the company selected for the
work w a s fa shion e d after the Credit Mobilier O f
F rance wh i ch h a d long be e n known in that country
Th e Cr e d i t Mobilier f F rance was a jo i nt stock com
pany found e d in Paris November 1 8 1 8 5 2 under the
l e ad O f the b r others E mile and I s a ac Pé e i e and o n
th e principle o f limit e d liability for the transaction Of
g e neral banking business to facilitate the constru e
tion o f public works and to develop intern a l in dus
t ry I ts capital was
francs divided i nto
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OF A M ER I CA
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5
hares Of 5 00 fra n cs I t w a s authorized to hold
public and oth e r securities and to issue bonds Of its
equal to its subscriptio ns and
o wn to an amount
purchases and aft e r its original capital was all
taken to issue bonds to te n times that amount The
profits Of the company were at first very large a
divid e nd Of forty o ne per cent w a s declared i n
I n 1 86 7
1 8 55 an d from that down to five per cent
having for some ye a rs paid only slight dividends
though
the
average
annual
divid
e
nd
for
fifteen
(
years was seventeen per
it lost confidence
and the stock fell to twenty eight per cent f its par
value and the company soon went into liquidation
T he man a g e rs retired with immense fortu nes The
High Court Of Appeals decided ( August I
that the brothers Pé e i e and other di re ctors w e re
responsible fo their a cts and that damages should
be given to the stockholders Among the enter
prises achieved by the Credit M obilier of F r a nce
m a y be mentioned the construction of th e Paris Ga s
Company the P aris O mnibus Company the cre a
tion Of the company Of the G rand HOte l d u L ouvre
and O f the Maritime Company Of Clipp e rs and im
mense railw a y operati ons in Austria Spain R ussia
and Switz e rland together with heavy loans to
F rench railway companies
T he company met
with much opposition and was at tim e s called th e
greatest gambling house the world h a d ever seen
The Credit Mobilier Of Americ a was originally a
company org a ni z ed under the laws Of the St a te Of
Pen n sylvania in the year 1 8 5 9 and was then known
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TH E C R E D I T
6
1
M OB
ILIER
by th e n ame o f The P e nn sylvania F iscal Age n cy
U n der this n ame however it l anguished and wa s
n ot u n til shortly previous to its p urchase by the
principal pa rties interested in the Union Pacific
R ailroad even orga n ized as a corporation A nd
after its fi n al orga n izatio n it n ever called any o f its
powers or functions into actio n while it retained its
first name The powers gra n ted to it were of a
peculiar nature and were what were so much n eeded
in the field in which it was soo n to appear that
every n ecessary Object was amply provided for
That a full understanding o f its provisio n s m ay be
had the act i n full will be give n
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II
THE A C T OF
.
TI ON
I N C OR P OR A
.
T O I N CO R P O R A T E TH E P E NN S Y L V A N I A
F I SC A L A G E N C Y
B e i t e na c te d by tfi e s e n a te a n d h o u s e of r ep r es e n ta
tiv es of t/z e Com m on w e a Zt/z of P e nnsy l v a m a 7 72
ACT
AN
.
en e r a l
g
t/z e
a ss e
m ély m et ,
h or i ty
a ut
f
o
tfi e
sa
a nd
i t is b er e by
en a c t e d
6y
me :
SE C T I O N I
That S amuel J R eeves E llis
L ewis G arri ck Mallory D u fl G reen D avid R
Porter J acob Z iegler Charles M Hall Horn R
Kneass R obert
R oss William T D ougherty
I saac Hugus C M R eed William Workman
Asa Packer Jesse L azear C S K au fi m a n C L
Ward a n d Henry M F uller be and they are
hereby appointed commissioners to r e ceive sub
c iptio n s and to organize a company
by the name
and style O f the Pennsylvania F iscal Agency ; a nd
the ow n ers O f the shares herei n authori z ed to be
issued when the company is organized shall under
the name and style aforesaid have perpetual succes
sio n ; and may purchase hold and acquire by any
lawful means estate real and p ersonal and the
same may use sell lease let mortgage transfer
a nd co n vey and o th e wis e d is p e O f ; and may sue
and be sued plead and be impleaded contract and
be contracted with and h a ve and use a common
seal and the same may change at pleasure ; and
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17
1
TH E C REDI T
8
M OB I
LIER
may make b y laws and regulatio n s fo r the govern
ment Of their a ff airs and m a y have and use all the
rights powers and privileges which are o may be
necessary for them to have as a company i nc po
rated fo r the powers herein stated Pr i d d that
the said company shall not at any time hold i n this
State m ore land tha n may be requisite for the c o n
v e n i e nt transactio n o f their business
SE C 2
That the p urpose o f this act is to organ
ize an i n corporated company and to a uthorize them
as such to become an agen cy fo the purchase and
sale O f railro a d bonds and other securities an d to
make advances o f mon e y and O f credit to railroad
and other improvement companies and to aid in
like manner contractors and m a nufacturers an d to
authorize them as a company to make all requisite
contracts and es p ecially to receive and hold o n
deposit and in trust estate real and personal i n
cluding the notes bonds Oblig a tions and accounts
and O f individuals and O f companies and
o f states
a n d the same to purchase collect
o f corporatio n s
adjust and settle and also to sell and dispose thereof
in any market in the United States o r elsewhere
without proce edings in law o r i n equity and for
such price and on such terms as may be agreed O n
be tween them an d the parties contracting with them
a n d also to endorse and guar a ntee the p a yment o f
the b On d s and the perform a nce O f the Obligations o f
individuals O f corporations and Of companies
That the capital stock O f said compa ny
SE C 3
hall consist O f fifty thousand sh ares of $ 00 each ;
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.
1
C REDI T
T HE
20
M OB
I L IER
be in Philadel p hia but the directors under such
rules and r e gulat i ons as they may p rescribe may
establish br a nches and agencies in E urope and
elsewhere and m a y d e a l i n exchange foreign and
domestic ; but the said company shall no t exercise
the privileges Of banking n or issue their o wn notes
o r bills to be used as bank notes o r as currency
SE C 5
That three fifth s o f the directors O f said
company shall be citizens O f the United States a n d
the majority Of the whole S h a ll reside in this State
That the sai d company shall pay to the
SE C 6
State treasurer for the use O f the State a bonus Of
o n e—
half Of o n e per cent o n the sum requisite to be
p aid in previous to the organization payable in four
equal annual i nstalments the first p y m ent to be
made i n o ne year after the payme n t o n the capital
stock shall be ma de and also a like bonus o n all
subseque n t p ayments o n account Of the capital stock
o f the said company o r any increase thereof paya
bl e in like m a nn er ; and in a ddition to such bonus
shall p ay such tax u p on the dividends exceeding six
p er cent p er annum as is o r may be imposed by
l aw
W C A LAW RE N C E
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Sp ea h er
f
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th e
o
J
NO
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H o u s e of R ep r es en ta ti v es
CRE S W E L L J R
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,
Sp ea h er
f
o
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,
th e S en a t e
.
Approved the first day Of November a nnO D omi n i
o n e thousand eight hundred and fi fty ni n e
,
-
WM
.
F
.
.
PAC K E R
.
AM ER I C A
OF
21
.
Such is th e origin a l a ct O f incorporation of th e
fa mous Credit Mob i lier Of Ameri ca and und e r this
a ct the organization Of the company w a s concluded
and O ffi cers duly elected Th e first elect i on Of
directors took place o n the 2 9th Of M a y 1 8 6 3 and
the first Offi cers of the corporation wer e J acob
Z e igler presid e nt ; O liver B arn e s s e cretary ; and
Ch a rl e s M Hall treasurer T he history Of the
comp a ny under this org a ni z ation w a s not of gr e at
i mpor ta nce but it was destined soon to assum e a
pl a c e in the national history O f our republic a nd
call to itself the a tt e ntion f th e whol e world
O n th e third d a y Of March 1 8 6 4 T homas C
D ur a nt th e n vic e presid e nt of th e Union Pacific
Ra ilro a d Company purch a s e d th e ch a rt e r O f the
P e nnsylvani a F isc a l Ag e ncy for th e purpos e O f using
t he comp a ny for th e construction O f th e Un i on
P a ci fi c Ra ilro a d B ut gr e a t h a nges w e r e in stor e
for th e F isc a l Agency On the tw e nty sixth O f
M a rch 1 8 6 4 only tw e nt y thr e e days from th e pur
ch a s e th e following a ct p a ss e d th e P e nnsylvania
l e gislatur e
A N A C T T O C H A NG E T H E NAM E OF T H E PE NN
S Y L VAN I A F I C A L AG E N C Y
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S
B
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by th e s e na t e a n d h o u s e of r ep r es en
ta ti v es If th e C o mm o n w e a l th of P e nnsy l v a n i a ,
i n g e n er a l a s s em b ly m e t a n d i t i s h e r e by e n a c ted
e
it
e n a c te d
,
by th e
a u th o r i t
y
f
o
th e
T hat from a nd after
P e nnsylv a ni a F i sc a l
sa
me :
the p a ssage O f this act T he
Agency shall b named
e
C REDI T M O BILIER
T HE
22
instead thereof The Credit Mobilier o f Am e rica
with all the powers privileg e s and authorities t hey
had under their former name and be subject to all
the restrictions and liabilities to which they wer e
subject u n der the sa me
!
,
,
,
,
HE N R Y C J O HN SO N
.
Sp ea h er
f
o
th e
,
H o u s e of R ep r es enta tiv es
J O HN P PE NN E Y
.
Sp ea h er
.
,
f
o
th e
S en a t e
.
Approved the twenty sixth day Of March anno
D omini one thous a nd eight hundred and sixty four
A G CU RT IN
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'
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.
.
B ut the change in n ame was
.
Of sl i ght
importance with what followed Und e r the p
visio n s O f th e C harter an agency was establish e d
in the C ity Of N e w Y ork and whe n subscriptions to
the Company were made it w a s upon the express
condition that the full p owers o f the board f d i e c
tors should b e given to the Ne w York agency ; it
was also stipulated that a railroad bure a u should b e
established at the N e w York agency Of five m a n
agers ; thre e to be directors Of the Com p any w h o
should have the sole management Of railway c n
tracts subj e ct however to the approval Of th e presi
dent O f the Compa n y The n umber Of managers
was afterwards increased to seven B y these means
the P e nnsylv a nia corporation with name chang e d
r e moved itself so far as the manag e m e nt f its
o ne
ro
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o
O F A M ERI CA
23
.
a ff airs w a s concern ed e n tirely from th e state of
Pe n nsylvani a maintaining there only its corporate
e xistence and with th e extraordinary powers co n
fe rred upo n i t by that state took upo n itself th e
constructio n o f the Unio n Pacific R ailroad Co m
pany
At this time the outs tanding stock o f the U n io n
P acific R ailroad Company amounted to
upo n which there had bee n made to the R ailroad
Com p any a payment o f ten per cent o $ 2 1 8 000
This stock was purchased by the Credit Mobilier by
repaying to the stockholders the amount adva n ced
by them —that is $ 2 1 8 000
When the Credit
Mobil i er purchased this Unio n Pacific stock the par
v a lue Of the shares was $ 1 000 B y act of Congress
this
stock
was
cancelled
and
a
r
e
issue
was
o f 1 86
4
made to the stockholders of the Credit Mobilier in
shares o f $ 1 00 ; a n d thus the stockholders of the
two corporations became identi cal the stockhold e rs
i n each taking p r r t with his interest in the oth e r
and thus th e persons composing o n e corporation
who were t tak e a contr a ct to build the ro a d were
the very same persons wh o h e ld complete control f
the cor p oratio n for which the road was to be built
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III
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THE UN I ON PA CI F I C R A I L R OA D C O
.
ET
us turn for a fe w moments to a consideration
f the status f th e Union Pacific R ailroad at this
time and to do this it will be necess a ry to i nvestigate
briefly the circumstanc e s which mad that work a
nation a l necessity T wenty years a g o had any n
a dvocated the building Of such a road he would
have been looked upon as insane Y et we find tha t
th e discovery O f gold n th e Pa Cifi co a st attracted
th e r e a l a rge populat i on who separ a ted as they were
from the influence O f the r e st o f our country wer e
gr a dually acquiring a s e ntiment of independenc e
toward th e common country ; and the conclus i on
was coming slowly but surely that their interests
sep a rate d by so gr e at a distance from the E ast could
be best p r otected in a n a tion governed by their wn
peculi ar laws ; and at the br e aking out o f the great
civil war there was danger Of o u losing that
valu a ble territory west of th e R ocky mountains
unless some means could be devis e d to place them
in C loser communication w i th th e E a st ; and to do
this it would be necessary to construct a railro a d
across the entire country and thus by placing th e m
i n e asy a ccess to the E ast stre n gthen the bonds
o
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24
OF AM ERI CA
25
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union between the Atl a nti c and Pacific coast
d e velop the immense r e sources o f the central portio n
of the United States a nd op e n a new route for com
m e rc e from t he At l an tic a nd E uro p e to the Pacific
and Asi a This w a s a n i d e a that cam e u p permost
in th e minds O f the gov e r nm e nt dur in g even the first
y e a rs Of the gr e a t war E very e ffort was made to
s e cur e this e nd ; e very m e ans was tried to induce
capit a lists t o e mbark their fortunes in the u nd e t k
ing T he gov e rnm e nt in July 1 8 6 2 incorporated
th e company giving th e m v a st grants Of land along
t h e entir e route loanin g them governm e n t bonds to
a large a mount p e r mil e f the road and a sking
only th at i t s lo a n should constitute a first li e n
upon th e ro a d wh e n comp l e ted B ooks for sub
c ipti n s to the s t ock were op e ned throughout the
country but the under t aking w a s too h a z a rdous and
novel t o s e cur e the c operation Of a ny responsibl e
persons a nd during th e following two ye a rs only
of the stock was subscr i bed f a nd
only ten p e r cent f that amount was a ctu a lly p a id in
in cash T hus it will be s e e n that in spit e of a ll the
concessions a nd aid th a t th e government tendered
only
had been r a is e d to complete this vast
work O ne rest ri ction which the government h a d
imposed was that t he c a pital stock of the com
p a ny which was pl a ced a t
should
n o t be sold a t less th a n par or $ 1 00 per sh a r e
In
order to have en a bled any company t obtain the
control f the ro a d would h a v e required an invest
m e nt of some
of
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TH E C REDI T M O BI L IER
26
I n July 1 8 6 4 Co n gr e ss d e e med it necess a ry to
i n creas e the inducement fo r capit a l to e mbark in this
great enterp ris e an d th e refore it doubled the land
gr a n t and authori z ed the comp a ny to issue an
e qual a m ou n t o f firs t mortgage bonds having pre
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,
,
,
,
over those Of the government ; thus in
reality reducing th e lie n of the government for the
bonds advanced by it to a second mortgage This
course led to practical action
I n the meantime
however attempts had bee n made to build the Union
Pacific R ailroad I mmediately after the first organ
i a tio n o f the company i n 1 8 6 2 they went to work
and commen ced to build the ro a d themselves by
putt ing men a nd laborers o n This w a s continu e d
through the fall and winter of 1 8 6 3 and 1 8 64 b y
which time the company h a d expended upwards
f
leaving the company in debt beyond
the subscriptions rec eived by them Of
to
the amount O f more than
They found
it impossible to proceed with the work ; parti e s
would not take the stock a nd they were forced to
sell some Of the materials cars &
which th e y
had bough t ; and yet they did not entirely ab a ndon
the work
May 1 2 1 8 6 4 a committee w a s appointed with
a uthority to rec e ive p ro p osals a nd let the work f
building the ro a d to p rivate p a rties A contract was
made with H M Hoxie August 8 th 8 6 4 f the
construction f one hundred miles o f ro a d c o m m n c
fo
ing a t the city O f O maha at the rate Of
each and every mile so completed ; the co n tractor
c ed enc e
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TH E C REDI T M O BILIER
28
e mbrace al l t ha t po r t i on of the r o ad bet wee n O m a h a a nd
th e 1 00 th m eri d i an o f l on gi tu d e
I W i ll subscribe o r
c a u se to be sub scribe d fo r
o f th e s t o ck O f you r
c o mp any
H M H OX I E
B y H C CRAN E
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A ttor n ey
Th e
ab ov e
be h alf O f th e
p r po i ti o n i h ereby acce p te d fo r and
U n i on Paci fic Rai lro a d C omp a ny
s
o
.
JOH N
C S
A
GE O
T
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.
.
D IX ,
B U S H N E LL ,
.
M DA V I S
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.
Sp e c i a l Co mm i tt e e
3
,
on
s
.
O cto b er
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1 86
4
.
.
T hus
the Hoxie contract was made to embrace all
the road between O maha and the n e hundr e dth
meridian a dista n ce O f
miles and thr e e days
later this contr a ct was virtually assigned to the
Credit Mobilier though in form the assignment was
made in th e following M arch and the Cr e dit M O
bilier under this assignment completed the contract
f O ctober 1 8 6 6
o n the fifth
I t was alleged by some Of the witnesses before
the Congressional comm ittee that this contract cost
the Union Pacific Ra ilroad Comp a ny
and th a t it c o t th C r e dit Mobilier
being a profit to the Credit M obilier O f
T his alleg e d profit it should be borne in
mind was in stock a nd bonds f th e Union Paci fi c
R ai l r o a d C omp a ny estim a ted a t par while th e
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AM ERI CA
OF
2
.
9
m arket
value o f the stock was o n ly about thirty
c ents and O f the bonds about eighty fi e cents on
the dollar The facts concerning this profit will be
s poken Of further o n
The contract with Hoxie h a ving been completed
a new agreement was made by Thomas C D urant
vice president o f the Union Pacific R ailroad with a
Mr B oomer fo the co n struction of
miles O f
road west from the one hundredth meridian Under
this agreement B oomer w a s to receive
per
mile for that p ortio n of the contract east of the North
P latte and for th a t portion o f the contract west Of
the river
per mile —the bridg e across the
river station buildings equipment etc to be addi
This contract w a s never r a tified by the
ti o n a l
company a lthough some fi fty eight miles of the
road had been completed I t has bee n impossible
to ascert a in what these fi fty eight miles cost the
ompany
but
from
the
evidence
Of
Mr
D
urant
the
c
o n ly ev i dence attainable it appears tha t it did no t
exceed
per mile including station houses
equi p ments etc Y et in view o f all this and with
the facts clearly before the company o n the fifth o f
J a n uary 1 8 6 7 the bo a rd o f directors by a resolu
tion extended the Hoxie contract over these fi fty
eight miles thus proposing to pay to the Credit
Mobilier — the Credit Mobilier being i n reality them
selves
per mile for these fi fty eight miles
without
any
consideration
amounting
to
1
000
$ 34 5
)
(
whatever the road already h a ving bee n completed
a n d accepted by the govern m ent
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TH E C REDI T
0
3
M OB
ILIE R
The following is a copy of the resolution
anuary
I
86
7
5
J
,
,
da t e
of
.
Th a t th e U n ion Pacifi c Rai lr o a d C omp a ny
w i ll a nd do h ereby c on s i d er th e H o xie c on trac t exte nde d
t o th e po i n t al ready c omp lete d n a m ely 305 m ile s w es t
f rom O m a h a a nd t h a t th e O ffi c er s o f th i s c omp a ny are
h ereby au t ho ri ze d to s ettle w i th th e C re d i t M ob il ie r a t
p er m i le fo r th e add i ti onal fifty eigh t m i le s
R es o l v e d ,
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This resolutio n was n o t carried o u t o n accou n t of
the protest against it by T homas C D urant al
t hough
as will appear hereafter this road fully
c o n structed an d accepted by the gover n me n t
cost
i ng in its constructio n according to the statement o f
Mr D urant though n o record O f it could be found
o n the books o f the railroad
company complete
with statio n houses equipme n t etc not over
per mile was included i n the Ames c o n
tract which will soo n b e outli n ed a n d paid for there
a t the rate o f
p er mile
The reader will more C learly u n derstand the true
relations O f this extension O f the contract a n d the
position o f Mr D urant con cerning it when he h as
b ee n informed that at about this time Mr D urant
h ad been removed from the board o f directors Of the
Credit Mobilier and that a desperate quarrel had
e nsued in which he o p e n ly made his boasts that the
Credit Mobilier shoul d never have another contract
from the Union Pacific R ailroad The dissensio n s
that arose concerning this were o f long duration and
e ntailed imme n se di ffi cul ties upon both companies
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my
WORN
O F A M ER I C A
a
31
.
F rom
the evide n ce that has been produced it has
also appeared th a t the contract with B oomer just
a lluded to never h a d any existence except i n the
mind o f Mr D ur a nt ; th a t the work upon these fi fty
eight mil e s had i n fact been performed by the
Credit Mobilier under the expectation o f receivi n g
The Credit Mobil
th e contract fo r its construction
i e r had gone o n with the work h a d ex p ended its
money in its constru ction and when it became a p
parent that the op p osition O f D urant and his party
w a s strong e n ough to prevent the executio n O f the
contract the board Of directors o f the railroad i n
doing what they supposed to be only just and fair
voted to extend the Hoxie co n tract over these fifty
i n order that the Credi t Mobilier might
e ight miles
receive retur n s fo their expenses Mr D urant then
protested agai n st this actio n o f the board for the rea
s o n as it aft e rwards appeared
o f having it a matter
to which he could subsequently refer to
o f record
S how the purity o f his motives should any investi ga
tion ever be made I n spite O f the failure o f this e x
tensio n Of the contract owing to the friendly attitude
O f the railway company toward the Credit Mobilier
and the promise to give them a contract as soon as
possible the Credit Mobilier continued to construct
the road eve n beyond the fifty eight miles above
s poke n o f
O n the first o f March 1 86 7 another co n tract was
made for building the road west of the o n e hun
M S Williams This con
d e d th meridian to
3
5
tract was to cover 2 6 7 1 5 miles at a cost of
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THE
2
3
p er
C
REDI T
BI O B I L I E R
mile a nd included that portion which was al
ready completed ; but at this time the complete d
portion of the road west o f the o n e hundredth merid
i an to be included i n this contract extended over
ni n ety eight and o ne fourth miles This proposi
tion was accepted by the company with the proviso
That
p er mile be reserved o u t o f the pay
ment
At the time of making this contract Wil
liams had made an agreement with the Credit
Mobilier that he would assign his contract to them
Thus in reality making the contract between the
U n io n P acific R ailroad and the Credit Mobilier ;
that is a contract to the Credit Mobilier by which
they were to receive p ayment for the road which w a
already com p leted at the same rate as under th e
Hoxie co n tract This co n tract O f Williams was not
however carried o u t owing to the protest Of Mr
D urant which protest ca n best be understood by
readin g the same whi ch is in the words following
U N I O N PA I F I RA I LR O A D O FF I E
Marc h 7 8 6 7
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C
C
C
2
To th e D i r e c tor s of
:
an
p y
,
1
,
.
Un i on P a c ifi c R a i l r oa d Com
th e
GENTLEME N I p ro te t gai n t the re o l u ti on of th e
p a e d at you r la t m eeti ng wh i c h p
b O d f d i rect o r
po e to gi ve th e on tract o f th ro ad f th i c omp any
omm e n ci ng a t th e on e h und re d th m eri d ia n of l ongi tude
th e rea on tha t a e ti on o f roa d already acce p ted i
f
i n cl ude d i n t h e c on tra t nd i t do e s not a pp ea r th a t th i
c omp a ny d eri ve s a ny be n efit d eq uate to t h e p rice p ai d
over th e ost f onstru t i on and do e not i n futur
,
ar
s
-
s,
o
s
a
ss
s
c
s
s
s
ro
,
O
e
s
,
c
or
,
s
s
c
c
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,
a
s
s
a
c
o
c
c
,
s
e
OF
A M ER I C A
.
req u i re a s a n esse n tial po i n t i n th e c on tract th e c omp leti on
O f t h e r o a d w i t h i n th e S ho rtest po s s ible ti m e a nd fo r o th er
reas o n s na m e d i n a p re v i ou s p ro te s t i n relati on to th e
H o xie c o n tract
I b e g to call you r atte n ti o n agai n t o th e fact t h at p art
o f th i s wo rk h a s bee n don e fo r w eeks a nd t h at c on tracts
h ave bee n mad e a nd m erc ha nd i se d el i ve red fo r nearly
on e hund re d and fifty m i le s o f road wh ic h th e c ompa ny
has p ai d fo r a s s hown by th e b oo k s
R es pectfu ll y
TH O MA S C D URA NT
The next import a nt s t ep i n the h i story Of this
tr a nsac t ion is the Ames contract the most important
perh a ps Of any th a t w a s made during the constru e
tion O f this g r e a t ro a d B ut before touching o n
th a t it may be well to dwell a little o n the rel a tions
Of th e se di ff e rent corpor a t i ons th a t is the Un i on
P a cific R ailroad and th e C r edit M obili e r
I t must be borne in mind th a t th e stockholders Of
the one and th e stockhold e rs O f th e oth e r w e r e id e n
tic a l a nd t hat wh a t e ver contr a c t s w e re m a d e by the
o n e w e r e known to the o t h e r
T he first larg e con
tr a ct t h a t w a s m a de w a s wi t h H M H ox i e and it
?
may be inter e sting to inqu i r e who w a s H ox i e T h e
contract which he had t a k e n imp l i e d not m e re ly an
exp e nditure Of m a ny m i l l i ons Of do l l a rs in the con
struct i on Of th e ro a d w hich w a s to be r e p ai d h i m i n
t he s e cur i t ies Of t he comp a ny but a subscript i on of
in s t ock O f t h e R a i lro a d T hese secu r it i e s
could not easily be converted into c a sh even fa r
below par thus making it a n ou t lay of cash
ess e ntially
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C REDI T
TH E
34
M OB
ILIER
W h o was this man with such unlimited mea n s ?
The testimony o f Mr O liver Ames before the C o n
re s s i o n a l committee is that Hoxie was a man O f
g
n o responsibility ; that he w a s an employ é o f the
road and had charge o f the ferry over the Missouri
river at O maha ; that it was never expected that he
would carry o u t the contract ; that he was simply a
fi gu e head ; a party to whom the contract was to
be let with the View Of his turning it over to some
o n e else
That some o n e else proved to be the Credit
Mobilier —th e very p a rties who under the guise of
a di ff erent name let the contract to him The same
is also true O f the contracts with B oomer and the
W a s it all the same
o n e made later with D avis
with the immense contract o f M r A mes which
was next to follow ? We sh a ll have occasion to con
sider this farther o n Up to this time th e n th e r e
had been built over three hundred mil e s f this
road and the construction was by th e Cr e dit
Mobilier Where did this corpor a t i on get all these
means ? They took th e ir p ay from the Union
Pacific R ailroad C omp a ny in the stocks and bonds
and it bec a m e n e c e ssary to conv e rt
o f the road
these into c a sh T hey could not buy nor co uld the
directors o f the r a ilroad sell th e stock o f the road
for l e ss th a n par ; and when it w a pl c d upon th e
market it would not bring more th an th i rty cents n
the dollar and few sales could b e made even a t th a t
any oth e r price
o
The road could no t issu e it for less than par a n d so
the Credit Mob i lier must los e at least seventy dollar
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TH E C REDI T M O BI L IER
6
3
D urant
was opposed to the Credit Mobilier as a
corporation having any further contracts with the
R a ilroad Company and it w a s not str a nge that such
should be the case G radually large amounts o f the
stock O f the R ailroad Company had been absorbed
by the public and unless some means were taken to
secure to themselves the b e nefits o f these great con
tracts they might lose their advantage
Some
more stringent me a ns must be used ; somethi n g
must be done by which the control o f the two cor:
i
n
t
o
should
remain
und
i
sturbed
and
secure
p
until the mission o f the Credit M obilier should be
accomplished a nd this w a s done most e ffe ctu a lly in
the next great move in the history Of this road
After the proposition Of
M S Willi a ms was
m ade no great change occurred in the situation f
a ff airs I n spite Of the alleg a tions to the contr a ry
the testimony Of the m a ny witnesses before the Con
th
a
t
work
was
constantly
e s s io n a l comm i ttee was
g
being done upon the ro a d a nd by the 1 6 th Of
—
—
August 1 8 6 7 the d a te o f the Am e s contract one
hundred and thirty e i ght miles o f the road west O f
the ne hundr e dth meridi a n had been completed
a n d acc e pted by the government and this c o n s t u c
tion had been done a t an expense on an average
including equipments o f a bout
per mile to
the Company Still l et us b e a r in mind that the
only evidence o f the cost Of this portion Of the road
rests on the testimony Of Mr D urant and that the
books f the R ailroad Company do not give any evi
denc e o f this cost
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OF
A M ERI C A
37
.
The O akes Ames cont ra ct o f which we shall n ow
s p eak was fo the construction o f 66 7 miles o f road
commencing at the o ne hu n dredth meridi a n at
prices ranging from
per mile for the first
hundred miles to
per m i le I t has bee n
alleged by some that there was an u n derstanding
between the o ffi cers o f these two companies that
this co ntract known a s the Ames contract should
be assigned by him for the benefit of the Credit
Mobilier B y others it w a s cla i med that it was on l y
a n I mplied und e rstanding B ut the facts show th a t
reliance w a s pl a ced solely upon th e hono r Of M r
Ames to mak e the assignm e nt for the benefit o f a ll
Howev e r this may be w heth e r t he underst a nding was
expressed or implied
wheth e r there was no und e r
standing a t all it i s hardly material ; for with i n two
months from the signing o f the contract by M r
Ames it was assign e d to sev e n persons as trus t ees
fo th e ben e fit o f the stockholders O f the Credit
Mobilier We shall consider the nature Of this
a ssignment a littl e furth e r on T hese trustees w e re
among the principal stockholders and d i rectors Of
the Credit Mobilier and the Union Pacific Ra ilro a d
Comp a ny and und e r their directio n that portion Of
the Union Pacific R ailro a d e mbraced i nth e Ames
contract was completed
That this contr a ct m a y be fully understood as
well as th e assignment to the trustees they will each
be set o u t in full
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IV
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THE A M E S C ON TR A C T A N D A S SI GM
OA K E S AM E S CO NT R AC T
THE
.
A GR E E M E NT made this 1 6 th day o f August
1 8 6 7 between the Union Pacific R ailroad Com
p any party O f the first part a nd O akes Ames
party o f the second part witnesseth
That the par ty o f the first p art agrees to let and
contract a n d the p arty O f the second p art agrees to
contract as follows to wit :
F ir t
The p arty of the second part agrees and
binds hi m self his heirs executors adm i nistr a tors
and assigns to build and equip the following nam e d
portions Of the railroad and telegr a ph line o f the
party o f the first part commencing at the o o th
meridian Of longitude upon the following t e rms a nd
conditions to wit
1 st 1 00 m i les at and for the rate Of
per m i le
2 d 1 6 7 miles at and for the rate of
per mile
00
1
m
i
les
at
and
for
the
r
a
te
of
per
mile
d
3
f
m
i
les
at
per
mile
h
a n d for the rate
t
1
00
4
1 00 miles at a nd for the rate of
per
mile
t
h
5
6 th 1 00 m i les at and for the rate o f
per mile
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38
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C REDI T M O BILIER
TH E
.
At least 3 50 miles shall be if p ossible
completed and ready for acceptance before the I st
d a y Of January 1 8 6 8 provided the Union Pa cifiq
’
Ra ilro a d Company tra n sport th e material
Th é
whole to be constructed i n a good and w
orkmanlik e
manner upo n th e s a m e ge n eral plan a i d s p e c ific a
tions as adopted east o f the 1 oo th meridia n Of longi
tude The party o f the second part shall erect a ll
such necessary depots machine shops machin e ry
tanks turn tables and provide all necessary ma
chin e ry and rolling stock at a cost o f not less th a n
p er mile in c a sh and shall construct all
such necessary sid e tr a ck as may be required by th e
p a rty O f the first part not exce e ding six per cent o f
the length of the road constructed and to be con
struc t ed under this cont r a ct The k i nd of timber
us e d f ties and in th e b ri dg e s a nd in its p re p a ra
sh a ll be such a s from t i me to time m ay be
tion
ordered or prescribed by the general agent o the
company und e r the rules and reg ul a t i ons and
standard a s recommended by the S ecret a ry O f the
1 8 66
I n terior of the date O f F ebruary
Wh e never o n e O f the abov e n a med sec
Th i d
tions Of the ro a d shall be finished to the s a tisfaction
and a cceptance O f the G overnment Commissioners
the s a me shall be delivered in to the poss e ssion f
the p a rty of the first part and upon such portions Of
the road a s well as O n that part e a st o f the 1 00th
merid i a n now completed the p a rty o f th e first part
S h a ll tr a nsport without del a y a ll m e n and m a teri a l
to be used in constructi on a t a price to be agreed upon
S e c o nd
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C REDI T
THE
M OB
ILIER
by the party of the second p art his heirs executors
administrators o r assigns and the general a gent
but not less tha n cost to the party O f the first part
The party O f the second p a r t his heirs
F o u r th
executors admi n istrators o assigns sha l l have the
right to e n ter upo n all lands belonging to the com
pany o upon which the company may have any
rights and take therefrom any material used in the
construction of the road and may have the right to
change the grade and curva ture with i n the limits o f
the provisions Of the act of Congress for the tem
purpos
e
ar
o f hast e ning the completion o f the
o
p
y
road but the estimat e d cost of reducing th e same to
the grade a nd curv a tures as est a bl i shed by th e chief
engin e er r as a pproved from time to t i me by the
comp a ny S hall be d e duct e d and ret ai n e d by the
p a rty o f the first part unt i l such grad e a nd curv a
ture is so reduced
The party o f the second p a rt his heirs
F ifth
ex e cutors administrators
assigns is to r e ceive
from the comp a ny and enjoy the b e ne fit Of all
e xisting contracts and shall assume a ll such con
tracts and all liabilities O f the comp a ny a c c r ued o
arising therefrom for work done o to b e done a nd
mater i al furnished or to be furnished for o o n
a ccount o f the road west o f the 1 00th m e r i d i a n cred
iti ng however the party f the first p a rt n this
contract a ll moneys heretofore paid expended on
account th e r e of
T he party o f the second p a rt for h i mself
S ix th
h i s heirs executors adm i n i str a tors and assigns
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ur
A M E R
IC A
4
.
1
sti p ulates and agrees that the work shall be prose
c u te d and completed with energy a nd all possible
speed so as to complete the s a me a t the e a rliest
practicable day it being understood that the speed
of constructio n and time of completion is th e essence
o f this contract
a n d at the same time the road to
be a fi t class road with equipments ; a nd if the
same in the O pinio n o f the chief engineer is not S O
pros e cuted both as rega r ds qu a lity and dispa t ch
that then the s a id party Of the first part shall and
may through its general agent or other O ffi cer
detailed for th a t purpose t a ke charge of s a i d work
and c a rry the s a me on a t proper cost and expens e
Of the party o f t he s e cond part
n th
The grading bridging a nd supe r
S
struc ture to be completed under t h e supervision O f
the general agent o f the comp a ny to the s ati sfa ction
and to be f t h e s a me ch a r
O f th e ch i ef engineer
act e r a s to the workmanship a nd mater i als a s in
the const r uc ti on f the ro a d e a st O f th e 1 00th m e ri d
ian
I t is how e v e r und e rstood th a t a ll i ron h e r e aft er
purch a sed o contr a ct e d fo r sh a ll be O f t h e weight
O f not l e ss th a n fi fty six pounds to the yard a nd to
be fi h b a r jo i nts
All th e expenses of the eng i ne e r i ng a r e
E igh th
to be h a rg e d and p a id by t h e p a r ty O f th e s e cond
part e x cept th e pay a nd salar y Of th e ch i e f e ng i n e e r
and consult i ng e ngine e r and th e i r imm e d i ate assist
ants and th e expenses o f the general survey o f the
rout e
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eve
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C
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4
THE
2
C R E DI T
M OB
ILIER
The depot buildings m achi n e sho p s
water ta n ks an d also bridges shall be o f the most
approved pattern and they as well as the ki n d o f
m aso n ry and other material used shall be previous
l y a p proved by the ge n eral age n t a n d chief engi n eer
a n d al l tu nn els shall be of the
o f the com p a n y
p roper width for a double track an d shall be
arched with brick o r sto n e whe n n ecessary for th e
protection of the same
Payments to be made as the work p ro
Tenth
e s s e s u p on the estimates o f the C h i e f e n in e e r
g
g
i n making which the engineer shall deduct from each
section its propo r tionate cost o f the equipment not
the n furnished station buildings superstructure a n d
cost o f telegraph ; but all materials delivered or in
transit fo the account Of the company may be e s
timated for
n th
Payments hereon shall be made to the
El
party o f the secon d part his heirs executors a d
m in i t ato s or assigns in cash ; but if the govern
ment bonds received by the company c a nnot be
converted into mo n ey at th e ir par value net and the
first mortgage bonds O f the company at ninety cents
o n the doll ar net then the said party of the secon d
part his heirs executors administrators and assigns
sh a ll be charged herein the di ff e rence between the
amount realized and the above named rates ; pro
i d e d the first mortgage bonds are not sold for l e ss
th an eighty cents o n the dollar ; and if there shall
not be realized from the sale o f such bo n ds a n
a mount s u fli c i e nt to pay the party o f the second part
I Vi nth
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T H E C RED I T M O BI L IER
44
tel e gr a ph l i n e i s included h e r e
ra i l r o a d a nd i s to be construct
i n und e r th e t e rm
ed i n the s a m e m a nner and wi t h similar mat e r i a l s
as i n th e l i nes e a st o f th e on e hundredth meridian
T he s a i d parti e s h e reto i n consideration o f th e
pr e mises and o f th e ir cov e n a nts herein do mutually
a gree s e ver a lly to perform a nd fulfil their several
respective agr e e m e nts abov e wr i tten
This contract having be e n subm i tt e d to th e e x e c u
tiv e committee by r e solution f th e bo a r d o f direct
August 1 6 1 8 6 7 and w e h a v i ng examin e d the
o s
d e t a ils o f th e sam e re commen d i t s e xecution by the
prop e r O ffi c e rs f the company w i th the H n O akes
Am e s th e p ar ty nam e d as th e s e cond part
F
o u r t e e nt
h
T he
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S
i
gned
)
(
O L I VE R A M E S
C S B U S H N E LL
S PR I N G ER H A RB A U GH
T H O MA S C D U R A N T
,
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Uni o n P a c ific
E x e c u ti v e C o m m i tte e
R a il r o a d C o mp a ny
,
.
T his
contract was adopt e d by the e x e cutive com
m itt e o n O ctob e r I t 1 8 6 7 a nd one condition O f i ts
b e ing a dopted w a s that it should re c e ive the w r itten
ass e nt f a ll th e stockhold e rs o f the Union P a cific
R a ilro a d Comp a ny
All this tim e the outstanding
stock o f the R a i lroad Company w a s continually i
cr e a s i ng a nd n ow a mount e d to about
This had b e en sold almost e ntir e ly among the
e
s
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h
,
OF
A M ERI C A
.
stockholders of the Credit Mob i lier and of this
nearly if no t quite e i ghty fi e per cent rem a in e d
in the hands f such s t ockholders B ut it was
necessary th a t th e control should be so a bsolutely
in the hands of a few Of t he pr i ncipal stock
holders that the man a gement o f the two co n cerns
until th e complet i on of this immense contr a ct should
not be changed T his w a s the next step to be
settled a nd it w a s S ettled beyond all controversy
I t might become nec e ssary before the completion of
the contract to place upon the market large amounts
Of the stock f the r ai lro a d comp a ny This m i ght
pass into th e h a nds o f those hostile t t he present
d i rec t ors ; might ind e ed e nd i n d i ssensions a nd
e v e n jeopard i z e the successful compl e tion of the
ro a d I nd e ed a t t h e last e l e ct i on of d i re c t ors pre
i u t o t h e m a king o f this con tr a c t th e l e c t ion w a s
a very clos e one and n e arly r e sult e d in a ch a nge O f
dir e c t ors T he migh ty responsibili ty th a t M Ames
had a ssum e d in s i gning this contr a c t w a t gre a t
to a llow a nything to stand between h i m a nd com
l
succ
e
ss
H
e
had
oblig
a
t
e
d
hims
e
lf
his
he
i
rs
e
t
e
p
e x e cuto r s a nd a dmin i s t rato r s for mor e t han $ 4 7
p e rh a ps t he l a r g e st Oblig ati on e ver a ssum e d
by a single indiv i du a l in t h e United Stat e s if n t th e
world A u e rror committ e d t d e fe at i t would
ruin him fo r e v e r a nd al l thos e a ssociat e d w i th him
E very point must b e p r o te c t ed e v e ry Obst a c l e must
be r e mov e d T h e c al culations had a ll be e nmad e ;
the in i tiatory st e ps h a d a l re a dy b e en taken E v e ry
a venu e t hrough w h i ch d e fe at could com e had bee n
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v o
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s
e
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oo
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TH E C RED I T
46
MO
BI L I ER
guarded and wh e n the contract had been r a tified by
t h e s tockholders the machinery was all ready for
O peration A n assignment o f this contract was
made n o t to the Credit Mobilier direct but to c e r
t ain trustees for the benefit o f the stockholders o f th e
Credit Mobilier but not to l l but only such as
b eing stockholders in the Union P a cific R ailroad
should have made and executed pow e rs o f attorn e y
o
proxy irrevocable to said trust e e s empowering
them to vote upon at least six tenths f all the shares
o f stock of the Unio n P a cifi c R ailroad Company
own e d by said sharehold e rs O f the Credit Mobilier
and upon six tenths O f all that might come to th e m
through any dividend resulting from said contract
This assignment is in the followi n g words Vi z
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a
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ASS I G N M E N T
CO N T R A C T T O T C D U R A N T A N D
O TH ER S
M E M O R AN D U M o f agre e ment
in tripl i c a te
m a de th i s 1 5 th d a y O f O ctob e r 1 8 6 7 b e twe e n
O ak e s Am e s of North E a ston M a ss a chusetts
p a rty o f th e fi r st p a rt ; T homas C D urant o f th e
Ci ty o f New Y ork Oliver Ames of North
E a ston Mass a chusetts ; John B All e y O f L ynn
Mass a chus e tts ; Sidn e y D illon of th e C i ty o f
N e w Y ork ; Co r n e lius S B ushn e ll of N e w
H a v e n Con n e cticut ; H e nry S M c C o m b o f
Wilmington D elaw a r e ; B e nj a m In E B a t e s of
B oston M a ssachus e tts p a rties o f the second
OF
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part and the Credit Mobilier
o f th e third part
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of
America party
,
O F AM ER I C A
47
.
the p a rty of the fi r st p a rt has
undertaken a cert a i n large con tra ct fo r th e con
stru ction O f a certain portion t h e re i n n a med o f the
railroad and telegraph lin e o f the Un i on Pacific
R ailroad Company O ver the plains and through
and over the R ocky Mountains which will require a
very l a rge and h a zardous outl a y o f capital which
capit a l he is desirous to be assured o f raising at
such times and in such sums as will en able him to
complete and perform the said contr act according to
its terms and conditions ; and
the Cr e dit Mobilier o f America the
Wh
party o f the third p a rt a corporation duly establish e d
by law is empowered by its C h a rter to advance a nd
loan money in aid Of such enterp r ises and c a n c o n
trol l arge amounts of capit a l for such purposes a nd
is willi n g to lo a n to s a id party O f the first p art such
sums as may be found nec e ss a ry to complete said
contract provid e d su ffi cient assurance m a y be m a d e
to s a id p arty of the third p a rt th e rein that said sums
shall be duly expended in the work Of completing
s a id railroad and telegr a ph line and th t the pay
ments for the faithful performance of said contract
by said railroad company shall be held and applied
to reimburse sa i d party o f the third p a rt for th e ir
loa n s and adva n ces together with a reasonable in
te e s t fo r the use o f th e money so loaned and a d
a n c e d ; and
Wh
said p a rty o f the third part fully believes
that said contr a ct if ho n estly and faithfully e x e c u
ted will be both profit a ble and a dva ntageous to the
Th a t
w h e r ea s
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TH E C RED I T M O BI L IER
8
4
parties performing the same are therefore willing
to guar a ntee the performanc e and execution o f th e
same fo a reason a ble commiss i on to be paid there
fo ; and
Wh
both parties o f the first a nd third part
have confidence and reliance in the i ntegrity busi
ness capacity and ability o f the sever a l persons
named as parties o f the second part hereto a nd con
fi d e n tl y believe that said persons have large interests
as well in the Union Pacifi c R ailroad Company as
in the Credit Mobilier o f America they will execute
a nd perform the sa i d contract and fa ithfully hold the
proceeds thereof to the just use and be n efit o f the
parties entitled thereto
Th f
it is agreed by and between the said
parties Of the first second and third p a rt hereto as
follows that i s to say
That said O akes Am e s party of the first part
hereto hereby for and i n consideration o f o n e dol
lar lawful money f th e Un i t e d St a tes to h i m duly
paid by the p a rty o f the second part and fo divers
other good and valuable consid e r a tions h e rein there
unto moving doth hereby a ssign s e t over and
transfer unto the s a id Thom a s C D ur a nt O liver
Ames John B Alley Sidney D illon Cornelius S
n d B enjamin E
B ushnell Henry S M c C o m b
B a tes parties o f the s e cond p a rt a ll the right titl e
a nd interest Of in a nd to the s a id cert a in contr a ct
hereto fore m a de and execut e d by a nd between the
Union Pacifi c R a ilroad Comp a ny a nd the s a id O ak e S
Ames bearing date the 1 6 th d a y o f August 1 8 6 7
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O F AM ERI C A
49
.
the construction of portions of the railroad and
telegr a ph line Of s a i d r ai lroad company to which
cont r a ct refe ren ce is herein made for th e m the said
p a r ti es o f the second part to have and to hold the
sam e to th e m and their survivors and successors fo
ev e r i n trust
th l
N
upon the following trusts and c o n
d itio n s and limitations to wit :
t
fi
That th e y the s a id part i es of the second
part shall perform all the terms and conditions of
the s ai d contr a ct so assigned in all r e spects which
in and by the terms and c o nd itio n th e re o f is under
t a ken and assumed and a greed to be done and per
formed by the said party o f the first part herei n
named
S e nd
T hat they the said parties of the second
part shall hold a ll the av a ils and proceeds of the
s a id contract and therefrom sh a ll reimburse them
selves and the p a r ty Of the third part hereto all
moneys advanced a nd expended by them
e ither
in ex e cuting o performing the s a id con
o f them
tract with interest an d commission thereon as here
in a fte provided
Th i d
O u t o f the said av a ils and proceeds to
pay unto the p a rties o f the second part a reasonable
sum as compensation for their services as such trus
t e e s f executing and pe fo m in g th e terms and
conditi on s o f this agreement which compens atio n
shall no t exceed the sum o f three thous a nd dollars
per a nnum to each a n d every o n e o f the parties O f
the second p a rt
fo r
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e es s
e v er
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rs
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TH E C RED I T M O BI L I ER
0
5
To hold all the rest a n d residue o f the
s aid p roceeds a n d avails for the us e and be n efit o f
such o f the several persons holding and owning
shares i n the Capital stock o f the said Credit Mobilier
o f America
f the date hereof in propor
o n the day O
tion to the n umber o f shares which said stockholders
n o w s everally hold a n d o wn
and for the use and
ben efit o f such o f the several assignees and holders
o f such shares o f stock at the times herein set forth
for th e distribution o f said residue and remainder o f
said avails and p roceeds who S hall comply with the
p rovisio n s conditions and limitations herein con
to be complied
ta in e d which are o n their part
with
F ifth
To pay over o n o before the first W e d ne s
day Of June and D ecember in e a ch year o within
thirty d a ys thereafter his just sh a re a nd proportion
O f the residue and remai n der f the s a id proce e ds
and avails as shall be justly e stimated by the said
trustees to h ave bee n m ad e and e a rned a s n e t profit
during th e pr e ceding six months
o n said contract
t o each shar e holder only in said Credit Mobili e r o f
America who being a stockholder in th e Union
Pacifi c R a i lro a d sh a ll h a ve made and executed h i s
p ower o f attorn e y o proxy irrevoc a ble to s a id sev
eral parties o f the second part their survivors a nd
successors empowering them the said p a rties o f the
second part to vote upon at least s i x tenths of all the
shares of stock owned by said shareholders o f the
Credit Mobilier o f America in the capital stock O f f
the U n ion Pacific R ailroad Co m pany o n the day f
F
o u r th
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THE
2
5
case
C RED I T M O B I L I ER
a vacancy in the bo a rd f truste e s th e
c anc
to
be
filled
by
remaining
trustees
in
c
a
se
of
;
y
wilful neglect or fraud o f any trustee he was to be
deprived o f his trusteeship and all interest through
The trustees a greed to accept
o r under the contract
the trust and faithfully perform its conditions T he
Credit Mobilier agreed to adv a nce the necessary
funds at seven per cent interest and to guarantee
the performance and execution of the contract a n d
to hold harml e ss and i n d e mnify the p a rties of the
first and second part from a ny loss through s a id
contr a ct fo a commission o f two a nd o ne half per
cent o f the money advanced by it a nd a further
agreement that the net profits of the work fin i sh e d
1 86 7
o n the first hundred m iles prior to January I
should be paid to the Credit Mobilier
This assignment is signed by O a k e s Am e s by
each o f the seven trustees and by the Credit M obil
ier O f America by Sidney D illon president
Such is the contract and its assignment ; and in
wh a t respect does it di ff e r from the c ontr a ct Of
Hoxie except in its magnitude and di ff erence in the
parties The one w a s given to an irrespon sible
who
it
was
n
ever
intended
should
complete
C
O
p
the contr a ct but was used as a figure he a d to trans
fer the contract to the Credit Mobilier — i other
words b a ck to the Pacific R ailro a d And it is i n
deed understood and Claimed by many even of those
who have paid the subject much attention that th e;
other though a man o f large means o f great e x e c u
tive ability took the co n tract simply for the purpose
of
o
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O F AM ERI CA
53
.
turni n g it over to a board of trustees com p osed of
th e o fli c e rs and directors and principal stockholders
o f the two corpor a tions who should then hold the
absolute co n trol o f both corporatio n s and who by
this means could use for their own exclusive benefit
the extraordinary franchises and concessions a n d
loans which the governmen t had made to push
forward the building o f the Pacific R ailroad ; but
this is a position which cannot be maintained b y
a n y o ne who will give the subject a careful con
sideratio n and try to arrive at a true understanding
o f this co n tract an d its assig n ment
We are ready to a ffi rm —a nd we believe this
—
contract a n d assignme n t will be a r us o u t that
the Credit Mobil i er as a corporation had nothing
whatever to do with this contract or its execution
We hav e before alluded to the hostility o f Mr
D urant toward the Cr e dit Mobilier
NO contr a ct
could by reaso n o f that hostility be made to the
Credit Mobilier o r to any o ne who would assign
it to that company As matters were standing the
construction o f the road must soon be brought to a n
end The Credit Mobilier had indeed b e e n con
f
a
part
the
ro
a
d
without
any
contr
a
ct
s t u c tin
g
but this was a dangerous proceeding a nd might end
i n total loss E ff orts were made to g e t some c o n
tractor to take a contr a ct but in all th e country
th e re was no man so foolish At l a st e fforts for a
compromise w e r e mad e a nd r a ther th a n see the
road fail rather than see th a t project to which his
l i fe was devoted brought to a n i n glorious end
of
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TH E
54
.
C REDI T
M OB
ILIE R
Mr Ames was p revailed upo n to take the contract
I n taking it his motives were high honorable an d
p atriotic The road was a p ublic a n ation a l n e c e s
To falter now the consequences might be the
s ity
aba n donment for generations o f any attempt to cross
the continent by means o f a railroad Mr Ames
considered w e ll the responsibility h e assumed H e
believed also that by proper management the road
could be built at the contract p rice so th a t a small
p rofit could be realized to the contractor a n d he
firmly believed that when the road was once com
l
e te d the increase of business along its line would
p
make its securities valuable There was o n e con
dition he imposed and that was that the contract
must receive the assent Of every stockholder Of the
Union Pacific R ailro ad in writing
When the
question was raised as to the manner in which this
mighty contract was to be executed Mr Ames
insisted that he must take the contract untramm e l e d
by any promise agreement o understanding He
could t e ll no ma n what he would do
O f course
said Mr Ames I must have a ssociates but no
man sh all be wronged no o n e S hall be deprived o f
his rights I am an honest man and I will see that
every man is protected
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V
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TH E A S S I GN M E N T TO SE VE N TR US
O TH
sides to the co n tro v ersy whic h made this c o n
B tract necessary pl aced the utmost c onfid n c e in
Mr Ames and in the integrity o f his ch a racter a nd
w e re sure th at the rights o f al l would be prot e cted
Thus Mr Ames took this great co n tract with no a gr e e
ment un derstanding o r p romise He made none
and none w a s exacted o f him Y et all felt a c o nfi
dence i n him that the contract would be so used that
the int e rests of all should be guarded The contract
properly belonged to the Credit Mobilier which had
commenced the constructio n o f the road and had
continued it up to the date o f the contr act I ts e ntire
capital had been absorbed in that work and not o n e
cent o f r e turns had been made to the stockhold e r s
What profi t there was if a ny had bee n made had
been mis a ppropriated by those who h a d fo
w hich
merly held the ma n a gement
those stockholders h a d paid for the c a pital stock o f
that company w e re now in th e Union Pacific road
bed T hat road had r e a ped the b e nefit while the
me n who paid the money had nothing to S how fo r it
This was the View which Mr Ames took and h e
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55
TH E C REDI T M O BILIER
6
5
determined that this contract should inure to th e i r
b e n e fi t — to them as individuals and not as a corpor a
tion H e therefor e made his ass i gnment to seven
tru stees for their benefit provided they would S hare
with him the responsibility o f the contract ; a nd pro
v i d e d also that they were holders Of Union Pacific
stock I t was an assignment for the benefit of cer
tain specified individuals those individuals being
also stockholders in the Credit Mobilier T his term
was used to designat e them because o f its simplicity
and had no relation to the corporation o f which they
were members I f instead Of the fourth and fifth
clauses Of th e d e cl a r a tion o f trust cont a ined in the
ass i gnment above the wording h a d been T hold
all th e r e st and r e sidu e of the s a id proceeds and
avails fo the use and b e n e fit f ( h e re n a ming e a ch
individual stockhold e r o f th e C r e dit M obili e r by
name ) in the proportion following to wit to ( h e re
designate the proportion which each was to have it
b e ing the same proportion as the stock owned by hi m
bore to the entire capital stock o f the Cr e dit Mobilier
B y doing this the exact obj ect d e s i red wou l d
h ave be e n obtained and the connection with the Credit
Mobilier — unfortunat e as it proved to b e —would
h a ve been avoided The n could h ave fo l lowed the
condition about giving proxies and e v e ryth i ng would
hav e b e en pr e cis e ly a s it was without th e compli
cations that a ft e rwards arose At this tim e ther e
wer e about n e hundred stockholders i n the Credit
?
Mobilier an d so fo convenience the d e signation o f
stockhold e rs in the Credit Mobili e r was used
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A M ER I CA
OF
.
Upon th e s e grou n ds it is th a t we a ffi rm that the
Credit Mobilie r had not h ing whatever to do with the
Ames contract T his position has a lso been a ffi rmed
by th Suprem e Cou rt of Pennsylvania where the
Cr e dit Mobilier was sued fo taxes to the amount o f
upon the dividends declared by the
trustees and it was there decided that the Credit
Mobilier had d e clared no dividends Could stronger
a rguments be used than th a t the State o f Pe nn sy l
vania decid e d a gainst its o wn claim to the amount
f more th a n a million dollars ?
Upon this a ssignment being made the U n ion
P a cific R a ilroad Comp a ny rele a sed Mr O akes
Am e s from a ny personal liability under the c o n
tract he h a d signed The great liability which
Mr Ames assumed in less than two months had
e ntirely v a nished and a g a in he w a s a s fr e e as before
h e sign e d it Under th a t contract he incurred no
liability h e d i d not even ent e r upon th e fulfilling o f
the contract but for these two months it l a y dorm a nt
in fact for n e arly this entir e tim e it w a s inop e r a tive
I t ne e ded the wr i tt e n assent of a ll th e stockholders
f the Un i on Pacific R a ilroad a n d this a ssent w a s
not Obtain e d unt i l after the first f O ctober SO th a t
in fact and in re a lity the person a l l i a bil i ty o f O akes
Ames und e r the contract amounted to nothing
T here w a s how e ver a di ff er e nce in ne respect
which should be noticed a nd which indeed h a s a
very pow e rful b e a r ing upon not only th e liability f
O akes Ames but o f every b e nefic i a ry under the
contr a ct O n e cond i t i on which Mr O a k e s Ames
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TH E C REDI T M O BIL I ER
8
5
insisted upon before he would accept the co mm a
was that it should receive the asse n t in writing of
e v e ry stockholder of the Union P acific R ailroad
T his was obtained He then assig n ed the contract to
the trustees and th e n the agreement which all the
st ockholders in both compani e s made made them
each individually l iable under that contract Though
O akes Ames was i n reality released from perso n al
liability under the contract by the Union Pacific R ail
road Company upon his assigning th e co n tract he
in common with all others agai n took that liability
upon himself an d no man bore the brunt o f that lia
b il ity more th a n did he His whole immense fortune
was involved in the undertaking ; and it came near
wrecking him financially H e was at o n time
forced by reason of the responsibility under this con
tract an d his investments therein to suspend pay
ment in his e g u l b u s in e s s and a sk f an extension
by his creditors His liabilities at that time amount
ed to some
B ut with a courage seldom
if ev e r equalled he continued n in this e nte r prise
an d a t last was successful a nd saw the road com
I
n
time
a
ll
his
cr
e
ditors
were
fully
satisfied
l
e te d
p
F rom this time forth the control f the Union Pa
c ifi c Ra ilro a d passed from the hands o f its directors
and o fli c e s into t h e hands o f the seven truste e s who
were constructing the road an d into their hands
irrevocable powers f attorney had been given by the
stockholders to vot e upon th e ir shar e s thus e nabling
them to hold absolut e control o long as they shoul d
desire C e rt a inly they were not long in understanding
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60
TH
E C REDI T M O B I LIER
forward rapidly by the C e d t Mobilier ; and a t th e
date o f the assign m e nt — which is essentially the
date o f the ratification o f the contract by the stock
—
holders there had been 2 38 miles o f the road
completed which were embraced in this contract
i n oth e r words more than O ne third o f the whole
contract was completed before a stroke had been
done Y et these 2 38 miles which had been c o m
l
i
n
e
t
d
at
a
cost
n
ot
exceeding
p
er
mile
e
p
(
cluding equipme n t ) to the compa n y were paid for to
the trustees at a rate O f over
r mile
This
e
p
was a p o fit — if such a n ame is applicable to it — o f
betwee n
and
under this con
tract for which n o work was needed o ever done
though all this work had been done by the Credit
Mobiler
more strictly speaking by th e stockhold
ers o f the Cr e dit Mobil e r
I n l e ss than two months a fter th e a s signm e nt ( viz
D e c e mber 1 2
the fi r st divid e nd w a s de
which was
in first mo r tg a ge
Cl
ed
bonds of the Union P a cific R ail ro a d Comp a ny a nd
in the stock f th e company Consid e r
ing the bonds at th a t time worth e i ghty fi e cents
a nd th e stock thirty cents o n the dollar would
make th e a ctual cash value Of th a t dividend at
the time it was declared about
and
this beyond all question is the extra c o m p n
sation paid to these trustees o n account f th e
road already completed and to that extent a pay
ment to the stockholders o f the Credit Mobiler fo r?
the work done by them without a co n tract F rom
I
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O F A M E R I CA
61
.
this amount there should be deducted
paid by the trustees to the Credit Mobilier o n
account o f the ro a d included in th i s contract which
had been constructed by that Company These
trustees continued to work under this Ames con
tract until it was completed The work was pushed
forward with wonderful rapidity a n d as a natural
consequence greatly i n creased th e c o s t o f c o ns tru c
I t was asserted by o ne o f the trustees that had
tion
the full time bee n taken i n which to complete the
road it could h a ve been built at scarcely more than
o n e half what it did cost
G reat stress has been laid o n the fact that at the
time the Ames contract was made the estimated cost
o f buil ding the road over the mountains was greatly
in e xcess o f wh a t it really cost n account O f the
discovery of a n e w route which was much more easy
and far less expensive T his is set forth as o ne
excuse why the Ames contr a ct was to include all
from the 1 00th meridian ; that by s o doing the c o n
tract would be less for the whole distance and thus
the average expense would be the s a me fo there
bei n g a large profit upon the first portion the con
tr actor could a fford to take a less sum per mile for
the more d ifli c u l t port i on B ut it is a fact well set
tl d that the very route upon which the road was
built was known months before that contract was
give n and the advantages of that route were all
known to the contractor and were considered by
him i n his calculations and in making these calcula
ti ons no o ne believed that the more di ffi cult p ortions
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TH E C RED I T M O BI L IER
62
the road could be built for the price named i n
the contract and had not th i s port i on b e en included
the average for the bal a nce must h a ve been n e c e s
s a il
largely
i
n
creased
B
ut
there
remains
the
y
other fact which should n ot be forgotten that the
completed work i n cluded in this contract had been
performed by the Credit Mobilier ; and by the con
tract and its assignment the trustees were to rep a y
the Credit Mobilier fo r this work which was done
and o u t o f the money so received the Credit M obilier
declared the o n ly dividend it ever made
I t is claimed th a t the pl an of letting this contract
to Mr Ames including as it did the fin i shed por
tion ignored the right o f the government in the
premises and was calculated to destroy all that i n
te e s t
The government had given them the right
had granted them larg e subsidies o f mon e y
o f way
for every mile o f road to be built and had consented
to take a second mortg a ge as security ; had given
them the privil e ge Of creating a debt equ a l to the
amount advanced by the government which should
have precedence ; and in return asked that a cer
tain proportion o f the net profits should go to the
government a nd that the government should have
the right to regul a te the fares when the n e t profits
S hould exceed a certain per c e nt o n the cost o f the
road and tha t by this vast increase in the cost f th e
road the i n terest o f the governm e nt was practic a lly
destroyed and the cl a im to regulate tari ff s made o f
no e ffect B ut we shall have occasion to co n side r
this right O f the government further o n
of
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O F AM ER I C A
63
.
The Ames contract w a s finished but i n the mea n
ti m e another contr a ct h a d b e en l e t a nd i n a fe w days
after it was made w a s a ssign e d t o th e s e s a me tru
tees This the D avis contr a ct w for the balance
of the road from th e end of th e Ames contr a ct and
embraced about 1 2
miles and i t w s upon the
same t e rms and co nditions as the Ames contract
Under th ese three contracts was constructed the
entire ro a d
The di ffi culties which were surmounted w e re such
as to attr a ct th e att e ntio n of the world I t w a s the
gr e a t e st en t erprise ever undertake n in Am e rica I t
was th e fi r st a nd public O pinion must b e control l e d
public confidence must be secured ; th e c a pit a lists o f
the country must be induced to put th e ir money into
an ent e rprise wh e re failure was openly predict e d
and by the m a ny firmly believed ; there was no s e
c u ity except the obl i g a tio n o f the seven truste e s a nd
the bonds of the governme nt which then wer e b e low
par I t was a qu e stio n O pen to discussion whether
the ro a d would pay e ven i f complet e d Th e debt
that mus t be cr e at e d w a s l a rg e and seem i ng l y i m
possibl e to meet ; the r a te of int e r e st was great a nd
would e a t up all the e a rnings o f the ro a d T he 0p
tin g expenses must nec e ss a r i ly b e l
The
e
e
g
local busin e ss of th e ro a d could not be depended
upon for any considerable income un t il the country
through which it passed should become s e ttl e d a nd
that coun t ry was the n believed to be but little better
th a n a desert where nothing but the h a rdy sag e
bush would grow or else it was through th e
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64
TH
E C RED I T M O B I L I ER
mountains where even man could no t live I nde e d
the undertaking was a ha z ardous on e i nd e e d it w a s
enough to appall the stoutest heart and to fright n
the most reckless capitalist Y et these me n were
n ot to be diverted from their course ; they had
emb a rked their n a m e s their for tunes upon its
accomplishme n t , and the most discour a g i ng events
could not make them abandon the Object o f their
lives
Though they were many Of them men of immens e
resources though their credit had stood in business
C ircles the very h i ghest they soon found their credit
in many places b a dly sh a ken and their ability to
carry on the mighty work greatly impeded T hey
were compelled to take the securities ofthe road and
to hold them because no market could be found for
them ; they were forced to borrow money at most
ruinous rates of interest ; they w e e f c e d to pl a ce
the bonds of the road in pledge for the n e cessary
c a pital and that at times at th e rate O f three
dollars to o ne I t ne e ded the most w a tchful care
the greatest ability i n the country and the most
extraordin a ry energy to carry it o n a nd all this
i t h a d I n spite f a ll discouragem e nts the road
w a s completed —complet e d seven years before the
—
time limited and it became at once a n a tional
highway ; the country through which it p a ssed was
found to be a fa ir proport i on of the distance the
nearest approach to the G arden o f E den now found
on earth Towns and C ities sprang up a long the l ine
Territories became states and a happy prosperous
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O F A M ERI CA
65
.
people swarmed over those o n ce desolate p lai n s
t o find there homes of contentment a n d peace
B usiness was gr e atly incre a sed far beyo n d even
the expectation of its builders ; but there was yet
much to d o
Much ca p ital was n eeded and it was n ecessary
that the me n who had risked their all i n its c m
i
l
e
t
n
should
n
ow
sta
n
d
ready
to
aid
it
s
ill
with
their
o
t
p
means E ven with the success alre a dy attain e d h ad
the suppo rt of these me n been remov e d the road
would have become bankrupt and the millions th at
had been spent i n its constructio n would have been
wasted At the completio n o f the road the company
fou n d itself
in debt and this burden must
fall upon individuals to be followe d by others n e c e
sary to keep the road in active operation until a busi
ness was created a ffording revenue s u fli c ie nt to meet
the running expenses and interest and this burd e n
w a s su fficie n t to destr oy n early all profit d e riv e d fro m
the building of the road
Wh a t was that profit ? Was it so great a s to alarm
any thinking mind ? W a s it such a s to call forth the
?
criticism of the public W a s it such as to convince
the world that gre a t corruption h a d been us e d to se
cu r e it ? I n esti m at ing profit we should always
consider the outlay and the risk assumed In con
id e in g this portion o f the subj e ct the figures will
be taken mostly from the testimony brought o u t by
the Congressional committee of investigation in
1 873
F rom the report of the committee it appears
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TH E C R EDI T M OB ILI E R
66
T HE
COS T
T O THE
R A I LR OA D C O M P A NY
The Hoxie contract was
Ames contract
D avis contract
24
94
10
M aking to tal cost
THE
COS T
OF
28
C O NT R A C T O R S
TO THE
The Hoxie contract
Ames contract
D avis contract
OF
33
,
99
62
94
L eaving a profit to contr a ctors
34
I n addition to this there was a p a y
,
ment to the Credit Mobilier
count Of fi fty eight m i l e s
on ac
-
00
,
Making the tot a l profit
34
This profit it should b e r e membered includes th e
p ayments Of bonds and stock a t par and not at i ts
c a sh v a lue I t is therefore n ec e ssary to asc e rt a in
th e proportion a te value O f each o f this l a ss o f pay
ments in order to ascertain what w a s the c h profit
in the construction o f the road T he books o f the
comp a ny S how th a t the p rofits und e r the Ames a nd
D avis contracts w e re composed of
first mortg a ge bonds worth ninety cents
o n the doll a r
certificates fo first mortg a ge bonds
afterwards conv e rted into income bonds at abo ve
par
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TH E C R ED I T M O BI L IER
68
In
this co nn ection attention is called to the aid
which the gover n me n t extended to the road i n its
o wn bo n ds
and in the first mortgage bonds which
the government had allowed the road to issue an d
to make a lien upo n the road prior to the Claim o f
the gover n ment
F irst mortgage bonds issued
00
Sold at a discou n t o f
3 494 9 9 1 2 3
,
,
.
2
Net proceeds
G overnment bonds issued
Sold at a discount f
77
00
2
7
o
Net proceeds
The n et proceeds
Of
28
of
the
two
C lasses
b o nd s
05
We have seen that the actual cost o f
the whole road to the contractors
was
94
V alue o f the bonds over cost o f con
1 1
structio n
I n other words the n et proceeds o f the gover n
ment and first mortgage bonds were su ffi cient to pay
fo the construction Of the entire road and from the
stock the income bonds and la n d grant bonds the
contractors received i n cash value at l a st
as profit being about forty eight per cent o f the
whole cost This profit which certainly is a large
it is
n e in whatever light it may be considered
laimed by the directors of the Credit Mobilier fis
not the correct statemen t o f th e cas e but that the
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C
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O F A M E R I CA
69
.
actual profit received by them is far less than this
that it did not in fact aggregate more than about
fiftee n per ce n t but how any such conclusion ca n
be reached from the figures presented by the c om
m i tte e is far more than the ordinary intellect can
understand The claim is made a n d with some
force that at times the stock which they took was
worth far less tha n thirty and that sales were made
eve n as l w as nine cents o n the dollar ; but eve n
co n sideri n g that the entire issue had been sold at
that rate the cash profit would have reached at least
o ab o ut thirty two per cent o n the cost
B ut the evidence o f all parties was that the average
n et price o f the stock was thirty cents o n the dollar
T his is the reasoni n g o f the committee o n investi
to
us
as
a
most
wil
a tio n i n Congress but it see m
g
ful perversio n of fig u e — n un a uthorized use o f
those figures to prove a proposition which had been
in their minds at the start and which they were de
te m in e d to maint a in and prove it mattered not by
what means This estimate m a de by the committee
leaves o u t from the cost o f the ro a d a l a rge number
O f items which w e re expe ndi tures o f the Cre dit
Mobili e r but which might not enter into a n estimate
actu a l cost O f building the ro a d E very
o f th e
man who has done any business knows full well that
there ar e always expens e s that could n t be c al c u
lated a s items f this actual cost
Such w a s in
deed the testimony f the w i tnesses b efor e this
committee but th a t t e s t imony was u tterly ignored by
the committee in their report I t would tell agai n st
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C RE D I T
THE
0
7
M OB
ILI E R
their argume n t a n d the bias which it is manifest they
e n tertained from the beginning o f the Invest i gation
Again the committee refused to take n otice o f the
testimony O f losses amounting to millions f dollars
which the Cr edit Mobilier sustained notably the loss
o f their entire capital o f
which had bee n
paid in in cash and was entirely used up in the con
struction of the road and which should properly be
deducted from the profits shown The committe e
also have recorded as profits the transfer o f mo n ey
from o n e account to another as an instance the pay
ment by the trustees Of
to the Credit
Mobilier T he committee cite it as a payment by
the Union Pacific R ailroad Company Again the
committee have figured as p fi t actual l
as
may be see n in the bonus which the Credit Mobilie r
was compelled to give in order to get the additional
capital subscribed fo
As a n i n duce m ent to th e s a l e
the Credit Mobilier gave
o f these additional shares
in first mortgage bonds for each
sub
scription to the stock I n this way
of
these bonds were d i posed o f it being a loss to the
company of that am o unt but which the committee
No have the committee
h ave set forth as a profit
noticed the gre a t losses which the Credit Mobilier
and the trus te e s sustained in their endeavors to find
a market fo r the securities they had taken I t was
of
cl early in evidence that more than
Union P a cific stock w a s sol d by the Credit Mobilier
at
per share because it could be disposed of
in no other way
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O F AM ERI CA
1
7
.
B ut n ow the actual profit ear n ed by the Credi t
Mobilier and the trustees was i n evide n ce before the
committee but i n their report they made no allusio n
to it ; let us do th a t and the n we may understa n d
T here was never any qu e stio n raised but that all th e
profits m a de und e r these co n tracts were divided I n
fact the committee states that such w a s th e case
B elow will be found the date o f each dividend the
recko n i n g the
a m OII nt and the cas h value o f each
bo n ds at 8 5 a n d the stock at 30
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,
D ec
.
D ec
.
F i rs t m o rt g age b o n d s
3
.
,
,
D ec
.
D ec
.
,
,
,
,
00
Cas h ,
F i rs t m o rt g a g e b o nd s
Unio n Pac i fic St o c k ,
1 2 pe r c e n t d i v
C r Mob
50
,
86 7 ,
1
00
C as h ,
.
2 9 , 1 86 8 ,
,
40
,
F i rs t mo rt g a ge b o nd s ,
1 868 ,
J
n e 1 7 1 86 8
u
J
1
l
u
8
8
68
J y
u l y 3 1 868
J
an
Uni o n Pa c ifi c Sto c k
1 2 , 1 86 7 ,
80
,
.
.
.
00
.
00
,
70
t g th l o s f th
n e nt i
l
( wh i h w
D e d u c in
as a
c
L e av es
s
e
as
th e
ne t
o
e
re
t
C re d i
oss
)
ro fi s , c a s
p
t
M o b i l ie r
t l
c api a
,
00
,
h
l
70
v a ue ,
To this there S hould perhaps be added th e pres
e n t value o f the Credit Mobilier stock
B ut that
value i s uncertain and if the utmost th a t i s claimed
by some should be reali z ed there might b e added
about
to this as the total profits B ut
these C l a ims are very uncertain
This being all the profit realized from an e x pe n
B ut
d itu e of a bout
o about 1 2 per cent
n ot counting at all this loss of capital the profit would
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TH E C REDI T M OB I L IER
2
7
be but little over 1 6 per cent upon the cost T his
conclusio n coincides with all the testimony before th e
committ e e and to an unprejudice d min d shows th e
bias o f this committee and the determination t o n u
earth some gigantic fraud whether it existed there
F rom this re p ort were derived nearly all the
or n t
arguments that were made before Congress upon
this subj ect and which arguments have tended to so
large an extent to influence the p ublic min d and
pr ejudice the p ublic against the operations o f the
Credit Mobilier B ut how cha n ged is the r e sult !
The immense profits o f
which have
been paraded before the country have dwindled
down to less th a n t e n millions upon a n e xp e ndi ture
Certainly this is a profit that
o f some
may of itself sound large but it was the result o f
some four years work and of gre a t e xp e nditure
The profit w a s not larger tha n th a t wh i ch som e o f
merchant princ e s w e re making at the s a me time
ou
and against whom no thought o f wrong w a s ever
entert a ined but whose i n dustry and skill wer e
highly commended
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VI
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TH E D I F F I C UL TI E S OF C ON S TR UC
TI OJ V
.
must at all times consider the risk and the
circumstances under which that risk was
ta ken I t should be remembered that there was no o n e
else willing to undertake so great a contract no one
who would be willi n g to risk all he had in such an
endeavor He must feel sure th at he could recov e r
himself from his grea t ou tlay and this no o n e could
do The company had tr i e d to build the road itself
and had wholly failed so that it bec a me necessary
to even sell their rolling stock to p a y their debts
Whatever was don e mus t be don e und e r the greatest
disadvantage All materials us e d in construction
had to be tr a nsported ov e rland or by me a ns Of the
Missouri R iver which was exceedingly expensive
The people were afr a id it would n o t succeed and a t
tim e s could not be induced to buy its b onds and thus
indeed the c a pital necessary for its completion could
no t be O bt a ined
Under all these discouraging cir
c u m s ta n c
this co n struction company took hold o f
the work and pushed it forward to comple t ion Why
E
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es
.
73
TH E C REDI T M O B I L I E R
74
was a construction comp a ny necessary ? I t was
n ecessary in order to limit the liability in case of
loss I ndividuals engaging in it might find them
selves involved as partn e r s to the full exte n t o f al l
debts contracted while the liability of the constru e
tion company was limited to the amount of its capi
tal B ut this was only o n e reason There w e r
others more powerful B y the charter u n der which
the road was built it was provided that the capital
stock was to be
and that the books for
subscriptions to stock were to rema in ope n until th e
whole amount shoul d be subscribed To have ena
bled any company Or set of men to obtai n control
o f the road woul d have rendered necessary a sub
scription o f some
Such a subscri ptio n
was an utt e r impossibility E v e ry e ffort that coul d
be made w a s mad e at the b e g n n n g and in two
years the total subscri ptions amounted to o nly a
trifle over
No man
company could
be i n duced to engage in such a gig a ntic scheme
unless they could be assured that when the work
was in progress and success assured they w e re to
remain secure i n their hope o f profit Supposing
f
that a subscriptio n of
the
amount
o
(
stock finally issued ) had been made and the work
gone o n Here there would have been no chan ce
fo any p rofit to be made from construction for the
work would then be done by the road itself an d the
only chance for any profit from this investme n t
would be i n the running o f the road after its c o m
Wh
e
n
the
work
was
o far along that its
l
e tio n
p
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TH E C REDI T
6
7
M OB
ILI E R
as though other roads had reached across th e
continent demonstrati ng beyond a doubt that such
an en terprise was possible o f success it was no t as
though the certai n ty o f its accomplishment had in
spired the co n fidence o f the public i n it and had made
it plain th at it would be safe fo r capital to invest
L ike all first experiments it had all these Obstacles
to overcome and subdue I t was like the pioneer
who goes far into the wilderness to prepare a foot
hold for the more timid to follow The success o f
the first endeavor has made it easy to ins p ire public
co nfidence in other similar e n deavors and n o w in
the popularity o f such undertakings we are apt to
lose sight o f the C ircumstances surrou n ding the first
The first was completed and has been in successful
operation fo r more than eleven years but to this
day though various lines have b e e n started and
have received the same fostering c a re and a ssistance
O f the g overnm e nt not o n e in this length of time
has Op e ned a line to the Pacific an d w i ll not fo
som e years to com e T hey certainly do not have
so g re a t di ffi culties to surmount Public confidence
h a s been established and it has been demonstrated
th a t such roads can be built and that when built
are o can b e m a de paying investments However
great may be the cry ag a inst the immense profits
that the Credit Mobilier m a de in the construction o f
the Union Pacifi c Ra ilroad all this cry has arisen
o u t O f the fact th a t certain m e mbers O f Congress
became interested in the stock o f the Credit Mobili er
and political capital was made o u t Of it for the
no t
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O F A M ERI C A
p urpose
77
.
controlling elections Other roads have
been built i n the same way and a r e still b e ing built
i n the same m a nn er How many people a re there
no w to whom the name o f Credit Mobilier is per
fe c tl y familiar who have ever heard of the Contract
and F inance Company a n d who if asked to day
could tell when or where such an organizati on ever
existed
And yet it is a corporation almost id e nti
cal with the Credit Mobilier so far a s its purposes
and organizatio n are concerned and in the work
which it did The Co n tr act and F inance Company
w a s organized under the laws of the State of Cali
fo n i a and was used for the purpose of constructing
the Central Pacific R ailroad from S a n F rancisco to
its junction with the U n io n Pacific R ailroad I t
was i n operation at the same time that the Credit
Mobilier w a s at work on the e a stern s i d e o f the
R ocky Mountains a nd wa composed o f the prin
C p a l stockholders o f the Central Pacific Ra ilroad
T his company had a contract to build some six
hundred mil e s f the road and the profits that aros e
from that const r uction were v e ry large —fa r larg e r
than those o f the Credit Mobil i er — and this profit
instead o f being divided among the stockholders f
the Central P a cifi c R a ilroad as w e re the profits f
the Credit M obilier a mong the stockhold e rs of th e
Union P a cific R ailroad w e nt into the pockets f a
very few individu a ls I n e ffect these few individuals
took the contract O f building the ro a d of th e ms e lves
as representatives fo r that road at an immense
profit The gover n ment was interested in the road
of
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TH E C REDI T M OB I L IER
8
7
same and to the same extent as in the Union
Pacific R ailroad B ut h o w chang e d the C i c u m s tan
ces when a fe w members of Congress happened to
own a few sh a res in the n e The o n e h a s be e n
condemned unmercifully ; its o ffi cers a nd those int e r
e s te d in it
have been branded as felons ; its name
h a s become a b y word for infamy whil e the other
pursuing the same plan only not half so liberal t
the general public has gone free and its n a me
even is almost unheard of outsid e of speci a l C i r cl e s
?
W a s the government defrauded by th e one then
also was it by the other Was its pri nciple wrong ?
then so was th a t f the other I s the one to b e
condemned then so must the other Must a pol i cy
f h a t e be inaugurated against the one ? th e n S O
must it against th e other
Must the o n e be held
up for publ i c cond e mn a tion ? th e n so must th e
other T h e y meet a lik e on common ground T hey
w e re e a ch a ctuat e d by the same motiv e s T h e
public has r e ceive d the same gre a t and wond e r ful
adv a ntages from e a ch A gre a t n a tional highway
h a s b e e n constructed T he union o f our common
count r y has b e e n c e ment e d by ties that can neve r
b e broken ; a nd even though th loans m a d e by the
government should never b e p a id alr e a dy h a s th e
overnment
saved
enough
to
more
than
r
e
pay
all
g
the outl a y
Whether a ll this has been the result o f th e l abors
Mobil i er it is hard to say and c e r
o f the Credit
T he inter e sts f the U ni on
t ai nl y as hard to deny
P a cific R ailro a d and the Credit Mobilier are so
the
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OF
AM ER I C A
.
interwove n wi t h e ach othe r th a t it is i mpossible to sep
arate them Cert ai n it is th a t without the inte e n
tion o f a construct i on company the Union P a cific
R ailroad would n e ver have been bu i lt B ut wh e ther
it was absolut e ly nec e ssary th a t that constructio n co m
pany should be iden t i c a l w i th the R ailro a d C ompany
is the only question t hat c a n be raised a g a inst the pla n
I t is cla i med that this comb i nation
o f its op e ra t ions
w a s ag a inst equity and good conscie n ce and that the
direc t ors o f the Union Pacific R a ilroad Company h a d
no right to m a ke a contract wi t h themselves though
under the guise o f another corpora t ion by which t h e y
would make for themselves a profit from the funds of
the R ailroad Compan y but that they must e v e n i n
th a t capacity be regarded as trustees for the Ra il r o a d
an
d wh a tev e r profit was made through th e ir con t r a ct
must inure to the be n efit of th e Ra ilroad W hile this
m a y a ll be true th e questio n would naturally arise for
whom in th a t c a paci ty wo u l d th ey become trustees ?
The a nsw e r must be for the holders of the stock o f
the Union P a c i fic R a i lro a d Wh a t w a the natur e o f
?
the a greement by wh i ch they held their trust I t w a s
th at al l t he profi t s arising from the contract shou l d
be p a id to th e hold e rs o f t h e stock o f the Cr e d i t
Mobilie r a nd those stockholders w e r e identic a lly
the s a m e a s the hold e rs f the stock f th e Union
P a ci fi c Rai l r o a d I t w a s cl e a rl y in e vidence that
such w a s t he c a s e a nd wh e r e th e re w e re a ny who
wou l d not s i gn the agr e ement giv i ng to the t r us t ees
their i r revoc a ble power of a ttorney proxy to vote
o n their shares their stock w a s bought as fa r as it was
rv
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80
TH
E C REDI T
M OB
ILIE R
possible so that no stock should be unreprese n ted
in t he division o f profits I t should also be reme m
bered that every stockholder agreed in writing
to the Ames and D avis contracts and thus cer
tai nl y no advantage was taken o f their position
Was the government a party who should have bee n
consulted ? What was the interest o f the govern
ment ? The government gave the right of way o n
the co n dition that the ro a d should be built ; it gave
o n the same condition large subsidies o f l and
It
also loaned the road a certain amount o f its bonds
consenting that its claim should be a second lien o n
the road subject to an equal indebtedness to be
cre a ted by the R ailroad Company those bonds to be
paid by the Ra ilroad at the expiration o f thirty years
and in c a se o f the n e t profits o f the road exceeding
ten per cent of the cost o f the road the government
to have the right to regulate the rates o f fa re a nd
reserved to itself the right to appo i nt certa i n d i rect
ors o f the road and the right to l e g i slate upon the
Have any o f the conditions
C harter as granted
which the government requ i r e d been unfulfilled ?
T he ro a d was completed as r e qu i red a fi t class
road and w a s completed some seven ye a rs before it
was requir e d Upon th e completion o f the road the
grants o f l a nd and right Of way bec ame a bsolutely
the property o f the road a nd th government h a d no
cause to Compla i n I n fa ct th gov e rnment becam e
by th e early complet i on of the ro a d a gr e a t g a i ner
and s a ved by that ev e nt alon e millions of dol l a rs
every ye a r Was the cost o f the ro a d g eatly
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O F AM ERI C A
81
.
i ncreased by the ma n ner in which it was built ? and by
t hat mea n s were the future claims o f the government
rendered o f no account ? Was it the duty f th e
company to build the road by using as little o f the
loan o f the govern me n t as possible or h ad the road
the right to use all o f the loan which the governme n t
granted ? And if the company i n building the road
let the contr a cts to themselves did they thereby stand
in such a relation to th e gov e rnment that they must
account for all the profits they received ? I f any
question should arise as to the accounting to the
sh a rehold e rs of the Union Pacific stock those ques
tions are fully answered in the fact that a n equal
division o f all profits was made with the holders o f
th a t stock they not only all agreed to the contracts
and arrangements but th e mselves receiv e d wh a tever
profit a rose from the execution o f those contracts
B ut could the ro a d have been built at a less price
than it w a s ? Suppose that the
ep
sent e d by the stock had been paid into th e treasury
in cash it is e ven probable th a t under such circum
stances the road could no t h a ve b e e n built at all
E conomy and frugality under such circumstances
could not h a ve been expected The country at
large s e eing that th e work w a s sure to go through
urg e d in ever y way possible the utmost sp e ed o f
const r uction ; and more Congr e ss had giv e n to the
Central Pacific Ra ilro a d Comp a ny th e right to build
its ro a d until it should m e e t th e Union P a cific and
thus set th e two g re a t compani e s on a race a cross
the continent At this time there was no road across
o
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TH E C RED I T M O B I L I ER
82
the State of I owa a nd a ll the materials must be
transported overland or by way o f the Missouri
R iver from S aint L ouis to O mah a a t immense
cost At the commenc e ment o f the bu i ld i ng f the
road no sati sfactory route h a d been s e l e cted across
the mountains I t was building a r ailroad across a
country without timber without fuel without water
all
of
whi
ch
must
be
transported
with
gold
at
1
6
0
)
(
and iron $ 1 60 per ton with gangs Of men at work
both day and night with half the force engaged i n
keeping the I ndians from killing the other h a lf ; and
all these working together would have created a
spirit o f extr a vag a nce that would have w a st e d th e
entire capital o f th e comp a ny a nd left the ro a d u n
finished As these men undertook the enterprise it
seemed to those careful capitalists f the country a
wild waste o f money in the most favorable light
There was a spirit o f adventure a bout it of loyalty
and courage such as wer e never b efore se e n in the
history Of railro a d enterprise The conditions were
utterly incons i stent with a nything like prud e nce or
econ omy Had all that mon e y been in th e treasury
the road would necessarily have b Ce n built by day s
work for n o responsibl e contractor could h a ve bee n
found to take a contract when he had to fr e ight his
m a terials at such vast expense and where he h a d to
keep a standing ar m y to protect his workm e n from
the I ndians ; and it has been asserted by those well
qu a lified to judge th a t the contract a ssume d by
Mr Ames w a s the wildest contract ever m a de by a
civilized man
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TH E C REDI T
84
MO
BI L IE R
government might assume is to pr e v e nt th e w a ste o f
its mortgage secur i ty so that the debt m ay be paid
N hen due
This right the governm e nt has assumed
an d a sinking fund h a s b e en established by mea n s
) f which every dollar o f th e bonds advanced by the
government will be p a id at its m a turity I nto this
sinking fund the R ailroad Company is yearly turning
a l arge amount of money B ut yet the R ailroad
Company has really p i d n money into th i s sinki n g
fund The amount due the c m p an v from th gov
account h a s b e e n
e n m e n t on half trans p ortation
su ffi cient to meet a ny such r e quirement w i thout th e
p ayment by the company of a dollar fr om its other
e a rnings H ow can the government be wronged
by any such S howing a s that ?
The gov e rnm e nt has ev e rything that it required
o f the road
and has assurance that every doll a r will
be r e paid The gov e rnment has never part e d w i th
a doll a r except interest that it has p a id o n the
bonds a nd its security is amp l e I t has by this
operation secured adv a nt a ges o f unlimit e d value
The road h a s been th e m e ans f a in g it millions o f
dollars every ye a r and has increased the value Of its
own land through which the road passes to twice the
form e r v a lue and has rendered it p ossible for that
l a nd to find a market where before none existed at
any price and then above all the inest i mable valu e
the ro a d has been to the w
hole country ca n nev e r
b e understood T he intern a l comm e rce th a t h a s
be e n cr e a t e d by it is far larger than th e most e nth u
i ti advoc a t e f the road had ev e r dr e amed of
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OF AM ERI C A
85
.
I n e very respect the government
g a in e r a nd i n no respect has it b e en
,
has bee n the
injured o can
r
,
it be injured
I f then there has b e en any wrong done in
dividing the dividends among the stockholders o f
the Cr e dit Mobilier a n d that money is to b e e c o
?
ered to whom would it belong The answer must
be to the stockholders o f the Union P a cific R ail
road Com p any B ut they are the very ones to
whom it was divided the stockholders Of the Credit
Mobilier and the Union Pacifi c R ailroad being i dent
ical We need not d well upo n this longer fo it is
impossible to see how any wro n g has be e n done
a ny o n
I n fa ct none h a s be e n done
I n concluding this portion o f o u r subject w e desire
to allude to one fact in relation to the di fferent part
ies connected with the Credit Mobilier in the c o n
struction o f this road and the Views which were
held by th e m
T h e r e w e re two p a rties in what has been famili
a rly known a s the Union Pa c fi c R ailroad ring
D urant and his friends constituting o n e and O a kes
Ames a nd his associates the othe r T h e ir obj e cts
were as opposit e as it was possible to be a nd upon the
prev a iling o f o n e the oth e r d e p e nd e d the success
o
utt e r fa ilure of th e road T he D u r ant party
worked w i th the id e a of building th e ro a d in the
C heapest mann e r possible for th e pu r pos e of m a king
the l argest profit conc e iv a bl e fr om th e contracts for
const r uction avowing that the ro a d wh e n built
cou l d nev e r b e a paying investment and t h a t those
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TH E C REDI T M O B I L IER
86
looked fo r any profit in this lin e were deluded
They cared not how the road w a s constructed so
that it would be accepted by the government and
the gov e r n ment aid secured Th e y c a re d not to
retain the stock o f the company and while this
party was i n the ascendency in the control o f the
Cr e dit Mo b ilier a large propo r t i on of the stock
taken in payment for construction w a s sold for four
and o n e half cents o n the dollar I t was not co n
for they were co n
s i d e re d by th e m o f any value
v i n c e d th a t the road would n ever yield any retur n s
to the stockholders No t only was this done but
in their att e mpt to get the road accepted as they
completed it they p a id to o ne government director
to induce him to report in favor o f its
acceptance
The Object of the Ames party was to build as
good a r oad as possible and have it fully completed
and equi p ped They did n o t have any expectation
I t was
o f receiving l arge profits from their contracts
their obj ect to have a good road and in its mana g e
ment after completion realize their profits They
believed that the business o f the road would in time
be large and would yield l a rge returns abov e run
ning expens e s
T h e y had great hopes o f the
country through which the road was built and
believed that in a fe w ye a rs the loc a l tr a ffi c would
be imm e nse With this view in mind th e y ret a in e d
—
as much f th e stock o f the ro a d which they took
i n p a ym e n t for th e ir work — a s th e y could Upon
this th e y st a k e d a ll their expectation of profit T he
wh o
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O F A M ERI C A
87
.
controlling minds i n this p olicy were O akes and
O liver Ames a n d to their i n flue n ce is due the s u c
fu l building o f the road
ce
A decade h a s shown the wisdom o f their fai th
Th e Unio n P acific R ailroad is n ow p aying al l its
running expens e s all its interest is making ample
provision in sinking funds for the extingu i shment
0f the governm e nt loan at its maturity and is p a ying
about eight per c e n t di v idends upo n its stock which
has ready sale i n ope n market at nearly par
This result has been achieved by the faith and
honesty o f the Ameses whose i nfluence was strong
enough to co n trol the manage m e n t o f the c o n s tru c
ti on company through whose i n strum e n tali ty the
road was built
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V II
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TH E D I SA GR E E M E N T
WI TH M R
.
the for m er part o f this work we have at
tempted to show the connection of the Credit
Mobilier of America with the building o f the
Union Pacific R ailroad and in so doing we have
found it nec e ss a ry to go into som e det a il regarding
the history O f that road th e cost of its construction
&c
a s all th e se matters n e c e ss a rily c a me into a
consideration o f the workings and purposes o f the
Credit Mobilier The two organiz a tions were com
pos e d o f the same persons and th e ir interests bec a me
in a great m easure identical a nd it w a s impossi b l e
to separate them a nd to study th e m exc e pt in co n
n e c tio n
n e with the oth e r
T o the Cred i t Mobilier
may justly belong the credit o f building the Un io n
P a cific R a ilroad though it is true that to a great
extent that org a ni z a tion did not in fa ct h a ve the
control but upon its stockholders r e st e d the e p n
a nd to them came what profit there was in
s ib i l ity
its construction The g r e at wo r k th a t was a c c o m
l
h
i
e d will ev e r st a nd a s the nob l e st monument o f
s
p
th e achi e vem e nts of mank i nd a nd th e blessings th a t
N
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88
s
o
TH E C REDI T
M OB
ILI E R
89
.
have come upon the country through which it was
built b y e as o n of its construction ca n never be
told while coming generations will ever praise those
through whose instrumentality it was built
I t is n ot n atural that works o f this character should
ever assume the p rominence that has been accorded
the Credit Mobilier unless some circumstance fo r
e i n to i ts m a i n object should be a ssociat e d with it
g
Such inde e d was the c a se o f the C redit Mobilier and
it is that C ircumstance which it shall be o u pur
pose a t this tim e to s e t forth B u t for the a ccid e ntal
conn e ction with it f c e rtain membe r s o f Cong r ess
its fame would never have exte n ded beyond the
knowledge o f its ow n stockholders I t mattered n ot
whether any crime was ever co n nected with it ; it
mattered not how pure m a y h a ve been th e motives
it m attered
of those who bought r sold that stock
n ot how l a rge o r small m a y h a v e b e en the profits
realiz e d by the holde r s of th a t stock it m a tter e d not
whether the gov e rnm e nt was the loser or gainer in
its working ; it was su ffi ci e nt to know that political
capital could b e made o u t Of it a nd th a t some who
held high places f trust and honor could be brought
low and their n a m e s forever cloud e d with infamy
l
t
the
work
had
been
done
a
n
approving
e
o
p
n y
p le had praised and justly praised the r e m a rk a ble
energy which h a d char a cteri z ed those und e r whose
man a gement th e work was done and wh e n that work
w a s complet e d millions join e d in th e glad S houts o f
r ejoicing Ye t e re the l a st r ai l w s l a id ere the
last spike was driven th a t r i v e ted forever the band
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T HE
0
9
C REDI T M OB I L IER
union bet ween the E ast and the West that ren
dered the union of o u r stat e s forever secure ther e
could be heard the low mutterings and trembli n gs of
the volcano that four y e ars later was to break forth
casting ruin and infamy upo n ma ny a fair name
D issentions had arisen in the m anagemen t o f the
corporations Those who had bee n con n ected with
the Credit Mobilier from a n early period beco m i n g
discouraged at receiving no returns fo r their invest
me n ts sullenly held b ack until it seemed as though
the whole scheme must prove a disastrous failure ;
but whe n a n ew life was given the enterprise through
the connection and p e rso n al influence o f a n ew class
o f m en ; when it seemed as though success might
crow n their e fforts when i n fa ct large returns were
insured them n one more eager tha n these to step
forw a rd and assert their C laims to the profits which
they attempted before to destroy and which i n justice
belonged to others
As we have seen before the Credit Mobilier passed
i n to the hands o f the principal stockholders of the
Unio n P a cific R ailro a d i n the early part O f the year
1 86
and
that
it
took
the
active
management
o
f
4
the Hoxie contract so called in March 1 8 6 5
Throughout that summer the Company work e d upo n
that contract but it soon became apparent to all that
even then the work must prove a fa ilur e and that
the Credit Mobilier could not carry it on t o success
unless new life new e n e rgy and a great increase o f
capital could be secured This c e rtain failure which
stared them in the face and which no n e could avoid
of
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9
THE
2
C RED I T M O BI L I ER
lost no opportunity to urg e his p e rsonal fr i ends to
join him in the ent e r p ri se H e desired to h a v e asso
c i t e d w i th him m e n
f m e a ns and influ e nce m e n
whose n ames woul d inspir e confidence and give to
th e enterprise a stability of C h a racter and standing
that would induce others to join with them H e
went to his person a l fr i e nds and m e eting all their
ob jections induced them to put th e ir money in the
road He went to his frien ds in Con g ress and
demonstr a t e d to th e m the great n e cessity for the
road an d some did join with him and oth e rs pro m
ised At this time Congr e ss h a d no me a sure before
it a ffectin g the Pacific roads the l s t l e g is l atio n had
been fourteen months prior to the first conn e ction o f
Mr Ames with the Cr e dit Mobilier or the Pacifi c road
E very act O f l e g i l a ti o n they des i red h a d already been
granted ; they had nothing to a sk f Congress and
every dep a rtm e nt of government was so fully in
accord and sympathy with the undertaking that ther e
was n t the slightest c a use to fear any unfr iendly
legisl a t i on The gov e rnment was cl a morous to
hav e th e w
ork compl e ted an d was ready to grant
any furth e r concessions that might be requisit e to
the buildin g of th e ro a d T he popular fe e l ng
throughout the whole country was so strongly in
favor f th e early compl e tion o f the ro a d that no
m a n would h a ve risked his reput a tion a nd standing
among his constituents by h a ving att e mpted to
retard t h e progress o f the ro a d Und e r th e se C i
M r A m e s felt no compunct i on in ask
cum t n
ing memb e r s f Congr e ss to join with him
.
a
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O F AM ER I C A
T hrough t he
93
.
years 1 8 6 5 1 8 6 6 a nd th first p a rt
of 8 6 7 the Cred i t M obilier continu e d to work upon
the building o f th e road The origin a l contract O f
Hoxie had been extended to the one hundredth
meridian a distance of two hundred and forty s e v e n
miles and the comp a ny still continued to work on
the ro a d beyond that poi n t The Credit Mobi l i e r
had a s y e t paid no div i dends On the contrary
their entire capital amounting n w to
had been swallowed up in the construction of the
road They had be e n compelled to tak e the securi
ties of the Union Pacific Ra ilroad Company i n pay
m e nt of work a nd no m a rket could be found f
th e m
E ff orts h a d be e n mad e to g e t contractors to
build the ro a d without av a il Mr D urant h a d
qu a rre l led w i th memb e rs of the Cr e dit M obilier and
h a d b e e n oust e d from the dir e ction of th e C omp a ny
a nd h e d e termined th a t the Credit Mobili e r should
never have another contract for building th e ro a d ;
and with his influence as an o ffi cer and stockholder
in the Un i on P a cific R ailroad Comp a ny a nd th e
power of the courts this he pr e v e nted I n August
1 86 7
a compromise or at least the nature o f n
was conclud e d by which Mr O ak e s Am e s took his
great contract fo bui l ding 66 7 mil e s o f the ro a d a t a
cost o f a little mor e than
T wo months
lat e r a s w e h a ve s e en this contr a ct w a s as
S ign e d to the s e v e n trustees for ce r tain pu r poses
a nd uses About F e bruary 1 8 6 7 t he c a pital o f the
Cred i t M obili e r w a s increas e d 50 p e r c e nt
from
to
a nd it w a s d e cid e d to
1
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C REDI T M OBI L IER
TH E
94
a pport i on this to the then
th e stock they then held
stockholders p r t with
T his incr e as e of c a pital
was deeme d so absolutely necessary that as a n i n
d u c m e nt to take it the company gave as a bonus
in Union Pacific bonds for every
of
the additional stock taken B ut so low was the con
fi d e n c e n o t only o f the public but th e stockholders
th e mselves th a t many declined taking the new
stock even d e c l aring th a t they Would rather lose
their present investm e nt than to sink a noth e r dollar
in th e e nt e r prise T hus a fe w sh a res of the st ock
r e mained in the hands o f the comp a ny und i spos e d
f there being in a ll 6 50 sh a res
D uring all the
tim e intervening prior to th e execution o f th e O akes
Am e s contract Mr Ames had been endeavoring to
secu r e th e c oper a tion of ev e ry m a n of influ e nce
w ith whom he c a m e in cont a ct s e e king to sell th e m
an int e rest in th e Cr e dit M obili e r and he secured
promis e s from many Aft e r th e gr e at contr act h a d
b e e n assigned to the trust e e s and wo r k fa i rly com
m n e d and it was se e n th a t large profits would be
likely to a ccru e then ther e bec a me a d e mand for th e
stock Mr Ames on his r e tu r n to Congress in the
fall f 1 8 6 7 made arrangements to transfer the
stock as soon a s h e could Obt a in it fr om the com
pany to such as h e h a d a g re e d should h av e i t and
also spoke to oth e rs r e g a rd i ng it I n the winter of
a meeting f the pr i ncipal stockholders of
1 86 7 68
the Credit Mobili e r was hel d at the F ifth Avenue
Hot e l in New Y ork at which time M r Am e s made
th e request that the 6 50 shares f stock th e n belonging
ro
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O F A M ERI CA
95
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to th e Company be transfe r red to him th a t he
m ight fulfil the obligations he had made with his
various friends Mr T C D urant stated he also
had made numerous engagements with his friends
and demanded that the stock be transferred to him
Mr H S M c C o m b made a demand to have 2 50
shares transferred to him together with the 50 per
c en t increase making 3 7 5 shares in all H is claim
was that he had agreed to take 2 50 shares o f the old
stock o n March 3 1 8 6 6 an d that h e now demanded
the stock with all the rights which accrued to it
This was a claim th at non e o f the oth e r stockhold
ers would recog n iz e and a great de a l of discussion
arose over it
I t w s fi n l l agreed th at th e
stock S hould be divided between Mr D ur a nt and
Mr Am e s th e former to have 3 7 0 sh a r e s a nd
the l a t te r 2 8 0 shares This arrangement was
agreed to by Mr M c C o m b but the presid e nt was
unwilling to transfer the stock upon th e v e rb a l
a ssent f Mr M C m b a nd s o the following
agr e ement was entered into b v these principal stock
hold ers
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We the undersigned stockholders o f the Credit
M obilier o f Ame r ica understanding th a t
of the capital stock o f this c m pa nv held in trus t
by the president has been promised cert a in
p a rties by T C D urant and O akes Ames do
hereby cons e nt to advise the transfer f said stock
to such p a rties a s they the s ai d D ur a nt and
Am e s have agreed upon a n d d e sign ate
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6
9
TH
D urant
E C REDI T
MO
BI L IER
part i es
and Ames
partie s
J O HN D U FF
J O H N B ALLE Y
T H O MA S C D U RA NT C S BU S HN E LL
BA
RD
W
EL
L
S
ID
N
E
Y
D
I
L
L
O
N
J
OA K E S A M ES
H S M C CO M B
O LI V ER A M E S
The undersigned stockholders o f the Credit Mobilier
O f America recommen d the issue to Ho n O akes
Ames trustee O f ni n ety three ( 93 ) shares o f the
capital stock o f this company at par
T C D U RAN T
S H OO P ER
Co
C S BU S HN E LL
BA RD W ELL
J O H N D U FF
OA K E S A M E S
O L I VER A M E S
WM H M AC Y
C A L O M B A RD
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Mr M c C m b says he never read this paper which
he sign e d bu t the fa cts have been cl e arly shown
th a t h e at first refused to S ign it a nd st a ted his r e a
sons cl a iming th a t the pap e r failed to recogn i z e a ny
claim which he h a d m a d e but at last he did S ign it
ful l y und e rst a nd i ng a ll that it cont a ined
T h i s division f those shar e s shows the manner in
wh i ch M r Am e s s e cur e d the shares which h e h ad
sold to his friends a nd in t a king th e m from th e
Company p a id th e ir p a r value to the Company T h e y
were then no longer the property of the Company
but th e property o f Mr Am e s a nd the Company
had no fur t her co nt r ol
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AM ERI C A
OF
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T his
division did not tend to lesson the hostility
be tween Mr M c C m b a nd the Credit Mobilier He
still insisted that the 3 7 5 sh a res of stock belonged to
h i m and m a intained his demand for that together
with all the dividends th a t had bee n declared upon
it and before the year was closed he commenced a
suit against the Company and its o fli c e rs fo the
recovery o f the stock to his individual use I n sup
port o f this cl a im a ffi d a vits were fil e d during the
summer of 1 8 7 2 all e ging that th e s t ock h a d been
set ap a rt by the Credit Mobili e r to Mr Am e s fo th d
e xpr e ss purpose of distributing to members o f C
gr e ss with the Object o f creating in them such an
interest i n the road th a t they could be d e pend e d
upon in all cases where legislation should come
before Congress ; that Mr Ames had received the
stock for th a t purpose and had used it f the pur
pose f corrupting m e m b e s o f Congress that while
he h a d sold it to those members he h a d sold it at a
pric e fa r b e low its actu a l value th e r e by making it
in re a lity a g i ft to th e m to that extent and in his
a ffi davits he mentioned a long list of congressmen
who had been selected and to whom the stock had
b e e n tr a nsferr e d This list wh i ch h e claim e d had
be e n furnished him by Mr Am e s contain e d the
names of some who had nev e r b e en m e nt i oned in
connection with the Cr e dit Mobilier a nd who nev e r
b e came int e r e sted in it in a ny way and a s a ddition a l
evidence upon this cl ai m of bribery M r M C m b
filed l e tt e rs pu r porting t h a v e been written by Mr
Ame n d i n which h e said h e had given t he stock
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8
9
TH
E C RED I T M O B I L IER
to such a nd such congressmen t hat h e had g i ve n it
where it would do the most good a nd other expres
sions o f like import I t may be important in what
1 3 to follow to understand the relations o f this suit
which Mr M c C m b brought I n the early part o f
8 6 6 Mr H G F ant a b a nker in Washington and
a friend of Mr M c C m b concluded to invest
in Credit Mobilier stock a nd ask e d Mr
M c C m b to subscribe that amount for him and
draw o n h m for the mon e y with which to pay for
1 866
the shares
O n the 3 d of M a rch
Mr
M c C o m b made the subscription for 2 50 sh a res at
par and gave to th e treasurer o f the Cr e dit Mobilier
a draft n Mr F ant fo r
A fe w days later
Mr M C o m b was informed that th e draft h a d bee n
protested wher e upon he wrote to Mr F a nt asking
an expl a nation Mr F a nt repli e d that owing to
certain losses which he had su ff er e d in h i s busin e ss
he could not sp a re the money He c a me to New
Y ork in a f w days and requ e sted th a t his o ff e r be
l e ft op e n for a short time a nd perhaps h e would
take the stock The Cr e dit Mobili e r a t th a t time
in gre a t n e ed f funds and such a n acquisitio n
w
would be o f th e gre a t e st ben e fit to them and so they
gl a dly extended the t i me Thirty d ays pass e d but
still nothing w a s don e Som e time a ft e r this Mr
M c C o m b d e si r ed th a t th e dr a ft b e returned to him
and that the whol e trans a ction be cancelled and
that the stock b e r e turn e d to the treasury This
w a s done ; the s a le was rendered void and M r
draft was re turned to him Nothing
M c C mb
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TH E
1 00
C REDI T M O B I L I ER
fi nally ,
as we have seen h e consented t o the div i s
io n o f the stock between Mr
D urant and Mr
Ames thus e ffe ctually reli n quishing every right to
the stock wh i ch he h a d claim e d B ut e ven after
t hi s he insisted o n h aving the stock and s i ll threat
No a tte n tion
e ned suit unless it was given him
was p aid to him
D uring the same ye a r he did commence a suit
alleging the valu e of the stock to be very great a n d
that he was entitled to the divid e nds declared The
dividends which he all e ged h d been p a i d were very
largely in exc e ss o f all that were declared upon all
the contracts f r the building o f the Pac i fic road
This suit dr a gged along through the courts until
the year 1 8 7 2 when more d e sperate me a sures w e re
resorted to to secure a settlement Mr M c C o m b
through his counsel Judg e B lack came to Mr
Alley and s a i d that the best thing that could be
done was to settle the suits as Mr M c C o m b h a d
lett e rs from Mr Ames which established the proof
of bribery o n the part of Mr Ames and that if those
letters were made public it would ruin many a ma n
then high in O ffi ci a l position and bring untold
disgrace upon the country Mr Alley replied that it
was impossible that Mr Ame s could ever h a ve
written any such l e tters — h e had to o much faith in
—
Mr Am e s to even consider such a thought and
refus e d absolut e ly to entertai n the proposition o f a
settl e ment M r B lack came again and said th a t
he would settle all matters fo r
th a t he
kn e w the c ntents o f those letters and th a t there
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AM ERI CA
OF
1 01
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was the most co n vinci n g evi de n ce i n the m n ot o n ly
against Mr Ames but agai n st many prominent men
and among them o ne o f his de a rest friends S o
earnest was he a n d so positive that M r ; Alley l a id
the matter before Mr Ames Mr Ames asserted
p ositively that he n ever had e n tertained any thought
f bribery ; that he was a n honorable m an a n d that
never had he att em p ted in the least to influence the
acts o f any ma n i n Congress by gifts o r by any
thing o f pecu n iary value ; whatever he h a d do n e he
was p e rfe ctly willing the whole world should
know ; th a t he never ha d writte n a n y letters
such a s Mr M c C o mb claimed to hold nor
was h e awar e o f any expr e ssion i n any letter
he had e v e r wr i t t en which could be tortured
into such a n ide a for cert a inly not the faintest
thought o f any such conduct had ever entered
his mind
He told Mr Alley to say to Judge
B l a ck that he defied him i n any such attempt to
blackmail h i m or those he was associated with
A third time Judge B lack c a me around attempted
to e ff ect a settlem e nt on the basis o f surrend e ring the
letters and endi n g the suit So great w a s the con
fi d e n c e o f those associated with M r Ames in his
honor that all att empts to a rr a nge a settlem e nt fa iled
At l ast the l e tters were produced i n court and before
long found their w a y to the public through the New
Y ork S u n
We p re sent C opies o f these letters as they
app e a red b e for e th e public and the n S h a ll take
occ as i on to comment upon th e m
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THE
1 02
C REDI T
M OB
ILIER
I t should be remembered that these letters were
all writte n by Mr Ames in reply to letters writte n
.
him by Mr M c C o m b and that all the matt ers
referred to h a d be e n spoken f by Mr M c C o mb
At the time th a t Mr M c C o m b had assented to the
division of the stock o f the Credit Mobilier betwee n
Mr D ur a nt an d Mr Ames he made the C l a im tha t
he had promised a part o f his stock to certain o f his
friends an d whe n he could not obtain the stock h e
wished Mr Ames to deliver a portion o f the stock
assigned to him to Mr B ayard and Mr F owler ;
and now he had writte n to Mr Ames t know why
the stock had n ot been delivered Ther w a s a ls o
much complaint m a d e both by Mr M c C o m b and
Mr D ura n t and by their friends that Mr Ames
was selli n g this stock very largely among his own
p erso n al friends from Massachusetts thus s e e king
to kee p the control o f the corporations in his own
hands This circumstance had p r evious to this
led to many angry asserti ons but Mr Ames had
always declared that such was n ot his intention I t
was the desire o f all parties that the stock should
be distributed over as large a p art o f the country as
could be i n order that a ll sections should have an
interest in pushing forward this great national work
I t was a work i n which the whole country was
deeply interested I n Mr M C o m b s lett e r to Mr
Ames January 2 3 1 8 6 8 he insisted that M r Ames
should distribute the stock no t wholly to his o wn
New E ngland friends but to s e rve all a lik e All
o f this stock had long before been sold by Mr Ames
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T H E C REDI T M O BI L I E R
10
4
We p rese n t the letter in full
:
W A S H I N GT O N Ja n
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II
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S
JVc
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Com b E s q
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25 ,
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1
868
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,
D E AR SIR z—You r s o f the 2 3d i s a t h and i n wh ic h you
s ay S e n ato r s B ayar d a nd F ow ler h a v e w ri t te n
o u i n rela
y
t i on to th ei r sto ck I have spo ke n to F ow ler b u t not to
B ayar d ; I h av e n e ver bee n i nt r odu ce d t o B ayard b ut w i ll
see h i m s oon You s ay I mu s t not put too mu c h i n one
l o cal i ty I h av e a s s igne d a s fa r a s I h av e go ne to 4 fro m
Mas s 1 fro m N H 1 D ela ware 1 Te nn 1 O h i o 2 Pe n n
1 I nd
1 Mai n e a nd I h av e t h ree to p lace
wh ic h I S h all
p lace wh ere they w ill do m o s t go o d to u s I a m h ere on
th e spo t a nd c a n better j udge wh ere t h ey S hou l d g o
I
th i n k after th i s d iv i de nd i s p ai d w e s hou l d m a ke ou r ca p
i tal
a n d d istrib u te t h e n e w s to ck wh ere I t W I l l
p ro tect u s —le t th e m ha ve t h e s to ck at p ar a nd p ro fits
m ade i n th e fu t u r e ; th e 50 p er ce nt I ncrease o n t he o l d
a nd s o o n
A lley i s
s t o ck I w a n t fo r d i s trib u ti o n h ere
sa
y
o se d to th e d i v i s i on of t h e b ond s ;
s w e w il l n ee d
O
pp
th e m & c &c I sh ou l d th i n k w e ough t t o be able to
Sp are th e m w it h A lley a nd C i s c o on th e fi na nce c om
m i tte e : w e u s e d to be able t o b o rr ow wh e n w e h a d no
cre d i t a nd d eb ts p re s si ng We are now ou t o f de b t a nd
i n good cre d i t —wh a t s ay you ab ou t t h e b o nd d i v i d e n d ?
a p art o f th e pu rc h a ser s h ere are p o o r a nd wa n t th e m
b onds to s ell to e nable th e m to m eet t he i r p ay m e nt on the
M I h av e t o l d t h e m wh at th ey wou l d
s t o ck i n t h e C
get a s d i v i d e nd a nd they ex p ect I th i nk th e b on d s
d i v i d e nd
we
th e p artie s re c e i v e a s th e 8 0 p er ce n t
be tter gi v e th e m the b o nd s —I t w i ll n t a m ount to a ny
th i ng w i th u s S om e o f the l arge h o l der s w ill n o t care
wh eth er th ey have the b on d s o r certi fic ates o r t h ey w il l
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O F A M ERI CA
05
.
le nd t hei r b ond s t o th e c omp a ny as th ey hav e don e b e
fo re o r le nd th e m money Qu igley h a s bee n h ere a nd
we ha ve go t tha t tha t w as Unde r wood s I have take n
C arte r w a n t s a p art o f i t ;
half Qu igley J! and you if
at s om e fu tu re d ay we w ill su rre nd er a p art to h i m
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You rs tr u ly
,
OAK E S
E
AM S
In
.
interpreting any letter we should always a s c e
tain the style and character o f th e writer Wh a t
one man would do another would not O ne man
m ay be op e n and fr e e in h i s utterances whil e
another i s guarded and careful in all he says
Those who have known Mr Ames w i ll bear out the
assertion that he never stopped to consider the result
s a id or did He w a s not a finely educated
o f what h
—
m a n h e was not capable o f dr a wing fine d i tin
tions in the meaning f words To those who kn ew
him these letters will S how the man — open plain
—
and blu n t as he al w ays was Whe n there fore
he was accused by Mr M c C o m b of giving the stock
only to c e ta n personal frie n ds he naturally replied
that he h a d assigned it to such a n d such persons
covering the entire country he h a d made h i s d e c is
ion as to whom the stock belonged by r e aso n of
prior engagements And he h a d done this a mong
men o f influence men whose n am e s would add
dign i ty st a b i lity and strength to the enterpr i se ;
whose n a mes conn e cted with it would add confidence
among th e ir constitu e nts a nd thus in reality do
most good to th e e a rly complet i on f the road
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o
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1 06
TH
E C REDI T M O B I L I ER
He wanted the b a l a nce of the increase of stock for
distribution
He had sold it and the parties who
had bought it wanted it as appears very strongly
from th e latter part o f his letter where he says the
purchasers want the dividends to m eet their p ay
ments o n the stock Th e re was much opposition to
declaring these dividends and as Mr Ames says
this c ame from Mr Alley who i n sisted that before
the work was done they might need all their fu n ds
and in this he was right
Mr M c C o m b was well aware of the condition in
which Mr Ames was situated ; he knew that the
stock had been long before sold these parties at a
tim e when the stock w a s in reality below p ar and
here certainly no I nfer e nce w a s made that he was
selling it below par The l a st C laus e s o f th i s letter
have no reference to the Credit M obilier but to a
railroad in the West n which they w e re both inter
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I
e s te d
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T he
next l e tter
18
as follows
:
W A SH I N G TO N J a n
,
II
.
S
.
.
1
0
8
68
,
3
M e Com b ,
.
D EAR SIR —You r s o f t h e 2 8 th i s at h a nd e n cl o si n g a
letter from o r rath er to Mr Ki ng I don t fear a ny
i nv e s tigati on h ere W h a t s om e o f D u ra n t s frie nd s m ay
do i n N Y c ou r ts c a n t be c oun te d u p o n w i th a ny
certai n ty You do not und ers tand by you r letter wh at I
You
h av e d o ne
a m to do w i th my sale s o f s to ck
i
s om e
non
e
t
o
N
Y
I
h
a
v
e
p
lace
d
w
t
h
Ne
w
sa
y
Yo rk o r hav e agree d to You mu s t re me mber i t was
n early all p lace d a s y o u sa w o n th e l I st I n N Y
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TH E C REDI T M O BILIER
1 08
O akes A m es l i st o f na m e s
C M
B lai ne o f Mai n e
Patter s o n N Ha mp
Wi l so n Ma ss 2
Pai n ter R ep fo r Iu q 3
S C o lfax S p eaker 2
E lli o tt Ma s s 3
D aw e s
2
2
B ou t w ell
B i ng h a m
G arfiel d O h i o
Kelley Pe nn
Sc o fi e l d
F ow ler Te nn
Feb 1 1 8 6 8
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as s
howe d to d ay to m e
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This list o f names attached to this letter s i n th e
handwriting o f Mr M c C o m b himself an d he says
he wrote them as Mr Ames re a d them to h i m from
his memorandum book I t was not pretend e d eve n
by Mr M c C o m b in his evidence before the co m
m itte e th a t this list was written by Mr Ames
though in his a fli d a its in the suit it was set o u t to
that e ffect ; a nd it was this list as well as the letters
which produc e d th e gre a t commotio n through th e
country I n no other place in their correspondence
w e r any names mentioned
B ut this list is
extr e mely faulty containing names o f me n who
never contracted for a share o f stock ev e n i n the
most ind i rect m a nn e r
The a bov e letter is writte n in reply to another
in whi ch h e
c omplaining l e tter from Mr M c C o m b
referr e d to a n investigation to which Mr Am e s
merely replies that he does not fear a n y i n vestigat i on
I
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OF
A M ER I CA
10
9
.
He was sure that a n investigation could do no
harm fo a ll transactions had b e en honor a ble a nd
he w a s w i lling they should be known
I n fact when a motion was mad e in the House for
an inv e stigation no particul a r opposition was made
to it a nd especially by those who have been name d
as t a k e rs of these bribes The records f Congress
show that of all these men who have been n am e d as
holding the stock M r B rooks is th e only one who
was opposed to it or wh o did not vote for it and h e
did not for speci a l r e asons which h e assigned but
was not oppos e d to a n investig a tion The rem a rks
which were mad e t the form e r l e t t e r will a pply
h e re as to the d i st r ibution of th e stock
T he
Washburne move spok e n of was the motion for the
inv e s t ig a tion whi ch we h a v e s e e n was vo t ed for
by a ll these men who w e r e i n t e re st e d in Cr e dit
Mobilier I f then this s t ock w a s distribut e d fo r the
purpose of influencing the legisl a tiv e a ction of these
men how u tterly it fa iled ! He us e d the stock
where it would produce most good but th a t was
among those men who a s s a id in r e fer e nc e to the
former l e tter would add dignity s ta bility a nd
strength to the org a n i z a tion No r e fe renc e was
int e nded to l e gisl a tive a ction fo r non e w a s con t em
pl a t e d non e w a s fe ared a nd h a d any b e e n m a de it
would not h a v e r e c e iv e d opposition I n this letter
he again r efers t the bond divid e nd a gain speaks
of Mr Alley s Oppos i t i on to it but thinks it can be
made with s a fety for should they n e ed mon e y it
could easily be raised with such a man a s M r A l ley
r
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C REDI T M O BILIER
TH E
I IO
on the financ e comm i ttee and th e n says that his
contract c a lled for th e dividend a nd h e w a nted it
He th e n mak e s a brief statement showing how they
would stand after m aking the dividen d
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W A S H I N GT O N Feb
,
II
.
S
.
M c Co m b , E s q
.
22, 1
.
8 68
.
,
D E AR SIR You r s o f th e 2 1 s t i s at h a n d ; a m gla d to
h ear t h at you are ge t ti n g al o ng s o w ell w ith Mr We s t
a nd h O e
o u w ill bri ng i t o u t al l sati s fact o ry
o t h at it
s
p y
I
w ill be s o ric h t h a t w e c a n n o t h el p g o i ng i n t o i t
retu r n y o u th e p a p er b y m ai l th a t y o u ask fo r Y u a sk
m e i f I w ill sel l s o m e o f my U P R R st o ck
I w ill
sell s o m e O f i t at p ar C M o f A I d o n t care to s ell
I h e a r t h a t Mr B ates O ffere d h i s a t $ 300 b ut I d o n t w a n t
B ates to sell o u t
I t h i n k G ri m e s m ay s ell a p art o f h is at
n
h
I
w
a
t
t
at
i n crea s e o f t h e C re d i t M o b il
0
$ 35
i er to s ell h ere
We w a n t m o re frie nd s i n t h i s C ongre s s
if a m a n w i ll l o o k i n t o th e la w
i t i s d i ffi c u l t fo
th e m to d o i t u n less th ey h ave a n i ntere s t t o do s o ) h e
n g c o nv i n ce d t h at w e s h o u l d n o t be i n ter
be
i
c a n n o t h el
p
fe t e d w i th H op e to s e e y o u h ere o r a t N Y th e 1 1 th
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You r t ru ly
s
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OAK E S
A ME S
.
The first part of this letter relates to matters
enti re ly foreign to the Credit Mobili e r I n M
M c C o m b s letter the qu e stion was ask e d if Mr
Am e s would sell his U P R R stock This he
did not care to do a nd then he speaks o f the price
Of Cr e dit M obili e r stock in r e p l y to M r M c C o m b s
q u e stions ; a s to thes e v a lu e s w e sh a ll speak further
.
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C RED I T M O B I L I ER
TH E
1 1 2
had stood high e st in the national councils wer e b a n
di e d about a nd m a de b y words for infamy T hose
who d e n i e d th e ir conn e ct i on did so bo l dly firmly
believ i ng that when inv e stigation came as they
kn e w it must com e Mr Am e s would he l p them
through an d cle a r them from a ll bl a me A long
a s it w a s through th e ir conn e ct i on w i th Mr Ames
th a t they had b e come involv e d i n these investments
th e y calcul a t e d that h e would stand by them and
assume the responsibility and by his testimony cor
roborate their denials B ut th e y le a rned th a t O akes
Ames would tell the truth and a s a Consequence their
denials were found to be fa lse The denials served
however a tempo r a ry purpose and all was moving
along smoothly until Congress met in D ecember
8 7 2 when th e whole country seem e d to unite in the
demand f an investigat i on of these cha r ges There
was a fren z y of excitement ov e r i t T he disgrace
which had come upon the country w a s so great that
it was imperative som e thing shou l d be don e to dis
prove these allegations o f co r ruption in o u nation a l
councils
else to pun i sh the guilty a s th e y deserv e d
As soon a s th e session of Cong re ss wh i ch con
v e n e d in D e c e mber 8 7 2 was op e n e d the Speaker
Jam e s G B la i ne c a ll e d Mr S S C o x to the C h a ir
and fr om h i s position on th e floor spok e of th e se
rumors th a t h ad a pp e a red i n the press th r oughout
th e country a nd ask e d that a committee be appo i nted
NO
to inv e stigate the matters ther e in alleg e d
obj ection was made to the motion which as passed
was as follows
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O F AM ER I C A
1 13
.
Wh r e a s acc u sati on s have bee n ma d e i n th e publ i c
p re s s founde d o n th e allege d letter s o f O ake s A me s a
Re p rese n tati v e fr o m Mas sac hu setts a nd upon t h e allege d
affi d av i t o f He n ry S M c C o m b a ci tize n o f Wi l m i ngton
i n th e S tate o f D ela ware t o th e e ffec t t h a t m e m ber s O f
th i s H ous e w ere bribe d by O ake s A m e s to p erfo r m cer
tai n legi s la ti ve ac ts fo r th e be nefi t of th e U n i on Pac i fic
Rail w ay C omp a ny by p re s e n t s o f s to ck i n th e C re d i t
M obi l ie r o f A m e rica o r by p rese n t s o f a val uable c haracte r
deri ve d th erefrom Therefo re
R e s o l v e d That a S p ecial c o m m i ttee O f fi v e m e mbe r sbe
a ppo i n te d b y t h e S p eake r p r o te mpo r e who se du ty i t
S hal l be t o i nv estigate a nd ascertai n wh e th e r a ny m e mber
of t h i s H ou s e w a s bribe d by O ake s A m e s o r a ny o the r
p er son o r c o rpo rati on i n any matter tou c h i ng h i s legi s la
tI v e du ty
R e s ol v e d f u r th e r Th at t h e c omm i ttee h a v e th e righ t
t o e m p l oy a s te nogr apher a nd t hat th ey be e mpow ere d to
se nd fo r p erson s a nd pa p ers
T h e following committ e e w a s a ppointed :
e
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E P PO LLA N o f V ermon t
N ATH A NI E L P B A N K S o f Ma s c hu e tts
J AM S B B E K o f Ke n tu cky
W I LL I AM E N I B LA K o f I nd ia na
GEO RG E W M C RARY o f I w
LUK
D.
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E
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s
s a
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o
a
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T his
committee enter e d upon their duties as soon
as all th e pre l i minari e s could b e arrang e d and c o n
ducted their e x a m i nation each d a y until about th e
middle of the F e bruary follow i ng having in th e
meantime e x a min e d every p e rson who had any
knowledge of the subject o f th e ir i nquiri e s E v e ry
member of C o n gress whose name had b e e n
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I 1
CREDIT
THE
4
.
M OB
ILI E R
mention e d as having had an I nter e st in the Credit
Mobili e r came before the committee and gave his
t e stimony I n only a fe w inst a nces did a ny o f these
witnesses deny having any connection with the
Credit Mobilier
that th e y had engaged to take
stock from Mr Ames F o some time after the
committee comme n ced their investigation they met
with closed doors as is the usu a l p ractice of such
committees ; but owi n g to the garbled reports
that appeared i n the press and the great interest
which spread through the country the doors of the
committee room were thrown open and from this
time th e i n vestigation bec a me public and full reports
a ppeared in the daily papers
o f the p roc e edings
throughout the land Whatever may be said f the
work o f this committ ee no o n e c a n C ha rge that th e y
anything in their examinations o f the
a ttempted
witn esses but to arrive at the exact truth T he
examinatio n w a s thorough an d exhaustive and 0
the 1 8 th o f F ebruary 1 8 7 3 they submitted their
report to the House Much o f the subst a n ce o f th e
report will appear in th e following p a ges in s o far
as it relates to the connection with the members o f
Congress
D uring the progress o f this investigation at th e
time it was proposed to make the investi ga tion open
M r Wilson f I ndi a na o n January 6
a n d public
which w a s
1 8 7 3 presented the following resolution
a dopted :
d That a select c omm i ttee o f fi ve m e m bers
l
R
H ou e be a pp i nte d by t he S p eake r a nd s u c h
o f th i s
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1 1
6
TH
E C R EDI T M OB ILIER
the 1 0th Janu a ry the committee met an d
commenced the investigation and continued that
investigation until the 1 9th o f F ebruary and sub
m itte d their report to the House o n the 2 o th of
F ebruary
F rom this time on there were two committees o f
investigation at work upon the Credit Mobilier an d
its connection w i th the building of the Union Pacifi c
R ailroad T heir Obj ects were di ff erent but wer e
intended to cover the entire ground B y an exam
i mation o f the r e solutions cre a ting them it will be
seen that the first committee appointed and gener
ally known a s the Polland Committee from its
chairman had to investig a te the connection o f th
various members o f Congress with the Credit
Mobilier and discover if possibl e wheth e r any
bribery had been us e d by Mr Ames or any other
person or corpor a tion
in order to procur e the
influence of members of Congress in legislation to
be brought before Congress ; while the other com
Wilson Committe e from its
m itte e known as the
cha i rm a n was to investigate the connection o f th e
Credit Mobilier with the construction f the Unio n
Pacific R ailroad an d to discover if any ille ga l means
had b e en used wher e by the gov e rnment h a d been
defrauded and to a scertain whether the gov e rnment
could recede from the agreement to accept a second
lien f the lo a n of its bonds to the road
We hav e in th e fo r mer pa r t o f this wo r k had
occasion to de a l a lmost entirely with the p r ovinc e Of
t hi l a tt r the Wilson Committee and it will be
On
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O F A M ER I CA
1 1
.
7
u n necessary now to go over any of the details o f
that investigation T he work o f that committee
w a s intended to be thorough as was that o f the P01
land committee Y et when we come to the p r t
as written by th e committee we must dissent from
the conclusions reached by them T hey could n ot
a t least they did not understand the relations exist
i n g between the Credit Mobilier and the seve n
trustees and the Union Pacific road I n this they
were entirely at fault a nd it was not surprising that
they should be for to this day those who hav e e ven
given the subject much close attention have failed
to understand the nice distinctions that existed The
Cr e dit Mobilier had nothing to do with the Ames
contract it never received a dividend from that con
tract and no divid end was ever declared by the
Credit Mobili e r e xcepting o ne of 1 2 per cent from
the money p a id it by the trustees T he committee
did n ot discern that the Credit Mobilier had lost its
entire capital in the construction of the road ; or that
it had been cheated and robbed by those who first
had its management ; they failed a bsolutely to under
stand th e relations O f the government to the Pacific
roads and imagined that th e government had
loaned th e m a l a r g e amount f mone y for the con
struction o f the ro a d wh e n in fa ct th e gov e rnment
h a d nev e r lo a n e d th e m o ne c e nt T he utmost that
had be e n done was to lo a n th e m the cr e dit o f the
gov e r nme n t it being in r e ality the s a me as a n
a ccommod a tion not e which if p a id when due woul d
be no loss to any o ne and to secure this payment
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1 1
TH E C R E DI T M O BI L I ER
8
the gover n ment had a second mortgage o n the road
They could no t comprehend the mighty di ffi culties
that encompassed the road o n every side during its
construction but th e y judged it as though a ll those
great obstacles had been remov e d and the road
was being constructed at the time the report was
b e ing made They declared that so great had bee n
the fraud practiced o n the government by these pro
c e e d in s
that
the
goverment
would
have
a
right
g
but for the presence o f a few innocent stockholders
to declare th e franchises forfeited
The committee
could not understa n d the rel a tions of cost and profits
a n d in their attempt to show some great fraud
made o u t the profits of construction to amount to
more than
with a cash value of some
whe n the cash value of the profit
actually made was but a trifle over
T he
minds o f the committee were so evidently biased
that they could see nothing in its true light coul d
understand n othing as it actually was but thought
probably
because
so
many
o f their constituents did
(
and they were very anxious to be returned to Co n
gress ) that there was fraud on every han d and that
no men could carry through so gigantic a scheme
and remain honest The committee concluded their
report by recommending the passage of a bill which
we understand was the product o f the able mind
of Hon G eorge F Hoar f Massachusetts which
instructed the atto rn e y general to institute a suit
ag a inst every o ne who had ev e r received any of th e
divid e nds declared from the construction of the road
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C REDI T
THE
1 20
M OB
ILIE R
.
The Court adds
Th e truth i th t th e p er on who w ere a tu ally
d e fra ud e d by t h e e t r n acti on s if a ny u c h t here be w ere
th fe w b n y i d ho l d ers o f t h e st o ck o f t h e c o rp rati n
w h t oo k no p art i n th e e p r o cee d i n g a nd h d n i n ter
t i n th fra udu le nt c ont rac t
B ut i t i no t allege d th at
t here w ere a ny u h
We need not pursue the report o f the Wilso n
commi ttee a n y further We have attempted to
show the true relations o f the Cr e dit Mobilier and
the Union Pacifi c R ailroad also the relations b e
tween the Credit Mobil i er and the trustees We
hope we have made the subject plain The compli
cations were great the distinctions fin e l y d a wn
B ut the positions taken by the part i es at the time
have been sustained by the highest court Of justice
in the world ; their position has be e n declared
impregnable and no court h a s been found to declare
that fraud was used against the government in the
construct i o n o f the Union Pacific R o a d
This was the report o f the Wilson Committee
The evidence has been alluded to in the former part
Here we l e a ve this portio n o f th e
o f this work
subj ect and proceed to the work of the other com
m itte e o f i n vestigat i o n
a
s,
a
s
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V II I
TH E
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C OM M I TTE E
P OL L A J VD
.
first witn e ss ex a m i ned by the Polla n d co m
I m itte e ( after the st a tement o f J m e s G B laine )
was M r H S M C o m b
His te s t imony was to the
e ff e ct that in conv e rs a ti ons with Mr Am e s admis
s i ons were made by Mr Ames that he had used the
stock o f the Credit Mobilier for the purp ose o f
i n flu e n ci n g members o f Congress t vote in the i n ter
ests o f the Union P a cific R ailroad ; that M r Ames
had told him that such was his intention in getting
the stock and that once Mr Ames asked him if h e
did not consider it a good use o f the stock which he
gave to Mr Colfax the n S peaker o f the House in
view o f the decision or ruling m a de by him o n the
Washburne motion Mr M c C o m b alleged that by
some parli a mentary ruling the Speaker had killed
such motion The evide n ce was also positive that
Mr M c C o mb overheard a conversation between
Mr B rooks and Mr Alley in which Mr B rooks
d e mand e d the giving to him of fifty shares of th e
Cr e dit Mobilier stock and promising if that was
don e th a t he would look o u t f the D emocratic side
f th e H ous e in all legisl a tion concerning the Unio n
Pacific R ai l ro a d ; and that in consi der a tion o f such
HE
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1 31
THE
1 22
C REDI T M O BILIE R
promise Mr Alley did cause to be issued to Mr
B rooks the fifty shares o f stock which he dema n ded
Mr M c C o m b s testimony in regard to this was most
positive and direct an d he fixed the time within
fi fty seven days o f when it occurred that there were
several conversations concerning it but all occurred
within this time which he could fix by the abse n ce
of D r D urant i n E urope and that he always
thought Mr Alley was taking advantage o f such
absen ce in giving away this stock
Mr M c C o m b also produced the letters which we
have set o u t and comme n t e d upon them in a n u nfa
o ab l e light ; he claimed that the letters were writ
te n in a m anner de n oti n g great co n fide n ce such as
Mr Ames had always placed in him ; that Mr
Ames had told him many times that he had used the
stock assigned him fo r the purpose o f influencing
members o f Congress an d that that was the purp ose
fo which the Credit Mobilier had given him th e
stock ; that though he had o ffered it for par it was
at the time o ff ered worth far more th an that
No other evidence was tendered o p roduced upo n
this point and the entire testimo n y regarding any
admission by Mr Ames o a n y co n versations by
him was that o f Mr M c C om b His testimony in
this respect stands unsupported and alo n e except
fo r what color m ay be given it by the letters which
he produced and which Mr Ames n ever denied
havi n g written A l arge amount o f the testimo n y
related to the work o f the Credit Mobilier which
we have already co n sidered and the ma nn er in
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1 2
THE
4
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C REDI T M OB I L IER
that usually e xist s between p a rties embarked in the
sam e enterpr i se ; that he was never confidential with
Mr M c C o m b i n fa ct was opposed to him in his
manageme n t of a ff a irs : He m a de no deni a l of sel
ling stock to members o f Congr e ss but maintained
it w a s all sold before there h a d been any increase
in the value o f that stock and that he sold it at its
full value Thus the evidence o f these two parties
stood directly opposed to each other and it was t o
be decided which was true
The evidence of all witnesses was to th e e ff e ct
that the stock Was sold by Mr Ames immediately
after the a ssembling o f Congress in the winter of
1 86 7 68
even before that — c e rtainly not lat e r
than a few weeks after the opening o f Congress
This point we shall refer to further o n The records
o f Congress showed th a t no legisl a tion a ff e cting the
Pacifi c roads w a s befo r e Congress a t the time a nd
that none f importance w a s brought up for n e arly
two years after the ro a d w a s completed I t was
by fi e witness e s th a t the conversations
s hown
betw e en M r B rooks and Mr Alley could not have
o ccurred ; for at th e time which w a s so positively
sworn to Mr Alley w a s o u t west on th e line of the
road then being built ; tha t Mr Alley had nothing
B rooks
to do regarding the issue of the stock to M
a s that was a matt e r decided upon by a larg e num
be r Of the p rincip a l stockholders and all of whom
signed an a greem e nt consenting to its sal e to Mr
B ooks
a n agreement which Mr All e y d i d not S ign
b t which Mr M c C o m b did ; a nd th a t agreeme n t
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or
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o
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v
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r
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r
u
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,
O F A M ERI CA
1 2
.
5
was before the committee ; and it was shown that
the Speaker Mr Colfa x had never mad e a ny such
ruling as testified to by Mr M c C o m b and co u se
quently Mr Ames could n e v e r h a ve made the asser
tion attributed to him regarding it
I t would o f course be impossible t set u t h e re
all this mass of testimony n would it be in accord
ance with the design o f this work W e must content
ourselves with a b r ief review o f the testimony c o n
cerning each member o f Congress whos e n a me was
m entioned as a hold e r f Credit Mobilier stock
W e shall attempt m e rely to give the r e sult
r e g a rding each excepting in those c a ses where
there were such strong d e nials f any connectio n
with the s t ock a nd which d e ni a ls were proved to be
false a nd also where the committ e e r efer to the
e vid e nce in support f th e ir conclusions
We shall commenc e with som e of t he members o f
the S enate and first with
.
,
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,
.
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o
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o
or
,
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o
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,
o
,
,
o
.
,
LI N O I S
I n D ecember 1 8 6 7 Mr L ogan made an arrange
ment with Mr Ames to pu r ch a s e ten shares of
Credit Mob i lier stock upon M r A m e s c m m e n d a
tion that it was v a lu a ble N p a ym e nt was m a de i n
consideration of the agre e ment a t a ny time a nd no
stock was ever delivered In June 8 6 8 Mr Ames
stated to Mr L ogan that he had two d i vidends n
his stock in the Credit Mobilier one of 8 0 and the
oth e r o f 6o per cent a nd that deducting the
due on the stock there was a bal ance i n his favor
J O HN
A
LO G A N
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,
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IL
OF
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’
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re
o
o
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,
1
,
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o
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,
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,
,
TH E C REDI T
1 26
M OB
ILI E R
n
which
was
paid
Mr
L
ogan
by
check
the
o
$ 9
serg e ant at arms which C heck w a s p a id On the
1 0 th o f July following
Mr L og a n becoming con
v in c e d that there might be trouble a bout it
returned
the money to Mr Ames stating he had concluded
not to take the stock and there the transactio n ended
Mr L ogan having no further interest in it Mr
L ogan at that time was a member o f the House
of
2
3
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.
R OSCO E C O N K L I N G O F N E W Y O R K
Mr Conkling does n o t appear to have been c on
n e c te d i n any way with the stock o f the Credit
Mobilier o o f the Union Pacific R ailroad Compa n y
a n d co n seque n tly coul d be in n o way a ff ected thereby
.
,
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r
,
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H E N R Y W I LSO N
about D ecember 1 8 6 7
.
S e n ator Wilso n
contracted for 2 0 shares o f the Credit Mobilier stock
in behalf o f his wife p ay ng n cash therefor
receiving a guarantee from Mr Ame s Mr Wilson
soon became dissatisfied with the tra n saction and
upon the agreement o f Mr Ames the sale was
thrown up Mr Ames re turned th e
and
Mr Wilso n re turned all dividends h e had rec eived
and also paid to his wife $8 1 4 which sh e would
have be e n entitled to as dividends The purch a s e
money belonged to Mrs Wilso n
On
or
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I
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J AM E S
.
BL A I N E
Mr Ames requested Mr B lai n e to take te n shares
recommending it as a good investment
o f the stock
Upon co nsideratio n Mr B laine concluded not to
G
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’
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,
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.
1 28
TH
E C REDI T
B ER
MO I L
see some Pennsylvanians in it and guaranteed M r
S c o fi e l d eight per cent o n his investment
Mr
S c o fi e l d a littl e later p a id
fo te n shares
and received upon the same the dividend o f eighty
per cent in bo n ds and also the cash divide n d o f
S ixty p er cent B efore the close o f the s essio n Mr
S c o fi e l d fo
some reason became disinclined to
hold the stock and made arr a ngements with Mr
Ames to rescind the s a le which was done a n d
thereafter Mr S c fi e l d h a d no further interest
,
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r
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r
,
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o
.
.
B I N GHAM O O H I O
I n D ecember 1 8 6 7 Mr Ames advised M r B ing
ham to invest in Cr e dit M obilier stock assuring
him it would pay him go Od dividends
About
F ebru a ry t 1 8 6 8 Mr B ingham purchased twenty
shares p aying the par v a lue thereof in cash Mr
Ames received a l l the dividends and turned the
most over to Mr B ingham retaining som e A final
settlem e nt was m a de in 1 8 7 2 and in th a t Mr B ing
ham received all divid e nds due him Mr Ames
the
twenty
sh
a
res
o f Credit Mobilier
and
e ta i n m
g
accounting therefor M r B ingham was accou n ted
the owner of the stock and received all the divi
d e n d s that wer e declared upon it
J O HN
A
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,
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,
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F
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,
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I s
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r
,
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,
.
E LL E Y O F P E N N S Y L V A N I A
I n the early part o f D ecember 1 8 6 7 Mr Ames
agreed to sell Mr Kelley t e n sh a res of Credit Mobilier
stock at par and inter e st from July 1 1 8 6 7 Mr
Kelley was no t then prepared to p a y for the stock
W I L L I A IVI
D
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K
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O F A M E R I CA
12
.
9
and Mr Ames agreed to carry it until he could pay
for it On the 3 d of J anuary 1 8 6 8 there was a divi
dend of eighty p e r c e nt on Credit Mobilier stock in
Union P a cific bonds Mr Ames received th e bonds
as the stock stood in his name a n d sol d them fo
nine ty seve n per ce n t of their face In Ju n e 1 8 6 8
there was a cash dividend of sixty per cent which
Mr Ames also received The proceeds of the
bonds sold a nd the cash received by Mr Ames
amounted to
The p a r value of the stock
a nd the interest thereon from the July previous
amounted to
so after paying fo r the stock
ther e was a balance o f dividends due Mr Kelley o f
n
2
2
d
1
6
the
day
of
June
Mr
Ames
O
8
8
3
$3 9
g a ve Mr Kell e y a C heck for that sum o n the
serge a nt t a rms o f the House of R epresentatives
and Mr Kell e y received the money thereon T he
committ e e were o f the opinion that Mr Kell e y
understood th a t the mon e y he thus received was a
bal a nce o f dividends due him after paying fo r the
stock I n S e ptember 1 8 6 8 Mr Kell e y receive d
from Mr Ames $ 7 50 in money which was unde r
stood between them a s a n advance t o be p a id out o f
dividends Th e re is however an entire varian ce
in the t e stimony of these two m e n a s to what the
trans a ction betwe e n th em w a s ; but the committ e e
were unanimous in finding th e facts as stated above
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G E O R G E S B O U T W E LL
’
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,
OF
MA SS A C HU S E T T S
was among those who have b een said to be holders
of stock in the Credit Mobilier ; but he n ever had
1
THE
0
3
C R EDI T M OB ILIER
a n y stock o any dividend thereon no mo n ey was
pa i d by him for stock or received by him for the
s ame
F
B
BO Y ER O P H I LA DE L P H I A
was a member of the House from 1 8 6 5 to 1 8 6 9 I n
his testimo n y he says
I took the stock in my o wn
n ame and have so held it ever since as th e books
will show I hel d seventy fi e shares as my o wn
and twenty fi e shares for my wife making 1 00
shares in all I always considered it a legitimate
stock operation and never d e nied having made the
investment I t did not interfere with my duties as a
member o f Congress
No o n e connected w ith
the Credit Mobilier o the Union Pacific R ailroad
ever directly or indirectly expressed o in any
way hi n ted that my services as a member f Con
gress were expect e d in behalf of either corporation
i n consideration o f the stock I obtained a nd c e r
It
f ainly no such servic e s were ever rendered
was in my judgment both honest and honorable
and consiste n t with my position as a m e mber f
Congress ; and as the investment turned out to be
profitable my only regret is that it was no larger in
amount
J A M E S A B AYA RD O F DEL AW A RE
was among thos e mentioned to whom stock was to
b e sold I n his letter to Mr M c C o m b he refers the
whole matter to his son ; but finding o u t afterwards
that it might be an arrangement a ffecting his action
as a senator he positively declined h aving anything
to do with it
r
,
,
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4
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,
F
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-
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-
v
v
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,
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!
!
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,
r
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r
,
o
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!
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o
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I
TH E C RE D I T
2
3
N eilson
M OB
ILI E R
but there was no t th e slightest evide n ce to
sustain this p oi n t When the stock o f the Credit
Mobilier several months before this h a d bee n
increased fifty per cent this was allotted to such
t
upon
the
o f the stockholders as d e sired it
p
payment o f the par value thereof M r B rooks
claimed that under the arrangement by which h is
stock came to him that he o Neilson wa s entitled
to an additional fifty shares o f the Credit Mo b ilier
stock F inally upon th e principal stockholders
signin g an agr e ement to that e ffect the fifty shares
were tr a nsferred to him and afterwards transferred
to Neilson Mr B rooks was not only a member o f
Congress but w a s a government director o f the
Union Pacific R ailroad Company As such it was
his duty to watch over the interests of the govern
ment in the road and see that they were prot e cted
and preserved The committee found that he h a d
through his O fli c i al position procured the stock Of
the Cr e dit Mobilier and bonds a nd stock Of the
R ailroad which he had no moral o legal right to
Obtain And upon this finding they submitted a
resolution for his expulsion from the Hou Se
,
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ro ra a
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W IL L I AM
B
.
A L LI SO N
,
OF
I
O WA
.
The committee in their report make no allusio n
to Mr Allison but in the testimony it appeared that
he had sever a l conv e rsations with Mr Ames con
cerning Credit Mobilier stock and finally r e ceiv e d
ten sh a res n which no money w a s p a id down H e
rece i ved from Mr Ames a memorandum showing
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,
O F A M ERI CA
1
.
33
that the dividends had nearly paid the p ar value of
I n June 1 8 6 8 he received a dividend o f
th e s tock
being
by
C
heck
on
sergeant
arms
Mr
6
0
0
t
$
Alliso n at first stated that he had re turned the sto ck
and the dividends immediately upon their receipt by
him but he afterwards te s tfi e d th a t it was some time
later I t appe a red only n the cross examin ation o f
Mr Ames that the stock had bee n returned after the
i n vestigatio n began and was with the u nderstanding
that as soo n as the matter had blow n over Mr Ames
was again to give him the stock the consideration
for th e surrender to Mr Am e s being only nominal
The check had been cashed by Mr Allison Owing
to h i s popularity a nd the influ e nce o f his friends the
committ e e were pr e vailed upon to p a ss Mr Allison
by without mention
,
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-
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J AM E S A G A RFIELD
.
OF OHIO
,
.
The Committee say
Th fact i n regard t o Mr G arfiel d a s found by th
c omm i t tee are i d e n tical w i th th e case o f Mr Kel ley t o the
po i n t o f rece p ti n of th e he k fo r $ 3 9 He a gree d w i th
Mr A me s t o take te n share f C re d i t M obi l ier s t o ck b ut
d i d n t p ay fo r t h e am e Mr A m e s re e i ve d th 80 p er
ce n t d i v i de nd i n b ond a nd o l d th e m fo r 9 7 p er ce n t
a nd al s o recei ve d t h e 60 p er ce n t ca h d i v i d e nd wh ic h
toge th e r p ai d t h e p rice o f t h e sto ck a nd i n tere t a nd left
a bala n ce o f $ 3 9 Th i s sum was p ai d over to M r G ar
n d Mr G arfiel d
fiel d by a c h ec k on th e e rgea n t t ar m
the n und er tood th i sum was th bala n ce f d i v i d e nds
after p ay i ng f th s t ck Mr A m es recei v e d al l the
sub qu e nt d i v i d e nd s nd th c omm i ttee do no t fi nd t h a t
s
e
.
e
,
,
.
c
o
2
c
,
.
s o
.
s
o
c
.
.
s,
.
,
e
s
.
.
s
,
s
2
.
-
se
-
a
s
or
,
.
s
s
,
s, a
e
e
o
,
a
.
.
o
.
e
,
1
TH E C R E DI T M O BI L IER
34
p ayme nt o f th e $ 3 9 there h bee n a ny m
m n i ti n be twee n Mr A m es a nd Mr G arfi l d on th
ubject un ti l t h i s i nvestigati on began S om e c rres pond
e nce betw ee n Mr G arfiel d and Mr A m es nd om e
onver sati on be twee n the m du ri g th i s i nvestigati on w i l l
be found i n t h e re po rte d te ti mony
Th following is the statem e nt f G e n G arfiel d
1
J
an
4
(
Th fir t ti m e I e ver h ear d o f t h e C re d i t M obi lier w a s
som e ti m e i n 8 6 6 o r 8 6 7 —I ca n t fi x th date —whe n
G e rge Fran ci Trai n calle d on m nd i d h w o rga n
izi ng a c omp any t be k n wn as th e C re d i t M b il ier f
A m erica t o be f und e d n t h e m od el o f th C re d i t M bi l
ier o f Fra n ce ; th at th bject o f th c o m p a ny w t pu r
c h a e la nd nd b u il d h ou e al on g th l i n e f th Paci fic
nd v i llage w ere l ikel y t
Railr o ad at po i n ts wh ere ci t ie
p ri n g up that h h d no d ubt mon ey thu s i nve te d w l d
double o r treble i t elf eac h year ; that ubscri p ti ns w ere
l i m ite d t o
eac h nd h w i he d m e t s ubscr ibe
He howe d m e a l o ng l i t f ub criber a m ong th e m Mr
O ake s A me t o who m h e referre d m e fo r fu rther i n fo rm a
ti on c on cer n i n g th e n ter p ri se I a were d th at I h ad n t
money to p are and i f I had I w u l d n t ub cribe
th
w ith u t k now i ng m re ab ou t t h e p r po e d rga n izati on
Mr Trai n left m e ay i ng h e wou l d h l d a p lace op e n fo r
m e and hop ed I wou l d yet c n cl u d e t sub scribe Th
sam e day I aske d Mr A m es W h at h thought of th e e n ter
p ri e He ex p re e d t he p i n i on that the i nve tm e n t
wou l d be afe and p r fitable
I h ear d no t h i ng fu rth er n t h e subject f a year o r
mo re nd i t w as al m st fo rg tte n w h e n s om e ti m e I
s h u l d y d u ri ng th l ng se si on f 8 6 8 Mr A m es
s po ke f i t gai n ; ai d t h e c omp a ny h d rga n ize d was
Si
n ce
th e
u
ca
s
2
o
co
as
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e
.
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o
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c
.
s
,
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e
o
,
e
s
1
sa
a
o
as
e
s
o
e
s a
e
s
o
s
s
s
e
a
s
s
o
e
o
,
o
e
s
s a
as
o
o
o
s
e
o
e O
s
e
e a
o
,
.
no
1
s
o
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a
,
n
s
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e
o
s
o
s
s
o
ou
.
s,
.
s,
e
s
e
ns
.
o
,
s
o
o
O
ss
o
s
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o
a
sa
o
o
e
,
a
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e
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o
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e
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,
1
TH E C REDI T
6
3
MO
BI L IER
to h i m a l oa n o f $ 300 ; th at amo nt i th e on ly val uable
th i ng I e ver recei ve d from o r d e l i vere d t h i m
n
I ne ver ow ne d recei ve d o r agree d t recei v e
y
to ck o f t h e C re d i t M obi lie r o r o f th e U n i n Paci fic Rai l
r o ad no r a ny d i v i d e n d o r p r o fi t ari i ng fro m ei th e r o f
th e m
As the co n versatio n s and correspo n de n ce me n
tio n e d b y the committee in their report are importa n t
to show the relation o f the parties to the tra ns ac
tion the testimo ny o f Mr Ames is here give n i n full
B y the C H A I R M AN
I
n
r
egar
d
t
o
Mr
G
arfiel
d
state
t
t
h
e
omm
i
tt
ee
Q
th e d etai l o f the tra n ac t i o n s betwee n y
nd h i m i n
refere n ce t o the C re d i t M ob il ier to ck
A
I go t f Mr G arfiel d te n sh are o f th e C re d i t
M obi l ier to ck fo r wh i c h h pai d p ar a nd i n tere t
i
h
W
h
e
n
agree
w
i
t
h
f
o
r
t
h
at
d
d
i
m
?
Q
y
A
Th at agree m e nt w i n D ece m ber 8 6 7 o r J n
u ary 8 6 8 ab u t t h e ti m e I h a d t hese c nvers ti o n w i t h
all o f t he m It w all ab u t th e am e ti m e
S
tate
wh
at
gre
w
out
o
f
i
t
Q
A
Mr G arfiel d d i d n t p ay m e a ny mon ey I so l d
o f t c k at 9 7 m aki ng
th b ond s bel ngi ng t o h i
I n J u ne I recei ve d a d i vi d e n d i n ca sh n h i st ck
$ 77 6
f $ 60
wh ic h left a bala nce due h i m o f $ 3 9 wh ic h I
p ai d h i m That i all the tra nsacti o n bet wee n us I d i d
n
t
o
ck
bef
o
re
o
r
i
n
T
h
a
t
i
s
t
h
e
t d el i v er h i m
y
on ly tran acti on a nd th on ly th i ng
B y M R MERRI C K
wh
ic
h
p
ai
d
th
e
u
r
p
l
u
h
h
i
m
T
w
$
3 9
y
Q
earn i ngs n th e t ck ab ove th a m n t t be p ai d f it
p ar v l e
u
,
s
o
,
.
o
,
,
s
a
o
,
s
,
,
s
s
.
,
.
.
.
.
s
ou
s
s
or
.
.
c
o
,
s
a
.
s
.
e
,
s
.
ou
.
as
.
1
,
a
,
'
,
1
o
o
,
as
.
s
o
.
.
.
o
.
.
e
.
s o
s
o
,
o
.
0,
o
s
a
2
s
.
no
a
s
,
s
o
,
.
s
s
e
ce
.
.
.
e
.
o
a u
?
2
ou
s o
as
e
ou
o
s
s
or
,
O F A M E RI CA
1
.
37
s i r ; h e ne ver had ei ther h i s C re d i t M obilie r
s toc k
U n i on Pa i fic Rai lr o ad s t o ck Th on ly t h i n g h e
real ize d on th t ra n ac ti on w a s th $ 3 9
I
b
y
t
h
i
s
t
a
t
e
m
e
nt
o
f
h
acc
ount
i
h
G
e
n
e
r
l
t
w
t
Q
G arfiel d there i a c harge o f $ 47 ; t h at i i n tere st fr om
Ju ly p re v i ou s i s i t
Y e s sir
A
A
nd t h e $
6
on
t
h
e
c
re
i
t
si
e
o
f
t
h
e
a
c
ount
d
d
i
7
7
Q
th 80 p er ce n t b nd d i v i d e nd s o l d at
?
97
A
Y es ,
.
or
c
e
s
se e
.
2
e
s
.
e
a
s
s
?
,
.
e
.
.
.
c
.
e
A
Y es,
Q
d en d
.
Si r
.
A nd th e $ 600
.
A
o
.
.
s
o
n
th e c re d i t S i d e i s th e
money d i v i
?
Y es,
S ir
.
s e t wo s ums th ey
after
you
h
a
d
recei
v
e
d
t
h
e
Q
i n t h e aggregate over p ai d th e p rice o f th e s to c k a nd i nter
i
h
m
?
wh
ic
h
you
p
ai
d
est $ 32
9
A
Y es Sir
D
i
d
you
m
ake
a
s tate m e n t o f t h i s t o Mr G arfiel d ?
Q
I p res um e s o ; I th i n k I d i d w i t h al l o f th e m t ha t
A
Is m
i
mp
re
s i on
s
y
W
h
e
n
you
p
ai
d
h
i
m
h
i
s $ 2
d
i
d
o u u nd ersta nd
t
3 9
y
Q
i t w a s th e bala n c e o f h is d i v i d e nd after p ay i ng fo r th e
s to ck ?
I Suppo s e so I d o no t kno w what el se he c ou l d
A
suppo s e
You
no
t
d
el
i
v
e
r
t
h
e
ce
r
ti
fi
i
c ate o f s t o ck to h i m ?
d
d
Q
N O s i r ; h e s ai d no t h i n g ab ou t t h at
A
d
i
d
h
h
e no t re c ei v e h i s certi ficate ?
W
y
Q
I do no t k now
A
o u re m e m ber a ny c onv ersati on bet w ee n you
D
o
y
Q
a nd h i m i n th e adj u s t m e n t o f t hese acc ou nts ?
A
I do no t
Y
o u und er s t ood th at you w ere t h e ho l d er o f h i s te n
Q
s h are s ?
.
A nd
,
,
.
,
.
.
.
.
.
,
.
.
.
.
.
.
.
,
.
.
.
.
.
.
.
1
TH E C R E DI T
8
3
A
Y es ,
.
M OB
ILI E R
Sir .
h
D
i
d
e s o und er s ta nd i t ?
Q
A
I p re sum e so I t s ee m s to h ave gon e from h is
m i nd how e ver
a s th i s t h e on l y d eali n g you h a d w i t h h i m i n
W
Q
refere n ce t o a ny s t o ck ?
A
I th i n k s o
a s i t th e on ly t ra n s a c ti on of a ny ki nd ?
W
Q
Th e on ly tra n s a c t i on
A
H
a s th at $ 2
e
v
er
bee
n
p
ai
d
you
o
?
t
3 9
Q
A
I h av e no rec o llecti o n o f i t
o u a ny bel ie f t h a t i t e v er h a s ?
Ha
v
e
y
Q
.
.
.
,
.
.
.
.
.
.
.
.
.
.
.
A
Q
A
l oa n
Q
A
No ,
.
s ir
.
you e ver l oa n G e neral G arfiel d $ 300 ?
N ot to my k now le d ge ; e x ce pt th at h e l l s th i a
D id
.
ca
.
s
.
do not call i t a l o an ?
I d id no t at th e t i m e I m w il l i ng i t h u l d g o t o
Y ou
.
s
a
.
.
o
u it h i m
h
i
W
at
w
e
w
a
nt
to
ge
t
at
t
h
e
exac
t
tr
uth
Q
I h a ve t l d th e t r u th i n my ta te m e n t
A
h
W
h
e
p
ai
d
h
i
d
i
d
und
e
r
ta
d
t
h
a
t
n y
m
$
3 9
Q
h e b o rr ow e d th a t money from you ?
I do not suppo e so
A
h s uppo e d
Ha
v
e
you
a
ny
bel
ie
f
now
t
h
a
t
?
Q
N ; on ly fr m wha t h s ai d t h e o th e r d ay I d
A
no t d i pu te a nyb ody
We
w
a
n
t
you
r
j
u
g
m
e
n
t
o
f
t
h
e
tra
n
sacti on
d
Q
My j udgm e n t of t h e t ra n acti on i j u t
I told
A
T
h
ere
w
a
s
b
ut
on
e
t
h
i
n
g
ab
ut
i
t
y
T
h
at
a
mount
h
n
e
v
e
r
bee
n
e
p
ai
d
you
You
?
Q
it
a ny
d id n t uppo e th a t you h d a ny righ t t
s
.
s
.
.
o
.
s
2
ou
.
s
.
.
e
,
.
e
.
0
.
s
so
e
o
s
n
s
.
.
.
o
ou .
as
.
o
s
s
clai m to i t
No
A
.
,
S ir
.
s
s
s
.
.
o
.
as
.
r
a
o
,
or
Q
A
.
.
S i n ce th i s i nvestigati o n c o m m e nce d ?
Y es,
s ir
.
o f th i s
d
m
n
c
ons
i
e
r
a
t
t
h
e
c
o
m
e
ce
m
e
t
n
Q
i nve s tiga t i on t hat y o u h el d t h ese o th er d i v i d e nd s wh i c h
o u say you d i d no t
a
be
h
alf
D
i
d
t
o
h
i
m
i
h
i
?
o
n
s
u
y
p y
y
regar d yo u r s el f as c u s t o d ia n o f t h e s e d i v i d e nd s fo r h i m ?
A
Y e s s i r ; h e p ai d fo r h i s s t o ck a nd i s e n ti tle d t o
h i s d i v i d e nd s
o m e to h i m at a n
Will
t
h
e
d
i
v
i
d
e
nd
s
c
ti
m
e
o n h is
Q
y
de m a nd ?
A
Y es s ir a s s o o n as th i s su i t i s s ettle d
d
t
o h im ;
h
ow was i t
o u s ay t h a t $ 2
w
as
p
ai
Y
3 9
Q
pai d to h i m ?
A
I p resum e by a c h eck on th e sergea nt a t ar m s I
fi nd t h ere are s o m e c hecks file d w i th o u t a ny let ter s o r
i n i ti a l s i nd icati n g who t h ey w ere fo r
Ha
v
e
o u h a d a ny c o rres pond e n ce
s i n ce th i s d i v i
y
Q
d e n d was p ai d w i th h i m i n regar d to th i s m atter ?
I d o n t k no w wh at m atter y o u refer to
A
h
o rres pond e nce I wou l d l i ke to see i t
I
f
you
c
ad a n
y
Q
I h av e n o c o py o f i t
A
Ha
v
e
you
th
e
o
rigi
n
al
?
Q
Mr G arfiel d show e d m e a letter wh i c h
A
N O s ir
h e sai d h e i n te nd e d to i n cl o se w it h s o m e mon ey s e n t m e
I d i d n o t k n o w w h o th e m o ney ca m e fro m He sh o w e d
m e a lette r wh ic h h e s a i d h e i n te nde d to h ave put i n I
i nd o r s e d o n th e back o f t hat lette r my re p ly I j u s t tu r n e d
over the letter a nd w ro te what I w ro te OII th e back o f i t
a nd let h i m h a v e i t
Y o u r a nswer i ndo rse d o n the back o f i t w a s pub
l i s h e d i n th e n e w sp ap ers ?
Y e s s i r ; h e publi sh e d th e l etter I b el ie ve
A
A
s publ i s h e d d id th ey c o rre spond w i t h y o u r r e c o l
Q
?
lecti o n o f th e p ap ers a s w ri tte n
.
D id y o u
,
,
,
,
.
,
,
.
.
.
.
.
,
,
.
-
-
.
.
.
.
,
,
,
’
.
.
.
.
o
.
.
.
.
.
.
,
.
.
.
.
,
.
,
,
.
.
,
,
.
A M ERI C A
OF
.
w rote i t ff ha tily He ca m e t my
m m and ai d h h d bee n acc u se d o f al l k i nds o f cri m e s
a nd m i sde meano r
I to l d h i m I h d m ad e no s u c h tate
me n t a s h re p rese n te d He wan te d m e to y i n w ri ti ng
tha t I h d no t I too k h i s letter wh i c h h e sai d h e i n te nd e d
t o h av e i ncl o se d w i th t he mon ey a nd w ro te n th e back
o f i t th at I had ma d e no su c h tate m e n t
pu
bl
i
sh
e
d
c
o
rre
pond
e
n
ce
i
n
t
h
e
mo
r
n
i
n
g
T
h
Q
p ap er o f the next day i s you r rec o l lecti on o f what
occ u rre d
It agrees w i th my rec o llecti on exce pt h e ays h e
A
left a le tter fo r m e at t h e A rl i ngton I n e ve r recei ve d t hat
le tter I on ly w th e lette r on wh i c h I i ndo r se d my
a n s w er
D
i
d
i
n
cl
o
se
t
h
e
mon
e
y
?
h
Q
S om e money ca me t o m e i n cl o e d i n a n e nvel o pe
A
wh ic h h sai d h ha d se n t I gave i t back t o h i m
i
n th at e nv el op e ?
H
ow
mu
c
h
mon
e
y
w
as
Q
A
A b ou t fou r hund re d do llars
T he following is a copy of the memora n dum
refe rred to by witn e ss as a statement f h i s a ccount
with Mr G arfield
A
G
J
T 0 s hare st o c k C re d i t M o b ilie r o f
868
I n t rest
J un e 9 T ca h
A
o
I
s ir.
Y e s,
.
s
o
.
a
.
e
s
s
a
e
s
,
O
s
sa
.
a
.
o
,
s
s
e
.
.
s
?
s
,
.
.
sa
.
.
e
.
s
.
e
e
,
.
.
.
.
.
o
:
.
.
1
o
.
1
.
.
s
e
1
1
8 68
o
.
yd i v i de nd b on d s Un i on Pac i fic Rai lroad
at 80 p e r ce n t less 3 p e r ce t
$
By d i v i d e nd c o llecte d fo r you r acc t
B
.
1 000
J
u n.
s
1
7
.
n
.
’
.
,
$ 7 76
00
600
00
$ 1 3 76
00
1
4
C REDI T M OB ILIER
THE
2
You
m
a
y
tate
wh
e
th
er
i
n c onv er ati o n w i th you
Q
M G arfiel d clai m e d
h clai m e d bef re
th a t the
on ly tran acti on betw ee n you w b rrow i ng $ 300 ?
A
No s ir ; h e d i d not clai m t hat w i th m e
l
S
tate
do
e
i
t
w
i
t
h
you
wh
at
h
h
m
w
w
;
Q
ai d S tate al l t ha t o ccu rre d i n c nver ati on betwee n y
I ca n no t re m e mber h alf o f i t I h ave ha d t wo o r
A
th ree i n terv ie w w i t h Mr G arfiel d He wa n t t o p t i t on
th e basi f a l oa n He t te t hat wh e n h e ca m e back
fro m E u r op e bei ng i n w a n t f fu nd s h calle d n m e to
l a n h i m a sum o f mon ey He th ug h t h e h d re p ai d i t
I do no t k n w I ca nn t re m e m ber
i
W
h
at
d
i
d
you
sa
y
t
h
m
i
n
refere
n
ce
t
o
t
h
a
t
tate
Q
f t h e ca e
A
I state d t h i m t ha t h e n e er a ke d m e to le nd h i m
ny mon ey ; t h at I n e v er k n e w h e w a n te d to b o rr ow a ny
I d i d n t k n w he w
ho r t I m ad e a tate m e nt t h i m
h w i ng th tr n acti n nd W h t t here w du e n i t ;
that d e d cti ng th b n d d i v i de n d nd ca h d i v i de nd t here
w
$ 3 9 du e h i m f wh ic h I h d gi ve n h i m a c h eck ;
tha t h e ha d n ever a ke d m e to l a n h i m a ny money a nd I
n e ver l a e d h im ny
h
fter
m
a
d
e
t
h
at
state
m
e
n
t
wh
at
d
i
d
h
e
A
d
y
Q
state i n re p l y ?
He w a n te d to h av e i t go as a l o a n
A
i
n fac t a l o a n ?
h
e
clai
m
t
h
at
i
t
w
D
i
d
Q
sir ; I do n t t h i k h d i d N ; h e d i d not
N
A
Go
n t h e n a nd ta t e wh at w as ai d —al l th e d i
Q
k p lace
i n t hat t
u
I ca nno t tell y all w e h d t h ree o r fou r talk I
A
a nno t re me mber what w
ai d
h
l
n
g
after
t
h
at
tra
n
ac
t
i
on
d
i
d
g
o
to
H
w
Q
E u r op e ?
I belie ve i t w a y ear o r t wo
A
s
.
r
as
,
.
e
as
.
,
us,
o
s
o
,
.
e
o
.
s
s
,
s
as
C aI
o
.
ou.
s
.
.
s
s o
s
s a
.
s
.
.
,
O
,
o
o
o
a
o
.
e
,
.
o
u
.
.
o
.
o
s
?
s
v
o
.
s
a
.
o
o
s
o
as s
a
e
2
as
o
e
u
,
s
,
a
,
n
o
a
or
a
a
ou
.
as
,
.
a
,
.
as ,
o
o
,
,
e
.
s
.
a
as s
c
o
o
.
s
ou
.
.
,
s
oo
ss o
n
o
,
.
.
,
o
.
c
o
s
.
.
o
a
s
o
s
.
s.
.
s
o
as
e
.
1
TH E C R E DI T M O BILIE R
44
a t i s you r be s t rec o llecti on i n refe
W
h
re
n
ce
to
i
t
?
Q
My i mp re s s i on i s th at h e w a n te d to s ay a s li ttle
A
ab ou t i t as h e c ou l d a nd to get o ff a s ea s ily a s h e c ou l d
Th at w a s ab ou t t h e c onver s a t i on I h ad w i th h im ab out
th e l on g a nd s ho r t of i t
Ha
v
e
you
h
e
m
e
mo
ra
ndum
t
h
a
t
M
r
G
arfiel
d
t
Q
m ade ?
A
I h av e th e figu re s h e m ad e
.
.
.
,
,
.
.
.
.
.
[Pa pe r
fi
Q
A
gu
h
o wn
to
re s a s
fo
s
co
ll
mmi
tt
O
e e , c o n t a I n I ng
o ws
You say tho e figu re w ere mad e by Mr G arfiel d ?
s
.
Y es
.
,
s ir
W h at
Q
th e m down ?
.
s
.
.
do these sum s re p re se n t ? H ow d i d h e pu t
U n i on Pac i fic Rai lr o ad s to ck ;
C re d i t M ob i l ier s t o ck a nd $ 400 wh ic h h e c ou l d no t
re m e mber wheth er i t w as t o be i n ca sh sto ck o r b ond s
I
S t h at wh at h e recei v e d o r w a s e n ti tle d t o ?
Q
W hat h e w a s e n ti tle d to
A
h
i
T
h
a
t
w
as
s i d ea o f wh a t w as c om i n g to h i m ?
Q
Y es Sir
A
a s t h at ab out wh at h e wou l d h a v e bee n e nt itle d to ?
W
Q
He wou l d h av e bee n e n ti tle d t o th e
in
A
s to ck a nd h e wou l d have bee n e n ti tle d to mo re th an tha t
I gav e h i m $ 3 2 9 ;
Th e $ 400 I t h i n k h e i s i n erro r ab out
I do no t k no w wh et h er t h e $ 400 referre d to th at
e pu t t h i s d o wn as h i s rec o llecti o n o f th e
D
i
d
h
Q
state m e n t you m a d e to h i m ?
I SO u nd er s t o od i t
A
It
a s i n t h i s c onver sa t i o n t h at t h e s e figu re s w er e
w
Q
m ade that h e de p recate d th e e ffect o f th e m atter upon h is
elec t i on ?
A
.
,
,
,
,
.
,
.
.
.
.
,
.
.
.
.
.
,
.
.
.
.
.
.
,
O F A M ERI CA
1
.
45
I do no t k no w ab o u t h i s electi on i t was ab out h i s
p ro s p ects h is re p u tati o n & c
I
und
e
rsta
nd
t
h
at
i
n
s
u
b
s
ta
n
ce
h
e
d
e
s i re d you t o
Q
?
as
li
ttle
as
po
ssible
ab
ou
t
i
t
sa y
Y e s s i r ; a nd t hat i s my d e s i re
A
o u re p eat j u st wh at h e d i d s ay
Will
y
Q
I ca nnot re m e mber th e c onve r sat i o n w ell e noug h
A
to re p eat i t
o u ca n re p eat t h e s u bsta n ce o f i t ?
Y
Q
I ha ve gi v e n y u th e substan ce o f i t
A
a i n t h i s li ttle
H
ow
d
i
d
you
h
a
pp
e
n
t
o
ret
stra
y
Q
m e mo rand u m
I d o no t k now I found i t on my table two o r th ree
A
day s afterward I d id no t p ay a ny atte n ti on to i t at th e
ti m e un ti l I found th ere w a s to be a c on flict o f te s ti mony
a nd I though t i t m igh t be som eth i n g wo rth p re se rv i ng
T
h
e c onv er s ati on wa s i n you r r o om a nd t h e fig u re s
Q
?
were made there
Yes S i r
A
D
o
I
und
er
s ta nd you t hat t h i s l o a n wh ic h Mr G ar
Q
fiel d C lai m s to h av e bee n m ad e wa s i n refere n ce to a t ri p
t o E u rop e take n by h i m a year o r t wo afte rw ard ?
A
I d o no t k now wh e n h e t oo k h i s tri p I k no w h e
d i d no t go du ri ng that se s s i on o f C ongre s s Th i s p ayme n t
w as ma d e to h i m du ri ng that se ssi on o f 1 86 7
o u k now wh eth er h e w e n t du ri n g t h at rece s s
D
o
y
Q
fo ll ow i n g ?
A
I ca nno t say I do no t k now
D
o
you
k
now
t
h
at
h
e
d
i
d
no
t
g
o
t
o
E
u
r
op
e
f
o
r
Q
nearly two year s afterw ard
N o ; I do no t I t i s m y i m p re ssi on i t w a s t wo
A
years afterward b u t I canno t re me mbe r date s Pe op le
ask m e a b o u t th i ng s t hat o cc u rre d a year ag o a nd I c a n
not tell whethe r i t was te n year s ago o r one
A
.
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,
,
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,
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o
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,
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‘
,
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K
1
TH E C REDI T
6
4
M OB
ILI E R
By th e C H A IR M A N
o u u nd e r s ta nd i n t h i s c onv er sa t i on you h a d
D
i
d
y
Q
wi t h G e n eral G arfiel d t h a t you d e taile d to h i m t h e h i s to ry
o f t h i s m atter a s to h o w th e s tate m e n t you h a d le t h i m
h a ve w a s m d e up ? a nd d id you u nd er s ta nd h i m to c on
c e d e y our sta te m e nt ab out i t t o be t h e t ru t h ?
Well I cannot s ay He w o u l d n o t h av e bee n v er y
A
a p t t o rec o lle c t th e a mount th ere w a s du e h i m i f h e h a d
no t acce d e d to my s tate me n t
o m t h e w h o le c o nv ersati on —
Fr
fr
om
wh
at
h
e
s
ai
d
Q
d i d you und er s ta nd h i m to
a nd t h e figu re s t h at h e m a d e
c o nce d e th e s tate m e n t y o u h a d m ad e to h i m a s ab o ut th e
?
t ru t h
Y e s ; I s o und er s tood h im
A
T
h
at
s tate m e nt you m a d e to h i m w a s i n su b sta n c e
Q
the s ta te m e nt you m ad e to u s i n refere n c e to h i m ?
.
,
a
,
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,
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,
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A
Y es,
.
J AM E S
s ir
.
I
ER S O N O F N E W H A M PS H I R E
Mr Patterson purchased of M Ames August
f
thirty
shares
the
Cr
e
dit
Mobilier
paying
6
o
I
1
8
7
3
therefor $ 3000 which stock he subsequently trans
ferred to Morton B liss C O o f New Y ork a nd later
purchased
of stocks a nd bonds o f th Union
Pacific R ailroad which w e re sold for Mr Patterson
by Morton B liss Co F r om th e C r e d i t Mobili e r
s tock Mr Patterson received as dividends F ebruary
23
6
8
8
June
May
6
1 8 68
1
4
and 1 00 shares of Union Pacific
1 87 1
stock and
income bonds o f th a t ro a d Mr
Patterson s testimony was to the e ff e ct that he gave
to invest for him and that he
t o Mr Ames
W
.
P A TT
.
r
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,
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e
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1
,
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’
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,
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1
TH E C REDI T M OB ILIE R
8
4
c o m m i ttee fi nd in th e state m e nt o f Mr P a tters o n
befo re th e c omm i ttee o f t h e H ou se o f Re p re s e ntati v e s a nd
h i s s tate m e n t befo re t h i s c omm i ttee a c ont ra d ic to ry rela
ti on o f th e tra n sac ti o n betw ee n h i m a nd Mr A me s ; a
a nd a d e n ial o f o t h e r fa c t s
supp re s s i o n o f m a teri a l facts
wh ic h mu st h a ve bee n k n o wn to h i m
Th e
.
,
,
.
,
.
T he
committee then further review this tra n sactio n
and conclude th e ir report as follows
A nd fu rt h er t hat bei n g i nq u i re d f i n relati on th eret
befo re c omm i ttees f b o t h bra n c h e f C ongre s h e gav
a fal e acc ou n t f th e tra n acti s betw ee n h i m elf and
Mr A m e
upp re se d m aterial fact and d e n ie d th
exi te n ce o f o th er m aterial fact wh ic h mu t hav e bee n
w el l k nown t h im
Th c omm ittee h a ve reac h e d a c on cl u i on after t h e
m st atte n ti v e c on si derati o n a nd an xi u s d el iberati n
wh i c h th ey w l d fai n w i sh w ere othe rw i e b u t a se n s
f du ty c omp el s t h e m t d eclare
Th ey u b m i t th fo ll w i ng re o l u ti o n
is
l
d Th at Ja m e s W P tters on be a nd h
R
he r by ex p elle d fr m h i s s t a m e mber f th e S e n ate
N O definite actio n was taken on this report and
five days after the term of Mr Patterso n expired
Mr P atterson subsequently addressed the S enate
in a lo n g reply vindicating his actions but which
we ca n not i n sert here
,
:
o
,
s o
o
s
s.
s
s
on
s
o
.
o
s
s
s,
s
e
s
o
e
,
s
.
e
s
,
o
o
s
ou
o
o
s
es o v e
o
s
,
.
ea
o
e
e
,
.
o
e
,
:
a
e
,
as
o
.
,
.
,
.
:
,
,
.
SC HUY LER CO L F A X
.
The committees from the House an d from the S en
ate in their reports make no mention what e ver of
f Mr Colfax at that time V ice Pr e sident
th e name
of th e United States B ut from the testimony th a t was
,
,
o
,
.
.
-
OF AM ERI C A
1
.
49
taken before th e Hous e committ e e much of interest
may be gleaned J anu a ry 7 1 8 6 8 he made the
following statement before the committee
I m ay add t hat Mr A m es w i ll rec o llect wh e n I call t o
m i nd the ci rc um sta nce s f th tra n sac ti on t h a t h n e ve r
p ai d m e a do llar o r th val e of a do llar on a ny acc ount
whate ver
I re p eat that I ne ve r d i d recei ve a do l
lar or th val u e f a d llar on ny acc ou n t wh ate v er
from h i m
n d I t h i n k Mr A m es w il l rec o l l c t t h at I d i d
no t whe n I re all to h i m i nd t h e e c irc ums tan ce s wh ic h
wou l d o f c ou r e i mp ress t he m sel ve mo re on my m i nd
t ha n h is a s i t w as large r matte r to m e th an t o h i m
,
.
,
,
.
e
o
u
e
,
e
,
,
.
o
o
e
,
a
e
s
s
,
s
s
a
,
*
.
i
l
i
1
,
.
c
,
a
,
‘ ’
*
1
*
!
l
l
i
‘ '
1
I
’
I st a te ex p l ic itly th at no o ne e ver ga v e o r o ffere d to
gi v e m e a ny Shares o f s t o ck i n th e C re d i t M obi l ie r o r th e
U n i on Pacifi c Rai lr o a d I h ave ne v er recei ve d o r h ad
te nd ere d to m e a n v d i v i d e nd s i n c ash s to ck o r b onds
acc ru i n g upon a ny s t o ck i n ei th er o f sai d o rga n izati ons
A n d n ei th e r Mr A m es no r a ny o t h er p e r s o n c onn ecte d
w ith e i th er o f sai d o rga n izati on s e ver a ske d m e to vo te
fo r o r ag a i n st a ny m eas u re s a ffecti n g t h e i n tere s ts o f e i t h er
d i rectly o r re mo tely o r to use a ny p er s onal o r official
i n fl u e n ce i n t hei r favo r I d e s i re how e ver to state al l
th e ci rc um sta n ce s t h rou g h wh ic h
p robably my n am e
c a m e t o be a s s o c iate d w i t h t h i s o rga n iza t i on
F i v e years ago ab ou t th e ti m e o f t h e ho l i d ay rece ss I
w a s c onver s i ng on t h e fl oo r o f t h e H ou se w it h Mr A m e s
i n regard t o th e U n i on Pac ifi c Rai l roa d i n fa vo r o f th e
b u il d i ng o f wh i c h I h a d p re v i ou sly m ad e hund re d s o f
publ ic ad d resses I n th e c ou r s e o f t h i s c onversati o n h e
aske d if I wou l d no t li ke t o pu rc hase s om e s to ck i n t h e
C re d i t M o bilier U p to th a t ti m e I k n e w no th i ng o f i ts
c a p i tal o r p r o fits ; a n d I e n q u i re d of hurt a s to i ts O bje c ts
a nd t h e val u e o f i ts st o ck
,
,
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,
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,
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1
TH
0
5
E C REDI T M O BI L I E R
n ear as I ca n recall th i c onversati on fter th
lap e o f m a ny years I w i nf r m e d by h im tha t i t was
a legally i nc o r po rate d c omp a ny c mpo se d o f th p ri n ci p al
to ck h l d er s o f t h e U n i on Pacifi c Rai lr ad w h w ere
th e m el ve s b u i l d i ng th r ad i n tead f letti g i t ou t
t o c ont ra to r w h al w ay s ex p ecte d large p ro fit f
th ei r ri ks a nd fo r th ei r adva n ce f money f
p
p lie I t l d h im after h i ex p la n ti on tha t i t l o ke d
l ike a g ood a nd afe i nv e tm e n t fo r on e f l i m ite d m ea n
n d th at I wou l d be w ill i n g t
pu rc ha e twe n ty th i rty
h are at a fai r p ri ce i f I h d th e money B ut I adde d
fra nkly that I c ou l d not p ay fo r th e m till two o r th ree
m n th afterw ard
my h ou ekee p i n g ex p e n ses i n th
op e n i ng month o f th e i n w ere mu c h larger tha n th e
av erage H e sai d h e w u l d c on tract to el l m e twe nty
h are s a t p ar if I wou l d i n add i ti on agree t o p ay i n tere t
un til fi nal p ay m e n t I e n q ire d what p er ce n t i t w u l d
p ay a nd h rep l ie d th t there had bee n l rge d i v i d e n d s
b ut th r o a d w pu sh e d fu rther i n t th e i n teri r th
p ro fit m ight no t be large though they wou l d be very
su rely re mun erati v e
Th U n i on P acific Rai lro a d h d n legi lati n th a t I
k n e w o f p e nd i n g bef re C on gre at th ti m e
di d I
uppo e th ere c u l d be any i n th fu tu re as th la t
a m e ndm e t t th ei r c h arter au t ho rizi ng th i s u e o f
fi t mo rtgage b o nd s wh ic h s h u l d h a v e p ri ri ty f th
g over n m e t l ie n h d bee e nacte d i n 8 64 ver th r e
years bef re t h i s c versati n I nferri g t t any qu es
ti n s ari si ng u nd er th i c h arter wou l d be j ud icially settled
a nd uppo i n g at ny rate th at I h d t he am e righ t t
pu rc h ase th i st ck
t o b uy sto ck i n a nati on al ba n k
c h artere d by C ngres o r i n a m anu fact ry I to l d h im
I wou l d agree t pu rc h ase t we n ty h ares at p ar a nd i n ter
be p ai d f as s n
I h d th mon ey S m
t t
As
s
s
SO
as
,
,
o
e
o
,
s
o
o
s
e
c
o
s
,
s
o
,
a
,
or
.
s
as
e
ss o
e s
s
s
o
.
s
u
.
a
,
o
as
e
o
.
a
e
as
s
,
,
,
,
s,
s
a
s
,
su
o
o
s
or
o
!
s
a
o
or
s
o
s
s
s
n
o
s
.
o
,
o
s
s
s
e
a
s
o
e
,
.
a
e
n
rs
o
,
-
e
o
on
o
1
o
,
n
.
s
s
o
n
a
no r
e
,
,
,
,
,
n
o
e
o
e
ha
s
o
s
s
,
a
,
o
s
o
s
,
or
o
as
o
o
s
a
,
s,
o
es
o
e
e
o
s
s
ss
o
,
s
o
oo
as
a
,
,
e
.
o
e
1
TH E C REDI T
2
5
MO
BIL I ER
c on tra c t to pu rc ha s e t we nty s h are s of st o ck It th e c om
p any a t p ar and i nterest b ut th a t after a p artial p ayme n t
I w i thd re w e nt i rely fr o m what I regard e d a s a n u nc o m
l
e te d
t
o
c
ont
rac
t
pu
rc
h
a
e
fr
om
re
pu
g
n
a
ce
bei
n
g
s
n
o
t
p
i nvo l ve d i n li tigati o n a nd t h at i ns tea d o f bei ng e n ric he d
by i t on e t h ou s a nd o r tw e n ty thou sa nd do llar s a s h as
bee n c h arge d I a m vo l un tarily out o f po cke t fi v e hund re d
do llar s a nd h av e bee n fo r n early fi v e years
,
,
,
,
,
,
,
,
.
T he
testimo n y o f Mr Ames is that b e secured for
Mr Colfax twenty shares of Credit Mobilier stock
which he was to hold until p aid for ; that he
received a dividend on them o f eighty per ce n t i n
bo n ds which bonds he sold and accounted for to Mr
Colfax ; which left a bal ance due o n the sto ck of
which Mr Colfax paid him with a che ck ;
the date o f the c heck was March 5 1 8 6 8
The following are the questions by Judge Po l l afid
the chairman with Mr Ames answers
Were
t
h
ere
a
ny
d
i
v
i
e
n
d
s
on
t
h
at
t
o
ck
afte
r
w
r
d
d
?
Q
There w on e d i v i d e nd Th ere w ere o th er d i v i
A
Th ere
d nd i n to ck wh i c h I n e v er d e l i v ere d t h i m
w as a d i v i d e nd i n ca h i n J une wh ic h I d i d p ay t
.
.
,
.
.
,
.
.
,
,
’
.
,
s
.
as
.
e
s
.
o
s
s
h im
a
.
o
,
,
.
t
h
a
t
Q
Tw el ve hu nd re d d o llar s
A
f
o r th a t ?
Ha
v
e
you
recei
p
t
o
r
vou
c
h
er
an
y
Q
-at
n
h
i
m
o
s
i
r
I
ga
v
e
a
c
h
ec
k
th
e
s
ergea
nt
No
A
;
arm s a nd i t i s c h arge d to m e t h ere
nd y o u g o t t h i s d ate fr o m t h e sergea nt a t a rm s
A
Q
?
b ook
Y e s ; I n e v e r d el i v ere d to Mr C o lfax a nyth i n g
A
e l se a nd n e ver recei ve d a nyth i ng fr o m h i m exce p t that
Ho w large w
.
as
?
.
.
.
,
.
,
.
-
.
.
,
.
’
s
O F A M ERI CA
ti m e He p ai d
p ai d h i m a ca sh
.
3
‘
G
'
53
m e fo r th bala n ce o f t he t ck a nd I
d i v i d e nd
e
s o
,
.
O
O
1
.
l
I
‘ ’
U
!
’
I
'
I !
o u p ai d h i m
ti
m
e
o
r
ga
v
e
a
h
i
m
y
Q
c h eck upon th e sergea nt a t ar m s fo r t hat a moun t d i d Mr
C o lfax und er s ta nd tha t th i s was a d i v i d e nd 0 11 t h i s C re d i t
M o bil ier st o ck ?
A
I s uppo se s o ; I do no t k now ; I s o und er s t o o d i t
That i s wh a t i t was ; wh e th e r he und erstood t h e m a tte r i s
m o re tha n I k now ; I do no t k now t hat I ga ve h i m a ny
ex p la nati o n I ga v e h i m th e c h eck
Ha
v
e
vou
a
ny
d
u
bt
t
h
at
you
t
o
l
d
h
i
m
wh
at
i
t
Q
w as ?
I ca nno t re m e mber W he n I suppo s e a m a n
A
k now s a th i ng I don t tel l h i m ove r agai n
D
o
you
re
m
e
m
be
r
wh
et
h
er
h
e m a d e a ny i n q u i ry
Q
?
a s to wh at i t w as
A
I d o n t re m e m ber a ny th i n g ab ou t wh at w a s sai d at
all
You
s
uppo
s e d t h at i t w as und er s t ood t h at i t w as a
Q
d i v i d e nd y o u h ad recei ve d upon that sto ck ?
I s u pp o se d s o
A
Ha
s
h
o u t h at
e e v e r re p ai d
y
Q
N o t t o my k now le d ge
It d i d no t bel ong to
A
me
You
n
e
v
er
m
a
d
e
a
ny
clai
m
upon
h
i
m
f
o
r
i
t
a
nd
Q
d i d not suppo se you h a d a ny righ t t o i t
A
N O s ir
o u d i d no t s u
T
h
e
s e $ 5 34 t h a t w ere p ai d you
p
y
Q
p o s e h e ha d a u v ri gh t to cal l upon you to p ay back ?
I d i d no t s uppo se s o ; I un d er s t ood t hat I s o l d h i m
A
w o rt h o f s to ck Th e first d i v i d e nd 80 p er ce n t
f
p
ai
d
I n b ond s
o r t h e st o ck
a n d t h at c h eck f r $
5 34
Th a t w a s my s uppo siti o n
.
A t th e
-
-
,
.
.
.
.
.
o
.
.
.
’
.
.
’
.
.
.
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,
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,
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,
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,
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o
,
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,
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.
1
C REDI T
T HE
54
.
hI O B I L I E R
B y M R MERRI C K
I n what o rd er o f ti m e w ere th e two d i v i d e n d s p ai d
o f $ 1 2 oo a nd $ 00 ?
5
A
He p ai d m e $ 500 i n Marc h a nd I pai d h i m
i n t h e J un e fo ll o w i ng
Were
t
h
ere
a
ny
o
t
h
er
d
i
ere
nt
t
ra
n
s
f
f
a cti on s bet w ee n
Q
o lfax t o wh i c h t h e s e p a m e n ts c u l d refer
o u a n d Mr
C
y
y
a t all exce p t th i s C re d i t M o b il ier ?
A
N o s ir
m
W
h
at
m
e
o
ra
nd
a
o
r
e
n
trie
s h a v e you i n refere n ce
Q
to th i s t ra nsacti o n ?
I m a d e a l i ttle m e m o ra ndu m a t th e ti m e I s u pp o se
A
wh ic h I ha nd e d h i m whe n I don t re m ember
o u an
o ra ndum w i t h you ?
Ha
v
e
m
e
m
y
y
Q
.
,
,
.
,
.
.
o
.
,
.
.
,
.
.
,
,
’
,
.
.
A
.
No
.
Sir
.
Ha
v
e
o u m a d e a m e mo ra ndu m o f i t at a l l ?
y
Q
Y es ; I to o k a c o py o f th e m e mo rand u m I m ade
A
a nd br ough t i t w i t h m e W h e n I w e nt h o m e y o u a ske d
m e to l o o k o ver my b o o k s I d i d a nd fou nd I h a d
recei v e d $ 5 34 fr o m M r C o lfax a nd I fo und I h a d c harge d
i n J u ne
h im w i th
Ha
v
e
o u th e m e m o ra nd u m m a d e at t h e ti m e ?
y
Q
N o s ir ; not h ere ; I h ave a m e m o ra n d um wh ic h
A
I t o o k fr o m t hat
W
h
a
t
a s t h e c h aracter of th e b o o k i n wh ic h th e
w
Q
m e mo ra ndum w as m a de ?
I t w a s a s m all po cke t m e mo r a ndum and s o m e o f
A
i t o n sli p s o f p ap er
o u r n al fo r m ?
It
w
as
e
n
tere
d
i
n
j
Q
N o ; i t w a s s i mp ly a s m al l m e m o ra ndum b o o k
A
Th e s e t h i ngs w ere cl o s e d up at t h e ti m e h ere a nd th ey
w ere no t e n tere d o n my b o o ks at h o m e
o u r m e m o ra n d u m
I
s
wh
o u h a v e h ere a c opy O f
at
y
y
Q
?
m
m a d e a t th e ti e
.
,
.
,
.
.
,
,
.
.
.
.
,
.
.
,
.
.
.
.
.
,
.
.
1
TH E C RED I T M O BI L I ER
6
5
Q
you
W a s t h ere
.
th i ng
an
y
of
th e
ki nd
s
ai d b e t w ee n
?
I ca nnot rec o llect ; i t m ig h t h ave bee n s ai d ; b u t I
ca nn o t rec o llect i t
Ha
v
e
you
e
v
er
bee
n
rei
m
b
u
rse
d
f
o
r
t
h
at
1
2 00 ?
$
Q
N o si r
A
A
.
.
.
,
,
.
.
At this point i n Mr Ames testimony Mr Colfax
with the permissio n o f the committee began to i n
Many o f the questions o f
te ro g at e th e Witness
little bearing are here omitted ; but what ar e pre
sented includ e all th a t are o f import a nce
h
n th
f
N
ow
w
e
n
I
testi
fie
d
h
Ja
u
ar
y
a
nd
t
n
7
Q
ke d y t o cr o ss exa m i n e m i f t he state m e t I m a d e
no t c o rrect w h y d i d you t c tr d ict m th e n
w
I h d n t exa m i ne d t h e rec o rd th e n ; I h d no t
A
refre h e d my rec o llecti on
h
d
u
bject
bee
n
d
i
c
u
se
d
all
v
er
t
h
e
h
T
Q
c ou n try a nd you r atte n ti n m u st h av e bee n calle d t o i t
My m i u te w ere a t h m e a nd I h d not e xa m i n e d
A
th e m n ti l I w e n t back home
you
p
ai
d
m
e
b
y
a
h
eck
on
t
h
e
Y
y
Q
ergea n t t arm s
’
.
.
,
,
,
r
.
.
o
,
.
-
ou
as
as
o
n
no
on
a
?
e
s
o
a
,
e,
,
.
e
s
a
.
a
s
e
.
s
s
o
o
,
n
.
.
o
s
u
a
,
.
ou
.
-
s
a
C
sa
?
-
I d id
o u p ai d m e ?
W
h
ere
a s I wh e n
w
y
Q
I do not k now ; I ca nno t s ay Th e c h eck i s i n t h e
A
sergean t a t arm s r oom
wh
e
n
I
asserte
d
i
n
my
te
s ti mony t h at I h a d
ow
N
Q
n e v er recei v e d a d o llar fr o m y o u w h y d i d you not c on tra
d ic t m e t h e n a nd s ay to t he c omm ittee t hat you h a d p ai d
m e a C h eck o f
I w a s no t i n a po si ti on to c o n tra d ict y o u becau se
A
I h a d no t exa m i ne d m y m i nu tes a nd refres h e d my re c o l
A
.
.
.
.
.
-
.
’
-
.
,
,
,
,
,
,
.
,
l e c tI o n
.
O F AM ERI CA
1
.
57
D
i
d
I
no t tell
o u t h e fi rst o f th e p rese n t s e s si o n th at
y
Q
?
t
h
e
I w a n te d y o u t o tell
w ho le tr u th ab ou t t h e m atter
Well I th i n k I h av e don e so
A
h
W
h
d
i
dn
t
W
n
o t h a v e don e s o at fi rst ?
ou
y
y
y
Q
tell i t wh e n I w a s h ere a nd gav e my testi m ony ? W hy
d i dn t you s tate t h at you h a d p ai d m e
I d i d no t w a n t t o d i s pu te you
A
You
t
h
at
w
a s t h e on ly ca sh d i v i d e nd i n 1 8 6 8
sa
y
Q
?
upon t h i s s to ck
I th i n k th e on ly ca sh d i v i d e nd
A
I
n
Mr
D
u
ra
n
t
s tate m e n t
s testi mony t h ere i s a
Q
t hat t h ere was a cas h d i v i d e nd o f 30 p er ce n t i n J u ly
.
.
,
.
’
.
’
.
.
.
.
.
’
.
.
.
1
86 8
,
?
I t h i n k no t
n t al s o state s t h at t h ere w as a b ond d i v i
Mr
D
u
ra
Q
d e nd du ri ng t hat s essi on Wh at d id y o u do w i th the
b ond s bel ongi n g t o m e ?
Th ere are b ond s bel ongi n g t o you now
A
You
d
i
d
no
t
s ell all t h e b o nd s t h e n ?
Q
N o ; th ere are b ond s t h at bel o ng to you now
A
b onds that bel on g t o you r sto ck a nd t hat you are
e nt i tle d t o
W
h
e
re
i
s
wh
at
I
a
m
e
n
ti
tle
d
t
o
now
?
Q
I ho l d i t
A
Ha
v
e
you
e
v
e
r
o fl e re d i t t o m e ?
Q
N o si r ; I am w ai ti ng fo r th e re su l t o f th i s su i t
A
Ha
v
e
you
e
v
er
t
o
l
d
m
e
a
ny
t
h
i
n
g
ab
ou
t
i
t
?
Q
I suppo se I t o l d y o u ab ou t i t i n 1 8 6 8 wh e n I to l d
A
s e v e ral o t h er s
n k you t o l d m e d o
You
do
no
t
t
h
i
ou ?
y
Q
A
I do no t k now wh e the r I d i d ; I suppo se I gav e
o u a s tate m e n t
y
N
ow
i
n
regar
d
t
o
t
h
i
s
t
h
i
n
g
be
i
n
g
O ff you say
ou
Q
y
go t that fr o m my testi mony ?
A
.
.
.
.
.
.
.
.
.
,
,
.
.
.
.
'
.
.
,
.
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,
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,
.
.
.
,
,
1
TH E C REDI T M OB ILIER
58
It
S i n ce w e
mu s t h a ve bee n fr m a c onver ati o n w i th you
have bee n h ere th i p re e nt se si on I alle d
upo n you at you r r oom
D
i
d
h
a
v
e
a
ny
oth
e
r
c
h
ec
s
h
sergea
n
t
k
n
t
t
Q
y
rm s at t h e a m e ti m e t ha t you gave m e t h i on e fo r
A
o
.
s
s
s
s
c
.
.
ou
.
a
o
s
A
.
Q
.
Y es,
s ir
Y ou
do
-a
e
s
.
no t
re m e mbe r
wh e n you p ai d m e t h i s
c h ec k
A
I supp o se i t w a s i n t h e H ou se Th e s ergea n t a t
a r m s p ai d i t
a s i t p ai d t o my o r d er ?
W
Q
A
I t w as p ayable t o S C o r bearer
o m e b y t h e s e r e a II t a t ar m s ?
t
Pai
d
g
Q
A
I t h i nk s o I t i s i n h i s po s s e s s i o n a s a vou c h er fo r
t h e mon ey a n d my b oo k s s ho w th a t I ga v e you th e c h ec k
at th e ti m e fo r
Is
i
t
not
mo
re
p
r
o
bable
t
h
at
you
th
e
mon
e
y
on
o
t
g
Q
that c heck you r self a s w e h a d t h i s talk ab out bei ng O ff ?
Tha t c h eck w as gi ve n a l o ng wh i le befo re I h a d a ny
A
Th i s c heck was gi ve n i n J une 1 8 6 8
t alk ab o u t bei n g o ff
M
y
rec
o
llecti
o n i s t h at t h e tal k w e h a d ab o ut bei ng
Q
o ff w as i n th e s u m m er o f 1 8 6 8 at th e sa m e ses s i o n a t
w h ic h y o u s ay th e C h eck w a s gi v e n
Th ere h a d bee n no l i tiga t i o n th e n
A
a s i t n o t i n regard t o p r o s p ecti v e l i t igati o n t h a t
W
Q
?
w e w ere talki ng
N o ; I d id no t k now a ny t h i ng ab ou t a ny l i tigati o n
A
o r s u i t u n ti l afte r J un e
You
are
po
o u p ai d m e t h i s C h e c k fo r
s i ti v e th at
y
Q
?
.
-
.
.
.
.
.
.
.
-
.
.
-
.
,
.
,
.
,
.
.
.
,
.
.
.
.
.
.
.
po si ti ve I gave y the c heck
k
n why d id
agai
nd th e n I
A
y
y
Q
w h e n y te ti fie d i n D ece mbe r
A
.
I
am
ou
as
.
ou
s
.
ou
,
?
o u no t
say
so
1
TH E C REDI T M O BILIE R
60
The following day considerable testimony was
given both by Mr Ames an d Mr Colfax each
maintaining strongly the positions taken above Mr
Ames asser ting positively that he p aid Mr Colfax
the
and accounted to him fo the other
dividends a n d producing the check o f
Mr
Colfa x as positively denied its receipt but said that
he und e rstood that the
which he paid Mr
Ames was to p a y in full for the stock i n connectio n
with the unadjusted dividends o f which Mr Ames
made me n tion
Mr Colfax also made the following stateme n t :
I w i h t o re p eat exactly what I state d d ay befo re ye ter
d y ; t h a t I n e v e r rece i v e d fr om Mr A m es a do llar
n
any acc un t wh atso e ver I n ev er saw t h i s c h eck I n e v er
k n e w un ti l I sa w t h i s c h eck t h i s m r i g wh eth e r Mr
O akes A m es W h y
A m es sig n e d h i s n a m e O A m e
i f th c h eck w fo r m e h e hou l d h a ve fi lle d i t t w i th
S C
beare r I ca n t i m agi n e If I ha d ee n a c heck
s o fi lle d t i t w u l d h av e str uck m e v ery fo rc ibly Now
I c u l d n t h av e h d
add e d t o m y i n c om e w i th u t
re m e mberi ng i t very po si t iv ely I c ou l d not h ave talke d
w it h Mr A m e after ward ab out symp a th i zi ng w i th h i m
i n h i m i fo rtun e a nd p r opo e d t o re m i t t o h i m t h e $ 500
I ha d p ai d h i m if I h d recei v e d
fr o m h i m
,
.
.
,
.
,
.
r
,
.
,
.
.
/
.
s
s
a
o
.
o
.
.
o
,
s
.
as
e
!
.
.
or
ou
.
or
.
,
ou
o
.
o
,
s
.
a
o
o
n
,
,
s
,
!
n n
o
.
s
.
s
s
s
s,
s
a
,
.
The sergeant at arms and assist a nts testified that
the various checks were paid some with only ini
and some with whole n ames ; th a t a che ck
ti al s
payable to initials or bearer would b e p a id without
e ndors e m e nt ; but they could not tell to whom it was
p a id
-
-
,
,
.
O F A M ERI CA
1
.
61
January 2 8 1 8 68 the cashier o f the F irst Natio n al
B ank o f Washington where Mr Colfax had his
account was called and testified as follows
B y the C HA IR M A N
f
Will
you
s
tate
r
om
t
h
e
le
d
ger
wh
i
h
op
e
n
i
Q
b efo re you wh eth er i t a pp ear s th a t Mr C o lfax ma d e a
de po si t on the d f Jun e 868 ?
It do e s
A
i
W
h
at
t
h
a
moun
t
?
Q
A
By refere n ce to th e b oo k I fi nd i t w a s
th a t e ntry you und er s ta nd t h at a moun t o f
Fr
om
Q
money w d e p i te d to h i s red i t ei ther by h im
by
s om eb ody for h i m
,
,
,
.
:
,
,
c
,
.
,
s
.
22
o
1
,
.
.
s
.
e
s
.
.
os
as
c
or
?
A
.
Y es,
Si r
.
S
tate
t
h
e
v
ari
ous
d
e
o
si
t
s
m
a
d
e
t
o
i
c
re
d
it
fr
om
h
s
p
Q
?
th at ti m e du ri ng t he mon t h o f J u ly
A
J u ly 7 $ 400 ; J u ly 8 $ 1 50 ; J u ly 1 3
By M R A M E s :
C
a
n
you
s tate wh et h er
t
h
e
d
e
po
s i t o f the
2 2d
Q
?
J une w a s i n money o r i n c hecks
A
I t i s e n tere d as ca sh i te m s
It may have bee n
money ; i t may have bee n c heck s
B y the C HA IR MA N
?
Ha
v
e
you
t
h
e
d
e
po
si
t
c
h
eck
w
i
t
h
you
If
s
o
you
Q
w i ll pleas e read i t
It read s :
D e po s i te d i n th e Fi r s t Nati on al B a n k
A
by S c huy ler C o lfax J un e 2 2 1 8 6 8
U n i te d S tates a nd ban k no te s
00
2 0 oo
C h e c k s a s fo ll ow s
5
.
,
.
,
,
.
.
.
.
.
.
,
.
.
,
,
.
1
8 63
OO
$ 1 96 8
,
63
1 62
C REDI T
T HE
B IER
MO I L
You
w
i
ll
l
oo
k
a
t
you
r
le
d
ge
r
a
nd
s
ee
wh
e
n
la
t
h
t
Q
d e po i t of Mr C o lfax w m ad e p ri o r to the d J une
Th t w J un e
A
t
O n the 6 th o f F ebruary Mr Ames at the reques t
o f the committee produced his memorandum book
which is no w so famous The book w a s a small
which Mr Ames carried in his pocket a nd
o ne
used fo r the purpose o f making private memoranda
When called upon by the committee to p roduce it
he did s o but desired that it should be exhibited
only as to those matters before the committ e e We
shall no t attempt to put in the di fferent qu e stions
and answers relating to it but shall give co p ies o f
the memoranda and explanation su ffi cie n t to make
them clearly understood
The first e n try exhibited was th a t o f M Wilson
as follows
e
.
s
as
.
1s
as
a
.
22
s
.
.
.
,
,
,
.
.
,
,
.
,
,
.
,
.
r
1
868
.
.
,
T ue sday Ja nu ary
1
,
He n ry Wi l son
of A
,
cr
.
fo r c a s h
act
of C M
.
.
68
M onday February
,
.
b ond s
.
.
.
.
-
-
0
00
5 48
00
10
.
.
.
.
.
7
18
Fo r
Pai d H W ilson
I n Sc o fie l d c h eck
U P R R c h eck
S e rgt a t A r m s
O II
4
.
95 3 3
2
8
0
3
7
I
44
00
8
54
05
Mr : Ames stated that there were several other
business matters rel a ting to Mr Wilson upon th e
.
1
TH E C R E D I T M OB I L I E R
64
S atu rd ay Ja nu ary
1 8 68 .
H
.
L Da
.
,
wes
1 86
9
.
x 600
x 600
Sc o fie l d
Patter son
Pai n ter
Wils on
C o lfax
B i n gh a m
A lli son
Kelley
Wil s on
G arfiel d
X I , 800
X I , 800
X
1
X
I
X
I
,
2 oo
,
2 00
,
2 00
X
600
X
3 9
x
2
X
oo
00
2
3 9
2
3 9
When the amou n t had been paid Mr Ames made
the cross to S how that fact Th e y rel a t e to the c a sh
dividend in June 1 8 6 8 and show sim p ly the a mount
to be paid each
Th e next e ntry is
,
.
.
,
,
.
Th u rs d ay Marc h 5
O f S c huy ler C o lfax c h eck bala n ce
5 34
1
8 68
.
,
.
d
7
The next entry regarding Mr Colfax is a general
statement such as was made in each case
C o l fax
00
0 s h ares C re d i t M o bil ier c st
i
nt t
6
a
y
s
8
d
m
7
7
Rec
’
2
.
.
.
o
2
os
.
L e s s 80
Pai d
10
pr
’
’
.
Ct
.
bd s
7
.
at
Marc h 5
U P sto ck
C M st o c k
.
.
2
s
.
.
97
00
534 7
.
.
2
2
O F A M ERI C A
1
.
65
This e n try was made previous to Ju n e a n d does
cash at that time
no t include the dividend of
but shows the amount which Mr Colfax p aid to
balance the cost o f stock
There were no other entries o n the book regardi n g
Mr Colfax except the payme n t o f the
which e n try occurs as follows
’
,
,
.
.
,
.
1 8 68
S unday J un e
,
.
C h e c k s on C omm e rc e d e po s i te d w i th
se rgea nt a t ar m s
Pd S C o lfax
Ja m e s F Wi l son
H L D awe s
Wi llia m B A lli son
G W Sc o fi e l d
W Patterson
J ohn A L o ga n
Ja mes
G arfiel d
Will ia m D Kelley
He n ry Wi l son
J ohn A B i ngha m
3
1
.
I
,
-
.
00
-
.
2
3
.
.
9
.
.
.
.
.
2
3
.
9
3 9
2
3 9
2
.
.
Although the date would show it was made
the remark made above th a t these
o n Sunday
simple memor a nda wer e made o n such blank
p ages as were co n venient applies here also The
Mr Ames deposited for the express pur
pose o f paying these dividends from and as they
were adjusted he drew a check o n the sergea n t at
arm s for the amou n t a n d the sa m e was paid whe n
pr e s e nted
,
.
,
.
,
-
,
.
1
TH E C R E D I T
66
M OB
ILI E R
Mr Ames here produced his memora n dum book
fo the year 1 8 6 9 u p on which there appeared o n e
entry regardi n g Mr Colfax as follows
.
r
,
:
,
.
Fri d ay Ja nu ary
,
P ai
d S C lfax
U P
.
fo r i ntere s t
o
.
.
R R
.
on
29 ,
1
869
.
$ 1 500 certi fica te
of
.
This entry was made and the amount paid as Mr
Ames testified o n the day above Mr Colfax being
entitled to interest o n
the same as if the
bonds themselves had been actually divided He
collected the interest a n d paid the same to Mr
Colfax
The next memorandum was as follows
868
We dn e day Ja nu ary 8
Rec d o f G l nni W S fi l d h eck
on ergea nt f r m
0
8
7
5
I O c oupons 350 E a t
0
00
35
,
.
,
.
.
.
,
.
.
1
’
s
e
-O
s
co
.
-a
Le ss 5 p
r c
,
.
c
0
s
s
,
’
e
2
’
t
I
7
0
5
33
2
0
5
00
t o be i nve s te d i n 1 0 s hare s o f C re d i t M obi lier o f A m eri c a
as tru s tee b y m e
N O 346
,
,
.
,
.
I mmediately below this was the following entry
F e b y I s t 1 86 8 —D e l d t o H on G l e n n i W Sc o fi e l d
f
c ertificate N O
6
or
10
h
are
o
f
t
ck
on
C
re
d
i
t
s
o
s
s
34
M ob ilier b o t fo r h i s acc ount
’
’
,
.
.
,
.
.
,
.
.
The next entry is
1
S und ay Febru a ry
Reac h e d Wa sh i n gt on fr om N Y
86 8
.
,
.
.
9
.
TH E C REDI T
1 68
M OB
ILIE R
The ge n eral stateme n t is as follows
W M B A LL I S O N
Te n h ares C re d i t M
I ntere t t May
.
.
.
s
o
s
6
4
.
D i v i d e nd i n B ond s 80 pr
C a s h t o balan c e
C M
U P
.
ct , s
.
o ld a t 97
6
77
0
7
2
.
.
.
.
This bei n g crossed o ff s h ows that the accou n t
was fi n ally closed
The n ext is
JAME S F W I LS O N
sh re s C M
mo
0
d
a
y
6
7
43 3
,
.
.
Io
a
.
.
s
1
.
.
6
43 3
6
77
I .0
p r cen t D i v a t 9 7
80
.
.
.
26
’ ’
I nt
s
t to
U P
C M
.
J un e
20
2
.
.
7
6
7 3
64
1
00
.
This also was crossed
closed
Then follows
o ff ,
showi n g it was finally
.
1 868
Pai d
W Patters o n fo r
Pacific R R C o a s d i v i de nd
L es s i nterest p ai d
.
.
.
.
.
C a sh
P er recei p t
’
Pd
F R I D AY Feb ru ary
b onds o f U n i on
le s s 3 pr c t
,
.
,
.
1
4
.
.
5
10
And at the e n d o f the book
ment
W Pa tter n
R cd f
C sh and I ntere st
Re d for 3 B ond
the
ge n eral state
:
e
’
o
so
.
00
a
’
c
s
5 43 3
1
’
F eb y
1
to
C
a
h
4
00
s
00
U P S toc k
C
M
A
000
3
000
3
.
.
.
.
.
The n ext is the ge n eral state m e n t of
J O H N A I N G H AM
by C a h
N o te
to b ond
S t o ck
.
B
.
7
2
399 3
2
s
s
C M
.
Mr B ingh a m it will be remembered admitted
that he took tw bonds paid par a n d had the be n efit
o f them
Then com e s the ge n eral stateme n t of
W M D K E LLE Y
0 h are
C M A
m
i
nt t
d
a
y
0
6
7
43 3
.
,
,
o
,
,
.
.
1
s
s
os
80
pr
ct
.
1
.
.
.
.
.
.
s
b o nd
.
’
’
s
d i v a t 97
.
6
3
6
77
26
’
I nt s t
to J un e
20
2
U P s to ck
C M
.
.
.
.
7
6
7 3
64
1
1
C RE D I T
TH E
0
7
M OB
ILIER
This stateme n t was made just p reviou s to th e
6
0
0
cash
divide
n
d
which
credited
to
his
accou
n
t
$
leaves the balance due him $ 3 2 9 which Mr Ame s
paid by check o n the sergea n t at arms
Thi s
account is not crossed o ff as Mr Ames had not y et
delivered him the stock to which he was e n ti tled
There is o ne other item o n this accou n t
TUE S D AY S e pte mber 2 9
86 8
Wi l lia m D Kelley on m
$ 750
,
,
,
,
.
-
-
.
.
,
.
1
.
.
,
co
.
This is the a mou n t received later by Mr Kelley
regarding which there was a dispute betwee n the m
In regard to the n ext memorandum that o f Mr
G arfield we wish to give the evide n ce
B y the C H A IR M A N
ntrie you m ay h a v e i n refere n
N
ow
t
u
r
n
to
a
ny
e
Q
to Mr G arfiel d
A
Mr G arfiel d p aym e n t w ere j u t th e s am e M r
Kelley
I
fi
nd
Mr
Kelle
y
s
n
a
m
e
n the l i t
f
J
un
e
d
i
v
i
Q
d e nd p aym e n t f $ 3 9 Th at I und er tand you to be
th e amoun t o f th J un e d i v i d e nd after p ayi n g th e bala n e
du e on h i t ck ?
Y es sir ; t h e ge n eral tate me nt ma d e p f M r
A
G arfiel d i
fo ll ow s
GAR F I ELD
s h are C re d i t M
m
0 d ay
6
43 3
7
,
.
.
.
,
.
,
s
.
ce
.
.
’
.
s
.
s
s
as
.
’
s
.
’
o
.
.
s
2
or
.
,
e
s
o
s
,
c
,
s s o
.
s
,
s as
Io
u
or
:
s
os
.
1
s
I I0
80
p er c t
.
bd
.
d i v at 9 7
.
43
6
77
26
7
.
1
C REDI T
T HE
2
7
N ext follows
M OB
ILI E R
the ge n eral state m e n t
L O GA N
of
.
I
O hare C M
mo
d
a
y
0
7
s
s
.
.
1
A
.
.
6
43 3
s
6
43 3
6
77
I so
80
p r ct D i v a t 97
.
.
.
26
t o J un e
’
I nt s t
20
6
3 4
.
2
U P
C M
.
6
7 3
7
1
00
.
.
.
This ge n eral state m e n t like all the others was
m ade prior to the Ju n e divide n d o f $ 600 cash and
whe n that divide n d was made there was a bala n ce
due Mr L ogan o f $ 3 2 9 which he admits having
received The account was crossed o ff showi n g all
matters had been adjusted
Here is the general stateme n t o f
,
,
,
.
,
,
.
.
E
O
H N R Y W I LS N
.
d of h i m
two b nd
Rec
’
o
Le ss 3 p
s
’
r
Ca sh
’
d
p
ce n t
.
7
c as h
& I nte re s t
C re d i t
U P S to c k
.
.
0
OF
AM
E RI CA
1
.
73
This accou n t havi n g bee n fi n ally settled was
cr ossed o ff as were others
This includes all the memoranda relatin g to mem
bers o f Co n gress as a pp earing upon his book
Upon the co n clusio n o f Mr Ames testimony
regarding the memorandum book he was cross
examined at great le n gth by Mr R obert S H ale
who appeared i n behalf o f Mr Colfax but no new
feature was brought o u t n or were the former state
ments of Mr Ames in the least shak e n ; on the
contrary his tes timony was more positive O n the
1 87 3
Mr Colfax a g a in took the
l 1 th F ebru ary
witness stand at his own instance and made a long
statement denying again positively the receipt o f
any money or dividends from Mr Am e s In
regard to the deposit o f
in bills in his bank
imm e di a tely a ft e r the time which th e ch e ck of Mr
Ames was giv en and pai d by the sergeant t arms
Mr Colfa x attempts to expl a in by s a ying that $ 200
on the 1 th of July a noth e r l e tt e r cam e from Mr
of tha t a mou n t he r e c e iv e d i n th e month of June
from his step father Mr Matthews on account o f a
debt which he owed him and then says
,
,
.
,
.
,
’
.
,
.
.
,
,
.
,
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.
,
.
,
,
,
,
,
,
,
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.
,
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.
-
a
-
,
,
.
1
,
-
,
.
,
.
ti m e o f th i s p aym e n t a nd as n ear a s I ca n
fi x the d ate ab ou t th e m i dd le o f t he mon th o f J un e a nd
very s o on after the p aym e n t by Mr Matthe w s I was
ope n i ng my letter m ai l at th e breakfast table i n acc o rd
a n ce w i th my u sual c u st o m a nd found a n e nvel op e w i th i n
a no th er e nvel o pe po st m arke d Ne w Yo rk O n o pe n i ng
th e i nne r e nvel op e I found i t c on tai ne d a lette r w ri tte n by
G e o rge F Ne sbi tt c ongratu lati ng m e mo s t c o rd ially a nd
Ab
ou t
th e
,
,
,
,
.
,
-
,
,
.
,
.
,
1
TH E C REDI T M O BILIER
74
warm ly on my nom i nati on fo r th e V ice P re i de n cy a nd
say i ng th a t th w ri ter d e i re d to se nd m e c on fi de nt ially
th e re m i tt a n ce e n l o e d t ai d m e i n th e h ea vy ex p e n ses
b ut w i h e d i t ke p t a ecre t
n ei the r h i
f th e ca nva
fa m i ly n a ny on e el e wou l d e v e r k now o f i t n le s I
to l d t h e m I n cl o e d i n t h i le tt er w a g énb k o r
nati nal ba nk b ill fo r
-
!
s
e
,
s
s
ss ,
o
,
,
o
s
c
s
,
as
s
u
s
or
o
as
s
s
.
re
s
ac
,
,
He goes on then to say how he showed it to all
his family and speaks o f the surprise that all
exhibited as it passed around to each and says h e is
sure he deposited it with the $ 2 00 received from Mr
Matth e ws According to this the deposit could
n o t have been made within a week from the time o f
its rec e ipt This letter co n taining such warm c o n
gratulations had been lost and he was unabl e to
produce it before the committee F urther cross
examination brought o u t the fact that on the 1 8 th o f
April 1 8 6 8 Mr Colfax had received from this
same Mr Nesbitt a letter containing a ch h f
as a politic a l contribution and that again
on the 1 th o f July another letter from Mr
as a
N esbitt enclosing a noth e r h h for
political contribution B oth o f th e letters containing
these remittan ces which were both in checks M r
Colfax produc e d before th e commi tt e e T her e was
also a nother contribution of
from Mr N e s b itt
in Novemb e r at the end f the campaign I t m a y
only b e necessary to add th a t at this time M r
Nesbitt held a contract from th e Post Office D epart
ment fo supplying envelop e s and M r Colfax
w as chairman f the Post O ffi ce Committee during
,
,
,
,
.
,
.
,
.
,
,
.
.
,
,
ec
.
,
1
or
,
,
.
c
,
ec
.
,
,
.
.
.
o
,
.
.
r
,
o
.
1
TH E C REDI T
6
7
MO
BILIER
object o f Mr A m es To follow the language of the
report
Th c o m m i ttee do not fi nd t h at Mr A m e i n h i n eg o
ab ov e na m e d e n tere d i n to a ny
ti ti n w i th t h e p er on
d etail o f th e rela t i on be tw ee n the C re d i t M ob i lier Com
p a ny and t he U n i on Paci fi C omp any o r gave the m any
S p eci fic i nf rm ati on
to th a moun t o f d i v i de nd th ey
wou l d be l ikely to recei ve
And again
Th C re d i t M ob il ier C omp a ny w
a tate c o rpo ra t i on
no t ubject t Congre i onal legi lati on and t he fac t th a t
i ts p r o fi t w ere t o be d eri ve d fro m t h e b u il d i n g o f t h e
U n i on Pacific Rail roa d d i d no t a pp are n tly create uc h a n
i n terest i n that c m p any
t o d i squali fy th e ho l d e r f
C re d i t M bi lier sto ck fro m p artici p ati ng i n a ny legi lati o n
a ffecti ng th e rai lro ad
n eg tiati s w i th the e
In h i
m e m bers f C ongre Mr A m es m ad e no ugge ti o n t hat
he d esi re d t secu re th ei r favorable i nfl ue nce i n C on gre
i n fa v r f th e rai lr o ad c omp a ny a nd whe n e v er t he qu es
ti n w as rai se d
t wh eth e r t h e own er h i p o f t h i s st o ck
w u l d i n any way i nterfere w i th o r e m barrass th e m i n
t hei r acti on as m e mber o f C ongre s h ass u re d t h e m i t
wo l d t
A nd again
Th c m m i ttee h av e n t bee n able t o fi nd t h at a ny of
th e e m e m ber f C ongre hav e bee n a ffecte d i n t h ei r
ffi c i l
cti o n i n c on equ en ce o f th ei r i n tere t i n C re d i t
hI b i l i
sto ck
B ut the report goes o n
Th c o m m i ttee are al o ati sfie d t hat Mr A m e e n ter
fai n e d a fear t h at
whe n th tru e relati o ns betwee n th
C re d i t M obilier C m p n nd th e U ni n Paci fic beca m e
.
.
:
e
a
s,
.
o
s
s
s
s
,
s
c
,
as
o
s
e
.
s
as
e
s
s
ss
o
,
s
s
as
o
o
s
o
ss
o
on
o
s
.
s
s
.
s
o
o
ss
o
,
o
as
s
o
o
,
s
no
u
e
o
O
e
ss
o
a
er
,
o
s
a
s
.
o
s
,
s
s
.
s
e
s
e
,
o
.
a
v a
s
e
o
AM ERI C A
OF
I
.
77
ge nerally k nown a nd th e m ea n s by wh i c h th e great
p ro fit s ex p ecte d to be mad e w e re fully unders too d th ere
w as d a nger th at C on gres si onal i nve s tigati on a nd acti on
wou l d be i nvo ked
Th e m e m ber s o f C ongress w i t h whom h e d ealt w ere
ge n erally tho s e who ha d bee n frie nd ly a nd fa vo rable t o a
Paci fic Railr o ad a nd Mr A m es d i d no t fear o r ex p ect to
fi nd th e m favo rable t o move me n t s ho sti le to i t ; b u t h e
de s i re d to sti mu la te thei r a cti v ity and watc hfu l ne s s i n
Oppo s iti on t o a ny unfavo rable acti on by gi v i ng th e m a
per sonal i n tere st i n the s ucces s o f th e e n terp ri s e e sp ec
ia l l y s o far a s i t a fl e c te d th e i n te re s t o f th e C re d i t M o bilie r
C omp a ny O n th e 9th d ay o f D ece m be r 1 8 6 7 Mr C
C Was hb u r n o f Wi sc on si n i n trodu ce d i n th e H ou s e
a bi ll t o regu late by la w th e rate s o f tra nspo rtati o n over
th e Pacific Rail r o a d
Mr A me s a s w ell as o thers i n te re s te d i n th e U n i on
Pac i fic ro ad w a s oppo se d t o t h i s a nd d e s i re d t o d efeat
it O th er m easu re s a ppare n tly ho stile to t hat c omp any
were sub seq ue n tly i n trodu ce d i n to t h e H ou se by Mr
Wa shb u r n o f Wi sc on si n a nd Mr Wa shb u rn e o f Illi
no i s Th e C ommittee belie ve t hat Mr A m es i n h is d is
tr ib u ti o ns o f s t o c k ha d s p eciall y i n m i nd t h e hos tile e ffo rts
o f t h e Messrs
Wa shb u r n a nd d esi re d to gai n stre ngth t o
s ec u re t h e i r d efeat
Th e refere n ce i n on e o f h i s letters to
W a s h b u r ne s move m ake s t h i s qu ite a p p are n t
,
,
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’
.
The committee also set o u t th e tra n sact i ons of
Mr Ames with the sever al m e mbers of Congress
substantially a s above a nd a fter reflec ting sev e r e ly
upo n his conduct conclud e d with th e fo l low i ng
.
,
,
r e s ol u l u t o n
i
Mr OAK E S A M E S a Re p re s e n tati v e i n
t h i s H ou s e fr om t h e S tate o f Ma ssac hu sett s h a s bee n
I
IVh e r e a s ,
'
.
.
,
’
,
,
1
TH E C R E D I T
8
7
M OB
ILIER
gu il ty of sel l i n g to m e mb er s of C ongre ss sh are s o f s to c k i n
the C re d i t M o bilier of A m erica fo r p rice s mu c h bel ow the
true val u e of su c h s to ck w i t h i nt e nt th ereby t o i n fl u e n ce
th e vote s a nd d eci s i on s o f su c h m e m ber s i n m a tte rs to be
br ough t befo re C ongre s s fo r acti on : Th erefo re
R es ol v e d Tha t Mr OAK E S A ME S be and h e i s h ereby
ex p elle d from h i s s eat as a m e m ber o f t h i s H ou se
2
Wh e r e a s Mr J AME S B ROO K S a Re p re s e n tati v e i n
th i s H ou s e fro m th e S tate o f Ne w Yo rk d i d p ro c u re th e
C re d i t M ob i lier C omp a ny to i s su e a nd d eli ver to C h arle s
H Neil s on fo r th e us e and be nefi t o f s ai d B ROO K S fifty
at a p rice mu c h
s h are s of th e s to ck o f s ai d c omp a ny
bel o w i ts real val u e w ell k now i n g t h a t t h e sa m e w a s s o
i s sue d a nd deli vere d w i t h i n te n t t o i nfl u e nCe t h e vo te s a n d
d eci s i on s of sai d B ROO K S a s a m e mber o f th e H ou se i n mat
ter s to be br ought befo re C ongre s s fo r ac ti on a nd al s o to
i n flu e n ce th e a c t i on o f s a i d B R OO K S a s a gov er nm e n t d ire c
tor i n the U n i o n Paci fic Rai lr oad C omp a ny : Therefo re
R es ol v e d Th a t Mr J AM E S B ROO K S be a nd h e i s
h ereby e xp elle d from h i s s ea t as a m e m ber i n th i s H o u s e
,
,
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,
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,
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'
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,
There are a few observations which it may be
n ecessary to s p eak o f I t was by no means settled
by the testimony whether Mr Ames solicited these
members o f Congress to take the stock o whether
they came to him first I t certainly was u nc o nt a
dicted that in some cases these members came to him
in regard to other inv e stmen ts a nd when he c o m
mended the Credit M obilier and gave them refer
e e es concerning it th e y took the pains to investig a te
T he
a n d then said they would purchase the stock
whol e evidence shows it to have been a s any regular
business tra n saction T he stock which Mr A m es
.
.
,
r
r
.
re
,
,
h
,
,
.
.
.
1
TH E C REDI T M O BI L I ER
80
these sales o co n tracts were agreed upon imme
I t must
d i ate l y after the assembling o f Congress
therefore have bee n i n the month o f Nov e mber o the
early days o f D ecember at a time prior to the d e c l a
ration O f any dividends on Credit Mobilier stock
prior to any incr e ase in its value and at a time when
it was a mos t di ffi cult matter to dispose f the stock
to any o n e t so high a price a s par I t n e eded
therefore the earnest solicitation of M r Am e s to
induc e members to buy He a ssured them that the
stock would b e a good payin g investment ; but there
was not a particle of eviden ce showing wh a t the
dividends might b e —
nor was any st a tement m a de
because a t the tim e the contracts for the sales were
made it was n t known th a t a ny dividend would
be declared for some time in the futu r e The value
of the stock was entirely speculative and those who
bought o r agreed to buy did s o as an in e s tm e nt
the same as any oth e r man wo u l d d und e r simil a r
circumstances There were Violent object i ons made
to declaring these first divid e nds a nd the first o n
was declared o n the 1 2 th o f D ecember 1 8 6 7 I t
was n ot until some time after this that the value o f
the stock beg a n to ise I t was after this that Mr
Ames made his request to have shares O f the stock
issued him by the Credit M obilier Company in order
that he might fulfil the obligations he h d incurred
His agreem ent w a s that this stock should be d e l i
ered at par an d interest from the July previous and
though the price in the meantime had greatly n
creased still his word was as bind i ng to him as his
r
,
,
.
,
,
,
r
,
,
,
o
'
a
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,
,
.
.
.
,
,
o
,
.
,
‘
v
,
,
'
,
o
l
.
e
,
,
r
.
.
.
.
,
a
.
v
,
I
,
OF
AM ER I C A
1
.
8
1
bond H e delivered the stock a s he had agreed
though it was then fa r above the price he received
B ut to be accurat e he did n o t d l i
it but held it
in trust for those parties who had agreed to purchase
And why did he d this ? T he answer is p l a in H ad
he given the stock to e a ch buyer and had that t r ans
fer recorded o n the books f the Credit Mob i lie r the
holder would not have been entitled to any dividends
u n less being also a holder o f Union Paci fi c stock he
h a d give n his irrevocable proxy to th e trust e e s B ut
while the stock remai n ed in th e name ofMr Ames o n
the books f the Credit Mobilier it would be entitled
to its dividends wh e n a n v should be declared
An d
for this reason no other transfer o f the stock was
m a de and Mr Ames merely made a m emorandum
n his private book r e g a rding it and without a n y
pret e nse of system Mr Ames w a s not a book
k e e per ; and in al l those e xtraordin a ry transactio n s
o f busin e ss in which he was daily engaged
he car
ried the details in his h e ad trusting and relying upon
his memory for all the accuracy he desired n d he
never mad e an error
T here can be no manner of question but that Mr
Ames sold this stock and th a t cert a in members o f
Congress purchased it for this w a s admitted by
all ; whether a cert a in fe w who pos i tively denied
it made investments is anoth e r qu e stion Henry
Wilson John A L ogan Henry L D a wes Gl e nni
W S c o fi e l d John A B ingham B F B oyer Wil
liam B Allison James F Wilson — all adm i tted
that they bought it and a portion o f them returned
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TH E C R E DI T M OB I L I E R
82
it while another portion o f them reta i ned it There
is no conflict in the t e stimony of th e se men ( unl e ss
it was in that Of Mr Allison ) and that of Mr Ames
I n relatio n to James A G arfield and S chuyler
Colfax the very same testimony applied to them
—
that applied to the others the same chain o f cir
No question ca n
c u m s ta n c e s connected them all
remain in the mind o f any who will read the state
ments o f the parties and th e testimony and eviden ce
but that these two were untruthful —
that their
statements and expla n ations were wholly an d ab s o
l u te l y false from beginning to end and that M r
Ames tol d only the truth and that his record of
sales was true Mr G arfield having made his state
ment and being Confronted by the statements and
evidence produced by Mr Ames which proved
beyond all doubt in the mind of any one that the
oath o f Mr G arfield was false remained quiet and
n ever opened his mouth to O ff er an explanation to
ask a question or deny a n assertion made by Mr
A mes H e had expected after making his state
ment that Mr Ames would corroborate it and thus
place him befor e the world as C lean and pure ; but
when he found that Mr Ames would tell the truth
he was wise enough to see th a t any controversy
with Mr Ames o n this point would consign him
to a political grave He th e refore remained sil e nt
N o t so with poor Colfax
He tried to bre a k down
the testimony f Mr Ames and each step only
i n volved him deeper and d e eper in fals e hood
E very move he made only cast still stronger upon
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TH E C REDI T M O B I L I ER
84
As to the i n fl uence that was exerted upon these
members o f Congress who had purchased the stock
the records o f Congr e ss show th a t o n the bill in
s t u c ting the att orney general to investig a te wh e ther
the Union Pacific and Central Pacific railroads had
n o t both forfeited their franchises and directing th e
withholding o f bonds until the m a tter w a s d e cided
each and every o n e o f these members voted f r it
with the exceptio n o f Mr B rooks an d he opposed
it o n special groun ds which he then assigned Mr
W i lson of I owa was the author f the cl a us e c u
ing the government lien n interest due Mr B out
w e ll forced the collection of the interest and caused
Mr Ames to fa il in business Mr B ingham o f
O hio called up the most string e nt bill to p r otect the
inter e st f the government p a ssed since th e leg i sla
tion of 1 8 64 and advocated it and it w a s this that
all voted for wh e n the b i ll overruling M r B outw e ll s
ord e r for coll e cting the interest c a me up before the
house M r D a wes and Mr Allison a t the time
w e re a bsent at a meeting of confe rence committ e e s
and so could not vote The story that Colfax ruled
W a shburn e f W isconsin
o u t the r e solution of Mr
fix i ng fr e i ght rates on these roads is shown by the
Congressional G lob e to be wit h out found a tion I n
deed the committee were justified i n finding th a t
thes e m e mbers had not be e n influenc e d b y r e a son o f
the stock they held
T he debate upon these r e ports lasted two d a ys and
ev e nings and p a rt o f the third day and was partici
pat e d in by a larg e numb e r of the m e mbers ; very
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O F A M E RI C A
1
.
85
few however had the courage to sta n d agai n st the
re p ort o f the committee I n fact as the evide n ce
was so bulky they had not the time to investigate it
o r s tudy it a n d therefore could n o t discover the fear
ful errors into which the committ ee had fallen I n
the meantime the Judiciary committee o f the House
had made a le n gthy report in which they held
adversely to the committee on i n vestigation that
Co n gress had n o right or power to expel a member
for acts committed prior to his electi o n as a m e m ber
o f that body
We shall make n o attem p t to follow these argu
ments in this place many o f which were couched i n
language of purest eloque n ce and deep research
The one most listened to was that of the most inter
e te d party i n this u n fortunate controversy
that f
O a kes Ames which was read from th e C lerk s desk
I nasmuch as it presents a most thorough summary
o f the whol e subject matter
not merely o f the evi
d e nc e elic i t e d but also the history of the Cred i t
Mobili e r and its c o ne c ti n with the Pacific road we
shall ask the privilege o f sett i n g t forth e n tire ; and
asking for its ear n est perusal
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IX
D E F E N CE
.
AM E S
OA K E S
OF
A G A I N S T TH E C H A R G E O F SE LLI N G T O M E M BE R S
C O N G R ESS S H A R E S O F TH E CA P I T A L S T OC K
O F TH E C REDI T M OB ILI E R O F A M E R
I CA W I TH I NT E NT To B R I BE SA I D
M E M BE R S O F C O N G R ES S
OF
,
.
Re a d i n th e Ho u s e
of
Re p re s e n t a t i v e s , F eb ru a ry
2 5 , 1 87 3
.
the House proceeds to the co n sideratio n
B f the resolution reported on Tuesday last by
the special committee charged with the investigation
o f alleged transactions with certain members of thi s
body in the disposition O f shares o f the capital stock
o f the Credit Mobilier O
f America I desire to sub
mit the following statement
The C harges o n which said resolutio n is based
relate to eve n ts so intimately connected with a po
tion o f the history o f the construction o f the Union
Pacific railroad that I shall ask the indulgence o f
the House while I proceed to trace such history i n
greater detail than would otherwise be n e cessary
O n the st day o f July 1 8 6 2 was pass e d and
approved an act o f Congress authori z ing and pro
v i d in
f
for
th
e
construction
a
railroad
a
nd
t
e
le
o
g
graph l i ne from the M issouri river to the Pacific
E F ORE
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TH E C REDI T M O BI L I ER
88
board o f directors O n this subscription was th e
name o f n o recognized capitalist Parties know n to
the country as wielding large capital in railroad
enterprises h a d studiously a voided all pp ent
associ a tion with the enterprise and in thei r place
app e ared a class O f comparatively unknown men
whos e names wh e n rising to the surface had been
chiefly connected with enterprises involving s pe c u
lativ e a nd extra h a zardous risks Until the passage
n othing was done
o f the l a w heretofor e mentioned
under this organization beyo n d such acts as were
necessary to preserve the existe n ce o f the corpora
tion
The n came the a ct o f July 2 1 8 64 I ts principal
features were a s follows I t a uthorized a r eduction
n e thousand to
o f the par valu e of the sh a res from
with a C orresponding I ncrease
o n e hundred doll a rs
in number ; it enl ar g e d the l a nd grant from a te n to
a tw e nty mile limit ; it authori z ed the company to
issu e first mortg a ge bonds n its railroad a nd tele
graph to a n a mount p e r mile equal to the amount
o f United
States bonds a uthorized to be issued
to the company in aid o f the construction o f the
ro a d and m a de the mortgage securing th s a me a
lien prior to th a t of the Unit e d Stat e s ; it d e cl a red
that only n e h a lf o f the compens a tion for servic e s
r e ndered fo the government S hould be required to
b e appl i e d to the p a ym e nt o f th e bonds issu e d by
the gov e r nm e nt in a id f const r uction While thus
strengthening the company by th e se changes C o n
gress a t th e same time and in the sam e act dealt
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O F AM ERI C A
1
.
89
well n i gh fatal blows from the e ff e ct of
which complete recovery is impossible I t author
i e d the Kansas Pacific ; which w a s requir e d to e ff ect
a junctio n with the Union Pacific not fa rther west
—
1
h
00
t
th a n the
m e ridian of longitud e a distan ce
—
2
miles
west
of
the
Missouri
R
iver
to
o f about
47
make such connect i on at a ny point westw a rdly o f
such initial point deemed practicable or desirable
The result is a rival parallel road connecting with
the Union Pacific a t a point 5 1 6 miles west of the
—
R
Missouri iver b e ing ne half the length of that
—
ro a d a nd claim i ng equal advant a ges and fa cilities
in a ll running connections and interch a nge of busi
ness I t l i kewise pro v id e d that in c a s e the C e ntral
Pacific should r e ach the eastern bound a ry f Cali
f ni a b e for e the Union Pacific should b e built to
that point the former comp a ny should h a ve the
r ight to extend its ro a d 1 50 miles e a stw a rd a nd this
power was afterw a rds enl a rged by Congress by act
f July 2 d 1 8 6 6 so a s t authorize such ext e nsion
i ndefinitely until the tw roads should meet Thus
by a ct o f Congress these two corpor a tions were s e nt
forth upon a r a ce a cross the continent which finally
culminated in the construction of 500 miles f ro a d
by each company in a single se a son through a d e s e rt
country upon a route beset by unp a r a llel e d obsta
cles and at a necessary cost largely in ex cess of
the most extr a vag a nt estim a tes
I t is in testimony befor e a committee of the H ouse
that a fter the i mp ra ct i cab i li ty f build i ng the ro a d
und e r th e first act had b e e n demonstr a ted when i t
it two
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C REDI T M OBI L IER
T HE
0
9
had become appare n t that additi o n al aid was mece
sary to induce capitalists to embark i n the enterpris e
the late President L i n col n was urgent that Congress
should n o t withhold the additional assist a nce asked
and that he personally advised the o ffi cers o f the
company to g o to Congress fo r such legislation as
would assure the success o f the e n terprise declari n g
it a national necessity a n d recommending them to
f
additi
o
n
al
concessions
ample
to
place
the
a ppl
o
y
construction o f the road beyo n d a p e radventure
Notwithstanding this favor a ble legislation n o cap
ital was attracted no addition al stock subscrib d
O n the 8 th f August 1 8 6 4 a contract fo building
o n e hundred miles west from the Missouri river was
let to H M Hoxie the only contr a ctor o ff ering to
undertak e so hazardous a ventur e S ix months
demonstrated his inability to perform his contr a ct
and with the experience o f the company in d e a l ing
with individual contractors no course seemed open
except to seek a consolidation o f personal means into
a corpor a te body whereby the pecuniary li ability
o f a large number o f persons might be made avail
able to the t a sk of constructing the road while a t
the s a me tim e e njoying the shelter o f corporate lia
b il ity only Accordingly by a contract m a de March
15
8 6 5 the C r edit M obilier o f America a corpor a
tion created by a nd organi z ed under the l a ws o f
Pennsylv a nia in substance assum e d the Obligations
o f the H oxie contr a ct and entered upon its perform
anc e I t was soo n manifest th a t e v e n this org a n i
tio n
as the n co n s ti tuted would b e unable to
s
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1
9
T HE
2
C RE D I T M O BI L I ER
urgent sol i citation a n d long consideratio n myself
and oth e rs associated with me for the first time
took an interest in the organi z a t ion I ts c a pital
stock was increased additional money was raised
and the work went forward Und e r this arrange
ment two hundred and forty s e ven miles of road
w e r e bu i lt when on 1 6 th d a y f August 1 8 6 7 it
was superseded by the O akes Ames contract so
called a nd this contract was o n the 1 5 th day o f
O ctober 1 8 6 7 assigned to seven persons as trustees
and under it six hundred and sixty seven miles o f
road w e r e built
T he all e g e d corrupt transactions imputed to me are
a l l C harg e d to have be e n initiated in D e c e mber 1 8 6 7
G lance for a mom e nt a t th e S itu a tion of the Union
Pacific Company and my conn e ction with it a t that
time Aft e r a long and n e a rly ine ff e ctu a l struggle
the final construction of the ro a d h a d b e en assured
by my int e rv e ntion in its a ff a irs No o n e doubted
that it would be rapidly pushed to compl e tion Con
gr e ss h a d long before a nd n t at my instance
enacted the l aws tendering inducements to the capital
i s t of the country to emb ark in th e construction O f
th e road and I and my associ a t e s accepted its o ff ers
a nd undertook th e work T he company had no
reason to a ppreh e nd unfr i e ndly or hostile legisl a tion
for every dep a rtment of the gov e rnment manifest e d
a fr i endly attitude a nd th e whole country w a s loud
i n demonstrations o f approv a l o f the energy and
a ctivity which we h a d i nfused into the ent e rpr i s e
H e a ds of departments and gov e rnment o ffi cials f
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O F A M ERI CA
1
.
93
.
every grade whose duties brought them in co n tac t
with the a ff airs o f the company were clamorous fo r
increased speed o f construction and n ever lost an
opportunity of expressing approval of the work and
urging it forward I t had never entered my mind
t hat the company would ask for or need additional
legislation a nd it would h a ve been di ffi cult to find a
man so reckless of popular opinion a s to h a v e lent
himself to a crusade against an organization whose
praises everywher e filled the press and were o n th e
lips of th e people As a m a tter Of history no legis
lation at all e ff ectin g the pecuniary interests of the
company was asked fo f thre e years and a half
after the d a te o f the alleged sales by me f Credit
Mobilier stock and then only in settlement f a
purely judicial question suddenly and without warn
ing sprun g upon it in a critical p e riod of its fortunes
and i n rel at ion to which n con troversy had ever
before be e n m a de Under no oth e r state o f a ffairs
and in no other atti t ude f t he government could I
fo
a moment hav e been induced to assume the
enormous respons i bility en ta i led by a contr a ct in
volving a li a bility f forty seven millions o f dollars
T und e rtake th e construction of a railroad at any
price fo r a distanc e of nearly seven hundre d miles
in a desert and unexplore d country its line crossing
three mountain ranges at the high e st elevations yet
a ttempted o n this conti nent extending through a
country swarm i ng with hostile I ndi a ns by who m
locating engineers and conductors O f construction
tr a ins were repeatedly killed and S calped at thei r
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1
C REDI T M OB ILI E R
TH E
94
,
work upon a route desti tute of water except as
supplied by water trains hauled from o ne to o ne
hundred and fifty miles to thousands o f men and
animals engaged i n constructio n the immense mass
iron ties lumber timber provisions
o f material
a n d supplies necessary to be transported from five
hu n dred to fifteen hundred miles I admit might
well in the light o f subsequent history a n d the
mutatio n s o f opinion be regarded as the freak o f a
madman if it did no t challenge the recognition o f a
higher motive namely the desire to connect my
name cons p icuously with the greatest public work
I t is by no means strange
o f the present century
that my credit with c o ns e htiv e financiers like G OV
Washbur n should h ave bee n shaken and that
e rn o
he should h aVe hastened to call in loans which in his
judgme n t this contract proved to be in unsafe hands
Under these C ircumstances with all legislatio n
sought granted and no future action o f Con g ress to
be asked for o r feared it is C harged that I h ave
been guilty o f selling to members of Congress shares
prices
o f stock i n the Credit Mobilier o f America fo
below the true value o f such stock with intent to
influence the votes an d decisions o f such members
in matters to be brought before C o ngress fo action
I f this C harge is true it is predicat e d upon three
facts all o f which should be shown to the s atis fa c
tion o f this body in order to justify the extreme
measures recommended by th e committee
F ir t
The shares must have been sold at prices
so ma n ifestly and palpably below the true value as
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TH
6
9
E C RED I T M O BI L IER
is liable to be sunk Apart from some proof that a
small amount o f this stock changed hands between
persons addicted to speculation at about one hun
dred and fifty nothing is shown in reference to its
value except that it was not on the market and had
no ascertained price To overturn the presumption
o f innocence and substitute the conclusive imputa
tion of guilt from the simple fact of such a t a n c
tion occurr i ng between men who had long main
—f
t a i n e d the most friendly personal relations
whom nothing was asked and by whom nothing
w a s promised — is to overturn all th e safeguards
a ff orded persons a nd property by the common law
and in lieu thereof est a blish an inquisitorial code
under which no man s reputation i s safe
I t has been assumed that the ownership f Credit
Mobilier stock necess a rily created in the holder a
personal and pecuniary interest in procuring Con
e s s i o n a l legislation favorable to the Union Paci fi c
g
R ailroad company
preventing legislation d
vers e to it At the date of the a lleged distribution
of Credit Mobilier stock the O akes Ames contract
had been made and was in progress of execution
I t was completed and the road covered by the con
tract turned over to the comp a ny about the close of
the year 8 6 8 Not until tw years a fter was a ny
legislation asked for by the company and then it
was such as a rose o u t o f exigencies pr e s e nted by
the actio n o f the government in reversing a long
continued an d uniform previous policy which could
not by any possibility have been foreseen o
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O F AM ERI C A
1
.
97
a n ticipated The stock depended for its value upon
the con nection o f the Credit Mobilier with the O akes
Ames contract which was simply in the cap a city o f
a guarantor of its execution whereby a certain class
of its stockholders became entitled to participate in
the profits of that contract in money There is n o
provision of the O akes Ames contract the assign
ment thereof or of the triplicate agreement where
by a stockholder became entitled to any f the secu
iti e s o f the Union P a cific R ailroad Company o in
any way interested in their value The profits
d e rived if any were to be a nd were in cash
When the O akes Ames contract was completed
and the consideration thereof divi ded in cash to the
several parties entitled in due proportion the inter
est f a holder f Credit Mobilier stock in the Union
Pacifi c R ailroad Company and ever y thing pertain
ing to it was a t a n end I n oth e r words the tipu
l a ti o n s of that contr a ct a nd the cash profits derivabl e
—
ther e from wer e th e end and the beginn i ng
the
c e ntre a nd circumfe r e nc e —th e a bsolut e me a sure o f
the pecun i ary interest f a holder of Cr e dit Mobili e r
stock i n 8 6 8 T o s a y that th e Washburne bill
which profe ssed to deal e xclusively w i th the
oper a tion of the ro a d in th e hands of the com
pany a fte r it had b e en built and turn e d over by
the contractors w a s a m e a sure fe a red a nd to pro
te c t th e r a ilro a d company
a g a inst which the stock
i n question was sold to members f Congress
seems to me to i nvoke th e last extr e m e f
cr e dulity
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1
TH E C REDI T M O BI L I ER
8
9
I t is impossible to impute to me the purpose to
corruptly influence members o f Congress by c o n
ferri ng upon them pecuniary benefit without ade
quate consideratio n unless the benefit conferred is
o f such a C haracter as to necessarily create an i n c l i
n ation to aid the donor to the detriment of the public
There is but one escape from this position and that
leads to a lower deep I t may be said that the giv
ing by any person and the receiving by a member
what is
o f Congress o f any gratuity whatever
or
identical therewith selling and buying at an in ad e
quate price imports corruption in both the giver and
receiver the buyer and seller Whoever proclaims
this doctrine should instantly set o n foot the inquiry
how many railroad presidents a n d superintendents
have presented to members o f Congress the value o f
transportation over their respective railroad lines
and by whom the same has b een received to the end
that justice may be done and the o n e presented for
indictment and the other fo expulsion The d im e n
sions and value o f the gratuity have nothing to do with
the question There is no middle ground on which
to stand
F o the first time i n the history o f any t r ibunal
this body has before it an alleged o ffender without
an o ffense Any person accused in the courts o f the
country under like C ircumsta n ces might well when
called upon to plead to the indictment insist that it
failed to charge a crime I am charged by the com
m itte e with the purpose of corrupting certain members
o f Congress while it
at the same time declares said
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TH E
2 00
C REDI T M O BILIER
referred to in the r e port I have been in th e judg
ment of the committee a perpetual and chronic
o ffender against th e dignity and honor Of the House
and s o far a s my own volition is concerned must so
continue to the end of the world So long as a single
share o f this stock shall not be restored but shall
remain in the h a nds o f the several receivers o either
any of them m y o ff ense goes o n and I am bereft
o
of the power to stop i t And yet notwithstanding the
world is now apprised of my alleged cor upt i nte n
tions —and no member o f Congress can be ignorant
—
f
the parties wh o a lone have the power but
o them
’
fail to release me from the necessity o f continuing
my o ff enses by return of th e stock a re themselves
without blame and in no W y obnoxious to the si n s
laid upon me T he committee declar e that want
o f knowledge a lone o f the corrupt intention o f the
seller excused the buyer while holding and owning
the proceeds o f the sale Now that such knowledge
is everywhere and a mong all men how can this i n
the a bsence of a restoration of the stock
its pro
c e e d s be a living continuing perpe tu a l crime in the
seller and not in the buyer ?
I beg to be correctly understood I allege nothing
a gainst those members o f the H ouse who purchased
Cred i t M obili e r stock I am simply following the
reasoning of th e committe e to i ts logical results I
make no ass a ult upon any man o cl a ss o f men ; but
I earn e stly p r ot e st ag a inst being chosen the victim
f reasoning a nd assertion i n my judg
o f a lin e
m ent unjust parti a l
unsound inconsistent an d
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OF
AM ERI C A
20 1
.
inconclusive —C alculated if endorsed to bring this
body into disrepute and repugn ant to the sens e o f
justice and fair play embedded in the hearts o f the
American people
R efere n ce is made by th e committ ee to the act f
F ebruary 2 6 1 8 6 3 and after S etting out the same
the following language is used
I n the judgment
th e facts reported in regard to Mr
o f the committee
Ames an d Mr B rooks would have justified their
conviction under the above recited statute and sub
I
e c te d them to the penalti es therein provided
j
beg gentlemen t note th e entire section carefully
and criti cally and verify the assertion I n w m ake
that every penalty denounced upon him who shall
promise o ffer or give
cause o procure to h e
p romised o ff ered o give n
any a l u a
ble thi n g
to a ny memb e r o f Congress
with intent to influ e nce his vote n any
matter pending o to be brought befor e him is
alik e launched with imp a rti a l s e verity against any
member O fli c e o person who shall in a nywise
acc e pt receive the same N O T h n w i ng l m w i lf ul ly
or f l on i u sl y receiv e the same but I N A N YW I S E
a ccept o r e ceive th e same
M a rk the langu a ge :
And the member O ffi c e r
person w h shall I N
A NYW I S E accept o receiv e th e same or a ny part
thereof S hall be liabl e t an indi ctment a s for a high
crime and misdemeanor ; an d shall upon conviction
thereof be fin e d not exceeding ten times the a mount
so o ffered promised
given and imprisoned in a
n
n
i
e
e
t
e
t
a
n
t
exc
e
eding
ten
years
p
y
,
,
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o
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,
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-
,
!
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o
o
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!
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r
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or
r
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v
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o
r
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r,
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r
or
e
o
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o
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r
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or
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o
or
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THE
2 02
C REDI T
M
O BI L IER
Again I protest against the conclusion o f the com
m itte e which makes this unequal partial and dis
criminating allotment o f the penalties o f a statute
designed by its framers impartially to strike or
shelter all to whom it applies Whatever result may
be reached here none can doubt that in the courts
o f the country there will be one l aw for all
Aside then from the letters addressed to Mr
M c C o m b it is impossible to infer the motives att i
buted to me by the committee Mr M c C o m b claimed
o f s tock voted me
that about
o f the
to fulfil my obligations to my frie n ds should be
given to him fo distribution to his friends and the
letters to him were written to show that I was sellin g
the stock in small quantities to my friends and could
n o t give his friends the entire amount they desired
A perfect understanding of the C ircumstances under
which these letters were written and a candid
consideration o f their object and purpose must I
think carry to any unbiased min d the conviction that
my motives were very far from those ascribed to me
D r D urant Mr M c C o m b and myself were each
anxious to secure as l arge a portion as possible of
the shares o f Credit Mobilier stock and professedly
for the same purpose ; n amely for disposition to
those persons with whom from past favors o per
sonal friendship we were willing to share o ppo tu
n i ti e s o f profitable investment
I had no desire or
expectati on to further enrich myself for my sole
object was to get and retain as much o f this stock
as possible to be used in redeeming obligations o f
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C REDI T M O BI L IER
TH E
20
4
contained expressions liable to be construed against
the purity o f my motives T ried by the t est of casual
and confid e ntial letters often written hastily and
under C ircumstances and surroundings entirely dif
fe e nt from those in the light of which they a re
interpr e ted — framed fo a specific purpose and to
—
accomplish a particular end their collateral and
incidental bearings not refl e cted upon and deliber
ately weighed but flung o ff hastily in the instant
press of business and the freedom o f that personal
confidence ordinarily exis ting between parties jointly
concerned in financial schemes o enterprises o f
public improvement he wo u l d i n d e e d be a cautious
a prudent a wise and almost per fect man who could
emerge from such a n ordeal completely free from the
suspicion of fault
I wish therefore to declare in the broadest sens e
that in writing the
o f which language is capable
M c C m b letters I had alone in View the Obj ects
above enumerated ; th at I never fo an instant
imagined that from them could be extracted proof
o f th e motiv e a n d purpose of corrupti n g members o f
—
motives and purposes which I sol e mnly
C ongress
declare I n e ver entertain e d
T he insignificant
amounts o f stock sold to each member with whom I
had d e alings ; the proven fact that I never urged its
purch a s e and the entire lack o f s e c re cy — ordinarily
—
f
the badge
evil purposes in thes e trans a ctions
ought in my judgm e n t to stand as a conclusive e fu
f the o ffences ch arged
And above a nd
t a ti o n
beyond this I submit that a long an d busy life spent
.
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r
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,
O F AM E RI CA
20 5
.
in th e prosecution of business pursuits honorable to
myself and useful to mankind and a reputation
hitherto without stain should of its weight overcome
and outweigh charges solely upheld by the u nc o n
i d e re d and unguarded utterances o f confidential
business communications
A vast amount f error has b een disseminated and
prejudice aroused in the minds of many by incorrect
and extravagant statem e n t s of th e profits a ccruing
from the d ifl e e n t contracts for th e construction of
the road a nd e specially that commonly known as
the O akes Ames contract T he risk the st at e o f
the country th e n a tur a l obstacles t he infl a tion o f
the currency and consequent e xorbit a nt pr i ces of
labor and m a terial the I ndi a n perils the u npa l
leled speed o f construction a nd the clamorous de
mands of th e country for speedy completion seem
to b e forgotten and the parties connected with the
Credit Mobilier a nd th e construction f the ro a d are
now to be tried by a standard foreign to th e time
a nd c i rcumst a nces under which the work was done
I t is said that when the failure t secure the n e c e
s a ry amount f cash subscriptions to the stock was
proved a n d it bec a me manifest that the only m e dium
through which the work cou l d go o n w a s by a c o n
y wh i ch would undertake t o build
s tru c ti n g co m pa n
the ro a d and take the securities and stock of the
—
comp a ny in p a yment when the whole enterp r ise had
come to a complete halt and w a s set in motion by my
individual credit and means and that o f my associ
—
a tes the enterpri se should h ave be e n abandon e d
,
,
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s
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o
‘
r
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ra
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o
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o
s
o
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.
TH E
2 06
C
R E D I T M O BILIER
Were it possible to present that question to the
same public sentiment the same state o f n ational
O pinion which existed at the time the exige n cy
arose I would willingly and gladly go to Congress
and the country on that issue B ut I am denied that
justice and the motives and transactions o f o n e
period are to be judged by the prejudices of another
at an hour when the fluctuations o f opinion are ex
treme and violent beyond the experien ce of former
times The actual cost in mo n ey o f building the
road was about seventy millions of dollars and all
statements o f a less cost are based upon mere esti
mates o f engineers who n ever saw the work and
utterly fail to grasp the conditions under which it
was prosecuted T he actual profit on this e x p e n d i
ture estimating the securities and stock at their
market value when received in payme n t w a s less
than ten millions of dollars as can be demonstrably
established in any court I t is in testimony before a
committee o f the House by W itnesses who have
spent their lives a s contractors as well as those who
have been builders owners and operators o f some
that for
o f the great trunk lines o f the country
twenty years past the ordinary method of building
railroads has bee n through the medium o f c o n s t u c
ting companies ; that few if any roads involving a
large outlay o f capital are built in any other way ;
that a profit o f from twenty to thirty per cent is not
unreasonable in any case and that upon the con
struction o f the Unio n Pacific railroad estimating
it with reference to the magnitude o f the work and
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TH E
2 08
C
R E D I T M O B I LIER
The company in turn by accepta n ce of the charter
agreed to pay the United States the amount due o n
the bonds at their maturity and to perform certain
services Without asking additional legislation o
being called upon to resist obnoxious legislatio n
except wherein this contract had been disregarded
and ignored by the government the road has been
completed and successfully operated throughout its
entire line now ne a rly four years
N o complaint has ever come up from any quarter
of any failure to fa ithfully perform its obligations to
th e government both in respect to transportation
services a nd its pecuni ary obligations I n the only
i n stance in which it has di ff ered from any depart
ment o f the government the variance has been upon
a purely judicial question upon which the courts
h a ve been open to the United States but closed to
us The governme n t mad e itself the creditor of the
Union Pacific Company tying its debtor hand and
foot with a multiplicity o f stipulations and then e
fused to submit their interpretation to its own courts
T hat it has so far reaped the prin cip a l ben e fit of the
bargain cannot be denied Offi cial statements o f
the postmaster general are before the H ouse which
show that for the six years ending June 30 1 8 7 2
the saving to the govern m ent upon the transport a tion
of postal matter a lone by reason of the construction
f the Union Pacific railroad a ssuming the a mount
carried to be equal to that transported previous to its
co n struction has been
B ut the amount
of postal matter has been over six times greater by
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OF
A
M E R ICA
20
9
.
rail than by stage so that the real saving is n t less
E ven this result fails to e p e
than
sent the increased speed o f carriage and co n venience
o f handling and distribution a ff orded by postal cars
to th e employees o f the department accompanying
the mails thus insuri n g safety and regularity in de
livery A like statement from the war department
shows the saving upon military transportation for
No
the same time to have been
o ffi cial estimates are before the House for the saving
upon transportation o f I ndian goods for the navy
d e partment o f coin o currency but they may
be safely aggr e gated at not less than
T his gives a total saving for the six years ending
June 30 1 8 7 2 f the sum of
T he
S e cretary of th e Treasury in a communication to
the House bearing date M a y 2 0 1 8 7 2 in answer
to a resolution calling for such information esti
mates th e amount o f inter e st and principal which
will be due from the Union P a cific R ailro a d Com
p a ny at the maturity o f the government bonds
at the pres e nt r a te f p a ym e nt at
Assuming th a t the saving to the government o f all
the di ff er e nt classes f transportation in th e futur e
will be the s a me as in the past ( a supposition
e ntir e ly o n the side o f the Unit e d Stat e s for it
will in fa ct increase in almost geometrical p g s
sion ) a nd th e result is a total saving a t the date f
the m a turity f the bonds of
a sum
in exc e ss f th e principal a nd int e r e st due a t th a t
time to the amount f
I n other
o
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o
C REDI T M O BI L IE R
TH E
210
words if at the maturity o f the bonds not o n e cent o f
interest o princi p al was p a id but o n the other hand
was entirely lost the government would be the
gainer in money to the amount o f
All this is solid gain involving no cons e quential
element and susceptible of exact computation T o
attemp t to grasp the n ational benefits which lie u t
side th e domain of figures but are embodied in the
incr e a sed prosperity wealth popul ation and power
f the nation o v e tas k s th e most vivid imagin a tio n
When the rails w e r e joined o n Promontory Summit
May 1 0 1 8 6 9 the Pacific and the Atlantic E u r op e
and Asia th e E ast and the West pl e dged th e m
selves to that p e rpetu a l amity out o f which should
spring an interchange of the most precious a nd
costly commodities known to tr a ffi c thus assuring a
commerce whose tide should ebb to and fro across
the co ntin e nt by this rout e fo ag e s to come Ut a h
w a s then an isolated community with no industry
but agriculture and those manufactu r es n e c e ssary t
a poor and frugal people I n 8 7 2 it shipp e d t e n
millions f silver to th e money centr e s of the world
and is no w demonstrated to b e th e richest min e ral
storehouse n the contin e nt An institution pu g
nant to th e moral sense f the Ch r istian world is fa st
yielding to the civili z i ng contact of the outer tr a v e l
made possibl e by th e construction o f the rai l w a y
M any b e l i ev e it has a lready subst a ntia l ly solv e d th e
perplexing problem o f polygamy A v a st fore i gn
immig r ation bring i ng w i th it from E urope a n immens e
aggr e g a te sum o f m n y h a s al r eady be e n dist ri but e d
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1
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o
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e
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T HE
21 2
CR
EDI T
M OB
ILIE R
was opened without local busi n ess with no c on s id
crable through tra ffi c and in the dawn o f the
friendly relations between the United States and
those Asiatic nations which no w bid fair to prove
the source o f its largest and most lucrative business
T he conservative capitalists o f the country believed
it would bankrupt any organization which undertook
to operate it F our years hav e reversed that opinion
and n o w the same men are putting forth their best
e ff orts to secure the b e nefit f a close t affi c connec
tion and perhaps ultimate ownership Twenty four
years ago there was scarcely a mile o f railroad west
f L ake E rie and no connecting lin e west o f B uf
falo L et him who would rightly estimate the future
and
o back to the year 1 8 8
o f this company
4
g
the n ce forward to the pres ent time trace th e growth
and development o f that portion f the United States
lying west f the gre a t lakes and he will be able to
a pproximate the coming history o f the region through
which this road stretches fo a thousand miles and
f the trade a n d products and commodities f which
it is to be the gr e at commercial artery T here is
but o n e power that can dest r oy its abi l ity to perform
all its obligations to the governm e nt ; ther e is but
f paying
o n e agency that c a n rend e r it incapabl e
all its indebtedness to the l a st dollar namely the
Congress f the United States I t a lone can so
cr i pple weaken o destroy the company as to mak e
the loan o f the gov e rnment to it a t t l [
T hese then a re my o ff ences th a t I hav e r i sked
r e putation fo r tune everything in a n enterp r ise f
'
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-
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05 5
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:
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o
O F A M ERI CA
21
.
3
incalculable benefit to the governme n t from which
the c a pital of the world shrank ; that I have sought
to strengthen the work thus rashly undert a ken by
invoking the charitable judgment of the public upon
its obstacles a nd embarrassments ; that I h a ve had
frie n ds some f them in o fficial life with whom I
have bee n willing to share advantageous opportuni
ties o f investment ; that I have kept to the truth
through good a nd evil report denying nothing con
nothing
reserving
nothing
Who
will
say
c e a l in
g
that I a lone am t b e o ff ered up a s a crifice to p
?
pe a se a public clamor r expiate the si n s of others
N t until such an o ff e ring is m a de will I b e lieve it
possible B ut if this body shall so order th a t it c a n
best be purified by the choice f a singl e victim I
shall accept its mandate a ppealing with unfaltering
confidence to the impartial verdict of history for that
vindication which it is pro p osed to de n y me here
,
,
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o
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o
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a
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o
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o
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X
TH E
VO TE
.
CE N S
0F
UR E
.
consequence o f the report o f the Judiciary com
I m itte e already allud e d to a nd a feeling o n the
part of many m e mbers that the evidence would not
warrant the conviction it was growing apparent t h at
the report of the committee would no t be sust a ined
and that the expulsion o f these members would not
follow Mr S arg e nt o f California moved to sub
s titu te f
the r e solutions o ffered by the committee
the following
W/
by th e re po r t o f th p ecial omm i ttee h erei n
i t a pp ears th a t th acts c h arge d agai n st m e mber o f th i s
H u e i n c on necti on w i th th e C re d i t M b i lier o f A m eri ca
o cc u rre d mo re tha n fi ve year ago and l ong befo re th
electi on o f u c h p ers on s to th i Congre s two electi ons by
th p e op le h v i n g i nt er v e n e d
a nd wh erea grav e doub t
exi t to th rightfu l exerci e by th i s H u e o f it p w er
t o ex p el a m e mber f o ffe n e c omm i tte d by u c h m e m
ber l o ng befo re h i elec t i n th ere to a nd no t c onnec te d
w i th u c h elec t i on therefo re
R
l
d Th a t th
p ecial c omm i t tee be d i c harge d
from th e fu r th er c on i d era t i on o f th i ubject
l
d Th a t t h e H ou e ab o l utely c ond e mn
the
R
onduc t of OAK ES AME S a me mbe r of th i s H ouse from
N
,
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or
,
zer eas
c
e s
,
,
e
o
s
s
o
s
s
e
s
as
o
s
s
o
,
,
e
,
s
s
s s
s
,
,
214
s
s
s
s
c
s
s
o
:
es o v e
,
s
s
or
es o v e
s
,
e
s
e
,
s
a
,
s
.
s
21
6
TH E
C
R E D I T M O BI L IER
sat there silent immovable a deathly
p a llor n his counten ance calmly waiting f the
awful decision Mr B rooks occupi e d his wn seat
looking more like a corpse than a human being
T hose were awful moments to th e se men as n a me
after name w a s called a nd recorded o n the e e l s t
ing p a ges f history where generations yet unborn
might come and reading point the finger f scorn
at thos e nam e s thus shrouded in et e rn a l infamy A
whole life was centered in those fe w moments All
hope was lost all honor gone When the decision
had be e n announced and the a wful s e ntence record
ed there ensued upon the floor f Congress a
scen e without p a rallel Men who had j u st j o in e d i n
the vote o f condemnation against Mr Ames gath
er e d a round him to ask his pardon for having done
so T h ey said to him w e know that y o u are inno
cent ; but we had to do it in order to satisfy o u r
h im
.
He
,
o
,
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,
or
o
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,
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,
r a
v
o
,
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o
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o
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'
.
,
This scene is a fact and the names o f those who
thus spoke c a n be given What virtuous men to sit
in judgment upon their fe llow men How noble the
hearts that could thus consign to infa my a fellow
being Y ears after others hav e confessed their vot e
was given as it was solely o n account f p e rsonal
hop e s I t presents a picture f depravity by the side
o f which all the acts
h g d against O akes Ames
stand ou t as honorabl e in the extreme
Congress soon adjourned and the terms o f service
o f O akes Ames and James B rooks were at an end
They retur n ed to their res p ective ho m es o n ly to die
,
.
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,
o
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c
ar
e
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,
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O F A M ERI CA
7
21
.
I n a fe w weeks they were n o more The people
o f the whole nation soon b e gan to realize that in the
d e a th o f M r Ames the country had lost a gr e at ben
e fac to r — a m a n through whose instrume ntality th e
greatest achievement o f th e present a ge h a d bee n
successfully compl e ted Th e r e is no doubt but th e
disgrac e thus placed upon him ended his life
Whatever opinion the world at larg e m a y hav e
ent e rt a in e d o f th e m a n how e v e r de e p was th e
fe eling ag a i nst him in general those who knew him
and who had b e e n associated with him could no t
b e m a de to beli e ve that dishonor o r guilt h a d e ver
lurk e d within his heart I n all his privat e relations
his name w a s pur e and s p otless I n his business
'
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his honor and integrity were proverbial Still he
may n t h a ve bee n a man who would impress those
who knew him not with a sense of his greatness
T hat w a s reserved fo r those who could become inti
mate with him and und e rstand him He was no t
given to niceti e s or to small matters H e might no t
be a ble to discern fine drawn distinctions but his
mind w a s comprehensive enough to gras p th e most
gigantic schemes a nd understand them To him
th e success of the Pacific road was beyond doubting
H e believed it and he was willing to risk his entir e
—
—
fortune as i n fact he did i n its construction
He beheld the vast benefit it would be to the
coun try and he saw the stream o f commerce that
was to roll o n forev e r over its line He saw the
unity it would establish be twee n all sectio n s of the
country a n d com p rehe n d e d the p atr ioti c i n fl ue n ce it
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21
TH E
8
C
R E D I T M O BI L IER
would ever exert He became interested i n the
Pacific road at a critical hour o f its fortunes and he
g a ve it his m e ans his energy his life
While we cannot s a y that he was insensibl e to
g a in still thos e who knew him best c a n never be
m a de t doubt that th e re w a s a l a rge element o f
patriotism in the views which induc e d him to tak e
th e position he did in constructing this great h i gh
w a y from th e river through the wilderness and
over the mountains to the oc e an His work was
finished in th e same spi rit in which h e worked all
through his connectio n with it ; and at the time wh e n
h e ought to have received his r e ward when he
should have b e en entitl e d to a life f honor and
e a s e he found himself assailed in the most most
wanton manner and his name and fame forev e r
t a rnished
Wh e n he returned from Washington at the clos e
l a bors h e was m e t by the
O f his Congr e ssio nal
citi z ens f his home with a demonstr a tion which
show e d their absolut e confidence in his honor and
th e y gav e e xpression of th e ir love f him in a
manner that was most impressiv e Two months
l a ter they followed him to his grav e and wept over
his remains
T he flight o f time has not fa iled to bring b a ck
to the m e mory o f O akes Am e s the v i ndic a tion that
was denied him o n the floor f Congress E very
position which he took reg a rding th e Credit Mobili e r
o
the Union P a cific road has been sustained when
ever brought b efore Ou r tri b un al s o f j usti c e Th e
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XI
TH E
.
CR E D I T M OB I L I E R
—
TO D A I I
0F
’
this time forward the Credit Mobilier has
lived only in history The work which it wa s
commissioned to do had bee n completed — at the
date o f this vote Of censure three years — and since
then has never been heard o f save as spoken f in
connection with this last disgraceful scene in its his
tory Why did it assume s o great importanc e? Wh a t
were the causes which brought it forth so promi
n e ntl y ? These causes have a lready been alluded to
viz the political influence th a t could be created by
and through it Undoubtedly had its purposes its
objects its work been understood and appreciated it
would never have been heard o f after its work was
finished T here is an element in the politics f all
countries which will grasp every incident that will
tend to inflame with prejudice the minds Of the peo
ple against any party o any individual Party suc
cess overcomes and controls the judgme n t o f party
a dvocates and those events which in th e mselves
may be pure and innocent are distorted an d made
to appear impure and corrupt Ou own cou n try is
certai n ly n o exce p tio n to this s p irit Ou r p arty
R OM
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220
C R EDI T
T HE
MO
BILIER
22I
.
leaders are not opponents to the rule that success
will justify any means used to attain it Party feeling
runs high in o u land and the advantages O ff ered to
party leaders to prejudice public opinion are singu
l a l y attractive for in the h ands o f the people lie all
power and upon them rests the entire responsibility
The jealous care with which
o f good government
our liberties have been governed the deep love that
h s been instilled within o u he a rts fo our i ns titu
tions and the patriotic desire f every American to
se e those liberties sustained those institutions per
e
t
u
a
t
e
d
oft
e
ntim
e
s
make
us
forget
to
examine
into
p
the merits of the arguments pres e nted and w e c n
d e m n where we should praise and praise where we
should condemn We do not stop to consider con
sequ e nces but t o o ft imbibe within us the very fe e l
ings f prejudice which a re thrown in our way We
see an a ction which app e ars t be born of corrup
tion or to hold within its hands el e ments of evil
a nd straightway we condemn n e v e r stopping to look
a t its real work o obj e ct nev e r considering whether
not that v e ry app e a r a nce is n t artifici a l and h a s
b e en pictur e d to us by skilful p a rtisans for no other
purpos e than th e ir w n benefit and adv a ntage No
cry in a ll o u country h a s so powerful an e ffect o
exerts gr e at a n influ e nce upon publ i c opinion as
th a t which tells us u lib e rties ar e in d a nger f
b e i ng destroy e d by corruption in pl a ces of h i gh trust
a nd honor i n u n a tion a l councils S it w a s when
in the excitem e nt f a p r esid e nt i a l camp a ign th e cry
of Credit Mobili e r was r a is e d — when th e decl a r a tion
.
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C REDI T
THE
222
M OB
ILIE R
was made that corruption the most flagrant had been
—
f
une a rthed among the members o Congress when
the names o f representatives and senators and other
high O ffi cials were giv e n to the country as those who
had enriched themselves from the public treasury
and h a d used their positions and their honor for
their wn gain ; it w a s not strang e that the whol e
country should be aroused and that society should
be stirred to its very foundation The proof pre
sented was so direct and strong that those whose
n ames were thus paraded befor e the country dared
not face the storm of indign a tion a nd knew not
h o w to e xplain their positions
I n their dilemma they
took that course which seemed to a fford the easiest
and surest escape and denied all connection
Where was the wrong ? where was the guilt ?
The people could no t understand ; th e politicians
themselves did no t comprehend the relation o f the
Credit Mobilier o if compreh e nding they felt u m
able to state the case so th a t the people should be
abl e to understand I n the excitem e nt th a t pr e
vailed matters b e came so complicated that when the
investig a tion ended when all th e e vidence had b en
coll e ct e d v e ry o n e s e emed more in doubt th a n
ever T he public had becom e more a nd mor econ
in c d th a t th e gov e rnment had b e en defr a uded a nd
all parties and classes united in the cry f the pun
i s h m e n t o f the guilty
T he committees f investi
f
a
ll
this
cry
bec
a
m
e
so
a ti n in vi e w
o f alarm
g
bias e d that th e y were imp re ssed in the same m a n
ner and their reports were written more to a pp e ase
,
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22
THE
4
C RE D IT M O B
ILIE R
The Wilson committee failed utterly and com
l
to
understand
the
relations
between
the
e te l
p
y
Credit Mobilier and the Union Pacific road and
be tween that road and the government Their con
in the highest court o f
c l u s io n s have been shown
justice in o u r land to be founded in error and to
be absolutely wrong The Supreme Court o f the
United States has decided that the gover n ment was
not wronged ; that every obligation imposed upon
the road has been faithfully performed ; that neither
the Credit Mobilier nor the trustees who held the
contracts fo building the road had wronged any
n e unless i t might be some em
stockholder
d
fl
t
o f the road who took no part in its construction and
there was no proof o evidence o f such holders
Common sense would teach us that th e government
was not wronged when we consider th e n a ture
I ts credit alone was
o f its claim upo n the road
loaned ; it took a s e curity of its o w n choosing ; an d
though those contractors had incurred an expens e
per mile in the construction f the road
of
it would not have a fl e c te d the s e curity Of the gov
e nm e nt
T hat security was a second mortgag e
subj e ct only to a first mortgage o f th same a mount
I f the road had been built for only
the lowest estimate that could be given under th e
most favorable circumstances and the amount which
the Wilson committee e rroneously C laim a s its actual
cost —still th e gov e rnment s security would have
b e e n precis e ly the s a m e a second mortgage of the
s a me a mount that it now is subject to a first
,
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OF
AME
R I CA
2 25
.
mortgage of the same amount Whatever was more
than this whatever further Obligations were incurred
became subordi n ate to the C laim o f the governme n t
and so no wrong could be done i n that way The
prejudice Of the p ast has cleared away to such a n
extent that the peo p le can be brought to understand
this ; and when they see that every position taken
by th e managers of the Credit Mobilier has been
upheld i n o u highest courts o f justice ; when they
have seen that eve ry prediction o f the Ameses
regarding the prosperity f the road has bee n mor e
than fulfilled ; when they see that the loan o f the
government will be paid at its ma turity by the very
means provide d in the beginning ; when they see
the extraordinary advantages that have come to the
whole country through the building of that road ;
when they see the vast volume o f commerce that
rolls along from the Atlantic to the Pacific then
they become willing to listen to the voice o f re a son
and cast aside their p rejudices in an a ttempt
to understand and appreciate all that has been
done
Whe n al so they come to view with im p artial
eyes the con n ection o f m e mbers of Congress with
the Credit Mobilier ; when they comprehend the
circumstances under which that stock was held ;
when they ascertain that there was n o t then no for
ye a rs a ft e r any legisl a tion before Congress a fi e c ting
the Pacifi c roads that no further legislation was
desired asked fo o feared ; when they consider
that th e contract under which profits were to come
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2 26
THE C R E D IT M OB I
LI E R
if come at all had been m ad e an d was being
executed and that the gover n me n t had no t the
right to violate a contract legally m ade as the
courts have decided this was ; when they read the
conclusions o f the very committee who C harge
bribery that n o o ne had been bribed that no mem
ber had been influe n ced i n his actions by holding
the stock and that the holding o f the stock would
not even have a tendency to create an interest that
would influence the action o f a member o f Co n gress
and when they reflect upon the extreme litt leness o f
th e reputed bribe and its i n s ig ni fi c a n c e in compar
iso n with the risk o f exposure how can any other
conclusion be reached tha n that no bribe was o ffered
no bribe accepted a n d no bribery thought o f ; that
members o f Congress n ot only held the stock but
held it rightfully and with no c o u pt ng I nfluence
connected therewith
Then again whe n looking at all this when
understanding that the government was n o t could
n o t be wronged by the action o f the Credi t Mobil
ier ; when they understand th at the C onnection
o f members o f Congress with the stock was honor
able and right and that no bribery was attempted
thought O f ; when they remember that the sole
o
C harge f bribery came from a witn ess whose
testimony was shown by the m ost c o n c l u s i e e i
dence to b e perjury in ev e ry material point h ow
can any other conclusi on b e held tha n that O akes
Ames in all his acts was a conscientious and an
honest man and that the vote o f censure passed
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rr
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v
TH E
2 28
C
R E D I T M OB ILIER
outsta n ding There are some questions yet remain
ing as to its assets a n d claims have been made against
the Union P a cific R ailro a d and a suit is now pending
in the courts in B oston f r the recovery o f
which th e Credit Mobili e r claims is due from the
road No decision h a s been reached and nothing
can be said as to the result S hould this claim be
sustain ed the stock o f the Credit Mobilier will be of
value ; but as is more than probable if this suit
should be decided adverse to the Credit Mobilier its
stock will be o f n o value whatever I ts existen ce
thus lies upon the uncertain decision o f a suit and it
is more than likely ere another year shall pass the
Credit Mobilier will be among the organizations o f
the past I ts history may be a pleasant and interest
ing o ne in many respects a n d in others the extreme
opposite With its life were linked the fortunes o f
many Perhaps never in any organization o f equal
capital has there ever been associated so much
wealth energy and ability as in this I ts managers
were at all times men of the most extr a ordinary
talents and whose n ames have almost been hous e
hold words throughout the l a nd I ts achievements
have been the most wonderful ever s e e n in this
country and the results that have been reach e d
through its work have done more to build up the
commerce o f the nation a n d to add to its material
wealth an d power and strength than any other
enterprise since o u history began I A tract of land
greater tha n that o f most of the empires o f the world
has bee n re c lai m ed from a desert waste a n d made a
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OF
AM E
R I CA
22
.
9
fertile v a lley wh e rein may be grown all the p roducts
f the world in quantities su ffi cient to sustain the
e ntire human race
I t has already added two States
to our Union populat e d the Territories both t the
north a nd the south has added hu n dreds of millions
to the valuation o f o u r country and more than all
h a s created that feeling o f common interest between
the e xtr e m e E ast a nd West that will rivet forever
the bands o f union a nd weld all into o ne common
country wherein all interests ar e forever to be the
same I t has rendered that u n ion secure and h a s
giv e n inestimable blessings to every citizen Of
America
B right as may be the picture upon o n e side it has
lik e wise its dark sid e R eputations have be e n ruined
a nd n a m e s once honored no w lie in the seclusio n f
disgr a c e and infamy I ts purposes have been mis
understood it h a s bee n tossed hither and thither and
has be e n m a de a foot ball to be kicked about by
politici a ns Of a ll parties S hould its tru e Object and
purpose ever b e com e a ppreciated it will be looked
upon as a corporation that has been of incalculable
ben e fit to our country T he disgrace that h a s been
pl a ced upon o ne f its principal men will pass aw a y
a nd in the clear light of the sun Of truth and justice
the name f O akes Ames will stand o u t bright a n d
fair a s pure as the driven snow that circles around
the b a se f the monument that has been erected to
his memory o n the highest point where the road he
b uilt c ros s es the R ocky mou n tai n s
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