The Columbia herald. [volume] (Columbia, Tenn.) 1850-1873, 1872-09-27

TThe letters of MIR. Oakes Ames, embrac-
ed in the following article from the New
York Sun, are genuine documents, sub
mitted in his own handwriting in the due
course of trial still pending before an
Examiner In the Eastern District of the
Supreme Court of Pennsylvania, duly
authenticated on oath and confirmed by
sworn testimony
From the New York Sun.
The full import of the revelations con-
tanned in the letter from our Philadelphia
correspondent, published in the Sun of the
9th, can only be appreciated by careful
reading of the testimony of Col. McCOmb.
The main points of this expose are as fol-
lows:
The Union Pacific Railroad, of which
McComb was one of the corporators, was
Incorporated in 1862 by act of Congress.
From time to time this act was amended,
until the subsidies bestowed on the Com
pany in Government bonds amounted to
far more than the cost of the enterprise,
while there was in addition grant of more
than 100000 acres of the public lands.
The sworn testimony of Col. McComb
discloses, first: That few capitalists, in
order to obtain control of the vast sum of
money which was to be realized from the
Government bonds, purchased the fran
chises of Pennsylvania corporation,
known as the Pennsylvania Fiscal Agency,
and changed its name to the Credit No
bilier of america. Like many other con-
Germs chartered by the Pennsylvania Leg
islature, this corporation seems to have
had authority to do anything it chose. DIR.
Thomas C. Durant of this city seems to
have been the originator of this scheme,
and to have organized the inside ring"
as McComb terms it. Durant, Cornelius
S. Bushnell, Charles L. Lambert, and Nc
Comb took all the stock of this Credit Mo
bilier. or the great majority of it, and Du-
rant was made President. This was in
October, 1864 Durant was also Vice
President of the Union Pacific Railroad
Company, and the other gentlemen were its
principal managers. A contract had pre-
viously been made by Durant with man
named Hoxie to build the first 100 miles of
the road. Hoxie was, as McComb testi-
fies, mere fgure-head to represent the
Inside ring" of the stockholders, to
whom all the profits realized from the cen
tract were to go. There was danger OF in
curing personal liability under this ar
rangement Hence the Ring organized the
Credit Mobilier of America The Hoxie
contract was transferred to the Credit Mo
bilier. and thus officers and managers of
the railroad were enabled to make a con-
tract with themselves, as the officers of the
Credit Mobilier, to build and equip the
road. Under this arrangement, the stock
holders of the Credit Mobilier realized mil
lions of dollars. The dividends during 1866
amounted 22O per cent
Some time after the organization of the
Credit Mobilier, Cakes Ames and few
other Boston capitalists were taken in.
They were not willing to allow Durant and
his friends to manage the concern. They
made fight against Durant, and finally
succeeded in oustng him. McComb seems
to have been friend OF Durant, and he
was marked for prey also.
Cakes and Oliver Ames, who are broth
ers, were the leading spirits in the Credit
Mobilier in 1867. With their friends they
did pretty much as they pleased for a
while; about this time some additional leg
islation was wanted from Congress. Oakes
Ames was a member Of Congress, and
managed this business. The Ring was not
making enough to satisfy them out the
bonds received from the Government They
wanted an act passed allowing the Union
Pacific Railroad Company to issue first
mortgage bonds, with the interest guaran-
teed by the Government, to an amount
equal to those issued by the Government.
But the Government held first mortgage
on the road bed and franchises of the
Company, ard this NUT be retired and the
Government made to accept a second
mortgage. This Ames managed; but il
required liberal distribution of Credit
Mobilier stock to the leading Senators and
Representatives in Congress.
The following letter from Ames to Nc
Comb shows how he made the distribution
wAsHrSsroN Jan. 30. 1858.
II. 8. McCoxB-Dedr sur: Yours of the 1tn Is y ~ =
hand inciosing copy of letter ffom or rather 70 MI
King 1 don u fear any investigation here. Whsl
cant be counted on with any certainty You ~
not understand by your letter what have Gone
and am do with my sales of stock. You say more
| TO New York. / have PLACED some with New
York, or have agreed to. You must rememDse, ~
that IL nearly all placed you saw on the Is
| in New York. and there was but ors N for me =. y
i nj. \ n0f ofye wanted or tney