Eaton weekly Democrat. [volume] (Eaton, Ohio) 1866-1875, 1873-02-27
d" CREDIT MOBILIER."
What is ItG-A Short Chapter i'm Its
History.

What is 1t IA Short Chapter In 1ts
History.
In reply to numerous inquiries
What is this Credit Mobilier % we
viii endeavor to present as briefly a:
possible synopsis of its history.
The original &c Credit Mobilier" was
an organization founded by some of the
Napoleon Ill, for the purpose of max
ing loans on personal as well as real es
tate Some of this movable" proper
ty (mobilier) was railroad and CONNER
cia1 enterprises, often in the first stages
of existence. There would be the stock
of new enterprise, and the stock of the
Credit Mobilier which lent its credit, III
the market at the same time. It was
credit built upon credit, and built about
the widest era of stock gambling France
has ever known.
After this, was patterned the Ameri-
can Credit Mobilier, which had its stock
issued on top of a railroad stock !; and
the exact distinction between the in.
debtedness and ownership of the rail
road and of the Credit Mobilier was in
some respects rather matter of form
than of fact. The Credit Mobilier OF
America bought q loose charter that
had been issued to but not used by an
other company in Pennsylvania. Its
stockholders were also the stockholders
of the Union Pacific railroad. That
railroad company was endowed by act
of Congress with twenty alternate Sec
tions of land per mile, and had Govern
ment loans of $16, 900 per mile for about
two hundred miles; thence $32, 900 per
mile through the Alkah Desert, about
600 miles, and thence in the Rocky
Mor,nAosro rI0 000 p'hn roll
road company issued stock to the extent
OF about $40, 900. This stock was
received by stockholders on their pay
ment of 5 per cent. of its face. When
the Credit Mobilier came on the scene
all the assets of the Union Pacific were
turned over to the new company in con-
sideration of full paid shares of the new
company's stock and its agreement to
build the road. The Government mean
while had allowed its claim for its loan
of bonds to become a second instead of
a first mortgage, and permitting the
Union Pacific road to issue first mort
gage bonds, which took precedence as a
lien on road. The Government lien thus
became almost worthless, as the new
mortgage which took precedence
amounted to all the value of the road.
The proceeds of this extraordinary
DfduS1CblOu WOuU W swell bIt0 Vi
the Credit Mobilier, which had nothing
to pay out except for the mere cost of
construction. This also explains why
some of the dividends of the company
were paid in Union Pacific bonds. AS a
result of these processes, the. bonded
debts of the railroad exceeded it's cost
by at least $40, ,Oo0, 600.
1t is very easy to see that under these
circumstances the stock of the Credit
Mobilier was very handsome invest
ment, provided it could be purchased at
par. Here was wherein Oakes Ames
was such profitable friend to Congress
men and Senators. He let them in, as
he phrases it, on the ground floor.
They got their stock at par, and the
dividends which were ready to- be paid
were more than enough to pay for the
stock. This is what is called in Wall
street parlance making one hand wash
the other The actual value of the
stock thus sold at 800 a share would
have been to anybody out of the circle of
Oakes Ames' friends not purchasable for
less than $500 or $400. But there is a
film of decency thrown over the transac-
ton by Mr.. Ames, in charging several
months interest upon the stock at the
time it was sold to the members of Con-
gress. This interest had accrued while
he was holding it to see where it could
be placed to the best advantage.
The more recent legislation which
Ames' transactions with members of
Congress had reference to may be stated
in few words. Secretary Boutwell, in
sisted that half the earnings of the road
in carrying mails and troops for the
Government should be applied to the
0f ,,,4o thn loans hot
the Government had made to the
road The legislation obtained over
ruled the Secretary and enabled the road
to postpone payment of interest until
the bonds fell due-some thirty years
hence. To sum up, it may be briefly
stated that the Union Pacific and Credit
Mobilier together got the proceeds of
liberal United States land grants, of
donations, of communities near the
road, and the entire subsidy of Govern
ment bonds, as clear profit. The pro-
ceeds of the mortgage bonds, which dis
place the Government lien, were suffi-
cient to have built the road. To the
original stockholders in the Union Pa
cific, the profit was something almost
incredible. A share bought for $5 sub
scription became 800 Credit Mobiler,
which paid, as we have seen in the evl-
dence concerning the Legislators who re-
ceived it, dividends that amounted to at
least treble its nominal value. 1t is of
course evident that all legislation which
favored the Union Pacific, railroad
swelled the profits of the legisls18rs who
became stockholders in the Credit Mobi-
ier. The awkwardness of this position
was vastly increased by the thin dis
guise of purchase being torn away, un-
der which the profit bearing stock had
been really the gift of Oakes Ames.
The denial of the facts converted the
transactions into a criminal act.-C5'a-
ci1e7a0ti Chronicle.
COLD COMFORT. holiday amuse-
ments of London are peculiar. On
Christmas day there was swimming
match in the Serpentine, for which there
were 81 entries. The distance was 10O
yards. The race throughout was an ex-
ceedingly good one, although several OF
the good swimmers were unable to &c