New-York tribune., 1873-01-08
THE CASE STATED.
A CLEAR SYNOPSIS OF THE CREDIT MOBILIZE
STORY.



From To Bos:oS 2rarsuer
The Union Pacific Railroad was incorporated
with land grant o. 10 square miles for every mile Of the
road TO start at the Tooth meridian and so 10 the
Rocky Mountains. until 1t met the Central Pacific,
which was started san Francesca, at the point in the
mountains where either should have built TO in the
progress Of the work Beside that each had grant by
The United states OF six per cent bond Of $4,000 per
mile for the first certain number of miles. say 207 miles.
Then 1t being assumed that the GOO miles, going
through desert country would be worse TO build it had
bond OF So 900 per mile for that distance and then,
as the road approached the Rocky Mountains where
was deemed by Congress 20 be pretty nearly equivalent
20 going through HoOsac Mountain the bond was made
at s4sOlO a mile.
The stock was subscribed for say at sOOcOO although
that may not be the exact amount The subscribers
were called upon 10 pay in five per cent. 1t ap-
pears that they took atheasses of the roadts land
its United states bonds and what had subscribed
by the stOckhOders-lnd them to another corpora
on hud the road that theIstockhOIders had paid
up stock 500 per share issued to them for their sub
scrpuon five per cent believed these assets
would be more than enough TO build the road.
IRE oRGANIzATIOS OF THE CREDIT MoBLIER.
For this purpose, the Credit Mobilier of America"
was incorporated in the State Of Pennsylvania, eDpow-
cred among other things build railroads. The Credit
Nobier consisted in its stockholders OF the
who subscribed to the Union Pacific Road that the
stockholders OF Union Pacific Road aud the stock
holders OF tie Credit Mober, except the men who were
taken in afterwards TO do the most GOOD to the road,
were the same parties. When the Union Paclhc Road
let :he first 2O7 miles 10 the Credit Mober to build 1t
gave all the assets Of the Union Pacific Railroad to wit
the land grant the United states bonds, which were TO
he secured by a first mortgage road and whatever
was paid IN the stock 10 the Union Pacific. and what
ever wa donated by the inhabitants Of counties or towns
along the line of the road in payment for the expense OF
building the road The profits of building the road were
thus to be divided among the stockholders Of the Union
Pacific through the firm OF the Credit Mobiller,
But 1t turned out examination that this hrst 200
miles might not give very great profits 20 the Credit
Mobilier over the cost OF Duildng first because the
land along this end Of had been taken considerably by
settlers secondly, 1t was welwatered country ana
required very considerable trestework bridges ana IL
was rather rolling country and required some excava-
ton and filing so that the Credit Mobilier stock did
not appear TO be as profitable investment as at first 1t
was thought TO be under that contract But still 1t was
q reasonably good thing.
ofhe Credit Mober stock Of - o s5 900 at par,
$50 shares set apart for what is known in the man
agement peculiar purpose" and Mr. Thomas CDn-
rant who was YcePresideBt and Managing Director OF
the Unon Pacific Road subscribed for it, and 1t stood in
his name, but he did not pay it in.
GREAT swIEDLR.
About this time bright thought struck the promoters
OF the enterprise that they would put second mort
gage the road tre amounts per mile as the
Government mortgage, ana give tnesc bonus 10 inc
Credit Mober to build the road with and II they could
build It with what they had before these mortgage bonds
would be a clear profit to be divided among themselves
But that mortgage would not be a very valuable one
for the reason that the first mortgage TO the United
States TO its bonds, covered when built all the
road would be worth, aud something more Thereupon
another still brighter thought struck them II they could
get the Government surrogate its mortgage this
second mortgage the second mortgage bonds would be
thus made nearly If not quite par. The proposition,
however was be got through Congress- and 1t seemed
rather steep undertaking. harder in fact than build
ing the road over the Rocky Mountains, because
the road In fact was already mOrtgaged to
the United States for more :than 1t would
cost 10 build IT, and the United States mortgage would
thereby be rendered worthless Indeed wastefuy It
was built the whole road cost only about s29oO00oO and
It's bonded mortgage debt exceeds t7l00OOoO But the
great necessity OF having the road built and the claim
that IL could not be built without the desired bonds,
which was 70 be put forward 1t was thought would
1t TO Congress- or at least justify Congressto 10
The people that body could DO induced TO pass an act
which was In effect give mp the mortgage OF the United
states 10 the stockholders; and Mr. Ames and Mr. Dn'
rant were authorized this Peculiar Stock for the
purpose Of aiding the OF that proposition through
Congress; and they promised blocks Of this peculiar
stock TO their lobby agents aud to their iisnds, Mr.
A. and Mr. c., "whereger 1t would do most good" in
he language of!Mr Amess letters. Mr.. D1rant being
! Democrat dealt with the Democratic members, and
Mr. Ames being Republican, dealt with tho Republican
members OF Congress; and they promised the stock IN
blocks of ten twenty twenty-five and nifty shares upon
condition that whoever received It should pay the par
Yaue Mostiof the members we're let Into the whole
hing that was TO DO done They therefore were ready 70