Port Tobacco times, and Charles County advertiser. (Port Tobacco, Md.) 1845-1898, 1873-02-21
The Story of the Credit MobiIier.

The Story of the Credit MobiIier.
A correspondent suggests that many per
sons would understand the drift of the
Credit Mobilier investigation much better
if they could only get clear idea, to start
with, of the origin of the credit mobilier,
and OF the manner in which it became con-
nected with the Union Pacific railroad
1t is perfectly true that an intelligent no
ton of this first step in the affair is neces-
sary to full appreciation of all subsequent
ones; and it is also true, fortunately, that,
though the whole story would be a very
long one, the facts necessary for the pur-
pose just alluded to can be put in tolera-
bly, brief compass.
Something like twenty-three years ago
our legislature at Harrisburg granted a
charter to a certain Fiscal agency in
which the most prominent figure was Mr.
Duff Green. The heirs of Mr.. Duff Green
sold this charter, after his death, for a
small sum to Mr. G.. F. Train and others.
| by whom its name was changed, under
| legislative act, to the ''Credit Mobilier."-
Under this and it's former title various acts
regarding it were passed; but it is enough
to say that the company was financial in
character, and, as need hardly be added,
it was not originally formed for the object
to which Mr.. Cakes Ames afterward util-
lied it. For, it was more than a dozen
years later that, during the winter of 1862
'63, Congress passed the first transcontin-
entail railroad act, Incorporating thereby
the Union Pacific railroad company, au-
thorizing it to hold hundred millions
capital, and granting the right of way,
heavy additional land grants in alternate
sections along the proposed road, and, f.
nally, large government loan in six per
ct. bonds tor the construction of the road,
the amount per mile varying in different
sections according to the estimated diff
culties of construction. Liberal and al
most lavish as these provisions were, they
proved to be inadequate to achieve the
object, probably on account of the uncer-
tainties of the war then prevailing, which
made capital timerous regarding invest
ment in a new enterprise of such magni
tude, in times so perilous. 1t was found,
as Mr.. Cakes Ames has testified, practical
ly impossible to procure the enormous a
mount of paid up capital which the act of
incorporation required. Congress, there
fore, in the winter of 1896, let down
the bars, and while it relaxed the strin-
gency of its own safeguards on the one
hand, it offered much higher inducements
to capitalists on the other. It doubled
for example, the quantity of land grants,
and made its own claim for the reimburse
ment of its loan only second mortgage,
thus allowing first mortgage to be insert
ed prior to its own, on which contractors
for the construction of the road could rely
with more security.
Mr.. Ames, Congressman of large for
tune, accumulated in business, who had
become greatly attracted by this gigantic
railroad project, now devoted his energies
and fortune to pushing it through. For
the purpose of securing the great benefits,
-r1-ifS' s'r oila;--s5 e5I :lef Al de.-
taking, he devised the plan of construct
ing the road at large profit, under the
name of a subordinate company, who
should also have such controlling infu-
ence in the Union Pacific railroad compa-
ny as to pay themselves handsomely out
of the enormous Congressional grants
Directors of the latter company were pro-
hibited by law from being interested in
contracts for building the road He &C
cordingly purchased the franchises of the
Credit Mobilier (Which seemed as good
TOR his purpose as any existing corpora
ton, having large general powers,) and the
Union Pacific company then proceeded by
lndlrection Through a convenient subter-
fuge) to award to the Credit Mobilier the
contract for constructing the road, and
even transferred to it the profits on part
of the road then already constructed
This was the way in which these two
enterprises became connected. How, then
did the congressional scandal arise? I'M
the first place, as we already limited, the
arrangements of the two companies WERE
Tor all practical purposes, one and the
same. There were some trif1ing individ-
ual exceptions, but the leading spirits and
the great stockholders, such as Cakes
Ames, Oliver Ames, McComb, Durant and
Alley, were at different epochs, found in
both companies, so directing each as to
dovetail with the other. The Washington
lobbyists and jobbers, getting little ink
ling OF this secret connection, agitated in
Congress for adverse legislation apparent
ly for the purpose of extorting blackmail. !
To cOunteract this influence, and to make
Congressman disposed to legislate favora-
bly,, an arrangement was made for the sale |
of Credit Mobilier stock to Congressman,
at much less than its market value, which |
stock MIR. Ames says he "placed where he |
thought it would do the most good" So
matters went on till McComb and Ames
quarrelled, when the former filed bill in
equity in the Supreme Court of our State
for the recovery of the value of two hun
dred and fifty shares of Credit Mobilier
stock, which McComb alleges he had paid
for, and which Mr.. Ames, in reply, said
that he had ''placed" as already stated.
From this point start the congressional
which, as we need not ex-
plain, have resulted in full exposure of
the congressman concerned in the matter.
The first suspicious point in the purchase"
of Credit Mobilier stock by various con-
gressmen from Mr.. Ames was that it was
acquired at less than half its market value.
and that dividends on it, amounting to
two or three times the price paid by them,
came back Id the form of cash and Union
Pacific stock in the course of fifteen months,
while in all cases a cash dividend of sixty
per cent. was paid within ten or twenty
lays Of the purchase, accompanied, Mr..
Ames says, with his personal assurance
hat the dividends were so large as to re-
luire no paying up in money of the stock.
It was only long after, when the case came
before the courts that the members protest
I'd their innocence Of suspecting that there
vas anything wrong about the matter or
my effort to influence their legislation.-I ,
We may add that the testimony given be-
ore the Wilson committee day or two
nrI< 4l14 L. IL L