The Placer herald., 1873-01-18
THE CREDIT MOBlLIEK.
Its Birth, History, Death and Resurrection.

talked about, will do well to read the report
Of Ames and Alleys lawsuit with the State
of Pennsy ylvania, in the ffiy-seventh volume
of Pennsy ylvania State Reports-the last (and
seventeenth) volume issued by Z. Fraser
Smith, the present State Reporter. 1t be-
gins on the 233d page Of the volume, and
covers nearly seventy pages, containing the
proceedings of two jury trials and two hear
ngs under writ of error before the Supreme
Court of the State. The first trial was No
vember %, 1869, before Judge Pearson,
who so charged the jury that they gave a
verdict of S407 ,4S3, against the Credit Mo-
bilier for State tax on the fat dividends OF
that company in 1S67-'GS, when O. Ames
was placing the stock "where it will do us
most good. AT that time, as shown in the
trial. the capital stock of the Credit Mobilier
was S3, $50 900, and it had declared two
dividends, December 18th, 1867, in bonds
of the Union Pacific road valued at 81, 700,-
COO; one dividend, January 3D., 1868 (n
bonds) of S637 800; two dividends Zone
cash and one bonds) June 17ib, 1868, Of
So, $50, 600 (cash) and S525 900 (bonds);
one dividend (bonds, July 3D., 1868, after
ward proved 10 be bogus) Of 81 800 CPS;
aud finally, one cash dividend, July oth,
1868, of 81 .125 ,000 This makes a total
of SO ,375 COO in cash. SO 500, 1915 in good
bonds, about two-thirds of which were val
ued at So, and the rest at 35, at the time Of
dividend. Here, then, was an aggregate Of
dividends amounting to about no per cent
in seven months, not counting the spurious
81, 800 ,625; and upon this the State claimed
a tax "of J J a mill on the capital stock for
each one per cent. of dividends" above 6
per cent. year, amounting to S4Sl ACC,
and 10 per cent penalty for failure to re-
port dividends of $4S ,14l; so that the whole
amount claimed by Benjamin IL. Brewster,
the Attorney General, was $528, ,547 The
IL reduction for the bogus dividend of July
3D., 1868. But Messrs. Ames and Alley
excepted errors in the Judges ruling, and
got a new trial, December 18th, 1S70-two
years ago--beiore the same Judge Pearson,
who laid down the law as he had been in
structed from the Supreme Court, and the
jury gave verdict for Le State Of SG36
1858; which in November, 1871, was again
set aside, Justice Agnew dissenting, and an
other new trial has been granted.
In the course of these trials, which we
suppose are still going on-for no Pennsyl-
vania jury we take it, will ever give ver-
d ct for Ames and Alley-a host of inter
cstng revelations were made; and there are
more yet to be made. 1t seems that the
"Credit Mober of America" so baptsed
by George Francis Train in 1864 was first
incorporated as the "Pennsyvania Fiscal
Agency" by the State Legislature in 1859
Tie charter may be found in the Acts OF
1860 O,ot 1859, page 500; and the original
corporators were Samuel J. Reloes, Ellis
Lewis, Garrick Mallory, Duff Green. David
Il. Porter, Jacob Ziegler, Charles NJ. Hall,
Horn Il. kneass, Robert j. Ross, VIM. T.
Doushcrty, Isaac Hugus, G. M. Reed, VIM.
4 orllnan, Asa Packer, Jesse Lazear, G..
5. Kaufman, G. l.. Ward and Henry NJ
FulIer. Daft Green, the old Jacksonan ed
ior and politician, procured the charter and
became President of the company, which was
exempt frem individual liability in its stock
holders, was allowed to buy and sell rail
road bonds, advance money to railroads and
contractors, make contracts, etc.-in short,
to do almost everything but banking and the
issue of bills. The capital stock was fixed
at s. 600 ,O0O but business might begin
when $500, 600 WIS subscribed and $25 600
paid in. The agency organized, but the
war coming on, and its projected operations
being at the South, it did very little business
In 1854, by characteristic fraud on the
part of Duff Green's associate, who had been
chosen Secretary, the charter was sold out
20 Train, Durant, etc. Green being sup
posed to be dead, and by act of March 26th,
1864, the Pennsylvania Legislature changed
its name to "1he Credit Mobilier of Ameri-
ica." In 1865 contract was made with
one Ioxie to build 247 miles of the Union
Pacific road, and this contract was assigned
to the Credit Mober, and the taxes due
from dividends thus accrring were paid to
The State of Pennsylvania. But on August
lGh, 1867, Oakes Ames made contrac,
with the railroad, in which he was large
owner, to build COZ miles, and this was as
signed, October 18th, 1867, to certain trus-
tees, for their own benefit and that Of the
Credit Mober, Of which they were the chic
stockholders, along with Oakes Ames
These trustees were Oliver Ames, John
B. Alley, Henry S. McComb, 7. G. Du-
| ldlll, DNuIltN lJliItil, ". DNSuUtll ana DEM
min f., Bates; and it is of the action OF these
eight men that all the Pennsylvania law
suits and all the Congressional scandal has
come. Precisely what the agreement of Oc
ober 18th, 1868, meant no court has ye
found out-but under it the Credit MOBILIZE
declared DIVIDENDS of 80 G2S, ,125 parll,
bogus, as above mentioned Previous tc
this agreement, however, the State Legisa
ture had again amended the charter of Duf
Green's old "Fiscal Agency" giving it large
powers; this WAS done February 2Sth 1867
In the course of these trials, John B. ALE,
testified that he went into the Credit Mobil
Ter Company in August, 1865. the Hoxi
contract having been assigned to it in May
1868; that Ames was in it before, and wen
in to avoid personal liability; that when th
Hoxie contract terminated j. NJ. S. VIII
liams (now me nber of Congress elect from