The Cambria freeman. [volume] (Ebensburg, Pa.) 1867-1938, 1873-02-14
The Story of the C,'eeyit Mo0iate,.

VI.
and of the manner in which it became con. /
rected with the Union Pacific railroad. 1t /
is perfectly true that an intelligent notion !
of this first step is necessary to a full APP
pre- citation of all subsequent ones and iC is
also true, fortunately, that, though the
whole story would be very long one, the
facts necessary for the purpose lust alluded
to can be put in tolerably brief compass
Something like twenty-tnree 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 small
sum TO Mr.. q. F. Train and others, by
whom its name was changed, under legisla-
tive act, to the ''Credit Mobilier.' Under
this and its former title various acts regard
ing it were passed but it is enough to say
that the company was financial in charac-
ter, and. as need hardly be added, it was
not originally formed for the objectto which
Mr.. Oakes Ames afterward utilized it
For, it was more than dozen years later
that during the Winter of 1S72-63, Con-
grcss passed the first transcontinental rail
road company, authorizing it to hold hun
dred millions capital and granting the right
of way, heavy additional land grants in al
ternate sections along the proposed road,
and, finally, large government loan in six
per cent. bonds for the construction of the
road, the amount per mile varying in diff
ferent sections according to the estimated
difficulties of construction. Liberal and
almost lavish as these provisions were, they
proved to be inadequate to achieve the OBJ
iect probably on account on the uncertain
ties of the war then prevailing, which made
capital timorOuS regarding Investment in
new enterprise of such magnitude, in times
so perilous. 1t was found, as 8ir. Oales
Ames has testified, practically impossible
to procure the enormous amount of paid
up capital which the act of incorporation
required. Congress, therefore, in the
Winter of 1864-65, let down the bars, and,
while it relaxed the stringeucy of its own
safeguards on the one hand, it offered
much higher inducements to capitalists on
the other. 1t doubled, for example, the
quantity of the land grants, and made
its own claim for the REIN mbursement of its
loan only a second mortgage, thus allowing
a first mortgage to be inserted prior to it's
own on which contractors for the cOnStruc-
ton of the road could rely with more Sc
curity.
Mr.. Ames, a 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,
while avoiding the great risks of the un-
dertaking, he devised the plan of construc-
ting the road at large profit, under the
name of a asuL..-....' - company who should
also have such controlling I..teucnce in the
Union Pacific r. r. Company as to pay
themselves handsomely out of the enor-
nous congressional grants. The directors
of the latter company were prohibited by
law from being interested in contracts for
| building the road. He accordingly pur-
chased the franchises of the Credit Mobi-
lier (Which seemed as good for his purpose
as any existing corporation, having large
general powers, and the Union Pacific
company then proceeded by indirection
| Through a convenient subterfuge) to award
to the Credit Mobilier the contract for con-
structing the road, and even transferred to
it the profits on part of the road then al
/ ready constructed.
] This was the way in which these two
] enterprises became connected. How, then,
/ did the congressional scandal arise? ? In
] the first place, as we have already limited.
] the managements of the two companies
/ were, for all practical purposes, one and
/ the same. There were some tritiing indi-
vidual exceptions, but the leading spirits,
and the great stock holders, such as Oakes
/ Ames, Oliver Anes. McComb, Durant and
/ Alley, were, at different epochs, found in
both companies, SO directing each as to
dovetail with the other. Tie 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 black-mail
! To cOunteract this infiennce, and to make
congressman disposed to legislate favorably
an arrangement was made for the sale Of
Credit Mobilier stock to congressman, at
much less than its market value, which
stock Mr. Ames says he ''placCd where he
thought it would do the most good So
matters went on till McComb and Ames
I l..
| 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 part start the congressional
/ Investigations, which, as we need not ex-
! plain, have resulted III full exposure of
J the congressman concerned in the matter
| The trst stsusplclous polnJIn me purchase
of Credit Mobilier stock by various con-
gressmcn from Mr.. Ames was chat 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 in the form of cash and Union Pacific
! stock i'll the course of fifteen months,
while III all cases a cash dividend of 60
per cent. was paid within 10 or 20 days of
! the purchase, accompanied, Mr.. Ames
says, with his personal assurance that the
dlFldendS were so large as TO require no
paying up i'll money of the stock. 1t was
! only long after, when the case came before
the courts, that the members protested
their innocence of suspecting that there
was anything wrong about the matter or
auy effort to influence their legislation
; We may add that the testimony given be-
fore the Wilson Committee a day or two
SINCE shows that the profits of the Credit
o6O m0oiiler company were upward of $35, O00,
Voo ON building the road. No wonder that
/ the stock was considered lucrative at the
tlme wHen congressman took it, and took
1t with what some of them now have the
assurance to claim was sort of child-like
innocence, never dreaming that it was any
thing more than IN everyday business in
YeStment.
a BIT OF RoMANCE.-Mr. George Ste
phenS is a successful business man of Pitts
burg. He came originally from New York