The Portland daily press., 1874-02-26
History to be Remembered.

these persistent bcggars for the aid OF the
Government, but there may be a change not
for the better.
The project for Pacific Railroad has been
cherished ever since California became an i'm
portant state and the resources of the Pacific
coast were realized. During the war, Con-
gress recognized the necessity of such a road
by chartering the Union Pacific Railroad
with land grant of twenty square miles TO
every running mile of road and further loan
of $4,000 mile through the level of the
prairies, and from S32, 900 TO S4s,0OO mile
for the more difficult portions. By the char
ter, the Government offered the Pacific Rail
road loan of $6o,000,0 900 and a grant OF
twenty million acres of land worth $780, ,000,-
900 as minimum price but at the actual sci
ling price nearer 100000, 900. This bill was
not rich enough in its promises t. allure Cap
italists to subscribe stock. Consequently
Thaddeus Stevens introduced bill in 1864,
author zing the company to issue its bonds to
the same amount as the Government which
were to be first mortgage making the natioL-
al loan second mortgage. Upon this last
assurance company was organized and two
millions of stock subscribed of which ten per
cent was paid in. In short the available cap
ital of the road which was ultimately to cost
over $50, 100000. was but $21S,0OO and that
was the entire amount of money ever expend-
ed by individual stockholders for the road
Mr.. Oakes Ames and the few gentlemen a,
sociated with him early saw that the Govern
ment was Offering much more than was suf
hcient TO build the road. Their purpose was
not only to build the road but to appropriate
the $5O.OOO,O 900 lying about loose for some
body to pocket. These gentlemen had ascer-
tanned by the estimates of the best engi-
neers that the first one hundred miles could
be built for $50, 900 mile for which the Gov.
ernment had actually offered $4,000 a mile
and that which the Government was Offering
$4,000 to $4,000 per mile, could be built at
q cost not exceeding $4,000 or $4,000
mile with the land grant thrown in!
Now the principal question to these man
ayers was: ''How can we transfer this excess
OF values over the cost of construction from
the national treasury to our private purses ?''
Inc result OF this inquiry led the manipula
tors to form corporation of different name
but owned by the same parties who should
build the road. This corporation should re-
ceive all the vast profits and divide them
among the stockholders Who were also stock
holders in the Union Pacific but who could
not legally receive them. 1t was good plan.
for it Congress should ever ask these stock
holders what had become of is millions thew
could say: "We paid them all to the Credit
Mobiier for, work that corporation did for
u.s." The Credit Mobilier being organized
ur der the laws of Pennsylvania, could as
sert the doctrine of State rights and Stat
protection and say TO Congress: "We have
the money :gwhat are you going to Go about
it?" c
The corporation the manipulators used for
this purpose was first chartered as the
pennsylvania Fiscal Agency but was
moribund concern for which they paid $780,
645 and re-christened it. ''The Credit Nc
bilier of America The stockholders of the
Union Pacific now subscribed for the same
amount of stock in the Credit Mobiler.
Among the leadHg stockholders were T. c
Durant, Oliver Arnes, Oakes Ames, Samuel
The first step of the stockholders of the
Credit MObiler was to make the right kin6
of contract with the Pacific Railroad Com
pany. Accordingly Mr.. Durant, vice presi
dent of the road brought forward Nj.
Hoxie who proposed to build and equip one
hundred miles of the road for two million
dollars; but Hoxies contract contained
promise that when requested, he should as
sign the same to Durant who was president
of the Credit Mobilier, which in fact he did
within sixty days. This contract was ex
tended so as to cover 246 miles of the road
But by this extended contract Hoxie agreed
to expend over s12,OOo,O 900 and at the same
time take one million dollars of Pacific stock
The result was that this contract cost the
road in stock and bonds 2,974, ,418.24; il
cost the Credit Mooilier $7,SO6, 1S3. SO, the
odd five millions going into the hands of the
stockholders of this last corporation.
By this time money began to be scarce and
it became necessary fer the stockholders of
the Credit Mobiiier to advance funds to carry
on their great enterprise. A meeting of the
stockholders was held and it was agreed to
increase the stock fifty per cent and also to
induce the old stockholders to increase thei,
subscriptions, it be ng agreed that each stock
holder paying $1,000 into the Credit Mobile,
treasury should receive $1,000 of Credit Mo
bilier stock and $1,000 of Pacific bonds. The
patriots came up nobly under this generous
offer made by themselves to themselves.
The first 246 miles being well under way.
Mr.. Durant contracted with one Boomer tf
construct $50 miles more for $50, 900 rer mil.
exclusive of bridges. This contract was new
er legally ratified but Boomer built SO miles
OF road under it. 10 convert this cost into
profit, the Board of Directors extended the
Hoxe contract at $4,000 mile over th"
Boomer contract. already built at S27,5OO
mile. thus presenting the Credit Mobilier ST.,
l04.OOO for work it had not done, but which
had been done by Boomer for which he was
paid. Here was 100000 profit to the Cred
1t Mobliier under the elastic Hoxie contract
which at first contemplated but one hundred
miles OF road but extended to 396 miles.
Mr.. Williams OF Massachusetts, now mem
Der OF congress, was the next contractor. h,
also agreed to assign his contract to the Crod;,
Mobilier as soon as executed. Under th;s
contract 267 miles of road was to be constrro,
ed at $50,O00 mile, of which 9S miles wer,
already built and paid for In this business
this gift of so many miles was only trife
but it took $4,000, 900 from the Union Pacific
Railroad and transferred it to the Credit Mo
biler stockholders.
The next contract-the largest and most
profitable ever confded to one man. is known
as the Oakes Ames contract and was drawn
by Gen. Butler. The contract began at the
hundreth meridian and extended westward
667 miles for which The railroad was to nav
$47,915,000, OF this 667 miles, 1873 had al !
ready been built and paid for. 1t was, how
ever, generously included in Mr.. Ames' con-
'ract' and the much swindled Pacific contrib
ueeo So'5oO,oo0 to him for no return. The
average contract price of those 667 miles was
p'Z'ooo out deducting the 1873 miles already
Du;it, 1t was $4,000, while the actual cost
could not be over $4,000, per mile This
contract which was executed in Anm,s. 1oes ass
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