New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1876-08-27
THE RING LAWYER AND REFORM
CANDIDATE.

M0biIier-HOw Millions Wero NO
formed ,, into the Pockets of the Ring.
In 1866 James Parton pu blished his Man.
nal for rhe Instruction Of Rings, Railroad
and Political" etc. On Its appearance all
of the edition that could be had in the mar.
ket, it is said, was bought up and destroyed
by parties exposed. At any rate it is the
rarest chance now that Q copy can be had.
In the introduction, after referring to Sir
\ Morton Peto's troubles, on account OF his
unauthorized issue of securities l2o.UOO)
of the London, Chatham and Dover rail.
way, and the fact that Robert Schuyler, OF
this country, died OF broken heart, for .
similar oftense, the author adds: "There is
NO necessity for such unpleasant occur
rences and sudden reverses. The
mistake of Peto and Schuyler was in not
dividing their risk and legalizing their pro-
ceedjngs by q combination cow technically
known a. ring This plan was first
adopted, as far as known, in the United
States, by an eminent lawyer of Wall street,
s. j. Tilden, and prominent Chicago land
operator"
The work is devoted, in good part, to an
expose of Mr.. Tilden's operations and
ceny of the Galena and Chicago railroad,
the Chicago and Northwestern railroad
swind!e. "Tildens mine," etc., showing
how Westetn farmers and stockholders
were robbed of and Mr.. Tilden enriched
by millions in brief period, and how the
'Granger" movement resulted as conse-
quence.
Enormous and unblushing as these
ewindles are shown to have been, they are
insignificant as compared with the great
public robbery Of the Credit MObilier OF
America, whose exposure had not GO.
curred-in fact, the ring for its cOnsumma-
ton was scarcely more than formed-when
Mr.. Parton wrote.
1t is the purpose of these lines to call at
tentiOn to the recorded evidence connecting
Samuel j. Tilden's name with this ring.
Events Of moment come and fade away
SO rapidly that it is worth while first to re.
call the salient facts respecting the con-
struction of the Union Pacific railroad.
The Union Pacific Railroad Company, un-
der the grants of Congress, and the follow
ing sources from which to raise money to
construct It's railroad, namely:
First-Twenty sections, or II 800 acres,
of public land to the mile, or about l2OOO,-
900 acres in all.
Second-Goyernment elk per cent bonds
to the amount of $4,000 per mile for pOr-
ton, $50 900 for portion, and $4S, 900 Tor q
portion of its road.
Thlri-Its own bonds to an amount equal
to that go issued by the government secured
by first mortgage on the road and franch-
ises.
Fourth-The capital stock, limited to one
hundred million dollars
For something near 100 ~ miles of road
the company realized, from the first three
sources named government bonds to the
amount Of s27 ,256, 5l2, and issued its own
bonds to the amount Of $27 .2l3,00O >
1t has iseued bonds, called land grant
bonds. TO the amount of $l0.400,000" Re-
port congressional select committee, No. 2
February 20, 1873, page p
1t soon became manifest in the history of
the road that the cost of its construction
would not absorb the money Gerivable from
these sources by at least $20,000,OO0. 1t
TRANSFERRED that the problem then among
those having the enterprise in charge was,
how to divide this surplus among them.
selves. and yet seem to be expanding it in
building the road. The thought was tor the
directors to hire themselves to build it, But
there was the trouble of ''legalizing their
proceedings" in the language of Parton.
This was not long in the way. They had
the aid of eminent counsel" and soon
overcome all obstacles. They proceeded
thus: In order to avoid personal liability, in
case of any mishsp, they purchased the char
ter of the pennsylvania Fiscal Agency" q
trading corporation of the State of Penn
sylvania. had its name changed to the
"Ccsdit Mobilier of America" and acted
through it. This was in 1864. Two millions
Of the stock of the Union Pacific had been
subscribed, and $2l8.000 paid in-the
amount necessary for 0rganization-the
den had $4,000. tSee page 742, report Of
the committee, above quoted from. The
Credit Mobilier lin 1864 purchased all this
outstanding stock. Report, page II The
management of the two corporations be-
came identical. For time their offices
were together. The treasurer and secre-
tary of one was the auditor of the other,
etc. The stockholders in the two were sub
etantlally the same. In short, those who
controlled and managed the one, controlled
and managed the other. Report, pages IL,
~, lbs Thus arranged, the Union Pacific
Company, through middle-men (HOxie,
Ames and Davis and certain trustees" let
the contract for building to the Credit Mo.
bilier at price from $4,000 to $4,000 per
mile more than it was worth. The first engi-
neer, Peter b. Dey, was compelled to resign
because he would not consent to the sw;ndle.
lSee page 66S The "Oakes Ames con.
tract" covering 667 miles, ranged from $42,
600 to 1885, 900 per mile, when the actual cost
of about 100 miles Of this portion, built at
the time the contract was made, was only
$27 500 per mile. lSee page g.
The amount made in bonds and stocks by
the ring in these operations is stated on
page IA, as follows:
COST TO RAILWAY COMPANY.
ae.ie coniract.......sn. s7a4ls s q
Davis contract...... 23,43l 678 1885, ,2a7 %
COST 10 CONTRACTORS.
Hoxie contrsct....... e7,806, l83 IS
A@es c0nCtsct.......s N,SoS Ia - "a -.o o-o a.
Davis contract...... E,65S.663 e. so,72o,s Ss 81
Total profit on construction see. e43 ,s2s, 1923 "a
The cash profit is stated on the next page