The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1880-06-16
REDIr xoBILIER FRAUD.
Garfeld's Connection Herewith and the
Rascality of the Affair.
His Guilt Clearly shown-The Damning Ev-
idence Produced by Ames-His Ex-- ii
rr-e PLANTATION Explained.

The most gigantic fraud ever successfully
perpetrated in this country originated in
the construction of the Union Pacific Rail-
road Congress voted money and lands suf-
fcient to build 1t without any considerable
issue of bonds or stock by the Company. This
furnished the opportunity for vast specu-
lation, bat as the directors were forbidden
by law from engaging in contracts or hold
ing other interests OF profit, that obstacle
had to be. overcome before they could be
benefciaries by the abuse OF their trusts.
A charter had been granted by the State
of Pennsylvania to a Company known as the
Credit Mobilier, organized upon the French
plan, which had not operated with success.
This was purchased, and some OF the officers
and directors OF the Union Pacific obtained
absolute control of its affairs. This Credit
MotiIier thus composed contracted with
themselves, under another name, az the
directors of the Union Pacific for the build
ing of that road at exorbitant prices. In this
way the United States, the bondholGers, and
the stockholders were ali swindled for the
benefit of the Credit Mobilier corporation.
GETTING POSSESSION.
The first contract was nominally awarded
to II. Nj. Hoxie. but was soon transferred to
the Credit Mobilier, that put him forward as
a mere stool pigeon. The profits were so
enormous as 10 excite the cupidity of those
not favored with share. In the latter part
of 1867 Mr.. Ames, Mr.. Alley, and others,
known as ''the Boston party" got possession
of the Union Pacific and Credit Mobiller.
At that time Mr. Ames was a member OF
Congress. and large manufacturer OF re-
puted wealth. As soon as IL became known
that he beaded the new direction, his busi-
ness Standing gave an impulse to the enter
prise hardly inferior to that OF the large
capital which he was able to command. His
friends IN Congress soon multiplied rapidly,
and they were all anxious to invest their
votes and influence for sssres in the Credit
Mobllier, whose dividends even then had
acquired celebrity.
A few months after Ames obtained the
contracts hostile demonstration was made
in the House of Representatives by Mr..
Washburne, of Illinois, seconded by his
brother from Wisconsin, which caused
alarm among thess jobbers; but Co!fsx, then
the Speaker and a stockholder, succeeded by
parliamentary tricks in sileDcing. this men
acing opposition for time. Still there wss
good cause for fear, and under this pressure
Ames wrote from Washington to McComb
twho brought about the investgation) on the
18th of January, 1868, II have assigned, as
far as / have gone" certain shares to
various States, and added. ''the 90 per cent.
increase on the old stock want for distri-
button here and soon." A few days after
he was more urgent. SIN view of Wash
burne's move here, 90 in for making our
bond dividend in full" And again on
February % he writes urgently: Il want
that $l4, coo increase of the Credit MObllier
to sell here. We want more friends in this
Congress"
BRIBING COSGEESSMEN.
The motive for placing the stock where
il would do the most good is thus revealed
in these letters. And to fix the relation be
tween it and the distribution which fol-
lowed, the record shows that every share of
the stock for Congress was distributed at
this very time. 1t was issued in January,
1868, in blocks of thirty, twenty and ten
shares, upon which dividends of so per cent
in Union Pacific Railroad bonds, worth 81
and 100 per cent. IN Union Pacific Railroad
stock, worth about 80 or 10 per cent, had al
ready been declared,
In order to form just idea OF the value
of Credit Mobiliers ock when these transac
tons took place. Mr.. Ames himself Is the
best witness. He wrote, February %, 1865,
TO McComb, with whom his relations were
then close, whom he bad no object to de-
ceive, and who wanted to buy, ~. NJ. OF A,
Il L
offered his at $500, but don't want Bates
to sell out i think Grimes may sell a
part of his at $3.50" This is the stock
which was then sold at par TO members Of
Congress, and the so-called purchase OF
which was more than extinguished by the
accrued dividends.
The bribed members not only received
this interest "sll about the same time," but,
as if to make the coincidence more striking.
If init
cealed the ownership behind Cakes Ames,
who acted as their general trustee. Whether
they went through the empty form of pay
ing in the money one day, merely to draw il
outthe next from dividends, or extiDguished
the so-called purchase, they never failed to
cover their dealings with secrecy, and re-
fused to have the stock stand in their own
names. 20 .--
When the Sun fret disclosed this corrup-
ton in the summer of 1872, founded upon a
Judicial proceeding in Pennsylvania, the
lncriminated members promptly and Indig-
nantly denied any connection with the
Credit Mobilier, and went so far as to de.
nounce the charges IS gross and malicious
calumny All the Republican leaders Of
the House of Representatives, aud others in
tue Senate, were involved, and they spoke
with. equal emphasis The Presidential
election was then pending, and their
declarations were fabricated to meet that
exigeney. e
GARFIELD's DENIALs.
Among the most decided in denial was
James A Garfield. His statement exceeded
in boldness others more adroitly worded, SC
that the friends who confided in his integri-
~ could not believe he could have held
shares in the face OF such explicit and sol
emn assurance to the contrary. The investi-
cation, however, proved that be had not
only wilfully fslsified, but had added q still
more infamous crime TO venality.
After Mr. Ames bad given his first mild
and reluctant testimony concerning the
Credit Mobilier members, Mr.. Garfield ap
peared before the Committee aud submitted
prepared state ment. at the sitting of Janu
cry IA 1878. The substance of il is as fol.
lows. in his own words:
From the cas5, as presented, / probably
Should have taken the stock II had been
satisfied in regard to the extent OF the pc
cuniary liability. But in the meantime
heard that the Company wasinvolved in soms
CONTROVERSY with the Pacific Railroad, and
that Mr.. Ames' right TO sell the stock was de
MED. When next saw Mr.. Ames told him
had concluded not TO take the stock. There
the matter ended, so far as I was concerned
and had no further knowledge Of the Com
pany's operations, until the subject began u
be discussed in the newspapers last fall.