The Portland daily press., 1880-06-18
TERMS $500 PER ANNUM, IN ADVANCE.

10 per cent. as interest and commissions. But
the facts were that ring inside the Credit
Mobilier obtained the control both of that cor
poration and OF the profits OF the Ames con.
tract. The day after the triple contract was
signed by private agreement made in writ
ing the seven trustees pledged themselves to
each other so as to vote all the Pacific railroad
stock which they held in their own right or by
proxy as to keep in power all the members Of
the then existing Board of Directors of lie
railroad company not appointed by the Presi-
dent of the United States By this agreement
majority OF the directors were in the power
OF the seven trustees.
The result was that the Ames contract and
the triple agreement amounted in fact to
contract made by seven leading stockholders of
the Pacific railroad with themselves so that
the men who fixed the price at which the road
would be built we're tae same men who would
receive the profits of the contract. Thus tho
guardians of great public trust were enabled
to contract with themselves at an exorbitant
price, which virtually brought into their pos
session as private individuals almost all the
property of the railroad company. The 667
miles covered by the contract included 13S
miles already completed the profits on which
Injured to the benefit of the contractors Be-
fore the connection with the Ames contract
the Credit Mobilier Company had already been
engaged in Eseveral non-remunerative enter
prises, and its stock was below par. The triple
contract of October, 1867, gave it at once con-
siderable additional value. 1t should be borne
in mind, however, that the relations of the
Credit Mobilier Company to the seven trus-
tees to the OakeS AmeS contract and to the Pa
cltc Railroad Company were known to but
few persons. and they kept them secret until
long afterward. Nothing was known of it to
the general public until the facts were brought
out in the investigation.
In view of the facts as above stated, it is evil
dent that purchaser of such shares of Credit
Mobilier stock as were brought under the op-
Grafton of the triple contract would be sharer
in the profits derived by that arrangement
from the assets of the Pacific railroad, a large
part of which consisted of bonds and lands
granted to the road by the United States. The
holding OF such stock by member of Congress
would depend for its moral qualities wholly
upon the fact whsther he did or did not know
of the arrangement out of which the profits
would come. If he knew of the fraudulent ar
rangement by which the lands and bonds of
the United States delivered to the Union Pa
citic Railroad Company for the purpose of con-
structing its road were to be paid out at enor-
mously extravagant rates, and the proceeds to
be paid out as dividends to ring of stock
holders made the Credit Mobilier Company,
he could not with propriety hold such stock or
agree to hold it or any of its proceeds. If it
was morally wrong to purchase it, it was NOR
ally wrong to hesitate whether to purchase it
or not.
THE TESTIMONY OF GENERAL GARFIELD.
Putting the case on the highest ethical
ground and applying this rule in all its severi-
ty in judging of General Garfeld's relation to
the subject, the evidence before the Congress
sional Committee goes to prove clearly that be
never purchased nor agreed to purchase any of
the stock; that though an offer was made,
which he had some time under advisement
to sell to him 81 900 worth of the stock. he did
not then know, nor had he the means of know
ing the real conditions with which the stock
was connected, or the methods by which its
profits were to be made; that his testimony be-
fore the committee is a statement of the facts
as he has always understood them, and that
neither before the committee nor elsewhere
has there been on his part any prevarication or
evasion on the subject. In his sworn testimo-
ny, as given before the House committee JAN
uary IA, 1873, General Garfield says: 'The
first ever heard of the Credit Mobilier was
some time in 1866 or 1861 cannot fix the
date-when George Francis Train called on me
and said he was organizing company to be
known as the Credit Mobiier of America, to
be formed on the model of the Credit Mobiier
of France; that the object of the company was
to purchase lands and build houses along the
line of the Pacific railroad at points where
cities and villages were likely to spring up;
that he had no doubt that money thus invested
would double or treble itself each year; that
subscriptions were limited to 81 900 each. and
he wished me to subscribe. He showed me
long list of the subscribers, among them Mr..
'Oakes Ames, to whom he referred me for fur
ther information concerning the enterprise.
answered that had not the money to spare,
and if l had 1 would not subscribe without
knowing more about the proposed organiza-
tion. Mr.. Train left me, saying he would hold
place open for me, and hoped l would con-
clude to subscribe. The same day 1 asked Mr..
Ames what he thought of the enterprise. He
expressed the opinion that the investment
would be safe and profitable. heard nothing
further on the subjec. for year or more, and
it was almost forgotten when some time, l
should say during the long session of 1868, Mr..
Ames spoke OF it again, said the company
had organized, was doing well, and, he
thought, would soon pay large dividends.
He said that some of the stock was left, or was
to be left, in his hands to sell, and could take
the amount which Mr.. Train had offered me
by paying the $1,000 and accrued interest. He
said if was not able to pay for it he would
hold it for me until 1 could pay or until some
OF the dividends were payable. 1 told him L
would consider the matter, but would not
agree to take any stock until knew, from an
examination of the charter and the conditions
of the subscription, the extent to which i
would become pecuniarily liable. He said he
was not sure, but thought stockholder would
only be liable for the par value of his stock;
that he had not the stock and papers with him,
but would have them after awhile. From the
case as presented L should probably have taken
the stock if had been satisfied in regard to
the extent Of the pecuniary liability. Thus
the matter rested, think, until the following
year. During that interval l understood that
there were dividends due amounting to nearly
three times the par value of the stock. But in
the meantime had heard that the company
was involved in some controversy with the
Pacific railroad and that Mr.. Ames's right to
sell the stock was denied. When next saw
Mr.. Ames told him had concluded not to
take the stock. There the matter ended, so
far as / was concerned, and had no further
knowledge of the company's operations until
the subject began to be discussed in the news
papers last fall (1S72). Nothing was ever said
to me by Mr.. Train or Mr.. Ames to indicate or
imply that the Credit Mobiler was or could in
any way be connected with the legislation of
Congress for the Pacific railroad or any other
purpose. Mr.. Ames never gave nor offered to
give me any stock or other valuable thing as a
gift o ce asked and obtained from him,
and afterward repaid to him, a loan of $500;
that amount is the ouly valuable thing ever
received from or delivered to him. I never
stock of the Credit Mobiler or of the Union
Pacific railroad, nor any dividends or profits
arising from either of them:'
THE REAL CHARACTER DEVELOPED.
From the witnesses in the case it seems that
it was not until the winter of 1S69-70 that Gen.
eral Garfield received an intimation of the real
nature of the Credit Mobilier and the Pacific
Railroad Company. In the course of private
conversation with the Hon. Jeremiah S. Black
of Pennsylvania, finding that he was familiar
with the enterprise, General Garfield told him
of the offer made him. Judge Black then ex-
pressed the opinion that the managers of the
Credit Mobilier were attempting to defraud
the Pacific Railroad Company, and informed
him that Mr.. Ames was pretending to have
sold stock to Members of Congress for the pur-
pose of influencing their action in any legisla-
ton that might arise on the subject. General
Garfields action at that time is best explained
in the following letter from Judge Black to
the Hon. James G. Blaine, then Speaker of the
House, which of itself should be thorough
vindication, if any was needed, of General
Garfield:
LETTER OF JUDGE BLACK.
PHILADELPHIA, February 10, 1873.
My DEAR SIR;-From the beginning of the inves-
tigation concerning Mr.. Ames's use of the Credit
Mobilier, believed that General Garfield was free
from all guilty connection with that business This
opinion was founded not merely my confidence in
his integrity, but some special knowledge of his
case. may have told you all about it in converse
ten but desire now to repeat it by way Of remind
er.
assert unhesitatingly that whatever General
Garfield may have done or foreborne to do he acted
in profound Ignorance of the nature and character
sl.n ..nlA