Litchfield enquirer., 1880-08-19
WHOLE NO. 1881 ,,S:,lI.

are now being Dullt Dy construction companies
composed of the stockholders of these roads
and organized upon precisely the same basis
as was the Credit Mobilier. In nearly every
instance these companies have realized larg.
er percentage of profit on the money expend-
ed than was received by the stockholders of
the Credit Mobilier. In considering the con-
Hict between the statements of Mr.. Ames,
derived from hismemoranda made at the time,
and those of some of the Congressman impli-
Gated, made five years afterwards from memo
ry, great allowance is due to the fact that
these agreements were verbal, and in some in
stances conditional upon future payment.
They were never reduced to writing, and pos
slbly in some cases were regarded as options
rather than as investments. The pocket diary
in which the brief mem oranda were made was
probably the only record of these transactions.
Some of the agreements had afterward been
cancelled, and it is even possible that the facts
had been forgotten by some of the parties
when the list containing their names was I'M
expectedly made public. ..
When the Credit Mobilier Company, after
building 247 miles of road, approached the
rainless region, where the land grant was of
little immediate value it became embarrassed
and there was danger that the road would
have to be abandoned In this emergency
Cakes Ames was appealed to by the Union
Pacific Railroad Company, not only as cap
iialist, but as patriot. 1t was not until Au-
gust, 1865, fourteen months after the last act
of legislation in behalf of the road, that Cakes
Ames and his brother Oliver became interest
ed in the railroad company and also in the
Credit Mobilier Construction Company. They
had been urgently solicited to engage in the
work by President Lincoln, who assured them
that he regarded the speedy completion of
the road as so necessary that he would recon-
mend an increase of Government aid, if the
work could not otherwise be accomplished
The circumstances we're all unfavorable. But
Cakes Ames was no ordinary man. The SEN
ior partner of the firm of Olives Ames & Sons.
be stood in the front rank of New England
manufacturers, and was justly respected for
experience, solvency and integrity. He was
asked to associate his name, if successful,
with this great public enterprise. But he was
also asked to take an immense risk and re-
sponsibility, to put his own ample fortune
and those of his friends in jeopardy. In an
evil hour for his own peace be undertook the
herculean task. Against the advice of many
financial associates, he accepted the trust,
shouldered the load and carried it through to
success.
Up to October, 1867, the construction stock
had been sold with great difficulty and at
heavy discount, and much of it was unavoida-
bly, taken by Mr.. Ames and his friends. At,
and even subsequent to, the date of his agree
ments to sell to Congressman at par and &C
crued interest he offered the same stock at 30
to influential Boston capitalists whom he
wished to secure, and they declined to invest.
But, while MIR. Ames made persistent and
successful efforts to sell the construction stock
to capitalists, even at sacrifice he did not
make any special effort to enlist Congressional
holders of stock. The very few Congress
men, who we're not also eminent capitalists,
to whom he promiseda small number of shares
1916, 900 in alp, were his personal friends,
who had always been friends of the read In
most cases, if not in all, they applied TO him
for profitable Investment, as members had
for years been in the habit of doing. lie
agreed to let them have the stock as an act of
friendly goodwill. because he believed 1t
would prove profitable investment, and they
agreed to take it because. they had confidence
in his judgment.
OF course every effort was made to place
the stock in the hands of men of established
position. The motive was plainly stated by
Mr.. Ames II have Observed he said, THAT
men will not take the trouble to acquaint
themselves thoroughly with affairs IN which
they have no personal interest" But Mr..
Ames, who was large-hearted and liberal
man, doubtlessly felt also sincere pleasure
in securing among his associates men who
had shown themselves from the first in SYM
patty with his great work. 1t was this will
lingness to secure stockholders among intlu-
entail men, some of them members of Con-
gress, which was the sole basis of the subse-
quent scandal. Cakes Ames, from the time
when he first entered Congress in 1868, with
the reputation of being successful business
man, was often consulted by his fellow-mem-
bers in regard to their investments. Acting
as agent of the Construction Company, in the
fall of 1867, he acceded to requests previously
made by number of Senators and Repre-
sentatives to invest small sums in construc-
ton stock which had been placed in his hands
for sale. to fulfil these understandings, at par
and accrued interest. He agreed in some
cases to carry it for them. In all these cases
it was to be a sale, not gift and he was to
receive principal and interest for it.
At this time (186O no further legislation
was wanted. The relations of the road to the
Government had been legally defined and set
tied three years before. No additional fran
chises were asked or expected. The temper
Of the public was friendly. 1t was stock in
which all men had q right to invest Neither
Mr.. Ames, nor the men who agreed to buy,
nor the men who declined to buy, nor any one
else in or out Of congress, imagined for mo-
action, any more than in the purchase of or
binary railway shares, or of mining stock, OF
of national bank stock, or of merchandise, or
of produce, or of gold-any and all of which
might some day become the subjects Of legis-
lation, and be affected in value thereby.
At the time when Mr.. Ames agreed to sell
this construction stock its value was largely
speculative and il could not have been readily
sold even at par. But few months later,
when the crisis was passed and the successful
completion of the road assured by the power
full intervention of Mr.. Ames and his friends
in its affairs, it became evident that large div.
idends would be realized and the value Of the
stock appreciated. Unfortunately a contro-
yersy then took place between Colonel Nc
Comb, Delaware shareholder, and Mr.. Ames
as to anumber of additional shares which this
stakeholder Claimed. To satisfy MtComb
that this stock was all disposed of "where 1t
would do most good. to the enterprise, Mr..
Ames mentioned to this gentleman the names
of persons to whom he felt under obligation
to assign shares upon supposed understandings
previously made. These names included a
number of influential Congressman. In a suit
instituted the following year, in the Pennsyl-
vania courts, for the recovery of the. stock,
McComb furnished an incorrect list Of these
names, and, under the impulse of personal
feeling and self-interest, gave false color to
the transaction. When this litigation became
known most of the Congressman to whom Mr..
Ames had agreed to sell shares became alarm
ed. Some returned their stock and got back
their money with interest; some declined it,
and some afterwards denied that they had ever
agreed to take it.
In May 1869, the road was completed.
The proceeds were equitably Allotted by the
trustees, as the work progressed, to all the
parties in interest, according to agreement
Nearly four years elapsed In the fall of 1872
the fever of inflated Government expendi-
lures began to abate and a healthy political
reaction set in against the extravaganza which
had grown ND during the war. Some Com
gressmen probably had been Implicated IN
other transactions which would not bear day
light, and were living in dread of exposure.
The press of the country began most useful
and necessary crusade against abuses, real aud
imaginary. Vague and exaggerated reports Of