Credit Mobilier's Gentlemen Thieves
With Southern conservatives absent from the United States Congress after the war, Whig/Republicans had free rein for legislation and schemes to benefit the corporate interests which kept them in power. Thus the Northern marriage of government and corporations gave birth to public treasury-raiding schemes like the Credit Mobilier scandal, and all under the watchful eye of President U.S. Grant.
Bernhard Thuersam, www.circa1865.org
Credit Mobilier’s Gentlemen Thieves
“The looting of the Erie Railroad was accomplished with the help of the easily corruptible legislatures of only two States, New York and New Jersey. It was a fairly simple business. But to loot the immense federal project of the Union Pacific Railroad required far more sophisticated talents. This monumental piece of thievery involved United States representatives and senators. It involved cabinet officers, the Vice-President of the United States, and a future President. The loot ran to approximately forty-four million dollars. It was removed almost painlessly from the Union Pacific’s coffers by a trick outfit with a fancy French name, the Credit Mobilier.
The Union Pacific was sponsored and financed by the United States. The purpose of the Credit Mobilier was to take over the contract for building the road. Stockholders of both companies were identical. They proceeded to contract with themselves to build the road at a cost calculated to exhaust the resources of the Union Pacific. The so-called profits were to be divided among Credit Mobilier stockholders.
Prominent in Credit Mobilier were Oakes and Oliver Ames, brothers of Easton, Massachusetts, who had inherited a business . . . [and the] Hon. Oakes Ames was a representative of the old Bay State in Congress.
From the day it was whelped, the double-jointed money-making machine worked perfectly. As the tracks of the Union Pacific pushed across the Great Plains, the Credit Mobilier collected the enormous bounty granted to the line from the public purse and domain. Mile upon mile the railroad was systematically stripped of its cash, which reappeared almost simultaneously as dividends for the happy stockholders of Credit Mobilier. It was, as the Hon. Oakes Ames told his comrades in the House, “a diamond mine.”
Yet the gentlemen-thieves of Credit Mobilier had a falling out when two factions fought for control; and the warfare gave those senators and congressmen who were not involved the courage to demand an investigation of the Union Pacific-Credit Moblier situation.
In an effort to forestall just such a possibility, the Credit Mobilier officers had been distributing free stock in the House and Senate, and elsewhere. But Congress was at last forced to act, and the revelations of its investigating committee . . . were so appalling that “all decent men trembled for the honor of the nation.”
No one was more hopelessly involved in the scandal than Vice-President Schuyler Colfax . . . except of course, Representative Oakes Ames of Massachusetts . . . along with Representative Brooks, also of Massachusetts . . .
Although the Congressional investigation resulted in an almost complete official whitewash, it did leave strong doubt in many minds regarding the character of such eminent men as James A. Garfield, James G. Blaine, and almost a score more.”
(The Age of the Moguls, Stewart H. Holbrook, Doubleday & Company, 1953, pp. 49-50)