Crédit Mobilier of America
Crédit Mobilier of America(krĕ`dĭt mōbĭlyā`, krādē`), ephemeral construction company, connected with the building of the Union Pacific RR and involved in one of the major financial scandals in American history. Oakes AmesAmes, Oakes,
1804–73, American manufacturer, railroad promoter, and politician, b. Easton, Mass. With his brother Oliver he managed the family's well-known shovel factory at Easton.
..... Click the link for more information. , Thomas C. DurantDurant, Thomas Clark,
1820–85, American railroad builder, chief figure in the construction of the Union Pacific RR, b. Lee, Mass. He was successful in building railroads in the Midwest, and, after the Union Pacific was organized (1862) by an act of Congress, John A.
..... Click the link for more information. , and a few other influential stockholders of the Union Pacific organized the Crédit Mobilier under an existing Pennsylvania charter, which they took over. Acting for both the Union Pacific and for their newly created construction company, they made contracts with themselves. Oakes Ames, as head of the Crédit Mobilier, in 1867 assigned contracts to seven trustees to build the remaining 667 mi (1,074 km) of road for a total sum that brought profits variously estimated at from $7 million to $23 million. This process depleted generous congressional grants to the Union Pacific and left it under a heavy debt by the time of its completion in 1869. The scandal became political when Ames (a U.S. Representative), to forestall investigation or interference by Congress, sold or assigned shares of the Crédit Mobilier stock to members of Congress at par, although the shares were worth twice as much at the time. He wrote to Henry S. McComb, an associate, that he had placed the stock "where it will produce the most good to us" and subsequently forwarded a list of Congressmen who had received or were to receive shares. Later friction between Ames and McComb facilitated the publication of these letters in Charles A. Dana's New York Sun in the midst of the presidential election campaign of 1872. A subsequent investigation by Congress badly smirched the political reputations of Vice President Schuyler Colfax, Senator James W. Patterson of New Hampshire, Representative James Brooks of New York, and others—most of all, of course, Ames himself. Ames and Brooks were censured by Congress, but there were no prosecutions.
See study by J. B. Crawford (1880, repr. 1969).
The Columbia Electronic Encyclopedia™ Copyright © 2013, Columbia University Press. Licensed from Columbia University Press. All rights reserved. www.cc.columbia.edu/cu/cup/