Behind the Scenes in Washington 1873
Credit Mobilier view entiire page
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| Above left, the insane evangelist, Charles Guiteau, who shot President James Garfield, right, after losing a bid to being appointed ambassador. Garfield had been one of the Congressmen receiving bribes in the Credit Mobilier scandal. Guiteau was hanged in a few weeks despite his obvious delusion that God had pulled the trigger. | |
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Left, is Guiteau's letter to General Sherman. Click for the original. The text is below. Sherman said: "Never heard of or saw him to my knowledge." |
| Note: the Smithsonian maintains a rather bizarre little page called "Ask James Garfield a Question", here. Guiteau's brother in law Scofield said: "I believe that both Charles Guiteau and his father were crasey on religion." | |
| "To General Sherman: I have just shot the President. I shot him several times as I wished him to go as easily as possible. His death was a political necessity. I am a lawyer, theologian, and politician. I am a stalwart of the Stalwarts. I was with Gen. Grant, and the rest of our men in New York during the canvass. I am going to the Jail. Please order out your troops and take possession of the Jail at once. Very respectfully, Charles Guiteau." | |
Behind the Scenes in Washington 1873
by Edward Winslow Martin
One of the great public works of the Union, of which the whole country is justly proud, is the Pacific Railway, extending from the Missouri River to the Pacific Ocean. The early history of the great road is a story of constant struggles and disappointments. It seemed to the soundest capitalists a mere piece of fool-hardiness to undertake to build a railroad across the continent and over the Rocky Mountains, and, although Government aid was liberally pledged to the undertaking, it did not, for a long time, attract to it the capital it needed. At length, after many struggles, the doubt which had attended the enterprise was ended. Capital was found, and with it men ready to carry on the work. In September, 1864, a contract was entered into between the Union Pacific Company, and H. W. Hoxie for the building by said Hoxie of one hundred miles of the road, from Omaha west. Mr. Hoxie at once assigned this contract to a company, as had been the understanding from the first. This company, then comparatively unknown, but since very famous, was known as the Credit Mobilier of America. . . .
In 1865 or 1866, Oakes Ames, then and now a Member of Congress from the State of Massachusetts, and his brother Oliver Ames, became interested in the Union Pacific Company, and also in the Credit Mobilier Company, as the agent for the construction of the road. The Messrs. Ames were men of very large capital, and of known character and integrity in business. By their example and credit and the personal efforts of Mr. Oakes Ames, many men of capital were induced to embark in the enterprise, and to take stock in the Union Pacific Company and also in the Credit Mobilier Company. . . .
On the 16th day of August, 1867, a contract was executed between the Union Pacific Railroad and Oakes Ames, by which Mr. Ames contracted to build 667 miles of the Union Pacific Road at prices ranging from $42,000 to $96,000 per mile, amounting in the aggregate to $47,000,000. Before the contract was entered into, it was understood that Mr. Ames was to transfer it to seven trustees who were to execute it, and the profits of the contract were to be divided among the stockholders in the Credit Mobilier Company, who should comply with certain conditions set out in the instrument transferring the contract to the trustees. . . .All the large stockholders in the Union Pacific were also stockholders in the Credit Mobilier, and the Ames contract and its transfer to trustees were ratified by the Union Pacific and received the assent of the great body of stockholders, but not of all. After the Ames contract had been executed, it was expected by those interested that, by reason of the enormous prices agreed to be paid for the work, very large profits would be derived from building the road, and very soon the stock of the Credit Mobilier was understood to be worth much more than its par value. . . .
Like all great corporations of the present day, the Union Pacific Road was largely dependent upon the aid furnished by the Government for its success. The managers of the company, being shrewd men, succeeded in placing all the burdens and risks of the enterprise upon the General Government, while they secured to themselves all the profits to be derived from the undertaking. . . .
Mr. Ames was deeply interested in the scheme, being, indeed, one of its principal managers. Being a Member of Congress, he was peculiarly prepared to appreciate the value of Congressional assistance in behalf of the Credit Mobilier. It would seem that the object of the Credit Mobilier was to drain money from the Pacific Road, and consequently from the Government, as long as possible. Any legislation on the part of Congress designed to protect the interests of the Governmnet, would, as a matter of course, be unfavorable to the Credit Mobilier, and it was the aim of that Corporation to prevent all such legislation. . . .It was accordingly determined to interest in the scheme enough Members of Congress to prevent any protection of the National Treasury at the expense of the unlawful gains of the Credit Mobilier. Mr. Oakes Ames, being in Congress, undertook to secure the desired hold upon his associates. The plan was simply to secure them by bribing them, and for this purpose, a certain portion of the Credit Mobilier stock was placed in the hands of Mr. Ames, as trustee, to be used by him as he thought best for the interests of the company.
Some of these gentlemen, in their conversations with Mr. Ames, raised the question whether becoming holders of this stock would bring them into any embarrassment as Members of Congress in their legislative action; Mr. Ames quieted such suggestions by saying it could not, for the Union Pacific had received from Congress all the grants and legislation it wanted, and they should ask for nothing more. . . .
"It is very easy," says the New York Tribune, "to see that under these circumstances the stock of the Credit Mobilier was a very handsome investment, provided it could be purchased at par. Here was wherein Oakes Ames was such a profitable friend to Congressmen and Senators. He let them in, as he phrases it, on the ground floor. They got their stock at par, and the dividends which were ready to be paid were more than enough to pay for the stock. This is what is called in Wall Street parlance making one hand wash the other. The actual value of the stock sold at $100 a share would have been to anybody out of the circle of Oakes Ames's friends not purchaseable for less than $300 or $400. But there was a film of decency thrown over the transaction by Mr. Ames, in charging several months' interest upon the stock at the time it was sold to Members of Congress. This interest had accrued while he was holding it to see where it could be placed to the best advantage."
To sum up, it may be briefly stated that the Union Pacific and Credit Mobilier together got the proceeds of liberal United States land grants, of donations of communities near the road, and the entire subsidy of Government bonds, as a clear profit. . . .
Reduced to plain English, the story of the Credit Mobilier is simply this: The men entrusted with the management of the Pacific Road made a bargain with themselves to build the road for a sum equal to about twice its actual cost, and pocketed the profits, which have been estimated at about Thirty Millions of Dollars--this immense sum coming out of the pockets of the tax payers of the United States.
by Edward Winslow Martin