CRÉDIT MOBILIER SCANDAL
Cartoonist Joseph Keppler offered a satirical portrayal of the Crédit Mobilier Scandal by depicting politicians involved in the affair as residents in a hospital ward. In actuality, punishment was lenient: Representatives James Brooks and Oakes Ames were merely censured.
The Reconstruction era after the Civil War was a time of chaos, reorganization, and corruption that affected not only lesser state officials but also federal government agents. The Credit Mobilier affair, which had its early beginnings in 1864 but was not publicly investigated until 1873, is an example of the corrupt practices that characterized the period.
In 1864, Thomas C. Durant, an administra-
tor of the Union Pacific Railroad, bought the
Pennsylvania Fiscal Agency, which was chartered
in 1859. The agency was renamed Credit
Mobilier of America and its proposed purpose
as a construction company was the building of
the Union Pacific Railroad. The federal govern-
ment had granted the railroad generous loans
and contracts for its construction, and the
administrators of the railroad planned to divert
this money into the Credit Mobilier Company,
allowing the stockholders of the company to
enjoy huge profits. Government officials first
became involved in 1865 when Oakes Ames,
congressional representative from Massachu-
setts, and his brother Oliver bought shares of
stock in the Credit Mobilier and, indirectly, in
the Union Pacific Railroad. The Ames brothers
soon became the power behind the Union
Pacific, and, in 1866, Durant was replaced by
Oliver Ames.
The building of the railroad was fraudulently
financed for approximately $50 million more
than was necessary. In addition,Oakes Ames sold
a large number of shares of stock in Credit
Mobilier at a reduced rate to several of his fellow
congressmen. This move on the part of Ames
was to allay any suspicious interest in the under-
takings of the two companies and to encourage
legislation beneficial to the railroad. This maneu-
ver occurred in 1867, and for the next five years
rumors surrounding the activities of Ames and
other government officials circulated.
The scandal erupted in 1872 when the details of the Credit Mobilier Company became an issue of the presidential campaign of that year. Several important officials were involved including vice presidential candidate Henry Wilson, incumbent vice president Schyler Colfax, future president and member of the House of Representatives JAMES A. GARFIELD, and Speaker of the House James G. Blaine. An investigation began in 1873. The punishments for such behavior were surprisingly lenient, however, and the Credit Mobilier Company and Congressman Ames were merely publicly censured.
