W CHAPTER VII. THE CREDIT MOBILIER, AND A VILLAINOUS CONTRACT E now approach one of the grandest schemes for defrauding a people ever conceived in the breast of the speculator. Before considering the Credit Mobilier, and to show the utter rottenness of the policy of affording congressional aid to railroads, indulge us in a brief re-survey of the subsidy bonds issued to the Pacific railroad corporations. We may concede that at the date of the original charter of these companies, there were no congressmen interested in the grand scheme, and that it was planned by outside combinations. The charter received various amendments with additional aids and privileges after members of congress had become interested; these amendments were made while directors of, and contractors for, these Pacific roads were occupying seats in congress. Whether or not they voted for these amendments does not appear, but it is certain they did not oppose them. As we have already shown, the aid voted by congress was ample to build and equip these roads, taking the statements of the Railroad Manual upon the character of the country through which they pass, and the average cost of railroads as the basis for. our conclusion. The companies could have built the roads without using the capital stock they reported as paid up. The Union Pacific has made no public exhibit of the cost of its portion of the roads, and from this fact we are at liberty to infer that an honest exhibit would present a bad look. Facts enough have been disclosed to prove that the stockholders and directors of the Union Pacific company had formed a combination for the purpose of defrauding the government and the people. The letting of the contract for the construction of its division of the roads presents one of the most perfect combinations for private speculation at the ex pense of the public that was ever planned or executed. When this division was completed, according to the statements of the company, it was indebted in the sum of $112,911,512. The cost of the whole line of road, at the highest price per mile given, to wit: $50,000, would amount to less than one-half of the reported indebtedness of the company, including the paid-up capital reported as $37,000,000. To show what was done with the subsidy bonds issued to this company, we must look at the contract made by the directors with Oakes Ames for the construction of six hundred and sixty-seven miles of the road, and the subsequent transfer of this contract to the Credit Mobilier of America. Let us remember that, in addition to the bonds issued by the government to the amount of $16,000 per mile for a part of the road, $32,000 per mile for a part, and $48,000 per mile for a part, congress, by a subsequent amendment to the charter, allowed the company to issue its own bonds for a like amount per mile, as first mortgage bonds, and that at the time of making the contract now under consideration, the directors of the company and of the Credit Mobilier were the same persons, some of whom were at that time and since members of congress. With these facts before us, we can see the reason for the excess of the debts over the cost of the road, as well as for many of the peculiar features of this singular contract. The executive committee of the company was composed of the following named persons: Oliver Ames (brother of Oakes Ames, contractor and member of congress), C. S. Bushnell, Springer Harbaugh, and Thomas C. Durant. The seven directors of the company who were made trustees, and who signed the transfer of the contract to the Credit Mobilier, were Thomas C. Durant, Oliver Ames, John B. Alley (a member of congress), Sidney Dillon, C. S. Bushnell, H. S. McComb, and Eenjamin E. Bates; and the president of the Credit Mobilier was Sidney Dillon. The grant of lands and bonds was made to the railroad company, as well as the right to issue their first mortgage bonds. All of the contracting parties were directors in the railroad company, and in the Credit Mobilier. As a body they controlled the whole matter. If a desire to protect the best inter ests of the company, and to deal honestly with the public, had actuated these men, and not a determination to plunder the public, no reason can be shown for this strange contract; but it it was the intent of a combination of men to defraud the public and the government, then the contract and its assignments can easily be accounted for. All of the stockholders of the company, at the time the contract was made with Oakes Ames, by indorsement on the back of their certificates of stock, appointed the above named seven trustees, irrevocably to represent their stock at all business meetings and elections of directors, during the existence of the Ames contract. The following is a correct copy of the contract and assignments: THE OAKES AMES CONTRACT" ITS ASSIGNMENTS TO THE AGREEMENT made this 16th day of August, 1867, between the Union Pacific railroad company, party of the first part, and Oakes Ames, party of the second part, witnesseth: That the party of the first part agrees to let and contract, and the party of the second part agrees to contract as follows, to wit: First. The party of the second part agrees and binds himself, his heirs, executors, administrators, and assigns to build and equip the following named portions of the railroad and telegraph line of the party of the first part, commencing at the one hundredth meridian of longitude, upon the following terms and conditions, to wit: 1. One hundred miles at and for the rate of $42,000 per mile. 2. One hundred and sixty-seven miles at and for the rate of $15,000 per mile. 3. One hundred miles at and for the rate of $96,000 per mile. 4. One hundred miles at and for the rate of $80,000 per mile. 5. One hundred miles at and for the rate of $90,000 per mile. 6. One hundred miles at and for the rate of $96,000 per mile. Second. At least three hundred and fifty miles shall be, if possible, completed and ready for acceptance before the first day of January, 1868, provided the Union Pacific railroad company transport the material. The whole to be constructed in a good and workmanlike manner, upon the same general plan and specifications as adopted east of the one hundredth meridian of longitude. The party of the second part shall erect all such necessary depots, machine shops, machinery, tanks, turn tables, and provide all necessary machinery and rolling stock at a cost of not less than $7,500 per mile, in cash, and shall construct all such necessary side tracks as may be required by the party of the first part, not exceeding six per cent. of the length of the road constructed, and to be constructed under this contract. The kind of timber used for ties and in the bridges, and in its preparation, shall be such as from time to time may be ordered or prescribed by the general agent, or the company, under the rules and regulations and standard as recommended by the secretary of the interior, of the date of February, 1866. Third. Whenever one of the above named sections of the road shall be finished to the satisfaction and the acceptance of the government commissioners, the same shall be delivered into the possession of the party of the first part, and upon such portions of the road as well as on that part east of the one hundredth meridian now completed, the party of the first part shall transport, without delay, all men and material to be used in construction at a price to be agreed upon by the party of the second part, his heirs, executors, administrators or assigns, and the general agent, but not less than cost to the party of the first part. Fourth. The party of the second part, his heirs, executors, administrators or assigns, shall have the right to enter upon all lands belonging to the company, or upon which the company may have any rights, and take therefrom any material used in the construction of the road, and may have the right to change the grade and curvature within the limits of the pro visions of the act of congress for the temporary purpose of hastening the completion of the road; but the estimated cost of reducing the same to grade and curvatures, as established by the chief engineer, or as approved from time to time by the company, shall be deducted and detained by the party of the first part, until such grade and curvature is so reduced. Fifth. The party of the second part, his heirs, executors, administrators, or assigns, is to receive from the company and enjoy the benefits of all existing contracts, and shall assure all such contracts and all liabilities of the company accrued or arising therefrom for work done or to be done, and material furnished or to be furnished, for or on account of the road west of the one hundredth meridian, crediting, however, the party of the first part on this contract all moneys heretofore paid or expended on account thereof. Sixth. The party of the second part, for himself, his heirs, executors, administrators, and assigns, stipulates and agrees that the work shall be prosecuted and completed with energy and all possible speed, so as to complete the same at the earliest practicable day, it being understood that the speed of construction and time of completion is the essence of this contract, and at the same time the road to be a first-class road, with equipments; and if the same, in the opinion of the chief engineer, is not so prosecuted, both as regards quality and dispatch, that then the said party of the first part shall and may, through its general agent or other officer detailed for that purpose, take charge of said work and carry the same on at proper cost and expense of the party of the second part. Seventh. The grading, bridging, and superstructure to be completed under the supervision of the general agent of the company, to the satisfaction of the chief engineer, and to be of the same character as to the workmanship and materials as in the construction of the road east of the one hundredth meridian. It is, however, understood the all iron hereafter purchased or contracted for, shall be of the we. ht of not less than fiftysix pounds to the yard, and to be fish ba. ioints. Eighth. All the expenses of the engin ering are to be |