Who was this man with such unlimited means? The testimony of Mr. Oliver Ames before the Congressional committee is that Hoxie was a man of no responsibility; that he was an employé of the road, and had charge of the ferry over the Missouri river at Omaha; that it was never expected that he would carry out the contract; that he was simply a figure-head; a party to whom the contract was to be let with the view of his turning it over to some one else. That some one else proved to be the Credit Mobilier—the very parties who under the guise of a different name, let the contract to him. The same is also true of the contracts with Boomer, and the one made later with Davis. Was it all the same with the immense contract of Mr. Ames, which was next to follow? We shall have occasion to consider this farther on. Up to this time, then, there had been built over three hundred miles of this road, and the construction construction was by the Credit Mobilier. Where did this corporation get all these means? They took their pay from the Union Pacific Railroad Company, in the stocks and bonds of the road, and it became necessary to convert these into cash. They could not buy, nor could the directors of the railroad sell the stock of the road for less than par; and when it was placed upon the market it would not bring more than thirty cents on the dollar, and few sales could be made even at that or any other price.

The road could not issue it for less than par, and so the Credit Mobilier must lose at least seventy dollars

on every share of the stock that they purchased. It must appear upon the records of the Railroad Company that this stock was paid for in cash; that was required by the articles of incorporation. They could not use it to pay for the construction of their road. The act of incorporation required that it should be sold for cash at not less than par. But through the influence of the Credit Mobilier, they were enabled not only to evade one of these requirements, but both. They not only by this means used the stock and bonds of the road, but also sold the stock of the same far below par. The plan of operations, briefly stated, was that when any payment was to be made on account of work done, the Railroad Company would give its check to the Credit Mobilier for the amount, and thereupon the Credit Mobilier would pass the identical check back to the Railroad Company, receiving from them the stock and bonds. This they called a cash transaction; and yet the Union Pacific Railroad Company had no money, except as they sold their stock or bonds, or converted the government loans into cash. The Credit Mobilier had no money, except as they sold these stocks and bonds; for their capital, originally of $2,500,000, afterwards increased to $3,750,000, was soon used up in the construction of this road. But to all intents and purposes, the two companies were one and the same. Even this position was claimed by Thomas C. Durant, the president of the Credit Mobilier, and this was one ground of his objection to the extension of the Hoxie contract.

Durant was opposed to the Credit Mobilier, as a corporation, having any further contracts with the Railroad Company, and it was not strange that such should be the case. Gradually large amounts of the stock of the Railroad Company had been absorbed by the public, and unless some means were taken to secure to themselves the benefits of these great contracts, they might lose their advantage. Some more stringent means must be used; something must be done by which the control of the two corporations should remain undisturbed and secure, until the mission of the Credit Mobilier should be accomplished, and this was done most effectually in the next great move in the history of this road.

After the proposition of J. M. S. Williams was made, no great change occurred in the situation of affairs. In spite of the allegations to the contrary, the testimony of the many witnesses before the Congressional committee was, that work was constantly being done upon the road, and by the 16th of August, 1867-the date of the Ames contract-one hundred and thirty-eight miles of the road west of the one-hundredth meridian had been completed and accepted by the government, and this construction had been done at an expense, on an average, including equipments, of about $27,000 per mile, to the Company. Still let us bear in mind that the only evidence of the cost of this portion of the road rests on the testimony of Mr. Durant, and that the books of the Railroad Company do not give any evidence of this cost.

The Oakes Ames contract, of which we shall now speak, was for the construction of 667 miles of road, commencing at the one-hundredth meridian, at prices ranging from $42,000 per mile, for the first hundred miles, to $96,000 per mile. It has been alleged by some, that there was an understanding between the officers of these two companies, that this contract, known as the Ames contract, should be assigned by him for the benefit of the Credit Mobilier. By others it was claimed that it was only an implied understanding. But the facts show that reliance was placed solely upon the honor of Mr. Ames to make the assignment for the benefit of all. However this may be, whether the understanding was expressed or implied, or whether there was no understanding at all, it is hardly material; for within two months from the signing of the contract by Mr. Ames, it was assigned to seven persons as trustees, for the benefit of the stockholders of the Credit Mobilier. We shall consider the nature of this assignment a little further on. These trustees were among the principal stockholders and directors of the Credit Mobilier and the Union Pacific Railroad Company, and under their direction, that portion of the Union Pacific Railroad embraced in the Ames contract was completed.

That this contract may be fully understood, as well as the assignment to the trustees, they will each be set out in full.

IV.

THE AMES CONTRACT AND ASSIGN

MENT

THE OAKES AMES CONTRACT.

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 100th meridian of longitude, upon the following terms and conditions, to wit:

Ist 100 miles at, and for the rate of $42,000 per mile. 2d 167 miles at, and for the rate of $45,000 per mile. 3d 100 miles at, and for the rate of $96,000 per mile. 4th 100 miles at, and for the rate of $80,000 per mile. 5th 100 miles at, and for the rate of $90,000 per mile. 6th 100 miles at, and for the rate of $96,000 per mile.