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Mr. Ames was prevailed upon to take the contract. In taking it his motives were high, honorable, and patriotic. The road was a public, a national necessity. To falter now, the consequences might be the abandonment for generations of any attempt to cross the continent by means of a railroad. Mr. Ames considered well the responsibility he assumed. He believed also that by proper management the road could be built at the contract price, so that a small profit could be realized to the contractor, and he firmly believed that when the road was once completed the increase of business along its line would make its securities valuable. There was one condition he imposed, and that was that the contract must receive the assent of every stockholder of the Union Pacific Railroad, in writing When the question was raised as to the manner in which this mighty contract was to be executed, Mr. Ames insisted that he must take the contract untrammeled by any promise, agreement, or understanding. He could tell no man what he would do. "Of course," said Mr. Ames, "I must have associates, but no man shall be wronged, no one shall be deprived of his rights. I am an honest man, and I will see that every man is protected."

V.

THE ASSIGNMENT TO SEVEN TRUS

BOTH

TEES.

OTH sides to the controversy which made this contract necessary, placed the utmost confidence in Mr. Ames, and in the integrity of his character, and were sure that the rights of all would be protected. Thus Mr. Ames took this great contract, with no agreement, understanding, or promise. He made none, and none was exacted of him. Yet all felt a confidence in him that the contract would be so used that the interests of all should be guarded. The contract properly belonged to the Credit Mobilier, which had commenced the construction of the road, and had continued it up to the date of the contract. Its entire capital had been absorbed in that work, and not one cent of returns had been made to the stockholders. What profit there was, if any had been made, had been misappropriated by those who had formerly held the management. $3,750,000, which those stockholders had paid for the capital stock of that company, were now in the Union Pacific roadbed. That road had reaped the benefit, while the men who paid the money had nothing to show for it. This was the view which Mr. Ames took, and he

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determined that this contract should inure to their benefit to them as individuals and not as a corporation. He therefore made his assignment to seven trustees for their benefit, provided they would share with him the responsibility of the contract; and provided also that they were holders of Union Pacific stock. It was an assignment for the benefit of certain specified individuals, those individuals being also stockholders in the Credit Mobilier. This term. was used to designate them, because of its simplicity, and had no relation to the corporation of which they were members. If, instead of the fourth and fifth clauses of the declaration of trust contained in the assignment above, the wording had been "To hold all the rest and residue of the said proceeds and avails for the use and benefit of (here naming each individual stockholder of the Credit Mobilier by name), in the proportion following, to wit, to (here designate the proportion which each was to have, it being the same proportion as the stock owned by him bore to the entire capital stock of the Credit Mobilier, &c.") By doing this the exact object desired would have been obtained, and the connection with the Credit Mobilier unfortunate as it proved to be would have been avoided. Then could have followed the condition about giving proxies, and everything would have been precisely as it was, without the complications that afterwards arose. At this time there were about one hundred stockholders in the Credit Mobilier, and so for convenience the designation of "stockholders in the Credit Mobilier" was used.

Upon these grounds it is that we affirm that the Credit Mobilier had nothing whatever to do with the Ames contract. This position has also been affirmed by the Supreme Court of Pennsylvania, where the Credit Mobilier was sued for taxes to the amount of $1,200,000, upon the dividends declared by the trustees, and it was there decided that the Credit Mobilier had declared no dividends. Could stronger arguments be used than that the State of Pennsylvania decided against its own claim to the amount of more than a million dollars?

Upon this assignment being made, the Union Pacific Railroad Company released Mr. Oakes Ames from any personal liability under the contract he had signed. The great liability which Mr. Ames assumed, in less than two months had entirely vanished, and again he was as free as before he signed it. Under that contract he incurred no liability; he did not even enter upon the fulfilling of the contract, but for these two months it lay dormant; in fact, for nearly this entire time it was inoperative. It needed the written assent of all the stockholders of the Union Pacific Railroad, and this assent was not obtained until after the first of October. So that in fact and in reality, the personal liability of Oakes Ames under the contract amounted to nothing. There was, however, a difference in one respect which should be noticed, and which, indeed, has a very powerful bearing upon not only the liability of Oakes Ames, but of every beneficiary under the contract. One condition which Mr. Oakes Ames

insisted upon before he would accept the contract was, that it should receive the assent in writing of every stockholder of the Union Pacific Railroad. This was obtained. He then assigned the contract to the trustees, and then the agreement which all the stockholders in both companies made, made them each individually liable under that contract. Though Oakes Ames was in reality released from personal liability under the contract by the Union Pacific Railroad Company, upon his assigning the contract, he, in common with all others, again took that liability upon himself, and no man bore the brunt of that liability more than did he. His whole immense fortune was involved in the undertaking; and it came near wrecking him financially. He was at one time forced, by reason of the responsibility under this contract, and his investments therein, to suspend payment in his regular business, and ask for an extension by his creditors. His liabilities at that time amounted to some $8,000,000. But, with a courage seldom, if ever equalled, he continued on in this enterprise, and at last was successful, and saw the road completed. In time all his creditors were fully satisfied.

From this time forth the control of the Union Pacific Railroad passed from the hands of its directors and officers, into the hands of the seven trustees who were constructing the road, and into their hands, irrevocable powers of attorney had been given by the stockholders to vote upon their shares, thus enabling them to hold absolute control so long as they should desire. Certainly they were not long in understanding

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