The Crédit Mobilier scandal of 1872-1873 damaged the careers of several politicians of the Golden Age. In one of the nation’s first political corruption scandals, a number of members of the US Congress, including the vice president, faced intense scrutiny and public outrage when he was revealed that Credit Mobilier, a fake construction company set up to build the Union Pacific Railroad, was funded with fraudulent bonds and used stock to bribe officials, resulting in big profits for its shareholders.
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The bogus Crédit Mobilier of America (its misleading name was based on the influential French bank Crédit Mobilier, but was unrelated to it), ran a fraudulent scheme from 1864 to 1867, in which Union Pacific executives Railroad defrauded the US government. over $44 million, overcharging for railroad construction costs and expenses, bribery of senior officials, and manipulation of contracts.
Led by Thomas C. Durant of Union Pacific, the executives, who were also Credit Mobilier investors, worked with U.S. Representative Oakes Ames, a Republican from Massachusetts, to sell beneficial stock to a number of members of Congress. , including the president at the time. of the House Schuyler Colfax, who was elected vice president on a ticket with Ulysses S. Grant in 1868. Officials were offered cheap stock options and payouts in return for no oversight of the company as well as the approval of subsidies and various decisions that would keep the real costs of the railways lower than they claimed.
“We want more friends in this Congress, and if a man wants to lean into the law (and it’s hard to get them to do that unless they have an interest in doing so), he can’t keep from being convinced that we should not be interfered with,” Ames wrote in a letter to investor Henry S. McComb, according to the Washington Post.
Acting on a tip from a disgruntled McComb, who had been denied shares by Ames, the New York Sun The newspaper published an expose of the scandal on September 4, 1872. Naming the members of Congress involved – and central to President Grant’s re-election campaign – the story included correspondence between McComb and Ames and reported that the fictitious company had received $72 million in rail. construction contracts when only $53 million was actually spent.
“Credit Mobilier stock speculation shows that corruption exists in high places,” the Missouri newspaper said. Lincoln County Herald written in December 1872, the Washington Post reports, adding that without public vigilance, “the first we know, we will have been sold to a giant railroad or some other monetary monopoly.”
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Public outrage and numerous editorials led two House committees and one in the Senate to investigate 13 members of Congress in December 1872, with Ames, New York Democratic Representative James Brooks, and Republican Senator James Patterson of New Hampshire, facing eviction.
“A charge of bribery of members is the most serious that can be brought in a legislative body,” said Speaker James Blaine of Maine, who appointed one of the commissions of inquiry at the time. “It seems to me…that this accusation requires a prompt, thorough and impartial investigation.”
Ultimately, Ames and Brooks were censured for using their political influence for personal financial gain in 1873, while everyone else, including Colfax and then-Rep. James A. Garfield, who was later elected president in 1880, and Senator Henry Wilson, who replaced Colfax as Grant’s vice president for re-election in 1872 instead of scandal, were absolved of all charges.
The Grant-Wilson ticket won the presidential election in 1872, but the scandal tarnished the Republican Party and led to widespread public distrust of the American government.
“Well, the wickedness of it all is not that these men were bribed or influenced by corruption, but that they betrayed the trust of the people, deceived their constituents and, by their evasions and lies, confessed that the transaction was disgraceful”, New York Grandstand written on February 19, 1873.
“The Credit Mobilier Scandal”, History, Art and Archives, United States House of Representatives
“The Crédit Mobilier Scandal Unveiled, September 4, 1872”, Politico
“James Patterson Deportation Case”, U.S. Senate
“Buying ‘friends in this Congress’: The smoking gun that sparked a political scandal”, The Washington Post