“A Profound Sensation”
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On Feb. 18, 1873, the Credit Mobilier scandal got real.
The findings of the first – and most significant – of the three investigations into the sale of lucrative stock in the Union Pacific construction subsidiary to members of Congress went to the House. Rep. Luke Potter Poland, the Vermont Republican who led the investigation, had a rapt audience.
“The absorbing interest with which this report is looked for,” the National Republican reported, “is without precedent in the annals of Congress.”
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Rep. Luke Potter Poland. Library of Congress photo.
The drama began Sept. 4, 1872, when the New York Sun published lengthy excerpts of deposition testimony from a lawsuit filed by a Credit Mobilier investor against Rep. Oakes Ames of Massachusetts. Henry S. McComb alleged that Ames sold Credit Mobilier stock his colleagues in Congress – and presented letters showing that Ames did so intending to promote the interests of Credit Mobilier’s parent company, the Union Pacific.
“We want more friends in this Congress,” Ames confided to McComb in one of the letters, “& if a man will look into the law (& it is difficult to get them to do so unless they have an interest to do so,) he cannot help being convinced that we should not be interfered with.”
The Sun’s blockbuster exposé reverberated for months. Poland’s committee went to work behind closed doors in December– and then opened its proceedings in January after the press and public demanded that the investigation be conducted in public. Two other committees – one in the House and the other in the Senate – subsequently launched their own investigations of Credit Mobilier. But Poland’s committee, charged by the House with investigating “whether any member of this House was bribed by Oakes Ames, or any other person or corporation, in any matter touching his legislative duty,” was the most significant.
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The New York Sun, Sept. 4, 1872.
On Feb. 18, the House gallery was packed with what some reports characterized as the biggest crowd since the days of President Johnson’s impeachment in 1868. After the House waded through some of the legislative trivia that crowds its calendar, Poland stood at his desk, shuffled some papers and signaled that he was ready for his committee’s report to be shared with the House.
It was a moment of high drama. Over the course of the next hour, the House Clerk read the findings. “The report produced a profound sensation and was listened to with silence and painful interest,” James A. Garfield noted in his diary.
The report started strong, with a thorough review of the history of Ames’s transactions with his colleagues. Most of the lawmakers with whom Ames dealt had denied buying Credit Mobilier shares or claimed that they pulled out shortly after agreeing to purchase the stock. Poland’s committee dismissed these claims and concluded that most had indeed obtained shares from the Massachusetts Republican. Notable findings involved:
Henry Dawes of Massachusetts, who bought $1,000 and received $400 in dividends.
Glenni Scofield of Pennsylvania, who agreed to buy $1,000 in Credit Mobilier stock and $600 in cash dividends.
Garfield, the future president, and William D. “Pig Iron” Kelley of Pennsylvania, each of whom bought Credit Mobilier shares on credit from Ames and received $329 in dividend payments after the purchase price of the stock was deducted.
John Bingham of Ohio, who admitted buying Credit Mobilier shares when he testified to the Poland Committee, bought $2,000 in Credit Mobilier stock and received Union Pacific stock as dividend payments.
New York Democrat James Brooks, who bought 150 shares from Thomas C. Durant and the company while serving as a government –appointed director of the Union Pacific. “As such it was his duty to guard and watch over the interests of the Government in the road and to see that they were protected and preserved.”
The report followed the stunning findings with a damning observation. It acknowledged that a number of lawmakers abruptly closed their accounts with Ames. “But the committee believe that they must have felt that there was something so out of the ordinary course of business in the extraordinary dividends they were receiving as to render the investment itself suspicious, and that this was one of the motives of their action.”
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Thomas Nast in Harper’s Weekly renders his verdict on the Credit Mobilier scandal. Library of Congress image.
At this point, it may well have seemed to many in the House that the committee was going to land hard on everyone involved.
Then it pulled back. Immediately after noting the suspicious haste with which members backed out of their Credit Mobilier investments, the report declared that it had “not been able to find that any of these members of Congress have been affected in their official action in consequence of their interest in Credit Mobilier stock.”
That’s because the committee never looked for such evidence. The record suggest at least one member, Henry Dawes, introduced legislation to aid Ames shortly after buying Credit Mobilier stock in 1867. He was never questioned about it.
Poland’s committee called for the expulsion of Ames and Brooks but left everyone else off the hook. “All looked relieved when they found that they came in for no censure,” the New York Tribune reported.
The finding reflected an emerging view on Capitol Hill that the scandal was much ado about nothing. The lawmakers implicated in the scandal may have escaped punishment for their role, but it may have been too soon to relax. In the view of the New York Times, members involved deserved to face “some well-defined measure of condemnation.”
I am going on the road in the next several months to talk about the Credit Mobilier scandal — at Scuppernong Books in Greensboro, N.C., on March 27 and then Common Good Books in St. Paul, Minn., on April 27. If you’re not able to attend, then you can find Congress and the King of Frauds: Corruption and the Credit Mobilier Scandal at the Dawn of the Gilded Age at amazon.com
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