George Julian and “the King of Frauds”

The final installment in this series on George Julian and Political Recollections.

The Credit Mobilier scandal erupted shortly after George Julian left Congress, but he was familiar with many of the principals players in the drama that ushered in the Gilded Age.

[image error]Rep. George Julian. Library of Congress.

His last term in Congress concluded in 1871, but the central events of the scandal — the sale by Rep. Oakes Ames, R-Mass., of shares in the profitable construction subsidiary of the Union Pacific railroad to other members of Congress — occurred in the winter of 1867-1868 while he was still on Capitol Hill.

In Political Recollections, his memoir of his remarkable life in politics, Julian makes his disdain for corruption plain. But when it comes to the scandal that ushered in the Gilded Age, he offers a very guarded assessment.

“The history of its connection with American politics and politicians,” Julian writes of Credit Mobilier, “forms an exceedingly interesting and curious chapter.”

The sale of Credit Mobilier stock by Ames and Thomas C. Durant had been an open secret on Capitol Hill for years. But it burst into the headlines on Sept. 4, 1872, when the New York Sun published a lengthy expose based on transcripts of court depositions under the headline “King of Frauds.”

[image error]The New York Sun, Sept. 4, 1872

The story detailed testimony by Henry S. McComb, a fellow investor in the Union Pacific who was suing Ames to claim shares of Credit Mobilier to which he believed he was entitled. In the course of his testimony, McComb identified as many as 11 members of Congress who bought the valuable shares at steeply discounted prices — or were able to obtain the shares against promises they would pay Ames after they sold the stock or received dividends.

As McComb pressed Ames for more shares, the Massachusetts Republican wrote three ill-advised letters in which he explained that he was selling the stock to extend the influence of Credit Mobilier on Capitol Hill. “We want more friends in this Congress,” Ames confided in one, “and if a man will look into the law (& it is difficult to do so unless they have an interest to do so) he cannot help being convinced that we should not be interfered with.”

[image error]Henry S. McComb.

The disclosure shocked the Chicago Tribune, which pointed to it as evidence of the need for a “general cleaning out of the whole establishment.”

Julian was known to his contemporaries as a master of invective. “There were few men I have known who could use the English language more successfully in the way of bitterness toward his adversaries,” wrote Jeremiah Wilson, like Julian and Indiana Republican and one of the lead investigators of the scandal.

Therein may be the key to his measured assessment of the affair that consumed Washington in the winter of 1872-1873. Several of the principals in the scandal had been political allies and friends. Horace Greeley, one of his political heroes — a man he followed out of the Republican Party and into the ranks of the Democrats — seized on the scandal as evidence of widespread rot in Washington that required “purification.”

Julian had friends on both sides.

He regarded Ames, for example, with fondness. “Oakes Ames was one of the members of the House with whom I was best acquainted,” Julian writes. He adds:

I thought I knew him well, and I never had the slightest reason to suspect his public or private integrity. Personally and socially he was one of the kindliest men I ever knew, and I was greatly surprised when I learned of his connection to the Credit Mobilier project.

John Bingham, the Ohio Republican who helped write the Fourteenth Amendment, numbered among those who bought Credit Mobilier shares from Ames. When he testified before the committee investigating the scandal, Bingham conceded that he bought the stock and profited handsomely from the transaction. Moreover, he acknowledged that he wrote legislation that helped Ames and his Union Pacific allies by moving the headquarters of the congressionally chartered railroad from New York to Boston. Bingham insisted that the committee include a text of the bill in its record.

“He was often dogmatic and lacking in coolness and balance, but in later years he showed uncommon tact in extricating himself from the odium threatened by his connection with the Credit Mobilier scheme,” Julian wrote of Bingham.

Julian encountered James Brooks long before he met Ames or Bingham — and long before Brooks was a Democrat. As a young man, Julian saw Brooks — then a Whig — campaigning for William Henry Harrison in Indiana in 1840. Brooks became a Democrat as the Whig Party collapsed in the 1850s representing New York. Unlike most of the others implicated in the scandal, he bought his shares from Thomas C. Durant.

[image error]Rep. James Brooks. Library of Congress.

“He was a man of ability … and a bitter partisan” who viewed Black Americans with contempt, Julian remembered. “[B]ut I never saw any reason to doubt his personal integrity, and I think the affair that threw so dark a cloud over his reputation in later years was a surprise to all who knew him.”

These sober, charitable assessments of the principals in the scandal might suggest that Julian thought it amounted to nothing. But that would be wrong.’

Regarding the figures involved in the affair he writes:

The fate of the men involved in it seems like a perfect travesty of justice and fair play. Some of them have gone down under the waves of popular condemnation. Others, occupying substantially the same position, according to the evidence, have made their escape and even been honored and trusted by the public, while still others are still quietly whiling away their lives under the shadow of suspicion.

And he was correct. Ames and Brooks went to their graves with their reputations permanently scarred soon after the Forty-Second Congress adjourned and the investigation into the scandal entered the history books. James A. Garfield, who bought shares from Ames, went to the White House. Bingham, as Julian noted, escaped with his reputation intact. Schuyler Colfax, Julian’s fellow Hoosier, was vice president when it was revealed that he numbered among the beneficiaries of Ames’s largess. His attempts to clear his name failed miserably, and his reputation never recovered.

When it came to Credit Mobilier, justice was haphazard at best.

[image error]Rep. Oakes Ames.

Although he does not address Credit Mobilier except in the most general terms, Julian ends his memoir with a warning about the direction of American politics that was clearly informed by the same concerns that troubled Luke Potter Poland, the Vermont Republican who led the investigation into the scandal. As the House debated whether to sanction Brooks and Ames for their role in the scandal, Poland warned that Credit Mobilier raised disturbing questions about the nefarious sway of “money power” in the halls of government.

Writing a decade later about the state of American politics, Julian saw the same danger.

“Commercial feudalism, wielding its power through great corporations which are practically endowed with life offices and the right of hereditary succession and control the makers and expounders of our laws, must be subordinated to the will of the people,” Julian declared.

On the big issues raised by the Credit Mobilier scandal, there was no doubt where Julian stood.