American politics (non-partisan) from the beginning to date

by Thomas V. Cooper; Hector T. Fenton

The foregoing statement the committee think gives enough of the historic details, and condition and value of the stock, to make the following detailed facts intelligible.

Mr. Oakes Ames was then a member of the House of Representatives, and came to Washington at the commencement of the session, about the beginning of December, 1867. During that month Mr. Ames entered into contracts with a considerable number of members of Congress, both Senators and Representatives, to let them have shares of stock in the Credit Mobilier Company at par, with interest thereon from the first day of the previous July. It does not appear that in any instance he asked any of these persons to pay a higher price than the par value and interest, nor that Mr. Ames used any special effort or urgency to get these persons to take it. In all these negotiations Mr. Ames did not enter into any details as to the value of the stock or the amount of dividend that might be expected upon it, but stated generally that it would be good stock, and in several instances said he would guarantee that they should get at least 10 per cent. on their money.

Some of these gentlemen, in their conversations with Mr. Ames, raised the question whether becoming holders of this stock would bring them into any embarrassment as members of Congress in their legislative action. Mr. Ames quieted such suggestions by saying it could not, for the Union Pacific had received from Congress all the grants and legislation it wanted, and they should ask for nothing more. In some instances those members who contracted for stock paid to Mr. Ames the money for the price of the stock, par and interest; in others, where they had not the money, Mr. Ames agreed to carry the stock for them until they could get the money or it should be met by the dividends.

Mr. Ames was at this time a large stockholder in the Credit Mobilier, but he did not intend any of these transactions to be sales of his own stock, but intended to fulfill all these contracts from stock belonging to the company.

At this time there were about six hundred and fifty shares of the stock of the company, which had for some reason been placed in the name of Mr. T. C. Durant, one of the leading and active men of the concern.

Mr. Ames claimed that a portion of this stock should be assigned to him to enable him to fulfill engagements he had made for stock. Mr. Durant claimed that he had made similar engagements that he should be allowed stock to fulfill. Mr. McComb, who was present at the time, claimed that he had also made engagements for stock which he should have stock given him to carry out. This claim of McComb was refused, but after the stock was assigned to Mr. Ames, McComb insisted that Ames should distribute some of the stock to his (McComb’s) friends, and named Senators Bayard and Fowler, and Representatives Allison and Wilson, of Iowa.

It was finally arranged that three hundred and forty-three shares of the stock of the company should be transferred to Mr. Ames to enable him to perform his engagements, and that number of shares were set over on the books of the company to Oakes Ames, trustee, to distinguish it from the stock held by him before. Mr. Ames at the time paid to the company the par of the stock and interest from the July previous, and this stock still stands on the books in the name of Oakes Ames, trustee, except thirteen shares which have been transferred to parties in no way connected with Congress. The committee do not find that Mr. Ames had any negotiation whatever with any of these members of Congress on the subject of this stock prior to the commencement of the session of December, 1867, except Mr. Scofield, of Pennsylvania, and it was not claimed that any obligation existed from Mr. Ames to him as the result of it.

In relation to the purpose and motives of Mr. Ames in contracting to let members of Congress have Credit Mobilier stock at par, which he and all other owners of it considered worth at least double that sum, the committee, upon the evidence taken by them and submitted to the House, cannot entertain doubt. When he said he did not suppose the Union Pacific Company would ask or need further legislation, he stated what he believed to be true. But he feared the interests of the road might suffer by adverse legislation, and what he desired to accomplish was to enlist strength and friends in Congress who would resist any encroachment upon or interference with the rights and privileges already secured, and to that end wished to create in them an interest identical with his own. This purpose is clearly avowed in his letters to McComb, copied in the evidence. He says he intends to place the stock “where it will do most good to us.” And again, “we want more friends in this Congress.” In his letter to McComb, and also in his statement prepared by counsel, he gives the philosophy of his action, to wit, “That he has found there is no difficulty in getting men to look after their own property.” The committee are also satisfied that Mr. Ames entertained a fear that, when the true relations between the Credit Mobilier Company and the Union Pacific became generally known, and the means by which the great profits expected to be made were fully understood, there was danger that congressional investigation and action would be invoked.

The members of Congress with whom he dealt were generally those who had been friendly and favorable to a Pacific Railroad, and Mr. Ames did not fear or expect to find them favorable to movements hostile to it; but he desired to stimulate their activity and watchfulness in opposition to any unfavorable action by giving them a personal interest in the success of the enterprise, especially so far as it affected the interest of the Credit Mobilier Company. On the 9th day of December, 1867, Mr. C. C. Washburn, of Wisconsin, introduced in the House a bill to regulate by law the rates of transportation over the Pacific Railroad.

Mr. Ames, as well as others interested in the Union Pacific road, was opposed to this, and desired to defeat it. Other measures apparently hostile to that company were subsequently introduced into the House by Mr. Washburn of Wisconsin, and Mr. Washburne of Illinois. The committee believe that Mr. Ames, in his distributions of stock, had specially in mind the hostile efforts of the Messrs. Washburn, and desired to gain strength to secure their defeat. The reference in one of his letters to “Washburn’s move” makes this quite apparent.