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

by Thomas V. Cooper; Hector T. Fenton

The facts in regard to Mr. Garfield, as found by the committee, are identical with the case of Mr. Kelley to the point of reception of the check for $329. He agreed with Mr. Ames to take ten shares of Credit Mobilier stock, but did not pay for the same. Mr. Ames received the 80 per cent. dividend in bonds and sold them for 97 per cent., and also received the 60 per cent. cash dividend, which together paid the price of the stock and interest, and left a balance of $329. This sum was paid over to Mr. Garfield by a check on the Sergeant-at-Arms, and Mr. Garfield then understood this sum was the balance of dividends after paying for the stock. Mr. Ames received all the subsequent dividends, and the committee do not find that, since the payment of the $329, there has been any communication between Mr. Ames and Mr. Garfield on the subject until this investigation began. Some correspondence between Mr. Garfield and Mr. Ames, and some conversations between them during this investigation, will be found in the reported testimony.

The committee do not find that Mr. Ames, in his negotiations with the persons above named, entered into any detail of the relations between the Credit Mobilier Company and the Union Pacific Company, or gave them any specific information as to the amount of dividends they would be likely to receive further than has been already stated. They all knew from him, or otherwise, that the Credit Mobilier was a contracting company to build the Union Pacific road, but it does not appear that any of them knew that the profits and dividends were to be in stock and bonds of that company.

The Credit Mobilier Company was a State corporation, not subject to congressional legislation, and the fact that its profits were expected to be derived from building the Union Pacific road did not, apparently, create such an interest in that company as to disqualify the holder of Credit Mobilier stock from participating in any legislation affecting the railroad company. In his negotiations with these members of Congress, Mr. Ames made no suggestion that he desired to secure their favorable influence in Congress in favor of the railroad company, and whenever the question was raised as to whether the ownership of this stock would in any way interfere with or embarrass them in their action as members of Congress, he assured them it would not.

The committee, therefore, do not find, as to the members of the present House above named, that they were aware of the object of Mr. Ames, or that they had any other purpose in taking this stock than to make a profitable investment. It is apparent that those who advanced their money to pay for their stock present more the appearance of ordinary investors than those who did not, but the committee do not feel at liberty to find any corrupt purpose or knowledge founded upon the fact of non-payment alone.

It ought also to be observed that those gentlemen who surrendered their stock to Mr. Ames before there was any public excitement upon the subject, do not profess to have done so upon any idea of impropriety in holding it, but for reasons affecting the value and security of the investment. 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.

The committee have 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.

It has been suggested that the fact that none of this stock was transferred to those with whom Mr. Ames contracted was a circumstance from which a sense of impropriety, if not corruption, was to be inferred. The committee believe this is capable of explanation without such inference. The profits of building the road, under the Ames contract, were only to be divided among such holders of Credit Mobilier stock as should come in and become parties to certain conditions set out in the contract of transfer to the trustees, so that a transfer from Mr. Ames to new holders would cut off the right to dividends from the trustees, unless they also became parties to the agreement; and this the committee believe to be the true reason why no transfers were made.

The committee are also of opinion that there was a satisfactory reason for delay on Mr. Ames’s part to close settlements with some of these gentlemen for stock and bonds he had received as dividends upon the stock contracted to them. In the fall of 1868 Mr. McComb commenced a suit against the Credit Mobilier Company, and Mr. Ames and others, claiming to be entitled to two hundred and fifty shares of the Credit Mobilier stock upon a subscription for stock to that amount. That suit is still pending. If McComb prevailed in that suit, Mr. Ames might be compelled to surrender so much of the stock assigned to him as trustee, and he was not therefore anxious to have the stock go out of his hands until that suit was terminated. It ought also to be stated that no one of the present members of the House above named appears to have had any knowledge of the dealings of Mr. Ames with other members.

The committee do not find that either of the above named gentlemen, in contracting with Mr. Ames, had any corrupt motive or purpose himself, or was aware that Mr. Ames had any, nor did either of them suppose he was guilty of any impropriety or even indelicacy in becoming a purchaser of this stock. Had it appeared that these gentlemen were aware of the enormous dividends upon this stock, and how they were to be earned, we could not thus acquit them. And here as well as anywhere, the committee may allude to that subject. Congress had chartered the Union Pacific road, given to it a liberal grant of lands, and promised a liberal loan of Government bonds, to be delivered as fast as sections of the road were completed. As these alone might not be sufficient to complete the road, Congress authorized the company to issue their own bonds for the deficit, and secured them by a mortgage upon the road, which should be a lien prior to that of the Government. Congress never intended that the owners of the road should execute a mortgage on the road prior to that of the Government, to raise money to put into their own pockets, but only to build the road.

The men who controlled the Union Pacific seem to have adopted as the basis of their action the right to encumber the road by a mortgage prior to that of the Government to the full extent, whether the money was needed for the construction of the road or not.