Credit Mobilier Scandal essays

Credit Mobilier Scandal essays In 1865 just after Civil War plans of reconstruction of the Union were on the minds of every government official as their first priority, or so it seemed. After the war anything that would boost patriotism was passed by Congress and a transcontinental railroad was a that would help heal the wounded Union. Credit Mobilier Corporation was given land grants from the government to complete the transcontinental railroad. The company arranged with several partners to help with the construction of the railroad. The real scandal took place in the House of Representatives, where Oakes Ames sold stock at par value. In the investigation of the Credit Mobilier, only two men suffered disciplinary action from the Judiciary committee. When the railroad was completed to the 100th meridian in 1869, the two brothers split the company into two fractions. Oakes took charge of Credit Mobilier, Oliver took control of the Union Pacific. Lincoln advised Ames to take over the Union Pacific construction and transcontinental railroad in which he could gains funds necessary for the completion of the railroad. Both Union Pacific and Central Pacific received large government grants to build the railroad. Each road received a thirty-year loan of government bonds to value twenty seven million dollars. Federal money was needed because of the huge risk in providing capital which was going to build across forbidden terrain, and this kind and amount of money could only be provided by the government. The first two hundred and twenty-eight miles of track under the Ames contract had been constructed at $27,500 per/mile. The new contract specified a per/mile cost of $43,500. This exorbitant increase carried huge profits as a result of the scandal. On November 21, 1867, Oakes Ames sold one hundred and sixty shares of Credit Mobilier stock at a minimum rate to Senators and Congressmen in fear that his fellow constituents would reject the Union Pacific-Credit Mobil...