CPRR.org Header.lbi" -->
"There ought to be some other form of fiction provided to the public other than that which comes from Congress." —Michael Crichton, National Press Club, November 28, 2006
"The political and commercial morals
of the United States are not merely food for laughter, they are an entire
It could probably be shown by facts and figures that there is no distinctly native American criminal class except Congress." —Mark Twain
"A Complete and Graphic Account
of the Crédit Mobilier Investigation"
from "Behind the Scenes in Washington"
By Edward Winslow Martin
The Continental Publishing Company and National Publishing Co.
THE CREDIT MOBILIER.
History of the Crédit Mobilier – Its connection with the Pacific Railway – The Oakes Ames Contract – Liberality of the Government towards the Road – A sharp Transaction Bleeding the Government – Congressional Aid – The kind of Aid needed – "We want more Friends in Congress" – Ames undertakes to manage Congress – "Satan in Paradise" – How Ames let his Congressional Friends into a "Good Thing" – History of the Purchase of the Stock – The Crédit Mobilier cheats the Government again – Estimate of the Profits of the Crédit Mobilier – Where the Money came from – How to win Friends in Congress – Quarrel between McComb and Ames – Letting the Cat out of the Bag – Charges against Congressmen – Indignant denials of the Crédit Mobilier Congressmen – "We never owned any Stock" – Fatal Mistake of the Congressmen – A he out somewhere – Meeting of Congress – Demand for an Investigation – The real Issue – Report of the Committee – A pitiful Affair – Congressmen convicted of Falsehood – The Innocents in Congress – Detailed Statement of the Facts in the Case of each Congressman – The two Victims – A Congressional Committee trying to humbug the People – The Truth of the Matter – The Crédit Mobilier Senators – The Facts in each Case – The Evils of a had Memory – Oakes Ames's Note-book – Senator Patterson's Documents – The Case of Mr. Colfax – Detailed Statement of it – Terrible Chain of Circumstantial Evidence – The Vice-President's Dilemma.
ONE of the great public works of the Union, of which the whole country is justly proud, is the Pacific Railway, extending from the Missouri River to the Pacific Ocean. The early history of the great road is a story of constant struggles and disappointments. It seemed to the soundest capitalists a mere piece of fool-hardiness to undertake to build a railroad across the continent and over the Rocky Mountains, and, although Government aid was liberally pledged to the undertaking, it did not, for a long time, attract to it the capital it needed. At length, after many struggles, the doubt which had attended the enterprise was ended. Capital was found, and with it men ready to carry on the work. In September, 1864, a contract was entered into between the Union Pacific Company, and H. W. Hoxie for the building, by said Hoxie of one hundred miles of the road, from Omaha west. Mr. Hoxie at once assigned this contract to a company, as had been the understanding from the first. This company, then comparatively unknown, but since very famous, was known as the Crédit Mobilier of America. The company had bought up an old Charter that had been granted by the Legislature of Pennsylvania to another company in that State, but which had not been used by them.
"In 1865 or 1866, Oakes Ames, then and now a Member of Congress from the State of Massachusetts, and his brother Oliver Ames, became interested in the Union Pacific Company, and also in the Crédit Mobilier Company, as the agent for the construction of the road. The Messrs. Ames were men of very large capital, and of known character and integrity in business. By their example and credit and the personal efforts of Mr. Oakes Ames, many men of capital were induced to embark in the enterprise, and to take stock in the Union Pacific Company and also in the Crédit Mobilier Company. Among them were the firm of S. Hooper & Co. of Boston, the leading member of which (Mr. Samuel Hooper) was then and is now a member of the House; Mr. John B. Alley, then a member of, the House from Massachusetts, and Mr. James W. Grimes, then a Senator from the State of Iowa. Notwithstanding the vigorous efforts of Mr. Ames and others interested with him, great difficulty was experienced in securing the required capital.
"In the Spring of 1867, the Crédit Mobilier Company voted to add 50 per cent. to their capital stock, which was then $2,500,000, and to cause it to be readily taken, each subscriber to it was entitled to receive as a bonus an equal amount of first mortgage bonds of the Union Pacific Company. The old stockholders were entitled to take this increase, but even the favorable terms offered did not induce all the old stockholders to take it, and the stock of the Crédit Mobilier Company was never considered worth its par value until after the execution of the Oakes Ames contract hereinafter mentioned. On the 16th day of August, 1867, a contract was executed between the Union Pacific Railroad and Oakes Ames, by which Mr. Ames contracted to build 667 miles of the Union Pacific Road at prices ranging from $42,000 to $96,000 per mile, amounting in the aggregate to $47,000,000. Before the contract was entered into, it was understood that Mr. Ames was to transfer it to seven trustees who were to execute it, and the profits of the contract were to be divided among the stockholders in the Crédit Mobilier Company, who should comply with certain conditions set out in the instrument transferring the contract to the trustees. Subsequently, all the stockholders of the Crédit Mobilier Company complied with the conditions named in the transfer, and thus became entitled to share in any profits said trustees might make in executing the contract. All the large stockholders in the Union Pacific were also stockholders in the Crédit Mobilier, and the Ames contract and its transfer to trustees, were ratified by the Union Pacific and received the assent of the great body of stockholders, but not of all. After the Ames contract had been executed, it was expected by those interested that, by reason of the enormous prices agreed to be paid for the work, very large profits would be derived from building the road, and very soon the stock of the Crédit Mobilier was understood to be worth much more than its par value. The stock was not in the market, and had no fixed market value, but the holders of it, in December, 1867, considered it worth at least double the par value, and in January or February, 1868, three or four times the par value; but it does not appear that these facts were generally or publicly known, or that the holders of the stock desired they should be."
As will be seen from the above statement, the stockholders of the Crédit Mobilier were also stockholders in the Union Pacific Company.
Like all great corporations of the present day, the Union Pacific Road was largely dependent upon the aid furnished by the Government for its success. The managers of the company, being shrewd men, succeeded in placing all the burdens and risks of the enterprise upon the General Government, while they secured to themselves all the profits to be derived from the undertaking. "The Railroad Company was endowed by Act of Congress with 20 alternate sections of land per mile, and had Government loans of $16,000 per mile for about 200 miles; thence $32,000 per mile, through the Alkali Desert, about 600 miles, and thence in the Rocky Mountains $48,000 per mile. The Railroad Company issued stock to the extent of about $10,000,000. This stock was received by stockholders on their payment of five per cent.of its face. When the Crédit Mobilier came on the scene, all the assets of the Union Pacific were turned over to the new company in consideration of full paid shares of the new company's stock and its agreement to build the road. The Government, meanwhile, had allowed its claim for its loan of bonds to become a second instead of a first mortgage, and permitted the Union Pacific Road to issue first mortgage bonds, which took precedence as a lien on the road. The Government lien thus became almost worthless, as the new mortgage which took precedence amounted to all the value of the road. The proceeds of this extraordinary transaction went to swell the profits of the Crédit Mobilier, which had nothing to pay out except for the mere cost of construction. This also explains why some of the dividends of the latter company were paid in,Union Pacific bonds. As a result of these processes, the bonded debts of the railroad exceeded its cost by at least $40,000,000."
Mr. Ames was deeply interested in the scheme, being, indeed, one of its principal managers. Being a Member of Congress, be was peculiarly prepared to appreciate the value of Congressional assistance in behalf of the Crédit Mobilier. It would seem that the object of the Crédit Mobilier was to drain money from the Pacific Road, and consequently from the Government, as long as possible. Any legislation on the part of Congress designed to protect the interests of the Government, would, as a matter of course, be unfavorable to the Crédit Mobilier, and it was the aim of that Corporation to prevent all such legislation. The price agreed upon for building the road was so exorbitant, and afforded such an iniquitous profit to the Crédit Mobilier, that it was very certain that some honest friend of the people would demand that Congress should protect the Treasury against such spoliation. It was accordingly determined to interest in the scheme enough Members of Congress to prevent any protection of the National Treasury at the expense of the unlawful gains of the Crédit Mobilier. Mr. Oakes Ames, being in Congress, undertook to secure the desired hold upon his associates. The plan was simply to secure them by bribing them, and for this purpose, a certain portion of the Crédit Mobilier stock was placed in the bands of Mr. Ames, as trustee, to be used by him as be thought best for the interests of the company.
Frontispiece from "Behind the Scenes in Washington"
(Click on image to see full size.)
Provided with this stock, Mr. Ames went to Washington in December, 1867, at the opening of the session of Congress. "During that month," say the Poland Committee in their report, "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 Crédit Mobilier Company at par, with interest thereon from the first day of the previous July. It does not appear that in any instance be 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 Crédit Mobilier, but be did not intend any of those transactions to be sales of his own stock, but intended to fulfill all these contracts from stock belonging to the company."
"It is very easy," says the New York Tribune, to see that under these circumstances the stock of the Crédit Mobilier was a very handsome investment, provided it could be purchased at par. Here was wherein Oakes Ames was such a profitable friend to Congressmen and Senators. He let them in, as he phrases it, on the ground floor. They got their stock at par, and the dividends which were ready to be paid were more than enough to pay for the stock. This is what is called in Wall Street parlance making one hand wash the other. The actual value of the stock thus sold at $100 a share would have been to anybody out of the circle of Oakes Ames's friends not purchasable for less than $300 or $400. But there was a film of decency thrown over the transaction by Mr. Ames, in charging several months' interest upon the stock at the time it was sold to the Members of Congress. This interest had accrued while he was holding it to see where it could be placed to the best advantage."
The motive of Mr. Ames in thus "placing," as he termed it, this immensely profitable stock among the Members of Congress, is thus stated by the Poland Committee:
"In relation to the purpose and motive of Mr. Ames in contracting to let Members of Congress have Crédit 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 a doubt. When he said he did not suppose the Union Pacific Company would ask or need further legislation, he stated what be 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, 'where he says he intends to place the stock where it will do the 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 Crédit 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 Crédit 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 Railroads. Mr. Ames, as well as others interested in the Union Pacific Road, were 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. E. B. Washburn, of Illinois. The Committee believe that Mr. Ames, in his distribution of the 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."
"The more recent legislation," says the New York Tribune, "which Ames's transactions with Members of Congress had reference to, may be stated in a few words. Treasury Secretary George S. Boutwell insisted that half the earnings of the road in carrying mails and troops for the Government should be applied to the payment of interest on the loans that the Government had made to the road. The legislation obtained overruled the Secretary and enabled the road to postpone payment of interest until the bonds fell due – some thirty years hence. To sum up, it may be briefly stated that the Union Pacific and Crédit Mobilier together got the proceeds of liberal United States land grants, of donations of communities near the road, and the entire subsidy of Government bonds, as a clear profit. The proceeds of the mortgage bonds which displaced the Government lien, were sufficient to have built the road. To the original stockholders in the Union Pacific, the profit was something almost incredible. A share bought for $5 subscription became $100 Crédit Mobilier, which paid, as we have seen in the evidence concerning the Legislators who received it, dividends that amounted to at least treble its nominal value. It is of course evident that all legislation which favored the Union Pacific Railroad swelled the profits of the Legislators who became stockholders in the Crédit Mobilier. The awkwardness of this position was vastly increased by the thin disguise of purchase being torn away, under which the profit-bearing stock had been really the gift of Oakes Ames. The denial of the facts converted the transaction into a criminal act."
Reduced to plain English, the story of the Crédit Mobilier is simply this: The men entrusted with the management of the Pacific road made a bargain with themselves to build the road for a sum equal to about twice its actual, cost, and pocketed the profits, which have been estimated at about THIRTY MILLIONS OF DOLLARS – this immense sum coming out of the pockets of the tax payers of the United States. This contract was made in October, 1867.
"On June 17, 1868, the stockholders of the Crédit Mobilier received 60 per cent. in cash, and 40 per cent. in stock of the Union Pacific Railroad; on the 2nd of July, 1868, 80 per cent. first mortgage bonds of the Union Pacific Railroad, and 100 per cent. stock; July 3, 1868, 75 per cent. stock, and 75 per cent. first mortgage bonds; September 3, 1868, 100 per cent. stock, and 75 per cent. first mortgage bonds; December 19, 18682 200 per cent. stock; while, before this contract was made, the stockholders had received, on the 26th of April, 1866, a dividend of 100 per cent. in stock of the Union Pacific Railroad; on the 1st of April, 1867, 50 per cent. of first mortgage bonds were distributed; on the 1st of July, 1867, 100 per cent. in stock again."
After offering this statement, it is hardly necessary to add that the vast property of the Pacific Road, which should have been used to meet its engagements, was soon swallowed up by the Crédit Mobilier.
This is the story of the Crédit Mobilier, as far as the facts have been permitted to become known. We shall now see how it came to make such a noise in the world.
Mr. Ames was not the only member of the company engaged in "placing" the stock where it would benefit the corporation. Dr. Durant, the President of the Pacific Railway, was engaged in securing his friends in the same way, and he received a portion of the stock to be used in this manner. Mr. Henry S. McComb, of Delaware, who was also interested in the scheme, now put in his claim for a part of the stock, which was being used as a corruption fund, "for his friends." His claim involved him in a quarrel with Oakes Ames, and Col. McComb had the mortification of seeing the stock he claimed assigned to Mr. Ames, for the use of his friends.
In the summer of 1872, in the midst of the Presidential Campaign, the quarrel between Ames and McComb reached such a point, that it was impossible to keep it quiet. McComb made public the facts in the case, and published a list of the Congressmen with whom Ames had said he had "placed" the stock, naming the number of shares sold to each. These were: Schuyler Colfax, Vice-President of the United States; Henry Wilson, Senator from Massachusetts; Jas. W. Patterson, Senator from New Hampshire; John A. Logan, Senator from Illinois; James G. Blaine, Member of Congress from Maine, and Speaker of the House of Representatives; W. D. Kelley, of Pennsylvania; James A. Garfield, of Ohio; James Brooks, of New York; John A. Bingham, of Ohio; Henry L. Dawes, of Massachusetts; Glenni W. Scofield, of Pennsylvania, and one or two others, who were not at the time of the exposure Members of Congress.
As may be supposed, the publication of the charges, and the list of names, created a storm of excitement throughout the country. The members implicated, as a rule, indignantly denied the charge of having purchased or owned Crédit Mobilier stock. Not content with this, they declared themselves incapable of holding such stock, as it would have been, they said, a high crime against morality and decency to be connected in any way with the Crédit Mobilier. These denials were generally accepted. The persons making them had always borne high characters for veracity and integrity. Partisan orators, and newspapers made the most of the charges, and made them so odious that the persons implicated repeated their denials with more bitterness.
Here was the fatal error of the Congressmen implicated in the affair. They deliberately denied all connection with Crédit Mobilier stock, and the position they assumed caused the country to believe that they had had no connection with it, because of their knowledge at the time that it was "too dirty a business for a Member of Congress to be concerned in." Had they frankly acknowledged the purchase of the stock, had they asserted that they thought the purchase legitimate, and that they relinquished their stock as soon as they discovered its true character, they would have saved their reputations with the public, which, while it might have thought them very foolish, would have acquitted them of criminal intentions; but they deliberately denied the whole business, and placed themselves in a position to be convicted of falsehood, if Ames's charges should be proved. Mr. Ames, on his part, repeated his charges, and declared his ability to prove them.
When Congress assembled, in December, 1872, Mr. Blaine, the Speaker of the House, wishing to vindicate his character, which he declared had been unjustly assailed, asked the House of Representatives to appoint a Committee to inquire into the charges of Ames and McComb, and to report the result of their investigations. The Committee was appointed, with Mr. Luke P. Poland, of Vermont, as its Chairman. An effort was made to conduct the investigation in secret; but the indignant public demanded and obtained an open trial. On the 18th of February, 1873, the Committee reported to the House the result of its investigation.
The reader will remember that the Members of Congress had denied that they had owned Crédit Mobilier stock, and had indignantly repudiated the assertion that they had been bribed with it. The investigation was to determine whether they had owned the stock in question, as well as whether they had been bribed with it. They had warranted, by their course, the public inference that the mere ownership of the stock placed the Congressional holder of it in a terribly suspicious light. The stock was extremely valuable, it paid seven or eight hundred per cent. in a few months. Oakes Ames had asserted that be had sold this valuable stock to Congressmen for less than half the value set upon it by the Crédit Mobilier; and that, where the purchasers had not the ready money to pay for it, be had "carried" it for them, and had allowed them to pay for it out of the enormous dividends declared upon it, charging them a slight commission for this service. The investigation was to either triumphantly sustain the denials of the Congressmen in question, or prove them liars, by fastening upon them the ownership of the stock, which they had disclaimed.
The Committee, in their Report to the House, concerned themselves only with the members of that body. Their report failed to sustain the denials of the members as to the ownership of the stock, although it acquitted all but one of them of the charge of having been bribed. It fastened the ownership of the stock upon all but Mr. Blaine, and presented them, with this one exception, to the House and to the country as men convicted of falsehood. "The report admits," says the New York Herald, "that these Congressmen at first denied the receipt of money from Ames, and that, in some instances, their denials were met by the production of checks and receipts. The evidence of falsehood is conclusive against all, or nearly all of them."
THE CASE OF MR. BLAINE.
Mr. Blaine, the Speaker of the House, met the charge against him with a prompt denial when it was first made. The Committee fully sustained his denial, and reported that the evidence before them did not show any ownership of the stock by him at any time.
THE CASE OF MR. DAWES.
Mr. Henry L. Dawes, of Massachusetts, met the charge of ownership of the stock with a denial at the time it was made. He pronounced the charge a libel. Concerning him, the Committee reported as follows:
"Mr. Dawes had, prior to December, 1867, made some small investments in railroad bonds through Mr. Ames. In December, 1867, Mr. Dawes applied to Mr. Ames to purchase a $1000 bond of the Cedar Rapids Road, in Iowa. Mr. Ames informed him that he had sold them all, but that he would let him have for his $1000 ten shares of Crédit Mobilier stock, which he thought was better than the railroad bonds. In answer to inquiry by Mr. Dawes, Mr. Ames said the Crédit Mobilier Company had the contract to build the Union Pacific Road, and thought they would make money out of it, and that it would be a good thing; that be would guarantee that he should get ten per cent. on his money, and that if at any time Mr. Dawes did not want the stock, he would pay back his money, with ten per cent. interest. Mr. Dawes made some further inquiry in relation to the stock of Mr. John B. Alley, who said he thought it was good stock, but not as good as Mr. Ames thought; but that Mr. Ames's guarantee would make it a perfectly safe investment. Mr. Dawes thereupon concluded to purchase the ten shares, and on the 11th of January he paid Mr. Ames $800, and in a few days thereafter the balance of the price of the stock at par, and interest from the July previous. In June, 1868, Mr. Ames received a dividend of sixty per cent. in money on his stock, and of it paid to Mr. Dawes $400, and applied the balance of $200 upon accounts between them. This $400 was all that was paid over to Mr. Dawes as a dividend upon this stock. At some time prior to December, 1868, Mr. Dawes was informed that a suit had been commenced in the courts of Pennsylvania by the former owners of the charter of the Crédit Mobilier, claiming that those then claiming and using it had no right to do so. Mr. Dawes thereupon informed Mr. Ames that as there was a litigation about the matter, he did not desire to keep the stock. On the 9th of December, 1868, Mr. Ames and Mr. Dawes had a settlement of these matters, in which Mr. Dawes was allowed for the money he paid for the stock, with ten per cent. interest upon it, and accounted to Mr. Ames for the $400 he had received as a dividend. Mr. Dawes received no other benefit under the contract than to get ten per cent. upon his money, and after the settlement had no further interest in the stock."
The Committee thus fail to sustain Mr. Dawes in his denial. They show that he received his shares in December, 1867, and his first dividend on the 3d of January, 1868. This dividend was in Union Pacific bonds and stocks. The Committee state that it was an eighty per cent. dividend. The official report published in the New York Herald of December 21st, 1872, stated that it was a dividend of one hundred and twenty per cent. – sixty per cent. in first mortgage bonds and sixty in stock. The Committee also state that Mr. Dawes kept the stock nearly a year and surrendered it because "there was a litigation about the matter." Yet the Committee, in the face of these facts, declare that Mr. Dawes was ignorant of the true character of the stock which paid him such a tremendous dividend. Mr. Dawes is the Chairman of the great financial Committee of the House, that of Ways and Means, and is accustomed to dealing with financial questions.
THE CASE OF MR. SCOFIELD.
Glenni W. Scofield, of Pennsylvania, was another of the Congressmen to whom Ames sold stock. Say the Committee:
"In 1866, Mr. Scofield purchased some Cedar Rapids bonds of Mr. Ames, and in that year they had conversation about Mr. Scofield taking stock in the Crédit Mobilier Company, but no contract was consummated. In December, 1867, Mr. Scofield applied to Mr. Ames to purchase more Cedar Rapids bonds, when Mr. Ames suggested that he should purchase some Crédit Mobilier stock, and explained generally that it was a contracting company to build the Union Pacific Road; that, as it was a Pennsylvania corporation, he would like to have some Pennsylvanian in it; that he would sell it to him at par and interest, and that he would guarantee he should get eight per cent. if Mr, Scofield would give him half the dividends above that. Mr. Scofield said he thought he would take $1000 of the stock, but before anything further was done Mr. Scofield was called home by sickness in his family. On his return, in the latter part of January, 1868, he spoke to Mr. Ames about the stock, when Mr. Ames said he thought it was all sold, but be would take his money and give him a receipt and get the stock for him if be could. Mr. Scofield therefore paid Mr. Ames $1041, and took his receipt therefor. Not long after Mr. Ames informed Mr. Scofield he could have the stock, but could not give him a certificate for it until he could get a larger certificate dividend. Mr. Scofield received the bond dividend of eighty per cent., which was payable January 3, 1868, taking a bond for $1000, and paying Mr. Ames the difference. Mr. Ames received the sixty per cent. cash dividend on the stock in June, 1868, and paid over to Mr. Scofield $600, the amount of it. Before the close of that session of Congress, which was toward the end of July, Mr. -Scofield became, for some reason, disinclined to take the stock, and a settlement was made between them, by which Mr. Ames was to retain the Crédit Mobilier stock and Mr. Scofield took $1000 Union Pacific stock. The precise basis of the settlement does not appear, neither Mr. Ames nor Mr. Scofield having any full data in reference to it. Mr. Scofield thinks that he only received back his money and interest upon it. While Mr. Ames states that he thinks Mr. Scofield had ten shares of Union Pacific stock in addition. The Committee do not deem it specially important to settle this difference of recollection. Since that settlement Mr. Scofield has had no interest in the Crédit Mobilier stock, and derived no benefit therefrom."
Mr. Scofield held the stock about five months, and appears to have made a profit of about seventeen hundred dollars on the transaction.
THE CASE OF MR. BINGHAM.
The Committee say that:
"In December, 1867, Mr. Ames advised Mr. Bingham to invest in the stock of the Crédit Mobilier, assuring him that it would return him his money with profitable dividends. Mr. Bingham agreed to take twenty shares, and about the 1st of January, 1868, paid to Mr. Ames the par value of the stock, for which Mr. Ames executed to him one receipt or agreement. Mr. Ames received all the dividends on the stock or money. Some were delivered to Mr. Bingham, and some retained by Mr. Ames. The matter was not finally adjusted between them until February, 1872, when it was settled by Mr. Ames retaining the thirty shares of Crédit Mobilier stock, and accounting to Mr. Bingham for such dividends upon it as Mr. Bingham had not already received. Mr. Bingham was treated as the real owner of the stock from the time of the agreement to take it in December, 1867, to the settlement in February, 1872, and had the benefit of all the dividends upon it. Neither Mr. Ames nor Mr. Bingham had such records of their dealing as to be able to give the precise amount of these dividends."
Mr. Bingham appears from this, to have bought the stock in January, 1868, at par, at which time it was worth to any one else but "a friend of Mr. Ames" just four times its par value. He held the stock until February, 1872, receiving all the dividends in the meantime. "Taking the official list published in the Herald last December," says the New York Herald of February 19th, 1873, "we find that the dividends on twenty shares amounted to $10,900." Mr. Bingham was the only member who held this stock that did not deny it and try to make his innocence appear. He acknowledged the ownership, denied that he had been corruptly influenced by it, and maintained that, he had a right to buy and hold the stock. Consequently Mr. Bingham is not one of those whom the Report convicts of falsehood.
THE CASE OF MR. KELLEY.
Mr. William D. Kelley, of Pennsylvania; was one of those who denied his connection with the Crédit Mobilier. Concerning him the Committee say:
"They can find from the evidence that in the early part of the second session of the Fortieth Congress, and probably in December, 1867, Mr. Ames agreed with Mr. Kelley to sell him ten shares of Crédit Mobilier stock at par and interest from July 1, 1867. Mr. Kelley was not then prepared to pay for the stock, and Mr. Ames agreed to carry the stock for him until be could pay for it. On the 3d day of January, 1868, there was a dividend of eighty per cent. on Crédit Mobilier stock in Union Pacific bonds. Mr. Ames received the bonds, as the stock stood in his name, and sold them for ninety-seven per cent. of their face. In June, 1868, there was a cash dividend of sixty per cent. which Mr. Ames also received. The proceeds of the bonds sold and the cash dividends received by Mr. Ames amounted to $1376. The par value of the stock and interest thereon from the previous July amounted to $1047, so that after paying for the stock there was a balance of dividends due Mr. Kelley of $329. On the 23d day of June, 1868, Mr. Ames gave Mr. Kelley a check for that sum on the Sergeant-at-Arms of the House of Representatives, and Mr. Kelley received the money thereon. The Committee find that Mr. Kelley understood that the money he thus received was a balance of dividends due him after paying for the stock. All the subsequent dividends upon the stock were either in Union Pacific stock or bonds, and they were all received from Mr. Ames. In September, 1868, Mr. Kelley received from Mr. Ames $750, the money which was understood between them to be an advance to be paid out of dividends. There has never been any adjustment of the matter between them, and there is now an entire variance in the testimony of the two men as to what the transaction between them was, but the Committee are unanimous in finding the facts above stated. The evidence reported to the House gives some subsequent conversations and negotiations between Mr. Kelley and Mr. Ames on the subject. The Committee do not deem it material to refer to it in their report."
So Mr. Kelley, counted one of the most astute financiers of the House, got his stock without paying cash for it. He took ten shares in December, 1867, and in June, 1868, about six months later, received two dividends amounting to $1376, which paid the $1000 due on his stock (he getting it at par, when it was worth much more) and a profit of $329, after deducting the interest due Oakes Ames for carrying the stock. After that Mr. Kelley received all the dividends.
THE CASE OF MR. GARFIELD.
Mr. James A. Garfield's case has not been helped by the Committee. They say of this gentleman, who is a Representative from Ohio:
"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 Crédit Mobilier stock, but did not pay for the same. Mr. Ames received the eighty per cent. dividend in bonds, and sold them for ninety-seven per cent., and also received the sixty -per cent. cash dividend, which, together with the price of the stock and interest, left a balance of $329. This sum was paid over to Mr. Garfield by a check on the Sergeant-at-Arms. 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 conversation between them during this investigation, will be found in the reported testimony."
Mr. Garfield must share with Mr. Kelley in the "sympathy "of the country. The Committee have not made him blameless in the public estimation.
THE CASE OF MR. BROOKS.
Concerning Mr. James Brooks, of New York, the Committee say:
"The case of Mr. Brooks stands upon a different state of facts from any of those already given. The Committee find from the evidence as follows:
"Mr. Brooks had been a warm advocate of a Pacific railroad, both in Congress and the public press. After persons interested in the Union Pacific Road had obtained control of the Crédit Mobilier charter, and organized under it for the purpose of making it a construction company to build the road, Dr. Durant, who was then the leading man in the enterprise, made great efforts to get the stock of the Crédit Mobilier taken. Mr. Brooks was a friend of Dr. Durant, and he made some effort to aid Dr. Durant in getting subscriptions for the stock. He introduced the matter to some capitalists in New York, but his efforts were not crowned with success. During this period, Mr. Brooks had talked with Dr. Durant about taking some of the stock for himself, and had spoken of taking $15,000 or $20,000 of it, but no definite contract was made between them, and Mr. Brooks was under no legal obligation to take the stock, or Durant to give it to him. In October, 1867, Mr. Brooks was appointed by the President one of the Government directors of the Union Pacific Road. In December, 1867, after the stock of the Crédit Mobilier was understood by those familiar with the affairs between the Union Pacific and the Crédit Mobilier to be worth very much more than par, Mr. Brooks applied to Dr. Durant, and claimed that he should have 200 shares of Crédit Mobilier stock. It does not appear that Mr. Brooks claimed he had any legal contract for the stock that he could enforce, or that Durant considered himself in any way legally bound to let him have any; but still, on account of what had been said, and the efforts of Mr. Brooks to aid him, he considered himself under obligation to satisfy Mr. Brooks in the matter.
The stock had been so far taken up, and was then in such demand that Durant could not well comply with Mr. Brooks' demand for 200 shares. After considerable negotiation, it was finally adjusted between them, by Durant agreeing to let Brooks have 100 shares of Crédit Mobilier stock, and giving him with it $5000 of Union Pacific bonds, and $20,000 of Union Pacific stock. Dr. Durant testified that he then considered Crédit Mobilier stock worth double the par value, and that the bonds and stock he was to give Mr. Brooks worth $9000, so that he saved about $1000 by not giving Brooks the additional 100 shares he claimed. After the negotiation had been concluded between Mr. Brooks and Dr. Durant, Mr. Brooks said, that as he was a Government director of the Union Pacific Road, and as the law provided such directors should not be stockholders in the company, he would not hold this stock, and directed Dr. Durant to transfer it to his son-in-law, Chas. H. Neilson. The whole negotiation with Durant was conducted by Mr. Brooks himself, and Neilson had nothing to do with the transaction, except to receive the transfer. The $10,000 to pay for the 100 shares was paid by Mr. Brooks, and he received the $5000 of Pacific bonds which came with the stock. The certificate of transfer of the 100 shares from Durant to Neilson is dated Dec. 26, 1867. On the 3d of July, 1868, there was a dividend of eighty per cent. Union Pacific bonds paid on the Crédit Mobilier stock. The bonds were received by Neilson, but passed over at once to Mr. Brooks. It is claimed, both by Mr. Brooks and Neilson, that the $10,000 paid by Mr. Brooks was a loan of that sum by him to Neilson, and that the bonds received from Durant, and those received from the dividend, were delivered and held by him as collateral security for the loan. No note or obligation was given for the money by Neilson, nor, so far as we can learn from either Brooks or Neilson, was any account or memorandum of the transaction kept by either of them. At the time of the agreement or settlement above spoken of between, Brooks and Durant, there was nothing said about Mr. Brooks being entitled to have fifty per cent. more stock by virtue of his ownership of the 100 shares.
"Neither Mr. Brooks nor Durant thought of any such thing. Some time after the transfer of the shares to Neilson, Mr. Brooks called on Sidney Dillon, then the President of the Crédit Mobilier, and claimed that he or Neilson was entitled to fifty additional shares of the stock by virtue of the purchase of the 100 shares of Durant. This was claimed by Mr. Brooks as his right, by virtue of the fifty per cent. increase of the stock hereinbefore described. Mr. Dillon said he did not know how that was, but he would consult the leading stockholders, and be governed by them. Mr. Dillon, in order to justify himself in the transaction, got up a paper authorizing the issue of fifty shares of the stock to Mr. Brooks, and procured it to be signed by most of the principal shareholders. After this had been done, an entry of fifty shares was made on the stock ledger to some person other than Neilson. The name in two places on the books had been erased, and the name of Neilson inserted. The Committee are satisfied that the stock was first entered on the books in Mr. Brooks' name. Mr. Neilson soon after called for the certificate for the fifty shares, and on the 29th of February, 1868, the certificate was issued to him, and the entry on the stock-book was changed to Neilson. Mr. Neilson procured Mr. Dillon to advance the money to pay for the stock, and at the same time delivered to Dillon $1,000 Union Pacific bonds, and fifty shares of Union Pacific stock as collateral security. These bonds and stock were a portion of dividends received at the time, as he was allowed to receive the same per cents. of dividends on these fifty shares that had previously been paid on the 100. This matter has never been adjusted between Neilson and Dillon. Messrs. Brooks and Neilson both testify they never paid Dillon, and Dillon thinks he has received his pay, as he has not now the collaterals in his possession. If he has been paid, it is probable it was from the collaterals in some form. The subject has never been named between Dillon and Neilson since Dillon advanced the money, and no one connected with the transaction seems able to give any further light upon it.
"The whole business by which these fifty shares were procured was done by Mr. Brooks. Neilson knew nothing of any right to have them, and only went for the certificate when told to do so by Mr. Brooks. The Committee find that no such right to fifty shares additional stock passed by the transfer of the one hundred, and from Mr. Brooks' familiarity with the affairs of the company, the Committee believe he must have known his claim to them was unfounded. The question naturally arises, how was he able to procure them. The stock at this time, by the stockholders, was considered worth three or four times its par value. Neilson sustained no relation to any of these people that commanded any favor, and if he could have used any influence he did not attempt it. If he had this right he was unaware of it till told by Mr. Brooks, and left the whole matter in his hands. It is clear that the shares were procured by the sole efforts of Mr. Brooks, and, as the stockholders who consented to it supposed, for the benefit of Mr. Brooks. What power had Mr. Brooks to enforce an unfounded claim to have for $5000, stock worth $15,000 or $20,000? Mr. McComb swears that he had heard a conversation between Mr. Brooks and Mr. John B. Alley, a large stockholder and one of the Executive Committee, in which Mr. Brooks urged that he should have the additional fifty shares because be was, or would procure himself to be, made a Government director, and also that, being a Member of Congress, he would take care of the Democratic side of the House. Mr. Brooks and Mr. Alley both deny having had any such conversation, or that Mr. Brooks ever made such a statement to Mr. Alley. If, therefore, this matter rested wholly upon the testimony of Mr. McComb, the Committee would not feel justified in finding that Mr. Brooks procured the stock by such use of his position; but all the circumstances seem to point exactly in that direction, and we can find no other satisfactory solution of the above question propounded. Whatever claim Mr. Brooks had to the stock, either legal or moral, had been adjusted and satisfied by Dr. Durant. Whether he was getting for himself or to give to his son-in-law, we believe from the circumstances attending the whole transaction that be obtained it knowing that it was yielded to his official position and influence, and with the intent to secure his favor and influence in such positions.
"Mr. Brooks claims that he has no interest in this stock whatever; that the benefit and advantages of his right to have it he gave to Mr. Neilson, his son-in-law, and that he had had all the dividends upon it. The Committee are unable to find this to be the case, for in their judgment all the facts and circumstances, show Mr. Brooks to be the real and substantial owner, and that Neilson's ownership is merely nominal and colorable. In June, 1868, there was a cash dividend of $9000 upon this 150 shares of stock. Neilson received it, of course, as the stock was in his name, but on the same day it was paid over to Mr. Brooks (as Neilson says) to pay so much of the $10,000 advanced by Mr. Brooks to pay for the stock. This then repaid all but the $1000 of the loan, but Mr. Brooks continued to hold $11,000 of the Union Pacific bonds, which Neilson says he gave him as collateral security, and to draw the interest upon all but $5000. The interest upon the others, Neilson says, he was permitted to draw and retain. But at one time in his testimony he spoke of the amount he was allowed as being Christmas and New-Year's presents. Mr. Neilson says that during the last summer he borrowed $14,000 of Mr. Brooks, and now he owes Mr. Brooks nearly as much as the collaterals; but according to his testimony Mr. Brooks for four years held $16,000 in bonds as security for $1000, and received the interest on $11,000 of the collaterals. No accounts appear to have been kept between Mr. Brooks and Mr. Neilson; and doubtless what sums he has received from Mr. Brooks out of the, dividends were intended as presents rather than the delivering of money belonging to him. Mr. Brooks' efforts procured the stock and his money paid for it. All the cash dividend he has received, and he holds all the bonds except those Dillon received, which seem to have been applied toward paying for the fifty shares. Without further comment upon the evidence, the Committee find that the 150 shares of the stock appearing on the books of the Crédit Mobilier in the name of Neilson, were really the stock of Mr. Brooks, and subject to his control, and that it was understood by both parties.
"Mr. Brooks had taken such an interest in the Crédit Mobilier Company, and was so connected with Dr. Durant, that he must be regarded as having full knowledge of the relation between that company and the Railroad Company, and of the contracts between them. He must have known the cause of the sudden increase in value of the Crédit Mobilier stock, and how the large expected profits were to be made. We have already expressed our view of the propriety of a Member of Congress becoming the owner of stock possessing the knowledge. But Mr. Brooks was not only a Member of Congress, but he was a Government director in the Union Pacific Company. 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. To insure such faithfulness on the part of Government directors, Congress very wisely provided that they should not be stockholders in the road. Mr. Brooks readily saw that though becoming a stockholder in the Crédit Mobilier was not forbidden by the letter of the law, yet it was a violation of the spirit and essence, and therefore had the stock placed in the name of his son-in-law. The transfer of the Oakes Ames contract to the trustees to the building of the road under the contract, from which the enormous dividends were all derived, was all during Mr. Brooks' official life as a Government director, must have been within his knowledge, and yet passed without the slightest opposition from him. The Committee believe this could not have been done without an entire disregard of his official obligations and duty, and that while appointed to guard the public interests in the road, he joined himself with the promoters of a scheme whereby the Government was to be defrauded, and shared in the spoil. In the conclusions of fact upon the evidence the Committee are entirely agreed that action we ought to recommend
"In considering what action was right to be recommended to the House, upon these facts, the Committee encounter a question which has been much debated. Has this House power and jurisdiction to inquire concerning offences committed by its members prior to their election and to punish them by censure or expulsion? The Committee are unanimous upon the right of jurisdiction of this House over the cases of Mr. Ames and Mr. Brooks upon the facts found in regard to them.
Thus we have the main facts in the case. Certain Congressmen who were charged with holding Crédit Mobilier stock, and who denied it, are shown by the Committee to have held this stock, and are thus convicted of falsehood.
Of all the men implicated, the Committee find that only James Brooks and Oakes Ames were influenced by corrupt motives, and they recommend the expulsion of these members. This verdict has been accepted by the public at large, as regards these two members, but the people are not disposed to accept the verdict of acquittal pronounced by the Committee in favor of the other members concerned. With regard to these, in spite of the facts stated in the report, the Committee declare that the only criticism the Committee feel competent to make on the action of these members in taking this stock is, that they were not sufficiently careful in ascertaining what they were getting, and that, in their judgment, the assurance of a good investment was all the assurance they needed. We commend to them, and to all men, the letter of the venerable Senator Bayard in response to an offer of some of this stock, found on page 74 of the testimony. The Committee find nothing in the conduct of either of these members in taking this stock that calls for any recommendation by the Committee."
In other words, the Committee, after deliberately showing the denials of the implicated Congressmen to be false, declare that these gentlemen were innocent victims of Mr. Oakes Ames. They declare that a number of the shrewdest, most acute, and business-like men in the House, men in whose hands the solution of the great financial problems of the day are lodged, engaged in an investment of which they did not know the nature. Truly Mr. Poland and his associates must entertain a very poor opinion of the intelligence of the people of this great country, when they ask them to be satisfied with this pitiful evasion. The members concerned in the transaction may be innocent, but the report of the Poland Committee has not caused the public to regard them in that light. The people are at a loss, also, to comprehend the mental status of a Committee which can recommend the expulsion of Mr. Ames for bribing Members of Congress, and yet solemnly declare that they have no evidence that any one has been bribed.
The New York Herald thus forcibly and clearly states the opinion of the country at large respecting this report:
"The report acquits Messrs. Dawes, Scofield, Bingham, Kelley, and Garfield of any corrupt motive or improper act on the following grounds: – First, because there is no evidence to show that they were aware of the great value of the stock they received from Oakes Ames; second, because they did not appear to know that the dividends would be paid in Union Pacific stock, and as the Crédit Mobilier was a State corporation they had a right to invest in it; third, because it is not proved that any corrupt consideration was asked of them by Ames, that they were only seeking legitimate investments, and that it does not seem that they voted for any measures favorable to the Crédit Mobilier while they held the stock. It is true that the Committee believe the favored Congressmen must have felt 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 they attribute to this feeling the anxiety of some of the purchasers to get rid of the stock; but the report declares that it can find no evidence of corrupt intention on the part of any of these members. The Committee argue that if the whitewashed Congressmen had known of the large dividends they were to receive, or if they had been aware that the dividends would be paid in Union Pacific bonds and stock and thus have given them an interest in a corporation depending upon Congress for legislation, they would then have been guilty of corrupt and illegal conduct in accepting the shares.
"A single fact sweeps away in an instant this whole mass of false reasoning and fraudulent pleading. The stock was taken by some of the members in December, 1867, and by others in January and February, 1868. In some instances at the very moment of purchase, and in all cases within two or three weeks after purchase, these whitewashed Congressmen received eighty per cent. dividend on their shares in the first mortgage bonds and stock of the Union Pacific Railroad! If they did not know that they were bribed at the instant they completed the transaction, the guilty knowledge must have come to them very soon afterwards. Judge Poland and his associates stultify themselves when they argue that the knowledge of the amount and character of the dividends would be proof of guilt, and yet justify the men who held the stock and received the dividends in some cases for months and in others for years. They stultify themselves also when they pronounce Oakes Ames guilty of bribery, and find that he has bribed no person! Bribery is the giving or receiving a reward for a violation of official duty. Could Oakes Ames have committed this offence unless he gave this stock or sold it at a quarter of its value to these Congressmen for the purpose of inducing them to violate their official duty? And if he did do this, can the men he bribed – the men who received his valuable gifts – be innocent? As well might Judge Poland and his Committee tell us that their report is fearlessly and impartially made in the cause of truth and justice alone? The Committee stultify themselves further when they suppress the evidence against Vice-President Colfax and shrink from the responsibility of making an allusion to his case. Their excuse is that Mr. Colfax is the presiding officer of the Senate, and as such is beyond their jurisdiction. Yet the keen and subtly-reasoning lawyers of the Committee must be familiar with the Constitution of the United States; they must know that the Vice-President can be impeached and removed from office on conviction of treason, 'bribery,' or other high crimes and misdemeanors, and that in the House of Representatives rests the 'sole power of impeachment."'
It is a miserable business. The country expected of Mr. Poland and his associates a manly and straightforward investigation, and not a miserable effort to hunt up a couple of scape goats to bear the sins of those who were to be saved from expulsion. The people of the United States feel deeply the shame and humiliation of the whole affair, and they, let us thank Heaven, have not learned to consider party claims when the national honor is at stake. They had a right to expect of the Committee either a clear vindication of the accused parties, or an impartial and rigid meting out of justice to them. The result is appearing. They see their trusted public servants convicted of falsehood, stained with the ownership of the most questionable property of the present day, and they are gravely asked by a Committee of Congress to believe that the men whom they have trusted and honored, and whom they know to be keen, shrewd, practical business men, are a parcel of ignorant fools, unable to manage a simple investment in stocks with the prudence or care of the most ordinary man of business.
The Report of the Poland Committee did not touch the cases of the Senators, into which it inquired. It is customary in such cases to send the evidence to the Senate, when taken by a House Committee, and vice versa. This has been done in the present case, and it now remains for the Senate to deal with its own members. The Senate for a long time took no notice of the matter, but a Committee of investigation was at length appointed, which is still in session at the present writing. We shall notice the cases of Senators Wilson, Patterson, and Colfax, as developed before the Poland Committee.
THE CASE OF SENATOR WILSON.
When The Presidential Campaign was at its height, Senator Wilson was charged with having bought Crédit Mobilier stock from Oakes Ames. His friend, General Hawley, of Connecticut, at once denied that Mr. Wilson had had any connection with the business, and this denial made, as it was commonly believed, with Mr. Wilson's knowledge and consent, had the effect of inducing the public to believe that Mr. Wilson had no knowledge of the speculation. Upon the examination before the Poland Committee it was made apparent from Mr. Wilson's own statement that he had bought this stock from Ames, on the terms upon which the others purchased it, with this difference, however, that he had bought it in his wife's name. Upon discovering that the Crédit Mobilier had become involved in a lawsuit, he became frightened, and returned the stock to Ames, receiving back the amount of his investment and ten per cent. interest. He claims to have lost money by the transaction.
THE CASE OF SENATOR LOGAN.
Senator Logan paid no attention to the charge against him during the campaign, neither denying nor admitting his ownership of the stock, and consequently, next to Mr. Blaine, was the most fortunate man connected with the investigation. He stated to the Committee that he had agreed to take ten shares of Mr. Ames, in February, 1868. The first two dividends paid for it, and gave him a balance of $329. He took Mr. Ames's check for this amount, and got it cashed. A few days after, he concluded to keep out of the affair, and repaid Mr. Ames the $329, with $2 interest. It seems that be had a friend who was a contractor on the Union Pacific Road, and who informed him concerning the operations of the Crédit Mobilier, and the letters of his friend made him think he would prefer not to keep the stock.
THE CASE OF SENATOR PATTERSON.
James W. Patterson, Senator from New Hampshire, was one of those charged with purchasing Crédit Mobilier stock. He denied the charge, and declared that be had had no connection with the stock at all. Mr. Ames, upon his examination by the Committee, made oath that he had sold Mr. Patterson thirty shares of the stock of the Crédit Mobilier. Mr. Patterson then stated that he had bought stock of Ames, but supposed that it was Union Pacific stock. He added, on the 21st of January, in a voluntary statement before the Committee: "I have never received any certificate of stock or other evidence of ownership on the Crédit Mobilier, and am not enough of a lawyer to know how I could draw dividends on what I did not own." In support of his assertion, Mr. Patterson produced a letter written to him by Ames during the late Senatorial contest in New Hampshire. Mr. E. H. Rollins had assailed Mr. Patterson in this contest for owning Crédit Mobilier stock, and Ames, at Patterson's request, wrote the latter a letter stating that the books of the Company did not show that he owned any stock.
Mr. Ames, who had listened patiently to Mr. Patterson's statement before the Committee, was then questioned by the Committee as to the accuracy of Patterson's statement. He at once produced his memoranda, and proceeded to read from it, amid a painful stillness, "a connected account of his transaction with Patterson. He invested $3000 for Patterson in Crédit Mobilier stock, in January, 1868; on February 14th he paid him $2223 in cash, which were the proceeds of the sale of the first bond dividend; $3000 in Union Pacific first mortgage bonds, less $105 retained for interest, and also thirty shares of Union Pacific stock. On June 19th, 1868, he paid him $1800 as a sixty per cent. cash dividend. Some time in 1871 he settled the transaction and gave him about seventy shares Union Pacific stock. He supposed that Patterson knew he was buying Crédit Mobilier stock; he talked of nothing else with him. Ames explained his letter by saying that it was literally true, although intended to give a wrong impression.
His good nature led him to write it at Patterson's importunity – to help him out of a fix. If Patterson had not got the certificate for the thirty shares, then it had been lost. He (Ames) had all the other certificates in his pocket except that. Patterson again denied any knowledge of the fact that Ames had invested his $3000 in Crédit Mobilier stock."
Mr. Patterson's testimony being so at variance with that of Mr. Ames, it was evident that one of them had misstated facts. Mr. Patterson had declared that he had never held Crédit Mobilier stock, and when Ames testified that he had sold him thirty shares, modified his statement by saying that be supposed that they were shares and bonds of the Union Pacific Company, Mr. Ames stated that Mr. Patterson was fully aware that be was buying Crédit Mobilier stock. In order to sustain this assertion, Mr. Ames, on the 26th of January, produced Senator Patterson's receipts. We quote from the report of the examination. The answers are those of Mr. Ames to the questions of the Committee:
Q. I understand you to state that you had some other papers in reference to this transaction between you and Senator Patterson; will you be good enough to produce it? A. Senator Patterson testified that he never received any dividend from the stock, and that he had no money from me on account of it; here is a receipt which I present to this Committee. [The paper referred to was placed in evidence, and is as follows:]
"'WASHINGTON, June 22, 1868.
Received of Oakes Ames $1800, on account of dividend received by him as trustee in stock held for my account. J. W. PATTERSON.'
Q. Did you see him sign this paper? A. Yes; he gave it to me at the time I wrote the receipt, and he signed it; the receipt is in my writing and the signature in his.
"Q. And made at the time of the date? A. Yes, Sir; I also hand to the Committee another paper. [Paper placed in evidence as follows:]
"'BOSTON, May 6, 1871.
Received of Oakes Ames 200 shares U.P.R.R. stock, seven hundred and fifty-seven dollars 24-100 incash, on account of C. M. stock, and there is still due on the transaction thirty shares of stock in the C. M. of America, and 2000 in the Income bonds of the U.P.R.R. 'J. W. PATTERSON.'
"Q. Was that signed by him in your presence and given to yon? A. Yes.
"Q. And at the date it bears? A. I presume so.
"Q. The paper itself is in your own handwriting? A. Yes, Sir.
"Q. This is the paper given at the time of the settlement made between you and him, of which you spoke in your testimony? A. Yes; that $1800 is the check I gave him on the Sergeant-at-Arms, for which he gave me the receipt; that is the final settlement.
"Q. Have you still another paper? A. I have a letter Mr. Patterson wrote me in relation to this matter; he wrote me several, which I have destroyed; I found this last night in looking over my papers; it is a letter from Mr. Patterson.
"Q. You received it through the mail? A. I do not recollect how I received it; the letter is written here and I received it here; I received several others, which as I stated, I have torn up; this is all I have; this letter is written this winter, since the present investigation commenced.
"Q. Do you know whether it is in Mr. Patterson's own writing? A. I do not know that I can swear it is.
"Q. Have you had any conversation with him in reference to this letter? A. I have had several interviews with him since the letter was written.
"Q. In reference to the letter? A. Not in reference to the letter, but in reference to matters the letter alludes to.
"Q. In any of the conversations you have had with him has the fact that he had written such a letter been mentioned? A. I do not know that it has; I do not know whether it has or not; I think he asked me if I had got the letter he wrote me.
"Q. Is this the only one you have received from him, this winter? A. No, Sir, I have received several, and torn them up; I did not know that I had this until last evening.
"Q. Was there any envelope with it? A. I destroyed the envelope which I received it in; I received it when I got back from home, the 7th or 8th of January. [The letter referred to was placed in evidence, and is as follows:]
"WASHINGTON, D. C., Jan. 4, 1873.
The Hon. Oakes Ames–My Dear Sir: The facts in respect to the Crédit Mobilier, so far as I had any connection with it, were as follows:
"'You came to me one day, knowing that a want of means was a chronic evil with me, and said, 'Patterson, if you would like, I can let you have 30 shares of stock in the Crédit Mobilier, which I think will be a profitable investment, and will be a good thing for you.' My reply, in substance, was that if you had anything which I could properly invest in, and out of which I could make some money, I should be glad to take it, but that I had not the money at that time, and must defer it until I could get it.
"'Your reply was that you presumed I could have it later when it might be convenient, and you regarded it a perfectly legitimate transaction. At that time you did not and could not anticipate you should ever ask for further legislation from Congress in respect to the road, and you never did, except when it was forced on you by the Secretary.
"'After this conversation with me you may have had the impression that I should take the stock some time, but for some reason or other, perhaps for a want of funds, I never took any of the stock. If I never had any stock in the company I could not, as I did not, have its dividends. I pressed to know if I purchased at any time any bonds or stock of the road, you can say I did at the time they attempted to embarrass you when the value of the stock was depressed, and I paid you the full market value for it. I paid you $7000 in money for stock and bonds.
"'The stock I put into the hands of Mr. Morton immediately, to sell as soon as it should go up reasonably in the market, which he did.
'"I saw Mr. Morton on my way through, and he said he had never held any stock in the Crédit Mobilier for any one, but did not wish to have his name brought into the examination if it could be avoided. I am going to Ohio. I will see you on my return. Don't fail to correct your original statement before the Committee. It must not be reported as it now stands. Very truly, etc.,
"' J. W. PATTERSON."'
The production of the receipts and of this remarkable letter, created a decided sensation both in the Committee and throughout the country. The issue was fairly and distinctly made. If the receipts were genuine and Mr. Ames had sworn to the truth, Mr. Patterson had perjured himself. It remained for Mr. Patterson to prove that the receipts were forgeries. It remained for him to show that the letter we have given was a forgery, and not an attempt on his part to induce Ames to swear to manufactured testimony.
On the 29th of January, Mr. Ames produced and exhibited to the Committee the check for $1800, for which the first receipt was given. The check bore Mr. Patterson's endorsement. He also submitted another receipt from Mr. Patterson, which was as follows:
"'WASHINGTON, Feb. 14, 1868. - "'Received of Oakes Ames three hundred and twenty-nine dollars for three bonds of U.P.R.R. Co. sold for me, being dividend of eighty per cent. in bonds or stock of Crédit Mobilier of America, held by him as trustee on my account.
"J. W. PATTERSON."'
To this was appended the following: "2400 bonds at 97, $2328; interest paid, 105; paid cash, $2223."
This is the condition of the matter at present. Mr. Patterson has not succeeded in upsetting Ames's testimony, and the receipts, the check, and letter are still to be explained, or proved forgeries.
THE CASE OF VICE-PRESIDENT COLFAX.
When the charge was made that Mr. Colfax had been a purchaser of Crédit Mobilier stock from Mr. Ames, that gentleman denied it, and in a speech at South Bend, Indiana, said: "Never having in my life a dollar of stocks of any kind that I did not pay for, I claim the right to purchase stock in the Crédit Mobilier, or Crédit Immobilier, if there is one; nor do I know of any law prohibiting it. Do I need to add that neither Oakes Ames, nor any other person, ever gave, or offered to give me one share, or twenty shares, or two hundred shares in the Crédit Mobilier, or any other railroad stock, and that unfortunately I have never seen or received to the value of a farthing out of the 270 per cent. dividends, or the 800 per cent. dividends, in cash, stock, or bonds, you have read about for the past month, nor 100 per cent., nor the tenth of one per cent. I have said, that if twenty shares of it could be purchased at par, without buying into a perspective lawsuit, it would be a good investment, if as valuable a stock as represented; but never having been plaintiff nor defendant in a court of justice, I want no stock at any price with a lawsuit on top of it."
In short, Mr. Colfax's statement amounted to this: He had never purchased the stock from Mr. Ames, and had never received any dividends upon it.
This statement Mr. Colfax confirmed by a declaration under oath before the Poland Committee. The substance of this sworn statement may be thus stated in Mr. Colfax's own words:
"I state explicitly, that no one ever gave, or offered to give me any shares of stock in the Crédit Mobilier or the Union Pacific Railroad. I have never received, nor had tendered to me any dividends in cash, stock, or bonds accruing upon any stock, in either of said organizations."
Mr. Ames had from the first included Mr. Colfax in his list of the Congressmen who had purchased stock from him. Upon Mr. Colfax's denial of the charge, he declared his ability to prove his assertion.
On the 24th of January, Mr. Ames testified that he had purchased twenty shares of Crédit Mobilier stock for Mr. Colfax, in December, 1867, at the request of that gentleman. Mr. Colfax not having the money at the time, Mr. Ames advanced it. Soon after this, there was an eighty per cent. dividend declared in Union Pacific bonds. Mr. Ames stated that he had sold these, and had applied the proceeds to paying for the stock bought for Mr. Colfax, after deducting the interest. Mr. Colfax then gave him a check on the Sergeant-at-Arms for $534.72, the balance of the purchase money. Mr. Ames further stated that in June there was a cash dividend on the Crédit Mobilier of $1200, which he gave to Mr. Colfax by a check payable to "S. C. or bearer," drawn on the Sergeant-at-Arms of the House.
Mr. Colfax emphatically denied Mr. Ames's statement, and declared that he had never received the $1200, or any of the stock or money to which Ames referred. The books of the Sergeant-at-Arms were produced, and exhibited to the Committee. It was found that in June, 1868, Mr. Ames had. drawn a check on the Sergeant-at-Arms to "S. C. or bearer," and that this check had been paid to some one. This much of Mr. Ames's statement being sustained, Mr. Colfax found himself obliged to show that the check in question had not been paid to him. He utterly denied having received the money, and cross-questioned Ames rigidly, for the purpose of ascertaining if he (Ames) had drawn the money on this check. Ames declared that he had not, and intimated his belief that the money had been paid to Mr. Colfax. The Sergeant-at-Arms was then examined by Mr. Colfax. He stated that a check drawn by Oakes Ames to "S. C. or bearer," for $1200, had been paid at his office in June, 1868; but as he did not cash the check, he could not say to whom it was paid.
.At the close of this day's session, the matter stood thus: Mr. Ames charged that he had paid Mr. Colfax a cash dividend of $1200 on Crédit Mobilier stock, the payment being made by a check for $1200, drawn on the Sergeant-at-Arms to "S. C. or bearer," and dated June 20th. Mr. Colfax, on his part, made oath that he had never seen this check, or received any of the money upon it. The statement of Mr. Ames as regarded the drawing of the check, and its payment to some one, on the 21st of June, being confirmed by the books of the Sergeant-at-Arms, the Committee decided to examine the accounts of the First National Bank of Washington City, where Mr. Colfax's accounts were kept. The books were produced before the Committee on the 28th of January, and Mr. Colfax's account examined. "There appeared a credit of $1968.63, dated June 22, 1868, two days after the date of Ames's check to 'S. C.' on the Sergeant-at-Arms, and one day after that check was paid. This furnished only presumptive proof of the deposit of $1200, but all doubt was removed when the cashier produced a deposit ticket, bearing Mr. Colfax's signature, in which the $1968.63 was itemized, $1200 being cash, and the remainder drafts or checks."
The production of this account placed Mr. Colfax in a terrible position. Ames had sworn that Colfax had bought Crédit Mobilier stock of him; Colfax had denied it under oath. Ames had sworn that this stock had yielded in June, 1868, a dividend of $1200, which be had paid to Mr. Colfax by a check drawn to "S. C. or bearer" on the Sergeant-at-Arms. Mr. Colfax had denied all knowledge of this check, and had denied having received any money on it. The books of the Sergeant-at-Arms had shown that Ames had drawn a check to" S. C. or bearer" on the 20th of June, as he had stated, and that this check had been paid to some one on the 21st of June. Mr. Colfax's bank account had shown that, on the 22d of June, the very next day, after the payment of the check, he had deposited in cash the exact amount of this check, namely $1200. The circumstantial evidence against him was appalling. His best friends stood aghast, and pitied him from their very souls.
Mr. Colfax repeated his denials respecting the stock, and declared that be would show that the $1200 deposited by him was received from another source. If he could succeed in doing this, his vindication would be complete. It seemed. to the country at large very easy for Mr. Colfax to say where the $1200 came from, and to give the reason of its payment to him, and thus set the matter at rest. The bank account of Mr. Colfax was examined on the 29th of January, and it was not until the 11th of February that he offered any explanation of the source from which he had gotten the $1200. On the 11th of February, he appeared before the Committee, accompanied by Judge Hale, whom he had retained as his counsel, and made a statement under oath that the $1200, which he had deposited in cash in the First National Bank of Washington, on the 22d of June, 1868, was composed of two sums, of $1000 and $200 respectively. The $1000, he stated, he had received from a Mr. George F. Nesbitt, of New York, who had written him a letter congratulating him upon his nomination for the Vice-Presidency, and enclosing a $1000 bill to be used for political purposes during the campaign. The sender of the gift, Mr. Nesbitt, died a few years ago, and the letter in which the money was sent had, Mr. Colfax stated, been destroyed. Mr. Colfax submitted the evidence of several members of his family in proof of the reception of Nesbitt's letter. They swore to a recollection of it, and stated the incidents connected with its reception. The other $200 Mr. Colfax stated was received from, his step-father, Mr. Matthews, in payment of money borrowed from Mr. Colfax some time before. Mr. Colfax repeated his former denials concerning the stock and Ames's check.
This statement of Mr. Colfax was not accepted by the public as satisfactory. It amounted to this, in part: That a leading business man of New York had entrusted to the mail in a letter, a bill for $1000 dollars, without making any note of it, the man was dead, and the letter could not be found. Against this explanation was Oakes Ames's sworn statement, the proofs afforded by the books of the Sergeant-at-Arms, and the suspicious deposit of the exact amount of Ames's check. The New York Evening Mail, a candid and independent sheet, and very friendly to Mr. Colfax, in stating the popular judgment of the case as far as it had gone, said
"Mr. Colfax's explanation of the $1200 deposit which was made to his credit at the time when Mr, Ames swears that he had given the former that amount, has been received with general disbelief, not unaccompanied by mockery and ridicule. It was certainly a remarkable co-incidence that Mr. Colfax should have received at that particular time $200 from his father-in-law and a $1000 note from an entire stranger, Mr. George F. Nesbitt, of this city – the latter, besides, congratulating Colfax on his Nomination for Vice-President.
The whole course of Mr. Colfax's explanations has been of such a character as to excite the apprehension that every one of them was an afterthought and a device more unworthy by far than the original offence. Therefore it has been generally assumed that the strange story of receiving a $1000 note from a man now dead and out of reach of inquiry was merely a desperate and despicable expedient."
This is the simple truth. Whether Mr. Colfax's statement be true or false, the public did receive it with incredulity, if not with open disbelief.
Mr. Colfax, in order to break down the statement of Ames as to the check, brought forward a Mr. Dillon, the bookkeeper of the Sergeant-at-Arms, who swore that he had an "impression " that he had paid the "S. C." check to Mr. Ames himself. He would not say more than that this was his impression. The New York Tribune of the 14th of January, 1873, contained this statement respecting the evidence of two of the witnesses brought forward by Mr. Colfax:
"Mr. Matthews, the Vice-President's stepfather, testified that he paid Mr. Colfax $200 about the middle of June, 1868, and said that he went to the office of the Clerk of the House and arranged for obtaining a part of his salary before the end of the month in order to pay this bill. Oakes Ames in examining the accounts in the Clerk's office finds that it does not appear that Mr. Matthews received any money on or about June 16, 1868, but that he was paid the full amount on the 28th of that month. The young man who pays money to members says that it is barely possible that Mr. Matthews got some money on the 16th on a memorandum, but there is no evidence in his office of it.
"Mr. Dillon, the bookkeeper of the Sergeant-at-Arms, said that he had a vague impression of having paid the $1200 on the S. C. check to Mr. Ames himself, and added in reply to a question that the amount was so large that he would be likely to remember it. Oakes Ames at the time called his attention to another payment, about the same time, of $1000. Mr. Dillon said that he remembered that, and that he paid the money to Mr. Ames in large bills. Mr. Ames turning to his memorandum book, replied that Mr. Dillon was mistaken, as that $1.000 had been paid with a check to the order of S. M. Eldridge & Co., of Alexandria. Mr. Dillon denied that this could be possible, as if such had been the fact it would have been noted on the book. Today, Oakes Ames found the check drawn to the order of S. M. Eldridge & Co., showing Mr. Dillon to have been mistaken. Mr. Ames thinks that if Mr. Dillon was so much mistaken in a case where be was positive, and where he depended on his books to assist his memory, his vague impressions of what occurred at the time are not worth much."
In order to get at the facts of the case, for it was clear to all that either Oakes Ames or Schuyler Colfax was guilty of perjury, a member of the Poland Committee made an investigation of Mr. Colfax's deposits in the First National Bank of Washington. He found that two checks or drafts from Mr. Nesbitt to Mr. Colfax had been deposited by the latter in 1868, one in April, and the other on the 13th of July, of that year. Each of these drafts was for $1000. This discovery did not help Mr. Colfax much. It showed that Mr. Nesbitt had twice sent Mr. Colfax the sum of $1000, and had taken the precaution to insure the money against loss by sending each sum in the form of a draft payable to Mr. Colfax's order. This very precaution inclined people to doubt that Mr. Nesbitt would have been so reckless as to send Mr. Colfax a thousand dollar note in an unregistered letter, only a short while before he took the precaution to send a similar sum by a draft.
"Mr. Colfax," says the press dispatch from Washington of February 18th, "has no hesitation in saying that he did receive from Mr. Nesbitt, in each of the months of April, June, July, and October in that year, a remittance of $1000, making $4000 in all, the April and July remittances having been in checks. These remittances were made partly on personal and partly on political grounds. The letters accompanying two of them are in existence. Those covering the other two cannot now be found. Mr. Colfax, in his testimony, made no reference to any of the remittance except that of June, for the sole reason that that remittance only had any reference to or connection with the subject of the investigation before the Committee, and his counsel, with full knowledge of the facts, and to whom the whole responsibility in this regard belong, advised him that he could not properly open the subject of the remittance without bringing in extraneous and important matter before the Committee, and departing from the point of issue."
On the 19th of February, Mr. Colfax appeared before the Poland Committee, and produced Mr. Nesbitt's letters which accompanied the drafts received in April and July, but stated that he could not find the letter which accompanied the $1000 bill which he claimed to have received in June. He produced conclusive evidence as to the other three remittances, but could not produce evidence as satisfactory as to the June remittance.
There the case rests at present. Mr. Colfax has still before him
the task of proving that he received $1000 from Nesbitt in June, and did
not receive $1200 from Oakes Ames. He is still entangled in the terrible
web of circumstantial evidence against him. That he may escape from
it and vindicate himself is the wish of all good men. There is not
a public man in America whose vindication would be more cordially hailed
by the people. The people do not wish to believe him guilty; but
they are appalled by the terrible mass of circumstantial evidence against
him, and he must, in justice to himself, destroy this. It is the
earnest wish of the writer, who has sought to present a simple statement
of the facts of the case as far as they have been developed, that he may
Transcribed and annotated by, and Courtesy of the Bruce C. Cooper Collection.
Portraits courtesy Terry Cox.