A Shady Partner of Deals

The Railroad Act of 1864 doubled the size of the railroad's land grants and offered investments to attract investors.  It was particularly beneficial to Union Pacific's Vice President, Thomas Durant. 
Collis Huntington had met Durant while in Washington lobbying for the passage of the act.

Durant believed that the Union Pacific would never be profitable and decided as he put it:  "to grab a wad of money from construction fees and get out."  With that in mind, he had his associate buy a Pennsylvania construction company called Credit Mobilier (French for "Credit on Movable Property") in 1863.  Durant then hired it to construct the Union Pacific Railroad and overcharged the railroads by millions of dollars. 

The venture cost Durant the services of his chief engineer, Peter A. Dey, who resigned in 1864 rather than participate in the scheme.  Durant then tried to hire Grenville Dodge, a Union General, surveyor, and railroad builder, but he refused to leave the Army.  After the Civil War when again offered the position, Dodge accepted the job of chief engineer in 1866, but on the condition that he had complete control on the route the rails would take.

A member of Congress, Oakes Ames of Massachusetts was a stockholder in the Credit Mobilier Company.  In 1867, Ames thought to sell stock to his friends in Congress for far below value.  One of those "friends" was Schuyler Colfax, future vice-president of the United States, who bought stock in the company.  In 1872 rumors of the company's fraudulent dealings surfaced and Durant was investigated.  Ames seized control of the company and escaped unscathed but died shortly thereafter.

Oakes Ames, James Brooks and Schuyler Colfax were all ruined by the scandal.  We will revisit Mr. Thomas Durant later on...

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Today in Pioneer History: "On April 16, 1889, future Hollywood legend and silent film pioneer Charlie Chaplin is born Charles Spencer Chaplin in London, England. In 1918, he signed a contract with First National for $1 million for eight films. A masterful silent film actor and pantomimist who could elicit both laughter and tears from his audiences, Chaplin founded United Artists Corporation in 1919 with Mary Pickford, Douglas Fairbanks and director D.W. Griffith.