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greyseal
01-06-2013, 02:36 PM
The Corporation that controls America
(note to readers); The Credit Mobilier referred to in item 17,administered the Internal Improvement Corporation, railroads, bridges, and infrastructure improvements, something the first President from Illinois was obsessed with too. After the scandal, the Internal Improvements Corp. became the department of Interior , the Credit Mobilier became the Commodity Credit Corporation, and is also known as the Department of Agriculture
The Commodity Credit Corporation is the:
(1).Department of Defense, formally the War Department
(2)Armed Services, name changed to Armed Forces.
(3) land division of Interior is the National Security Agency.
(4) The Department of Education
(5) Public Mental Health Service, Congress’ refusal to add mental health test prior to gun ownership, granted a scholarship to James Holmes (the Colorado shooter).
(6) Administers all children vaccinations, and drugs for mental impairments.
(7) finances all home mortgage loans, through the banks, and foreclosure through MERS, based on laws that pertain to public lands, eminent domain.

Cato Institute
Department of the Interior
Timeline of Growth
by Chris Edwards


(1).1783: The Treaty of Paris gives the United States ownership of all lands south of Canada, east of the Mississippi River, and north of
Florida. In the 1780s and 1790s, the federal government gains further territory as the states cede to it their western land claims.
(2).1785: Congress adopts the Land Ordinance, designed to regularize the sale of federal lands. For the nation's first century, the
federal government's general policy is to dispose of its lands by selling them or transferring them free to settlers, veterans, railroad
companies, and state governments.
(3).1787: The Northwest Ordinance incorporates the idea that western lands should be held initially by the federal government and then
transferred to new state governments when they are formed.
(4).1787: The United States Constitution gives Congress the "power to dispose of and make all needful Rules and Regulations
respecting the Territory and other Property belonging to the United States."
(5).1789: The first Congress under the new Constitution considers creating a separate department for internal affairs, but ultimately
decides to put both domestic and foreign activities under the Department of State.
(6).1796: The Public Land Act aims to sell federal lands in the West and collect revenues to pay down the government's debt. However,
this law and other pre-1862 efforts to raise revenues from federal land sales are not very successful. The government sets prices too
high, and settlers generally ignore federal rules and squat on lands opening up in the West. The 1862 Homestead Act finally
incorporates the reality that it is better to provide western lands to settlers for free.
(7).1803: The Louisiana Purchase adds vast land holdings to the federal government. The purchase roughly doubles the size of the
nation. The United States expands further with the addition of Florida in 1819, Texas in 1845, the Oregon territory in 1846, and the
Mexican Cession area in 1848. These areas put an additional 1.3 billion acres of land under federal control.
(8).1812: The General Land Office is created to manage federal land sales in the West and to handle land bounties given for military
service. It is the forerunner to the Bureau of Land Management.
(9).1824: Secretary of War John C. Calhoun establishes the Bureau of Indian Affairs within the Department of War. The agency is also
called the Indian Office. Indian tribes are treated as foreign nations and the federal government negotiates treaties with them. The
bureau is moved to the new Department of the Interior in 1849.
(10).1830: President Andrew Jackson signs into law the Indian Removal Act. The law is designed to peacefully move Indians in eastern
states to west of the Mississippi River, but the federal government uses force to move noncompliant tribes. The government, for
example, sends 7,000 troops to remove 16,000 Cherokees from their lands in Georgia in 1838. The forced march westward is
known as the Trail of Tears, and it results in the deaths of 4,000 people from cold, hunger, and disease.
(11).1847: The Mormons arrive in Salt Lake Valley and within a year create an irrigation system covering 5,000 acres. Private irrigation
efforts are pursued in many areas of the arid West, and by 1900 about 7.5 million acres of farmland in the 17 western states are
irrigated.
(12).1848: The California Gold Rush begins before Congress has any detailed mining policies in place for federal lands, but the miners
quickly develop their own legal institutions. An official history of Interior notes: "Miners, who quickly spread their search for precious
metals across to the Pacific Coast and Rocky Mountains, were forced to develop their own laws and regulations. Prospectors
organized mining districts and devised rules as to how claims were staked and ‘title' was held. These rules were then enforced by
miner courts."
(13).1849: Congress creates the Department of the Interior. The Senate vote in favor is fairly narrow because of opposition from members
who fear federal encroachment on state affairs. Once created, Interior becomes known as the "department of everything else" for its
many disparate activities.
(14).1850: The first federal railroad land grant is for a line from Chicago, Illinois to Mobile, Alabama.
(15).1850: The Swamp Act leads to the transfer of 50 million acres of federal land to state governments over time. Many of the transfers
stem from the states cheating the federal government into handing over ineligible non-swamp land.
(16).1862: The Homestead Act allows western settlers to receive title for up to 160 acres of free land if they live on it for five years and
make improvements. The Republican Party adopts homesteading in its 1860 election platform, and passage is made possible by
the secession of Southern states from the union. This important law allows almost 290 million acres of federal land to be privatized in
coming decades. However, the 160-acre allotments are too small to make economic sense in many of the arid regions in the West.
Thus, "there was no legal way to acquire the large acreage required for a viable ranch, timber operation, or other production unit in
the West." Congress is slow in rectifying the problem with the result that western land acquisition is subject to rampant fraud and
various distortions as settlers try to assemble larger and more efficient parcels of land.
(17).1862: The Pacific Railroad Act provides land grants and low-interest loans to the Central Pacific and Union Pacific companies to
build a railroad connecting the eastern states to the West Coast. Congress grants 128 million acres of land to railroad companies
between 1862 and 1871. The process, which is overseen by Interior, is hit by the Credit Mobilier scandal in 1872. Credit Mobilier
—a construction company that is financially controlled by leaders of the Union Pacific Railroad—makes large profits at the taxpayers' expense.
(18).1862: The Morrill Act provides grants of federal land to the states. The states are to use the proceeds of land sales to create colleges
focused on agricultural studies.
(19).1866: Mining laws of 1866 and 1872 officially open federal lands in the West to mining, although mining on these lands is already
widely practiced. The new federal laws generally follow the rules and property rights developed by miners themselves in prior
decades.
(20).1871: Congress abandons the policy of making new treaties with Indian tribes as if they were fully sovereign governments.
(21).1871: Congress creates the U.S. Fish Commission to study the stocks of commercial fish in the nation's lakes and on the ocean
coasts. The agency is renamed the Bureau of Fisheries in 1903, and it is combined with the Bureau of Biological Survey to become
Interior's Fish and Wildlife Service in 1940.
(22).1872: Congress creates the first national park, Yellowstone, which is administered by Interior.
(23).1873: Congress transfers oversight of U.S. overseas territories from the State Department to Interior. Over time, Interior becomes
responsible for the territories of Alaska, Hawaii, the Virgin Islands, Puerto Rico, Guam, and American Samoa.
(24).1875: Interior Secretary, Columbus Delano, resigns from office in the face of various corruption scandals. An official history of Interior
notes that "corruption in the Indian Service rose to new heights" under Delano. He apparently secures favors for his son, takes
bribes for land grants, and oversees a department that has an array of bogus clerks and agents on the payroll.
(25).1879: The U.S. Geological Survey is created within Interior to research and map the nation's lands, thus consolidating activities that
had taken place within both Interior and the War Department.
(26).1880s: The Bureau of Indian Affairs expands to more than 2,000 employees who oversee the federal relationship with Indians living
on reservations. The federal approach is to "civilize" the Indian, which "meant transforming him into a Christian farmer embracing the
values of 19th-century white America." That misguided policy was combined with a federal Indian bureaucracy that was totally inept.
During this era, "the Indian Bureau operated under constant and often well-founded criticism of corruption and inefficiency in its
handling of the millions of dollars in supplies purchased each year for the reservations," notes an official history.
(27).1887: The Dawes or General Allotment Act provides Indian families with an individual portion of tribal land for homesteading in an
effort to assimilate them into American society. These land grants are held in trust by the federal government for 25 years. "Excess"
lands on reservations are sold to non-Indian settlers. The Dawes Act undercuts tribal governments, and it helps cause a huge
shrinkage of Indian tribal lands from 138 million acres in 1887 to 48 million acres in 1934. Allotment represents an effort "to destroy
tribes and their governments and to open Indian lands to settlement by non-Indians and to development by railroads."





(28).1890: Interior's Pension Bureau has about 6,000 employees, whose main role is to administer the benefits provided to Civil War
veterans.
(29).1891: The Forest Reserve Act allows presidents to set aside protected forest areas on federal lands. These reserves are initially
managed by Interior, but are moved to the Department of Agriculture's Forest Service in 1905. The Forest Reserve Act reflects the
Progressive movement's efforts to reverse the long-standing policy of transferring federal lands to state governments and the private
sector. However, efficiently managing vast areas of land from Washington turns out to be much more difficult than the Progressives
envision.
(30).1902: The Reclamation Act passes with the support of President Theodore Roosevelt and after years of lobbying by special interest
groups such as the railroads. The Act creates a Reclamation Service—later the Bureau of Reclamation—to construct dams and other
infrastructure to bring water to arid western lands. Reclamation projects are distributed across the states based on political factors,
and with little regard to choosing the projects with the highest returns. The Reclamation Act requires the full repayment of project costs
by water users—generally farmers—but only a small fraction of the costs are ever repaid.
(31).1916: Congress creates the National Park Service, which brings together the management of 14 national parks and 21 national
monuments. The agency's first director, Stephen Mather, argues that the federal government should manage only those parks that
are unique and nationally significant, with the rest managed by state and local governments. However, many of Mather's successors
are empire builders, and they encourage Congress to acquire as many sites in as many states as possible. Today, the National Park
Service is hugely bloated with hundreds of sites that would be better managed by state, local, or private owners.
(32).1920: Congress passes the Mineral Leasing Act, which forms the basis of modern rules for extracting oil, gas, and coal resources on
federal lands. The Act enables the government to raise substantial bonus payments, rental payments, and royalties from energy
production on its lands.
(33).1922: News of the Teapot Dome bribery scandal breaks. The Teapot Dome is a federal oil reserve in Wyoming. Investigations reveal
that Interior Secretary Albert Fall has secretly leased the Teapot Dome reserve and California's Elk Hills reserve to particular oil
executives and received a $409,000 payoff in return. Fall is convicted and sentenced to a year in prison.
(34).1928: Congress authorizes the building of Boulder Dam, later named Hoover Dam. Originally, the beneficiaries of western dam
projects were supposed to pay back the Bureau of Reclamation's costs of construction. With the approval of Hoover Dam, however,
"large appropriations began to flow to Reclamation from the general funds of the United States."
(35).1930: The blue ribbon Garfield Commission supports President Herbert Hoover's call to transfer ownership of millions of acres of
western lands to the states. However, the proposal fails in Congress and for similar reasons that such efforts would fail in the 1970s
and 1980s. Ranchers and other special interests in the West are subsidized under existing federal rules, and they are concerned
about how they would fare under changes to land ownership.
(36).1933: Harold Ickes becomes Secretary of the Interior and holds the position until 1946. Ickes is a key architect of the New Deal and
also head of the Public Works Administration. The new Interior building in Washington costing $12.7 million is one of the PWA's first
projects.
(37).1934: The Taylor Grazing Act creates the Grazing Service and authorizes the government to put 80 million acres of land into grazing
districts, requiring users to get permits, pay fees, and follow federal regulations. The law ends the homesteading era, under which
the goal had been to transfer federal lands in the West to private or state ownership.
(38).1934: The Indian Reorganization Act reverses the assimilation goal of the 1887 Dawes Act, and encourages the development of
tribal governments and tribal constitutions. Federal policies during the 1930s are called the Indian New Deal.
(39).1940: The U.S. Fish and Wildlife Service is created from the Bureau of Fisheries and the Bureau of Biological Survey. The agency
oversees a large array of wildlife refugees that the government has been accumulating since 1903. Its responsibilities encompass
migratory birds, endangered species, marine mammals, sport fisheries, wildlife research, and recreational activities.
(40).1946: President Harry Truman uses an executive order to create the Bureau of Land Management (BLM) out of Interior's General
Land Office and the Grazing Service. BLM's responsibilities encompass cattle grazing, timber, mineral resources, wildlife habitat,
cultural sites, recreation, and other activities. Today, the agency has jurisdiction over more than 10 percent of the total land area of the
United States.
(41).1953: Congress changes direction regarding Indian policies, and passes legislation aimed at assimilating Indians and eliminating benefits for tribes. In subsequent years, more than 100 tribes lose federal aid and have their tribal governments dissolved with tribal
resources distributed to individual members.
(42).1961: Stewart Udall becomes Interior Secretary and encourages passage of a flood of environmental legislation during his eight
years in office, including the Clean Air Act of 1963, the Wilderness Act of 1964, the Land and Water Conservation Fund Act of 1965,
the National Historic Preservation Act of 1966, and the Wild and Scenic Rivers Act of 1968.
(43).1968: Congress passes the Indian Civil Rights Act, which begins to reverse the policies begun in 1953 of encouraging assimilation.
The new policy direction for Indian tribes is called the Era of Self Determination. President Richard Nixon supports the new policy in a
1970 message, which promotes the self-determination of Indian tribes and promises tribes continued federal support.
(44).1968: Congress authorizes the massive Central Arizona Project to channel water with huge pumps and aqueducts from the Colorado
River to Phoenix, Tucson, and surrounding areas. The project is one of numerous large Bureau of Reclamation projects that don't
make much sense from an economic or an environmental perspective.
(45).1969: The phrase "Washington Monument strategy" is coined when the National Park Service shuts downs the Washington
Monument in a successful effort to persuade Congress to restore cuts to its budget.
(46).1971: President Richard Nixon signs the Alaska Natives Claims Settlement Act, giving 44 million acres and $962 million to local
native groups and 13 larger native corporations in Alaska.
(47).1973: Congress passes the Endangered Species Act, which expands federal power over private lands. The law's basic approach is
to put most of the cost of endangered species recovery onto the owners of the land the animals happen to live on. As such, it creates
perverse incentives for landowners to destroy or minimize wildlife on their lands before the government effectively expropriates it.
The law is administered by Interior's Fish and Wildlife Service.
(48).1973: Followers of the American Indian Movement (AIM) stage a 71-day occupation and stand-off with law enforcement officials at
Wounded Knee, South Dakota. Led by Russell Means and others, AIM publicizes a position paper describing how to reform federal
Indian policies and abolish the Bureau of Indian Affairs.
(49).1976: The Bureau of Reclamation's Teton Dam in Idaho collapses a year after it was built. The dam suffered from shoddy
engineering, and it was built based on a flawed economic analysis.
(50).1976: The Federal Land Policy and Management Act promotes the retention of federal lands and creates new regulations for lands
overseen by the Bureau of Land Management. Many westerners feel that the law is another federal power grab, and they launch the
Sagebrush Rebellion aimed at transferring federal lands to state ownership.
(51).1977: President Jimmy Carter tries to end funding for a "hit list" of 19 water projects being pursued by the Bureau of Reclamation
and the Army Corps of Engineers. Carter examines the environmental and economic effects of the projects, and he concludes
—probably rightly—that they are boondoggles. However, Carter misplays the politics of the issue, and his proposed spending cuts go
nowhere in Congress.
(52).1977: Congress creates the Office of Surface Mining Reclamation and Enforcement to oversee state regulation of surface coal
mines.
(53).1979: The Nevada legislature passes the Sagebrush Rebellion Act aimed at transferring federal lands in the state to the state
government. The Sagebrush Rebellion in Nevada and other states is spurred by resentment over increasing federal control over
western lands. However, the Rebellion fizzles out when ranchers and other users of federal lands realize that they might not receive
the same level of benefits if there is a change in land ownership.
(54).1979: Senator Orrin Hatch of Utah and other members of Congress introduce legislation to transfer some federal lands to state
control.
(55).1980: President Jimmy Carter signs the Alaska National Interest Lands Conservation Act, which adds more than 47 million acres to
the National Park System and nearly 54 million acres to the National Wildlife Refuge System.
(56).1982: The Reagan administration proposes to privatize unneeded federal lands. President Ronald Reagan's Council of Economic
Advisors spearheads the effort, and Reagan signs an executive order creating a Property Review Board to identify lands to be
sold. His budget chief, David Stockman, supports the plan as a way to reduce the federal deficit. However, Interior Secretary
James Watt is an "ardent foe" of privatization, and the plan runs into opposition from western interests worried that their privileges
with respect to federal lands will be altered.
(57).1982: The Minerals Management Service is established to handle federal revenue collection stemming from onshore and offshore
energy and mineral extraction. After major scandals, the agency is split up in 2010 into the Bureau of Ocean Energy Management,
Regulation, and Enforcement and the Office of Natural Resources Revenue.
(58).1994: Interior Secretary Bruce Babbitt proposes to increase Bureau of Land Management grazing fees for ranchers, which are set
far below market levels. However, he faces strong opposition and withdraws the plan.
(59).1995: Congress abolishes the Bureau of Mines, which had been established in 1910. The bureau acted essentially as an industrial
research organization for the mining industry.
(60).2006: Scandals at Interior lead the department's Inspector General, Earl Devaney, to declare that it suffers from "a culture of
managerial irresponsibility," including cronyism and widespread ethical failures. Devaney charges that "short of a crime, anything
goes at the highest levels of the Department of Interior."
(61).2006: Jack Abramoff pleads guilty to various crimes relating to his lobbying activities, including his efforts to gain favors from officials
at the Bureau of Indian Affairs (BIA). Abramoff had been on President George W. Bush's transition team for Interior, and he had
become friends with the department's deputy secretary, Steven Griles. Abramoff's lobbying goal was to use his BIA contacts to
secure favors for Indian clients related to tribal recognition and tribal gaming. Both Abramoff and Griles were sentenced to jail for their
respective roles in the scandal.
(62).2008: Government ethics reports condemn leaders at Interior's Minerals Management Service for various conflicts of interest.
Interior's Inspector General reports that MMS employees have close relationships with, and have received gifts from, employees of
the energy firms they were supposed to be regulating. MMS failures become even more evident in the aftermath of the 2010
Deepwater Horizon oil spill in the Gulf of Mexico.
(63).2009: President Barack Obama approves a $3.4 billion class action settlement for more than 300,000 Indian trust fund claims after a
long-running dispute. Cobell v. Salazar had charged the Bureau of Indian Affairs (BIA) with decades of mismanagement of Indian
trust funds. The 1887 Dawes Act was supposed to set up trust funds to receive royalty and lease payments for the use of Indian
lands, but the government's handling of these funds was a shambles from the beginning. U.S. District Court Judge Royce Lamberth,
who was overseeing the case, concluded that BIA management was "fiscal and governmental irresponsibility in its purest form." He said that the BIA "has served as a gold standard for mismanagement by the federal government for more than a century."
(64).2011: The Government Accountability Office reports that Interior has between $13.5 billion and $19.9 billion of deferred maintenance
costs. There are frequent complaints that the national parks and other Interior lands and facilities suffer from deterioration and
neglect. The problem is that Interior agencies have accumulated far more assets than they can manage efficiently.
(65).2011: The Department of the Interior manages more than 500 million acres of land, which is about one-fifth the land area of the
United States. The department has about 70,000 employees and 2,400 offices across the nation. It has gross budget outlays of
$20.5 billion and net outlays after offsetting receipts of about $13 billion in fiscal 2011

FrankRep
01-06-2013, 03:08 PM
the Credit Mobilier became the Commodity Credit Corporation

What? Two separate things.


Crédit Mobilier (http://en.wikipedia.org/wiki/Cr%C3%A9dit_Mobilier) was a French banking company, and one of the most important financial institutions of the world during the 19th century.

Commodity Credit Corporation (http://en.wikipedia.org/wiki/Commodity_Credit_Corporation) (CCC) is a wholly owned government corporation created in 1933 to "stabilize, support, and protect farm income and prices" (federally chartered by the CCC Charter Act of 1948 (P.L. 80-806)).

greyseal
01-07-2013, 09:30 AM
What? Two separate things.


Crédit Mobilier (http://en.wikipedia.org/wiki/Cr%C3%A9dit_Mobilier) was a French banking company, and one of the most important financial institutions of the world during the 19th century.

Commodity Credit Corporation (http://en.wikipedia.org/wiki/Commodity_Credit_Corporation) (CCC) is a wholly owned government corporation created in 1933 to "stabilize, support, and protect farm income and prices" (federally chartered by the CCC Charter Act of 1948 (P.L. 80-806)).


That is in part true, however there were two entities called Credit Mobilier.


The Crédit Mobilier scandal of 1872 involved the Union Pacific Railroad and the Crédit Mobilier of America construction company in the building of the western portion of the First Transcontinental Railroad. In 1868 Congressman Oakes Ames had distributed Crédit Mobilier shares of stock to other congressmen, in addition to making cash bribes, during the Andrew Johnson presidency. The story was broken by the New York newspaper, The Sun, during the 1872 presidential campaign, when Ulysses S. Grant was running for re-election. The scandal's origins dated back to the Abraham Lincoln presidency, when the Union Pacific Railroad was chartered in 1864 by the federal government and the associated Crédit Mobilier was established.

greyseal
01-07-2013, 10:18 AM
Credit Mobilier
Brian Trumbore
President/Editor, StocksandNews.com
Four years ago I wrote of the Credit Mobilier scandal and the administration of President Ulysses S. Grant. As this case was part of the legacy of the Transcontinental Railroad, I thought it was a good time to take another look. I've added additional material from new sources.
---
By the end of the American Civil War, no man was more admired, next to Abraham Lincoln, than Ulysses Grant. His efforts on behalf of the Union made him so. And in the South, they respected the magnanimous side of the war leader, for it was Grant who told his men at Appomattox that there would be no cheering after General Lee's surrender. "The war is over - the rebels are our countrymen again."
And so it was that in 1868, with zero prior political experience, Republicans made him their choice to be president and Grant won in convincing fashion in the electoral vote, 214-80, over the Democrat Horatio Seymour.
The post-war era was known as the "Gilded Age" in America. Business leaders certainly didn't want the government meddling in their affairs; unless, of course, it was the building of the railroads, whereupon the robber barons were more than willing to receive federal grants of free public land.
To the moneyed folk, President Grant was like a "chairman of the board," someone who would defer to them on matters of business. For his part, Grant didn't believe in an activist presidency either. Let the peoples' elected officials pass the laws and he'll administer them.
An example of this laissez-faire attitude was contained in Grant's first annual message. "The appropriations estimated for river and harbor improvements and for fortifications are submitted. Whatever amount Congress may deem appropriate for these purposes will be expended."
Patronage was the name of the game back then (actually, it still is today) and the practice would enmesh the Grant administration in all manner of scandals, one of which was Credit Mobilier of America. As historian Charles Morris notes, the name is the bane of history students, for the company had nothing to do with the* French bank of the same name. And the story would get more confusing when in 1867 the French Credit Mobilier collapsed, meaning that for a time a "Credit Mobilier scandal" was being investigated in both countries.
Back in 1859, businessman George Francis Train noticed that there was a little Pennsylvania corporation called the Pennsylvania Fiscal Agency, which wasn't doing any business to speak of yet offered something in its charter that Train and future associates like the legendary Will Durant wanted; a provision that limited liability for company stockholders. In other words, investors would not be liable for the corporation's debts to the full extent of the individual's personal worth. Instead, owner liability would go only as far as each had invested. So in March 1864, Train offered $25,000 for the charter, Will Durant was named president and the name was changed to Credit Mobilier of America.
Meanwhile, the Union Pacific Railroad had been formally chartered by the federal government in 1865 to build out one of the links in the transcontinental line. In return for constructing the railroad, and the costs (and dangers) were huge, the government would then grant the operators millions of acres along the route, land that would become much more valuable once it was accessible by the railroad.
The owners of Union Pacific then turned to Credit Mobilier to be the construction company. Credit Mobilier even had an office next to UP's headquarters (not exactly legal). Credit Mobilier then raised capital in its name to finance the railroad's construction, but charged exorbitant fees along the way, knowing it would be repaid (with healthy interest, of course) from the loan proceeds that Union Pacific received.
Through this scam, the stockholders of Credit Mobilier made millions as a result of the wild overcharging, while Union Pacific and its stockholders were bled dry. In one of my earlier pieces I wrote of chief engineer Dey initially estimating the cost of a large section of track to be $30,000 a mile. But Credit Mobilier asked for, and received, $60,000. [That's when Dey, a man of principle, resigned.]
As for the shareholders, John Steele Gordon writes in "An Empire of Wealth":
"In 1867 Credit Mobilier paid its first dividend to its stockholders, amounting to 76 percent of their investment. Future dividends ranged up to 350 percent. In the second dividend of 1868 alone, a person holding $10,000 par value in Credit Mobilier stock received $9,000 in cash, $7,500 in Union Pacific bonds then selling at par, and forty shares of Union Pacific stock worth $1,600, a return on capital of 181 percent."
And who were the Credit Mobilier stockholders that profited so nicely? Many members of Congress, 13 to be exact, though it took a number of years for the activity to be made public.
The ringleader was Congressman Oakes Ames, himself a shareholder. Since the owners of Credit Mobilier had to make sure there was no interference from Washington, they enlisted the help of Congress as well as members of the Grant administration, who were then given stock in Credit Mobilier. As for the Union Pacific executives, they received sweetheart deals which enabled them to buy CM stock, financing this through UP's huge dividends. Among those receiving shares was Schuyler Colfax, who would become President Grant's first vice president.
Finally, in 1872 the scam began to unravel. While the list of CM stockholders was to be kept confidential, Oakes released them. The 13 congressmen, plus Colfax, were implicated. Ames and one other pled guilty to bribery, while the other congressmen and Colfax were found innocent of receiving bribes after a lengthy trial, because, in the words of Charles Morris, "they did not understand his nefarious purpose." Morris goes on, "The notion that congressmen as a class were entitled to a defense of diminished responsibility delighted the nation's editorial writers."
The news of the scandal was trumpeted as "the most damaging exhibition of official and private villainy and corruption ever laid bare to the gaze of the world." Two vice presidents (Colfax was Grant's first term veep, Henry Wilson the second), the Speaker of the House, a future president (James Garfield) and almost every important committee chairman were involved. As a Philadelphia paper wrote, "All of them are proven, by irrefutable evidence, to have been bribed." The correspondent then goes on to say that "the public has long known, in a vague sort of way, that the Union Pacific Railroad was a gigantic steal:" the federal bond subsidies had been enough to build and equip the road, he said, but the public had been bilked when the Union Pacific was allowed to issue first-mortgage bonds ahead of the government's. On top of that were the tens of millions of acres of the public domain. [Source: David H. Bain]
While much of the activity took place before Ulysses Grant's election, and while he had no direct involvement whatsoever, it certainly hurt his legacy.
In 1873, Mark Twain co-wrote "The Gilded Age" with friend Charles Dudley Warner, an instant best-seller whose title literally defined the era for future generations. Historian Steve Fraser notes in "Every Man a Speculator":
"Twain captured the ridiculousness, the cant, and the pretentiousness of a post-Civil War America where 'the air is full of money, nothing but money, money floating through the air.' Who today can fail to hear the risibly familiar in the following contemplation: 'Beautiful credit! The foundation of modern society?That is a peculiar condition of society which enables a whole nation to instantly recognize point and meaning in a familiar newspaper anecdote, which puts into the mouth of a distinguished speculator in lands and mines this remark - "I wasn't worth a cent two years ago, and now I owe two million dollars." '