Credit Mobilier << moh BEEL yuhr or moh BEEL yay >> of America was a joint-stock company responsible for a major political scandal in the United States. It was first chartered in 1859 as the Pennsylvania Fiscal Agency. In 1864, the agency came under the control of the Union Pacific Railroad Company, which renamed it Credit Mobilier and made it the railroad’s construction company. In effect, the same men owned the Union Pacific and Credit Mobilier, and they awarded the railroad’s construction contracts to Credit Mobilier. Under the Pacific Railroad Acts of 1862 and 1864, the federal government gave the Union Pacific large loans and land grants to build a transcontinental railroad to the West Coast. In building the railroad, the Union Pacific paid unreasonably high bills submitted by Credit Mobilier, and the Credit Mobilier owners benefited immensely.
The managers of Credit Mobilier tried to ensure that the U.S. Congress did not question the way the railroad managed its business. They did this by offering Credit Mobilier stock at far below market value to certain key congressmen and other federal government officials. The participants were even allowed to pay for the stock out of dividends they expected to earn from it. Oakes Ames, the head of Credit Mobilier and a member of the U.S. House of Representatives, secured the participation of several important officials. Those accused of participating included Representatives Schuyler Colfax and James A. Garfield and Senator James W. Patterson. Colfax became Vice President of the United States in 1869. Garfield served as President in 1881.
Credit Mobilier’s dealings were revealed in 1872. Congress investigated the company and issued two reports. But it did little more than to censure (officially condemn) Ames, Patterson, and Representative James Brooks, another participant in the scandal. Ames argued that Credit Mobilier should not be singled out for criticism because similar financial manipulation and bribing of congressmen were widespread. The scandal resulted in mounting criticism by reformers of the standards of public morality in the 1870’s.
