The Credit Mobilier scandal was a political scandal that rocked the United States in the late 1800s. At the center of the scandal was the Credit Mobilier construction company, which was created to build the Union Pacific Railroad. The company was accused of bribing members of Congress in order to get favorable treatment for the railroad project.
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In 1864, as the Civil War raged, a new company called the Union Pacific Railroad began building westward from Omaha, Nebraska. Five years later, it joined forces with the Central Pacific Railroad, which was moving eastward from Sacramento, California. On May 10, 1869, the two lines met at Promontory Point in Utah and created America’s first transcontinental railroad. The Credit Mobilier scandal erupted a few years later, when it was revealed that some of the railroad’s executives had been bribing members of Congress in order to get favorable treatment for their business.
What was the Credit Mobilier Scandal?
The Credit Mobilier Scandal was a political scandal that took place in the United States in the 1800s. It involved the construction of the Union Pacific Railroad. A group of investors created a company called the Credit Mobilier of America and awarded themselves no-bid contracts to build the railroad. This led to overcharging the government by millions of dollars.
What was the Credit Mobilier Company?
The Credit Mobilier Company was a construction company created in 1864 by Union Pacific Railroad insiders. The company was formed to build a portion of the railroad between Omaha, Nebraska and Sacramento, California. The completed portion of the railroad was then leased back to the Union Pacific at an inflated rate, allowing the Credit Mobilier Company to make huge profits.
The Credit Mobilier scandal erupted in 1872 when it was revealed that members of Congress had been given stock in the company in exchange for their support of the Union Pacific Railroad. Several prominent politicians, including Vice President Schuyler Colfax, were implicated in the scandal. Although no one was ever convicted of wrongdoing, the public outcry led to a significant increase in public scrutiny of government officials.
What was the Scandal?
The Credit Mobilier Scandal was a major political scandal that took place in the United States in the late 1860s and early 1870s. At the center of the scandal was a fraudulent construction company, the Credit Mobilier of America, which had been set up by executives of the Union Pacific Railroad. The company received lucrative government contracts to build part of the transcontinental railroad, and then overcharged the government for its work. Some of the company’s profits were used to bribe members of Congress, in an effort to secure even more favorable treatment.
Who was Involved in the Scandal?
The Credit Mobilier scandal was a political scandal that erupted in 1872 during the administration of President Ulysses S. Grant. The scandal involved the construction of the Union Pacific Railroad, one of the main transcontinental railroads in the United States. A group of investors, known as the “Credit Mobilier of America,” had been formed to finance the construction of the railroad. The group’s primary owners were two prominent Grant administration officials: Vice President Schuyler Colfax and Secretary of War William Belknap.
In return for their investment, the Credit Mobilier investors were given a contract to build the railroad. The contract was very lucrative, and it allowed the investors to essentially overcharge the government for their work. As a result, they made a significant profit, while the quality of the work suffered.
In 1872, news of the scheme leaked to the press, and it quickly became a major political scandal. Both Colfax and Belknap were forced to resign from their positions in disgrace, and several other high-ranking officials were implicated in the scheme. Ultimately, no one was ever formally charged with any crime, but the Credit Mobilier scandal severely damaged Grant’s reputation and helped contribute to his defeat in his bid for re-election in 1876.
Aftermath of the Scandal
The Credit Mobilier Scandal was a United States political scandal that happened in the late 1860s. The Union Pacific Railroad Company hired the Credit Mobilier of America construction company to build the portion of the transcontinental railroad that passed through Omaha, Nebraska. The owners of Credit Mobilier created a fake company, named it after themselves, and then overcharged the Union Pacific for the work. This caused the Union Pacific to fall into debt, and the owners of Credit Mobilier profited immensely. After the scandal was uncovered, the owners of Credit Mobilier were fined and the company was forced to pay back the money it had stolen.
In 1873, a special Congressional committee was convened to investigate the Credit Mobilier scandal. The committee’s hearings were some of the most widely publicized in Congress up to that time. They resulted in the publication of a report that severely criticized misuse of inside information by members of Congress and other government officials. The scandal also brought about the formation of a House Ethics Committee, which is still in existence today.
A number of individuals were criminally prosecuted as a result of the scandal, but none were convicted. The lack of convictions, however, did not deter Congress from passing legislation that restricted the activities of credit mobilier companies and other businesses that might engage in similar activities.
The first trial began in December 1873, with Oakes Ames as the main defendant. The trial lasted for two weeks, and ended with the jury deadlocked. Ames then decided to go to trial a second time, which lasted from June to August 1874. In this trial, Ames was convicted and was fined $5,000.
The next Credit Mobilier trials were held in March 1875. They involved Francis B. Spinney and Charles E. Dunham, both of whom were acquitted. John A. Stewart was also tried and acquitted in April 1876.
The last Credit Mobilier trial was held in January 1877 and involved Daniel E. Sickles, who was found not guilty. After this acquittal, all charges against the participants in the Credit Mobilier scandal were dropped.
The Credit Mobilier scandal had far-reaching consequences. It confirmed the public’s suspicion that politicians were corrupt and that the government was inefficient. The scandal also hurt the reputation of the Republican Party, which was in power at the time. Many Americans began to support the Democrats, who they saw as less corrupt.
The Credit Mobilier scandal also led to a decline in public trust in corporations. The scandal damaged the reputation of Union Pacific, and it became harder for businesses to raise money from investors.
Finally, the Credit Mobilier scandal led to a decline in support for President Grant. Grant had been popular after leading the Union Army to victory in the Civil War, but his support began to decline after revelations about his involvement in the scandal. He was not impeached, but he is often considered one of the worst presidents in American history.
In the end, the Credit Mobilier scandal did not bring down the Union Pacific Railroad or destroy the Republican Party, though it did cause a few politicians to lose their jobs. It also resulted in new laws that made it more difficult for businesses to bribe Congress. The Civil War, which began just a few years after the scandal broke, soon occupied the attention of most Americans and overshadowed the Credit Mobilier story.