Rumors of financial scandal clouded the national celebrations over completion of the transcontinental railroad in 1869. Three years later, these suspicions were confirmed when a select committee of the House of Representatives uncovered a fraudulent relationship between the Union Pacific Railroad and the Crédit Mobilier of America Corporation, which had been formed to supervise the contracts to build the Union Pacific. A common group of stockholders secretly managed both companies, a scheme that permitted the construction firm to charge the railroad (and ultimately the government) two million dollars more than the actual building expenses. The major sensation of the exposé proved to be that many of the Crédit Mobilier stockholders were highly respected Republican members of Congress. The revelation shocked the nation and significantly weakened the Republican party's leadership.
Statement of the Case
The House investigation focused on the conduct of Representative Oakes Ames (R-MA), for many years an ardent spokesman for the railroad industry. In 1865 Ames permitted himself to be drawn into the machinations of the Crédit Mobilier. Since the secret organization of one group of stockholders under two different titles was questionable at best and since the government had initially granted the railroad exceedingly generous land and loan privileges, Thomas C. Durant, former president of the Crédit Mobilier and mastermind of the scheme, persuaded Ames to dispense company shares to his congressional associates, in order to deter any formal investigations into the shady dealings.
In September 1872 a New York newspaper, acting upon a tip from a disgruntled Ames crony, published the names of congressmen reported to have profited from the company's largesse. Unable to ignore the rising furor, the House of Representatives assembled a committee of inquiry chaired by Representative (and former Senator) Luke P. Poland (R-VT). By December of that year, the stunned Poland committee had received allegations against almost every important committee chairman of the House of Representatives, several senators, and Vice President Schuyler Colfax. Oakes Ames, the source of these charges, added to the confusion by giving rambling, erratic testimony that relied upon a complicated set of records kept on scraps of paper or in inscrutable ledgers. Nor were matters helped by Ames' repeated assertion that he was never good at remembering dates.
By February 1873, the House had become convinced that the Senate should be presented with the information. The House offered no recommendations to the Senate but simply made available all the testimony it had gathered. In this manner, the names of Senators William B. Allison (R-IA), James A. Bayard, Jr. (D-DE), George S. Boutwell (R-MA), Roscoe Conkling (R-NY), James Harlan (R-IA), John Logan (R-IL), James Patterson (R-NH), Henry Wilson (R-MA), and Vice President Schuyler Colfax (R-IN) formally came to the attention of the Senate.
Response of the Senate
On February 4, 1873, James Patterson asked the Senate to appoint a select committee to investigate the charges. When Vice President Colfax excused himself from appointing the committee, the task fell to Henry B. Anthony (R-RI), who chose Lot M. Morrill (R-ME) to chair the group of five. Two Democratic committee members, John P. Stockton (NJ) and John W. Stevenson (KY), promptly asked to be replaced, claiming that they were already excessively burdened by their other Senate obligations, but their colleagues refused to excuse them from serving.
In its preliminary meeting on February 8, 1873, the Morrill committee tried to limit the scope of the investigation to ensure that the report would be completed before the close of the Forty-second Congress on March 3. Since less than a month remained for the committee to review all the evidence from the Poland Committee, interview witnesses, and hold public hearings, the thoroughness of the inquiry came into question from the outset.
William B. Allison, who had served in the House until 1871 and entered the Senate in 1873, described his financial association with Oakes Ames as a casual one, which he terminated by returning the Crédit Mobilier certificates when his Iowa constituents severely criticized him for holding any type of railroad stock. The Morrill committee made no mention of Allison in its final report. He continued to serve in the Senate and was chairman of the Appropriations Committee when he died in 1908.
James A. Bayard, Jr., who had left the Senate in 1869, submitted a letter disavowing knowledge of the nature of the corporation or personal acquaintance with Ames. As the seventy-four-year-old Bayard no longer served in the Senate, the Morrill committee gave only scant attention to the charges against him. His name was not included in the final report, and the elderly senator lived quietly until his death in 1880.
George S. Boutwell, one of the original founders of the Republican party and secretary of the treasury under President Ulysses S. Grant, also received little notice from the Morrill committee, which did not mention him in its report. Boutwell's connection to Ames stemmed from their joint service in the House of Representatives in the late 1860s, a tie that all witnesses agreed was tenuous. Boutwell did not actually enter the Senate until March 1873, after the investigation was completed. He served only one term and later was appointed to codify the Statutes at Large. Active in the field of international law, Boutwell died in 1905.
Roscoe Conkling also escaped the scandal unscathed. Conkling, a former member of the House of Representatives and a senator since 1867, had been alluded to briefly during the House hearings. Based on Conkling's testimony and that of other witnesses, the Morrill committee report specifically dismissed all charges against him as entirely unfounded. An aggressive and powerful senator, Conkling remained an influential member until his dramatic resignation from the Senate in 1881 in a dispute with President James A. Garfield over patronage. He died seven years later.
James Harlan, an outspoken supporter of railroad construction throughout the West, fared less well, despite his prestigious reputation, having served in the Senate before and during the Civil War and as Andrew Johnson's secretary of the interior. The Morrill committee was concerned to discover that in 1865, while he was secretary of the interior, Harlan had accepted a $10,000 contribution toward a future campaign for the Senate from Thomas Durant, the notorious former president of Crédit Mobilier, who was at the time a vice president of Union Pacific. Declaring that "the use of large sums of money to influence either popular or legislative elections strikes directly at the fundamental principle of a Republican government," the committee suggested that such action deserved censure, although it found no evidence that Harlan had permitted the money to influence his behavior as a senator. Time saved Harlan from the possibility of formal censure, for his term expired on March 3, 1873, before further action could be taken. Harlan's subsequent campaigns for senator and governor proved unsuccessful. He died in 1899.
John Logan, who had served in the House before and after the Civil War and entered the Senate in 1871, was completely exonerated by the committee report. In a straightforward account of his dealings with Ames, Logan explained that he refused Ames' original offer but that a few months later the Massachusetts congressman presented him with a $329 check for his dividends. A reluctant Logan accepted the check, cashed it at the sergeant at arms' office, held the money for two days, and then returned it to Ames with $2 interest. Logan's detailed testimony convinced the committee that the episode, which occurred while Logan served in the House, required no further action by the Senate. Logan's long public service was interrupted briefly when he was not reelected at the conclusion of his term, but in 1879 Illinois again sent him to the Senate, where he remained until his death in 1886. In 1884 he was the Republican nominee for vice president on the ticket with James G. Blaine.
A more serious case was that of James Patterson, who had served in the Senate since 1867. He testified that, on separate occasions, he had given Ames $3,000 and $4,000 to invest for him. The $4,000 was invested in Union Pacific and the $3,000 in Crédit Mobilier. Patterson had told the House committee that, since Ames gave him no receipt in writing, he was unaware that he owned the Crédit Mobilier stock. Ames, however, contradicted Patterson on this point, producing a receipt signed by the senator that specified the stock as Crédit Mobilier. Patterson attributed the contradictions between his testimony and that of Ames to a faulty memory and his ignorance of financial matters. He also asserted strongly that there was no reason he should not own stock in that corporation. The Senate committee, however, concluded that Patterson, as a U.S. senator, knowingly arranged with Representative Ames "for the purchase of thirty shares in the stock of the Crédit Mobilier of America at rates greatly below its esteemed value," obtained the stock, received the dividends on it, and later bought and sold Union Pacific stock, knowing about the relations between the two companies and about Ames' involvement in them. He also knew that Ames' goal was to influence his actions as a senator in relation to the two companies. The committee therefore charged in its February 27, 1873, report to the Senate that Patterson gave false testimony to both the House and Senate committees. It unanimously recommended that he be expelled.
On March 3, the day his term expired, Patterson asked the Senate to take up the committee's resolution, so that there would be a full discussion of the case. The Senate, however, pleading the press of end-of-session business, decided not to consider the recommendation until the next session of Congress. On March 14, 1873, during the special session of the new Senate, Henry B. Anthony submitted a resolution declaring that inaction on the committee's resolution should be interpreted neither as approval nor disapproval. The resolution would also have permitted Patterson to submit a statement to be published in the Congressional Record, which just days earlier had begun publication as the official proceedings of Congress and the successor to the privately produced Congressional Globe. After a lengthy discussion, the Senate on March 26 amended the resolution to state only that a pamphlet prepared by Patterson in his defense would be printed, bound, and distributed with the report of the committee. The Senate adopted the amended resolution, believing that this would be the fairest way to give Patterson a chance to state his defense, since he had had no opportunity to defend himself on the Senate floor. At the same time, this approach avoided setting the dangerous precedent of permitting someone who was no longer a member of the body to place a statement in the official Congressional Record.
The unrepentant Patterson, whose friends felt he deserved expulsion no more than several other members, returned to New Hampshire, where he served in the state legislature and later as state superintendent of public instruction. He died in 1893.
Henry Wilson offered the committee the most imaginative explanation for his connection with Ames. He related that in 1865 his wife had received a monetary gift of $3,800, $1,000 of which she then lost through an unfortunate investment Wilson recommended. Wilson reimbursed her for this loss from his own money, then, anxious to provide his wife with a successful investment, he turned to the Crédit Mobilier Corporation. He had learned about the company from dinner-table conversation with Ames at their Washington boardinghouse. Mrs. Wilson, placing undeserved trust in her husband's financial skills, did purchase the stocks, although she never received the certificates. Wilson later had second thoughts about the propriety of the business deal and asked Ames to refund his wife's money, which Wilson returned to her. Out of his own pocket, he added the $814 that Ames told him would have been the profit on the transaction. Thus, Wilson told the committee, he was "and ever shall be, $1,814 poorer than I should have been had . . . the investment with Mr. Ames not been made." The Morrill committee agreed that these actions in no way benefitted or tainted Wilson, who in March 1873 had become vice president of the United States after the political ruin of Schuyler Colfax through his part in the Crédit Mobilier scandal. The Morrill committee report did, however, mildly reprimand Wilson for insisting vehemently and erroneously during his election campaign that he had never known anything of the infamous company or any person connected with it. Wilson, who—unlike many of his colleagues—was a poor man, having been a shoemaker before entering politics, died in office in 1875.
Schuyler Colfax, the bright and popular vice president under Grant, who had previously served in the House for fourteen years, six of them as Speaker, contributed to his own downfall by delivering an impassioned speech asserting his innocence in the scandal shortly before the House convened the Poland committee. The resulting testimony implicated Colfax so clearly that his political credibility never recovered. Colfax tried to cloak each new revelation with respectability, but he could not explain away a $1,200 canceled check in his name that Ames held. Colfax's status as president of the Senate made his position slightly different from that of the charged senators. Neither the Poland committee nor the Morrill committee reports discussed the allegations against him. On February 20, 1873, a resolution introduced in the House called for the impeachment of Colfax, but four days later the House Judiciary Committee rejected the measure. Again, time aided the accused. Before further action could be taken in either the House or the Senate, Congress adjourned and the term ended for Colfax, who had failed to be renominated for vice president. No formal adjudication resolved the Colfax scandal. Although he remained active in politics and gave many speeches, his brilliant career was destroyed. Colfax died in 1885.
The Morrill committee completed its work in less than three weeks. Given the complexity and the seriousness of the charges, many believed the investigations in both the House and the Senate had been little more than cosmetic cover-ups. Political observers wondered how many other politicians had escaped undetected. Still, the reputations of several leading Republicans, and indeed of the entire party, suffered from the scandal. Although the Republicans hoped to limit the damage, it became clear that the Crédit Mobilier affair had seriously undermined the Republican party. Despite several senators being implicated in the scandal, only in the case of James Patterson was expulsion recommended.
Source: U.S. Senate Historical Office, United States Senate Election, Expulsion and Censure Cases: 1793-1990 (Washington: Government Printing Office, 1995), pp. 189-1995.