Page images

Q. When that contract was made, who were the principal men of interest in, and controlling, the Union Pacific Railroad I-A. The principal stockholders at that time I could not now give. Mr. Durant and General Dix were among them. Not more than two or three hundred thousand dollars had been paid in, and that was a percentage on the shares taken. The first contract for the construction of the Union Pacific Railroad was made, I think, by a Mr. Hoxie, and transferred to the Credit Mobilier. The original parties to the contract had broken down. They had gone on for awhile, but had concluded they would rather lose what they had put in than go on. Then they came to Boston, and got Mr. Ames to go into it. But it was determined that the only safe basis to go on with it was through the medium of a contracting company, and they procured the Credit Mobilier for that purpose. My subscription was to the Credit Mobilier, originally, for 500 shares.

By Mr. SLOCUM: Q. The contract for 247 miles of road, then, was practically with the Credit Mobilier ?-A. Practically it was.

Q. The subsequent contracts for building the Union Pacific Railroad were made directly with the Credit Mobilier ?-A. No, sir; not at all. The Credit Mobilier never had anything to do with building the road, except the first 247 miles. When I went into the direction of the Credit Mobilier the Hoxie contract had been transferred to it. After that contract was completed, Mr. Durant said the Credit Mobilier should never have another contract. while it was under the control of the men who were called the “ Ames party,” and it never had, except in this way: The Credit Mobilier agreed to guarantee the fulfillment of the Ames contract for a consideration, and furnish money, when called upon, for which they were to have two and a half per cent. commission. When called upon, however, they were unable to furnish the money, and, therefore, they never had really any such connection, and I believe the formal connection ceased a few months afterward.

By Mr. HOAR: Q. The whole business of the Credit Mobilier consisted in this contract of 247 miles, and their whole property consisted in profits they made on that contract ?-A. No; their property consisted, in addition to that in the capital, of $3,750,000, which was paid in money.

By the CHAIRMAN: Q. Who contracted for building the balance of the road !--A. There were something over 800 miles of the road remaining to be built. Oakes Ames took a contract to build 667 miles, with the privilege of building the balance, if he should conclude to do so. But after the 667 miles were built, under this contract, he declined to take the remainder, and it was built, I understand, for and on account of the stockholders of the Union Pacific Railroad Company. The condition of the contract given to Mr. Ames, and the only condition he would take it upon, was that it should receive the consent of all the stockholders of tbe Union Pacific Railroad Company at that time.

Q. That portion of the road, then, which Mr. Ames declined to build under the provisions of this contract was built in the interest of the stockholders; by whom was it built; was it a contract let to any one? -A. There was a contract made with a man by the name of Davis ; but I think it could not be put through under his contract, and it was finally built for and on account of the Union Pacific Railroad stock. holders at that time.

Q. What interest did the Credit Mobilier have in the Ames contract, either at the time it was made or subsequently by transfer or assignment?-A. The corporation had no interest except as I have described. When Mr. Ames took this contract it was subject to the assent of the stockholders of the Union Pacific Railroad Company; but he said he knew the stockholders of the Credit Mobilier were the parties to whom it really belonged ; and if there was any benefit to be derived from it he thought it was fair and just to give every stockholder in the Credit Mobilier the right to come in and take an interest under his contract on signing an agreement to become personally liable, and that was regarded as satisfactory. I think he assigned the contract to seven trustees, for and on account of the individuals who were stockholders in the Credit Mobilier, and that they were to have an interest in his contract in pro rata proportion to their ownership of stock in that company. That was the original design with the Credit Mobilier, who built the road. The contract was not given to the Credit Mobilier on account of the feeling against it on the part of the chief men and managers of the Union Pacific Railroad Company; but they gave it to Mr. Ames; and all the parties interested had perfect confidence in him that he would do what was riglit, and would give to every man an interest such as belonged to him. The contract was executed in that way. The Credit Mobilier, as a corporation, bad no jurisdiction over or voice in it, or anything to do with it.

Q. Were there any dividends declared by the Credit Mobilier ?A. Yes, sir; there were two dividends of 6 per cent. each. I think these were all the Credit Mobilier, as a corporation, ever declared.

Q. Were there profits made from the Ames contract ?--A. Yes, sir.

Q. Do you remember the amounts ?-A. I think I can tell pretty nearly. The Oakes Ames contract amounted to $47,900,000. In a suit which was brought for taxes, in the State courts of Pennsylvania, I was a witness. I was then a director of the road, and of the Credit Mobilier, and had occasion to make out a statement for use in that suit, which, I think, was entirely accurate. The dividends upon that contract were the only profits amounting to anything ever made by the Credit Mobilier or anybody else in building the road, and these profits were between $8,000,000 and $9,000,000 upon that contract, estimating it upon this basis: The road was finished and opened, I think, in May, 1869. I took the average market value of the stock and bonds which they received in payment of this contract between that date and January 1, 1870. Upon that basis, which everybody regarded as a fair basis, taking the average market value for that period of over seven months, the profits would amount to between $8,000,000 and $9,000,000.

Q. Were these profits divided among the stockholders of the Credit Mobilier ?–A. They divided the profits during the progress of the work, in some instances, sooner than it should have been done, and the consequence was, that before the contract was finished they had to call upon the parties for a large sum of money. Mr. Ames aided them to the amount of several millions, and they all had to do a good deal.

Q. Where are the books and papers showing these transactions and this division of the profits ?-A. These books are in the hands of the trustees of that contract. I suppose they are in Boston.

Q. Who are the trustees !-A. Oliver Ames, Benjamin E. Bates, John Duff, Thomas C. Durant, Sidney Dillon, and H. Š. McComb. That is my recollection of the names.

Q. Do you know whether they have a secretary, or any officer, who is the special custodian of these books and papers ?-A. They are in the custody of the treasurer, I believe, Benjamin E. Bates, president of the Bank of Commerce.

Q. Will the books of the Credit Mobilier show anything on this subject ?-A. No, sir; not at all. They had nothing to do with it. There was a part of the road in dispute-I think about one hundred miles, which was compromised in some way—and I suppose the books of the Credit Mobilier would show in regard to that. I believe it was out of that these two dividends of 6 per cent. each were made.

Q. State whether the shareholders of the Union Pacific Railroad all consented to the Ames contract.-A. Yes, sir, I presume so, at least with two or three trifling exceptions; but I cannot recall any to mind now, except Brigham Young. I believe his stock was afterward purchased by Mr. Dillon or some one, so that finally they all came in. Brigham Young never made any objection to the contract that I heard of, and the only reason of his not assenting was that he was away in Salt Lake City.

Q. Was there any assent given by the Government, so far as you know, to this contract ?-A. I do not think there was. It was not regarded that the Government had any interest in it at that time, except to have · the road built according to the conditions that had been agreed upon.

WASHINGTON, D. C., January 10, 1873. OAKES AMES, a member of the House of Representatives, sworn and examined.

By Mr. SWANN: Question. Do you know of any further documents which would give additional light in this investigation other than those mentioned by Mr. Alley ?—Answer. No, sir; I know of nothing that would give any more light than the books of the company,

Q. Then all the information that the committee desire upon that subject has been communicated by Mr. Alley in his testimony?-A. I think he has named all the books and papers that bear upon the question.

Q. Have you any documents in your possession that would throw light upon the subject ?-A. I have no documents except printed copies of the contract, and other papers filed in this case in Philadelphia, which I will furnish to the committee, if they desire.

Q. Have you a copy of the assent of the stockholders of the Union Pacific Railroad to the Oakes Ames contract?-A. I do not know that I have; that would be in the possession of the trustees.

The committee adjourned until January 14.


WASHINGTON, D. C., January 14, 1873.
The committee met at 7.30 p. m. Present, the chairman, (Mr. Wilson,
of Indiana,) and Messrs. Hoar, Shellabarger, and Swann.
BENJAMIN F. HAN sworn and examined.

Question. Where do you reside!-Answer. In New Jersey.

Q. Do you know of a corporation known as the Credit Mobilier of America 1-A. I do.

Q. Are you an officer of that corporation ?-A. I am assistant secretary and treasurer, and also a director.

Q. Have you the custody of the books of that corporation ?-A. Yes, sir.

Q. Have you them here with you ?-A. Yes.

Q. Have you a copy of the act or charter under which that corporation is organized ?-A. Yes, (producing it.)

Q. Is this document which you have handed to me the original act of incorporation and the amendments thereto I-A. It is the original act of incorporation. It does not contain all the amendments.

Q. How many amendments are there to this act ?-A. I know only of one. There may be others. Q. Have you a copy of that one ?-A. No, sir; I have not.

Q. Look at this paper that I show you, and state whether that is a copy of it.-A. I should take it to be.

Q. Have you any doubt about it?-A. No, sir; none in the world; I take that to be a copy of it.

The charter and the amendment were put in evidence, as follows:

No. 715.

AN ACT to incorporate the Pennsylvania Fiscal Agency. SECTION 1. Be it enacted by the senate and house of representatives of the Commonwealth of Pennsylrania in general assembly met, and it is hereby enacted by the authority of the same, That Samuel J. Reeves, Ellis Lewis, Garrick Mallory, Duff Green, David R. Porter, Jacob Ziegler, Charles M. Hall, Horn R. Kneass, Robert J. Ross, William T. Dougherty, Isaac Hugus, C. M. Reed, William Workman, Asa Packer, Jesse Lazear, C. S. Kauffman, C. L. Ward, and Henry M. Fuller be, and they are hereby, appointed commissioners to receive subscriptions and to organize a company, by the name and style of the Pennsylvania Fiscal Agency; and the owners of the shares herein authorized to be issued, when the company is organized, shall, under the name and style aforesaid, have perpetual succession; and inay purchase, hold, and acquire, by any lawful means, estate, real and personal, and the same may use, sell, lease, let, mortgage, transfer, and convey, and otherwise dispose of; and may sue and be sued, plead and be impleaded, contract and be contracted with, and have and use a common seal, and the same may change at pleasure; and may make by-laws and regulations for the government of their affairs, and may have and use all the rights, powers, and privileges which are or may be necessary for them to have as a company incorporated for the purposes herein stated : Prorided, That the said company shall not at any time hold, in this State, more land than may be requisite for the convenient transaction of their business.

SEC. 2. That the purpose of this act is to organize an incorporated company, and to authorize them, as such, to become an agency for the purchase and sale of railroad bonds and other securities, and to make advances of money and of credit to railroad and other improvement companies, and to aid in like manner contractors and manufacturers, and to authorize them as a company to make all requisite contracts, and especially to receive and hold, on deposit and in trust, estate, real and personal, including the potes, bonds, obligations, and accounts of States, and of individuals, and of companies, and of corporations, and the same to purchase, collect, adjust, and settle, and also to sell and dispose thereof in any market in the United States, or elsewhere, without proceeding in law or in equity, and for such price and on such terms as may be agreed on between them and the parties contracting with them, and also to indorse and guarantee the payment of the bonds, and the performance of the obligations of individuals, of corporations, and of companies.

Sec. 3. That the capital stock of said company shall consist of fifty thousand shares, of one hundred dollars each ; and the commissioners aforesaid, or a majority of them, may, in person or by proxy, open books of subscription at such times and places as they deem expedient, and when five thousand shares shall have been subscribed, and five per centum thereon shall have been paid in, the shareholders may elect five or more directors; and the directors of the said company, when it shall have been organized may, and they are hereby authorized and empowered to have and to exercise, in the name and behalf of the company, all the rights, powers, and privileges which are intended to be herein given; and niay, from time to time, increase their resources by borrowing inoney on a pledve of their property, or withont such pledge, or by new subscriptions, not exceeding fifty thousand shares; and any citizen or subject, company or corporation, of any State or county, may subscribe for, purchase, and hold shares of the said company, with all the rights and subject only to such liabilities as other shareholders are subject to; which liabilities are no more than for the payment to the company of the sums due or to become due on the sbares held by them; and when new subscriptions are made, the shares may be issued at par or sold for the benefit of the holders of the shares heretofore issued.

SEC. 4. That the by-laws shall prescribe the manner in which the officers and agents of the company shall be chosen, and designate their powers and duties, and their terms of service and compensation ; and the principal office of the company shall be in Philadelphia, but the directors, under such rules and regulations as they may prescribe, may establish branches and agencies in Europe and elsewhere, and may deal in exchange, foreign and domestic; but the said company shall not exercise the privilege of banking, nor issue their own notes or bills to be used as bank-notes or as currency.

SEC. 5. That three-fifths of the directors of the said company shall be citizens of the United States, and the majority of the whole shall reside in this State.

SEC. 6. That the said company shall pay to the State treasurer, for the use of the State, a bonus of one-half of one per centum on the sum requisite to be paid in previous to the organization, payable in four equal annual installments, the first payment to be made in one year after the payment on the capital stock shall be made, and also a like bonus on all subsequent payments on account of the capital stock of the said company, or any increase thereof, payable in like manner; and, in addition to such bonus, shall pay such tax upon dividends exceeding six per centum per annum as is or may be imposed by law.

W. C. A. LAWRENCE, Speaker of the House of Representatires. JNO. CRESWELL, JR.,

Speaker of the Senate. Approved the first day of November, anno Domini one thousand eight hundred and fifty-nine.



Harrisburgh, Norember 1, A. D. 1859. I do hereby certify that the foregoing is a full, true, and correct eopy of the original act of the general assembly, as the same remains on file in this office.

In testimony whereof, I have hereunto set my hand and caused the seal of the secretary's office to be affixed, the day and year above written.


Secretary of the Commonwealth. PENNSYLVANIA, 88 :

[Seal of secretary's office, Pennsylvania.]




(L. S.] In the name and by the authority of the Commonwealth of Pennsylvania, Andrew G. Curtin, governor of the said Commonwealth,

To all whom these presents shall come, sends greeting:

Whereas an act of the general assembly of this Commonwealth, entitled "An act to incorporate the Pennsylvania Fiscal Agency," approved the 1st day of November, A. D. 1859, provides for the organization of a company by the name, style, and title of “The Pennsylvania Fiscal Agency;"

And whereas the commissioners, in accordance with said act of the general assembly; have made application to me for the issuing of letters-patent to said company; and whereas the stipulations and things in the said act directed to be performed have in all respects been fully complied with: Now, know ye, that in pursuance of the power and authority to me given by law, I, Andrew G. Curtin, governor of the said Commonwealth, do, by these presents, which I have caused to be made patent and sealed with the great seal of the State, create and erect the subscribers to the stock of the said company for the number of shares by them subscribed, viz:

Samuel T. Billmeyer, four shares,
Oliver W. Barnes, two thousand four hundred and ninety-six shares,
Cbarles M. Hall, two thousand four hundred and ninety-five sbares,
E. Reed Myer, five shares,
Duane Williams, three shares,

« PreviousContinue »