Crédit Mobilier scandal

(1872–73) Illegal manipulation of construction contracts for the Union Pacific Railroad that became a symbol of corruption after the American Civil War.

The railroad's major stockholders created Crédit Mobilier of America to divert its construction profits and gave or sold stock to influential politicians in return for favours. A newspaper exposed the scheme in 1872, and after a Congressional investigation two members of the House of Representatives were censured.

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▪ United States history

      in U.S. history, illegal manipulation of contracts by a construction and finance company associated with the building of the Union Pacific Railroad (Union Pacific Railroad Company) (1865–69); the incident established Crédit Mobilier of America as a symbol of post-Civil War corruption. Although its operations were more or less typical of 19th-century railroad building in a wide-open period of U.S. history often referred to as the “Great Barbecue,” sensational newspaper exposures and congressional investigations focussed attention on the Crédit Mobilier. Experience had already taught veteran railroad organizers that more money could be made from construction contracts than from operating the completed road. This promised to be doubly true in the case of the Union Pacific, which was supported by federal loans and land grants but would be spanning the vast unpopulated region between Omaha, on the Missouri River, and Great Salt Lake—a territory unlikely to produce much immediate revenue.

      Crédit Mobilier was part of a complex arrangement whereby a few men contracted with themselves or assignees for the construction of the railroad. Along with certain trustees, the manipulators reaped enormous profits but impoverished the railroad in the process. When it was revealed that Oakes Ames, a congressman from Massachusetts, was involved, the House of Representatives investigated the scandal and censured him and a colleague; several others, including Vice Pres. Schuyler Colfax, were absolved.

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