Autobiography of Seventy Years Part 26

4. A fourth example was the claim of Senators and Representatives which had been a.s.serted in Andrew Johnson's Administration, and to which General Grant had partly yielded, to dictate the appointment of executive officers. In that way a vast army of public servants, amounting to more than one hundred thousand in number, who were appointed and removed at the pleasure of the Executive, became first the instrument of keeping the dominant party in power, and afterward became not so much the instruments and servants of party as the political followers of ambitious men to whom they owed their office, and on whose pleasure they depended for maintaining them.

I made, in a speech at West Newton in 1876, an earnest attack on this system, and afterward in the Senate had a good deal to do with framing the Civil Service Law, as it was called, which put an end to it.

5. Perhaps the most dangerous attack upon the purity of the Government was the attempt of General Butler to get possession of the political power in Ma.s.sachusetts, and ultimately that of the country. What I was able to do to resist and baffle that attempt is the most considerable part of the public service of my life, if it has been of any public service.

I shall speak of each of these a little more fully.

The responsibility for three of these, I regret to say, rested upon Ma.s.sachusetts men, members of the Republican Party. The Union Pacific Railroad Company and the Credit Mobilier were made up largely of prominent Ma.s.sachusetts men for whom General Butler acted as counsel. When Mr. Ames was on trial before the House of Representatives General Butler, then a member of the House, appeared as a member and took part and made the extraordinary statement to the House that he was there as counsel for Mr. Ames.

Sanborn, who made the contracts, was a Ma.s.sachusetts man.

His profits were used largely in affecting elections in Ma.s.sachusetts.

The Treasury officials who were in fault, whether through carelessness or corruption, were Ma.s.sachusetts men, and the arch contriver of the scheme was a Ma.s.sachusetts man.

Yet the lesson which these things have taught me is that the American statesman who believes that the doctrines of his party are sound should never abandon his principles or quit political life because of its corruption. Let him never for any political advantage support or tolerate a corrupt man, or vote for a corrupt candidate. If a man whose principles are good will yield to an evil motive, it is not likely that the man whose principles are bad will resist it. The American people are upright and honest. They will vindicate and stand by any man in the contest for honesty and uprightness, be he Democrat or Republican, so long as they believe that the ends for which he is striving are for the public good. They will not sustain a man whose counsel they think bad, however honest he may be in his own conduct, or however much he may desire to secure honesty in the conduct of others. No man ever yet accomplished much good by abandoning his party while he continued to hold its principles. Many men have accomplished a great deal of good by striving to purify it.

Every account of political history from the inside will exhibit abundant evidence of wickedness, wrongdoing, and petty personal motives, of low ambitions, of bargains and sales, of timidity, of treachery. The reverse of the most costly tapestry looks mean and cheap. It is said that no man is a hero to his valet.

The reason is not that the hero is mean or base, but that the valet cannot see anything that is great and n.o.ble, but only what is mean and base. The history of no people is heroical to its Mugwumps. But, thank G.o.d, what is petty and personal is also temporary and perishable. The voice of all history, especially the voice of the history of our Republic, speaks to us the lesson which our great philosopher taught and so implicitly believed,

Saying, What is excellent, As G.o.d lives, is permanent.

CHAPTER XXII CREDIT MOBILIER

During the election of 1872 many rumors appeared in the press of the country that there had been great corruption in the management of the affairs of the Union Pacific Railroad. It was charged that the members of the House and Senate, some of whom were named, had been bribed by gifts of stock in the Credit Mobilier to secure their influence in legislation affecting the Union Pacific Railroad.

The Credit Mobilier Co. had been formed to take the contract for building the Union Pacific Railroad. The stockholders of the two companies were identical. Each stockholder of the Credit Mobilier owned a number of shares of the Union Pacific Railroad proportional to his holding in the former company.

The Union Pacific Railroad Company and Central Pacific Railroad Company received liberal land grants from the Government of the United States, that they might each build a part of the line which should connect the Atlantic States with the Pacific Ocean. In addition to the land grants, each road was to receive a loan of Government bonds, payable in thirty years, of $27,000,000, for which the Government was to pay interest, which interest was not required to be repaid by the roads. The roads were also authorized to give a mortgage on their properties for a like amount, of $27,000,000 each, which mortgage was to be prior to the Government's lien for its loan. The charter of the Union Pacific Railroad was granted by the Government of the United States. That of the Central Pacific was from the State of California. The Government undertook to remove all Indian t.i.tles from the public land granted to the Union Pacific Railroad for a s.p.a.ce of 200 feet in width on each side of its entire route, and conferred the right to appropriate by eminent domain necessary private land for depots, turnouts, etc., and public lands to the amount of ten alternate sections per mile, within the limits of twenty miles on each side of the road. It was required by the charter of the Union Pacific Railroad that its stock should be paid in full in cash, and that the interests of the Government should be specially protected by the appointment by the President of five Government Directors.

The Government bonds were to be handed over on the certificate of an officer appointed by the President, as the road advanced to completion. It was required that a Government Director should be a member of every Committee, standing or select.

The managers of the Union Pacific Railroad acquired the franchise of a Pennsylvania Company, known as the Credit Mobilier, divided its stock among themselves in proportion to their ownership in the Union Pacific Railroad, mortgaged the road to the extent permitted by the act of Congress, being a little more than $27,000,000 and mortgaged their land grants for a further sum of $10,000,000. Then they made a contract with the Credit Mobilier Company to construct the road at a price which would exhaust all the resources of the road, including the proceeds of the bonds of all kinds, and divided the proceeds among themselves as dividends on the stock of the Credit Mobilier.

This left the Union Pacific Railroad to begin business mortgaged to its full value, without any resources for its operation, and utterly stripped of the ample endowment which the bounty of the Government had provided for it.

Congress supposed when this munificent grant of land and loan of credit was made it would create a great public highway across the continent for the use of the Government and the people, in war and peace, which should be a strong, solvent corporation, ready for every emergency, and as secure for the public use as New York Harbor, or as the Pacific Ocean.

The devisers of this scheme soon got to quarrelling among themselves. One faction was made up largely of Boston capitalists, and the other of men belonging in New York, New Jersey and Connecticut. The former wanted to have the headquarters of the corporation in Boston, with a Boston man for President; and the latter desired to have the management in New York.

A suit in equity was brought, and the Boston men, headed by Oakes Ames, a member of Congress, and his brother Oliver, both eminent and highly respected business men of Ma.s.sachusetts, were enjoined from voting at a stockholders' meeting held in New York for the election of officers. The injunction was issued by Judge Barnard, who was afterward impeached, and removed from office. On the day of the stockholders'

meeting General Butler, counsel for the Ames faction, found Judge Barnard at lunch, and got him so to modify the injunction as to permit that the votes might be cast, the result of the election not to be declared until the further order of the Court. The other faction who had rested with fancied security under their injunction were taken by surprise.

The Ames ticket had a majority. Thereupon one of the other faction wrote a letter to Elihu B. Washburn, at Washington.

He was an influential member of the House of Representatives, known as the "Watch Dog of the Treasury." The letter was put in the post-office. It exposed the whole transaction. He then informed his opponents what he had done. They knew very well that if Washburn moved an investigation by the House of Representatives, which was likely, the game was up. No further bonds would come from the United States Treasury.

Judicial proceedings would in all likelihood be taken at once to annul the charter, or restrain further action under it.

They instantly came to terms. The two factions agreed on a Board of Directors. The letter to Washington was withdrawn from the mail. Oakes Ames received a quant.i.ty of the stock of the Credit Mobilier, which he was to distribute among influential members of Congress at par, "putting it," according to his testimony given before a Committee afterward, "where it would do the most good." A list of members of the two Houses was agreed upon, to whom the stock should be offered. It was expected that they would pay for it at par. But there had been already a large dividend a.s.signed to it, which with the dividend expected to be paid shortly, would amount to much more than the nominal par value of the stock. So the purchase of one of the shares was like purchasing for $1,000 a bank account which already amounted to, or shortly would amount to, more than double that sum.

A list of the men who were to be induced to take this stock was made out with wonderful and prophetic sagacity. It contained some of the ablest and most influential men in the two Houses of Congress, representing different parts of the country.

It included men as conspicuous for integrity as ability. Each of them occupied already a great place in the respect of his countrymen, and nearly every one of them attained a much greater place afterward. This is the list of the members of Congress to whom stock was to be conveyed:

LIST OF MEMBERS OF CONGRESS TO WHOM STOCK WAS TO BE SOLD AGREED UPON IN NEW YORK, ENTERED IN OAKES AMES'S MEMORANDUM BOOK, AND TAKEN BY HIM TO WASHINGTON

James G. Blaine of Maine.

Senator James W. Patterson of New Hampshire.

Senator Henry Wilson of Ma.s.sachusetts.

Schuyler Colfax of Indiana.

Thomas D. Eliot of Ma.s.sachusetts.

Henry L. Dawes of Ma.s.sachusetts.

George S. Boutwell of Ma.s.sachusetts.

James A. Garfield of Ohio.

Glenni W. Schofield of Pennsylvania.

William D. Kelley of Pennsylvania.

Joseph F. Fowler of Tennessee.

John A. Bingham of Ohio.

Senator James A. Bayard of Delaware.

William B. Allison of Iowa.

James F. Wilson of Iowa.

Roscoe Conkling of New York.

James Brooks of New York.

John A. Logan of Illinois.

When Mr. Ames got to Washington he added the names of several Senators to his list, some of whom took the stock.

It will be seen by an examination that men of great ability and influence were very skilfully selected. Two of them afterward became Vice-Presidents of the United States. One of them became President of the United States. Another became Secretary of the Treasury. Two others became Speakers of the House. Five others were very prominent candidates for the Presidency. Another was Chairman of the Judiciary Committee of the House. Another became Chairman of the Committee on Appropriations and subsequently of Ways and Means. Nine of these gentlemen, then members of the House, were afterward elected to the Senate.

Mr. Blaine, Mr. Eliot, Mr. Bayard, Mr. Conkling and Mr. Boutwell refused absolutely to have anything to do with the transaction.

All the others were fully acquitted on investigation, by the judgment of the House, of any corrupt purpose or any desire to make money or get private advantage by reason of their official influence, or of any expectation that they would be likely to be called upon to take or refuse any action by reason of their relation to these corporations. It was thought that they had been careless in that they had not been put on their guard by the fact that so large a dividend was to be paid on the stock. In all cases the amounts received were very small, in general not amounting to more than $1,000.

In two or three instances the people thought there was want of candor or frankness in telling the full transaction to the public, when the newspaper charges first made their appearance.

Henry Wilson never had any of the stock. But some of his friends made a present of a small sum of money to Mrs. Wilson, and the persons having the matter in charge invested a portion of it in Credit Mobilier stock. As soon as Wilson heard of it, he directed that the stock be reconveyed to the person from whom it had been received, and gave his wife a small sum of money to make up the difference of what turned out to be the value of the stock and the value of the investment which had been made in its place. There was no lack of the most scrupulous integrity in the transaction. Wilson met at a great public meeting Gen. Hawley, who was one of the speakers. Hawley told Wilson on the platform just before his speech that he understood that his name had been mentioned in the papers as the owner of Credit Mobilier stock. Wilson answered that he never had any of it. Thereupon Hawley in his speech alluded to that matter and said he was authorized by Mr. Wilson to say that he never owned any of the stock.

Mr. Wilson did not get up and say, No, I never owned any.

But my wife once had a present of a little money which was invested in it, and as soon as I heard of it, I immediately had it returned to the person from whom it came, and I made up the loss to my wife myself. Such, however, was the public excitement that his omission to do that was held in some quarters as culpable want of frankness.

All the persons who received any of the stock and told the story frankly at the investigation were acquitted of any wrongdoing whatever, and never in the least suffered in esteem in consequence.

But Schuyler Colfax and Senator Patterson of New Hampshire were found by the Committee, and believed by the people to have been disingenuous in their account of the transaction.

The Senate Committee of investigation reported a resolution for the expulsion of Senator Patterson. The case was a very hard one indeed for him. The Senate adjourned, and his term expired without any action on the resolution, or any opportunity to defend himself.

Schuyler Colfax was also held to have given an untruthful story of the transaction. But the public attention was turned from that by the discovery, in the investigation of his accounts which the Committee made, that he had received large sums of money from a person for whom he had obtained a lucrative Government contract. But his term of office as Vice-President expired before any action could be taken, and he died soon after.

Mr. Ames, whose character as a shrewd and skilful investor and manager of property stood deservedly high, recommended to his friends the stock of the Credit Mobilier as a safe investment, and one in his judgment very sure to prove profitable.

It has been often asked how the managers of the Credit Mobilier could be guilty of bribing men when n.o.body was guilty of being bribed. But the answer is easy. The managers of the Credit Mobilier knew that they had violated the law, and that an investigation would ruin their whole concern. The men who received the stock were in ignorance of this fact. It was as if the managers of a railroad whose route under State laws is to be determined by a city council, or a board of selectmen or some other public body, should induce the members of such a board to take stock in their enterprise, intending afterward to pet.i.tion the body to which the subscribers belonged to adopt a route very near land owned by them, which would much increase its value, the receivers of the stock being ignorant of their scheme. The person who should do that would be justly chargeable with bribery, while the persons who received the stock would be held totally innocent. That was the judgment of the House of Representatives which acquitted the members who had received the stock, but held Ames, who had conducted the transaction, censurable. A large number of the members voted for his expulsion. Ames was a successful business man.

He was regarded by his neighbors as a man of integrity. He was generous and public spirited. But he and his a.s.sociates in the Union Pacific Railroad seemed, in this matter, to be utterly dest.i.tute of any sense of public duty or comprehension of the great purposes of Congress. They seemed to treat it as a purely private transaction, out of which they might get all the money they could, without any obligation to carry out the act according to its spirit, or even according to its letter, if they could only do so without being detected.

They seemed to have thought they were the sole owners of the Union Pacific Railroad and of the Credit Mobilier corporation, and that the transaction between the two concerned themselves only and not the public. They treated it as if they were transferring money from one pocket to another.

When Congress met in December, Mr. Blaine, the Speaker, who had been one of the persons implicated by public rumor, although in fact he had refused absolutely to have anything to do with the transaction, left the Chair, and, calling Mr. c.o.x of New York to his place, introduced a resolution calling for an investigation of the affairs of the Union Pacific Railroad.

Two Committees were appointed. One, of which Judge Poland was Chairman, undertook to deal with the charges against the members of the House of Representatives. The other, of which Jeremiah M. Wilson of Indiana was Chairman, was directed to inquire into the entire management of the affairs of the Union Pacific Railroad and the Credit Mobilier. I was a member of this last Committee. A Committee was appointed also in the Senate, with direction to inquire into the charges so far as they affected Senators. The whole country was profoundly excited by the affair.

I stood third on the Committee on which I was a member. It was thought best that Mr. Wilson, the Chairman, who was a very able and distinguished lawyer, should go to Boston where the books of the Companies were kept, and make a searching examination of their books and accounts. Mr. Sh.e.l.labarger of Ohio, the second member on the Committee, one of the ablest lawyers in the House, was in poor health. He consented to serve only on the condition that he should not be compelled to do any duty requiring any considerable labor. So I had to a large degree the charge of the investigation in Washington, where the witnesses were examined, and in the end the duty of preparing the report.

We did not deal in our report with the alleged misconduct of the individual members of the House, but solely with the two corporations. The report sets forth the transaction at length, and contains the following summary of the Committee's conclusions: