Ivory marked by the Royal African Company. International Slavery Museum, Liverpool. Wikimedia Commons.
Insiders of the Union Pacific used a construction firm they owned to overpay themselves, then used shares to quiet Congress.
A poor household had helped fund the railroad through federal bonds and land and received none of that construction profit.
A small shipper paid rates on a line whose builders had already taken their fortune off the top.
Credit Mobilier’s stockholders, several of them in Congress, took the profit an honest contract would have left inside the railroad.
The scandal broke in 1872.
The Union Pacific’s inner circle had contracted with Credit Mobilier of America, which they controlled, to build the road at prices that enriched the insiders.
Shares had been placed with members of Congress, and a House investigation that winter censured members and damaged the Grant administration.
House Report on Credit Mobilier, 42nd Congress (1873); White, Railroaded