In 1866, with the Union Pacific foundering financially, Oliver Ames assumed the presidency of the Railroad while Oakes Ames became the president of Credit Mobilier. As the Encyclopedia of American Business History delicately puts it: "The Union Pacific formed a separately incorporated construction company to finance and build the line. In addition to the limited liability a corporation offered investors, the construction company offered near-term profits on a project that was risky and unprofitable except in its long-term prospects." To put it a more baldly, one enterprise ? the construction company ? profited wildly from its monopoly, taking those profits from another company ? the railroad ? which, if it was to profit at all, must have huge grants of land along the line to sell in the future, for town sites and agricultural settlement. With the cooperation of the Federal government that is what happened, always moved along by the reputation of the Ames brothers as men of substance and helped not a little by Oakes? dual positions: president of the construction company, and representative of the State of Massachusetts in the U.S. House of Representatives. In 1872, using copies of of Oakes? own correspondence, the New York Sun connected the dots and closed the circle of corruption: Oakes Ames had been selling shares of Credit Mobilier ? made extremely profitable by commissions from his brother?s railroad ? to fellow representatives in Congress, and a senator or two; in exchange the representatives supported vast grants of land, and the treasury bond loans necessary to keep the Union Pacific solvent. The value of the stock involved was small, and the railroad clearly profited the Federal Government (not least because frontier defense was now practical) but that did not matter to the combined chorus of journalists and politicians nearly as much as the evidence of collusion: the outcry was immediate. Over the course of two Congressional investigations, Oakes Ames was censured by Congress. Only days after his final fall from honour, in a narrative that would make shame fatal and pathetic fallacy a factor in government and fraud, Oakes Ames died, in disgrace.
0 
