Friday, May 5, 2017

Crédit Mobilier Scandal

The Crédit Mobilier scandal of 1872-1873 damaged the careers of several Gilded Age politicians. Major stockholders in the Union Pacific Railroad formed a company, the Crédit Mobilier of America, and gave it contracts to build the railroad. They sold or gave shares in this construction to influential congressmen.

It was a lucrative deal for the congressmen, because they helped themselves by approving federal subsidies for the cost of railroad construction without paying much attention to expenses, enabling railroad builders to make huge profits. When the New York Sun broke the story on the eve of the 1872 election, Speaker of the House James G. Blaine, a Maine Republican implicated in the scandal, set up a congressional committee to investigate.

The House censured two of its members who were involved in the scandal: Oakes Ames of Massachusetts and James Brooks of New York. But the affair also tarnished the careers of outgoing vice president Schuyler Colfax, incoming vice president Henry Wilson, and Representative James A. Garfield, all of whom were implicated (although Garfield denied the charges and was subsequently elected president).

The scandal also showed how corruption tainted Gilded Age politics, and the lengths railroads and other economic interests would go to assure and increase profits.


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