MONOPOLY OF TRANSPORTATION. 583 



Congress with twenty alternate sections of land per mile, 

 and had government loans of $16,000 per mile for about 

 200 miles; thence $32,000 per mile through the Alkali 

 Desert, about 600 miles, and thence in the Rocky Mount- 

 ains $48,000 per mile. The railroad company issued stock 

 to the extent of about $10,000,000. This stock was 

 received by the stockholders on their payment of five per 

 cent, of its face. When the Credit Mobilier came on the 

 scene, all the assets of the Union Pacific were turned over 

 to the new company in consideration of full paid shares of 

 the new company's stock and its agreement to build the 

 road. The government, meanwhile, had allowed its claim 

 for its loan of bonds to become a second instead of a first 

 mortgage, and permitted the Union Pacific road to issue 

 first mortgage bonds, which took precedence as a lien on 

 the road. The government lien thus became almost 

 worthless, as the new mortgage which took precedence 

 amounted to all the value of the road. The proceeds of 

 this extraordinary transaction went to swell the profits 

 of the Credit Mobilier, which had nothing to pay out ex- 

 cept for the mere cost of construction. This also explains 

 why some of the dividends of the latter company were 

 paid in Union Pacific bonds. As a result of these pro- 

 cesses, the bonded debts of the railroad exceeded its cost 

 by at least $40,000,000. 



u Mr. Ames was deeply interested in the scheme, 

 being, indeed, one of its principal managers. Being a 

 member of Congress, he was peculiarly prepared to appre- 

 ciate the value of Congressional assistance in behalf of the 

 Credit Mobilier. It would seem that the object of the 

 Credit Mobilier was to drain money from the Pacific road, 

 and consequently from the government, as long as possible. 

 Any legislation on the part of Congress designed to protect 

 the interests of the government, would, as a matter of 

 course, be unfavorable to the Credit Mobilier, and it was 



