credit mobilier scandal ahmed

by arthurblock3
Last updated 7 years ago

Discipline:
Social Studies
Subject:
History

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credit mobilier scandal ahmed

The Crédit Mobilier scandal of 1872-1873 damaged the careers of several Gilded Age politicians.

Thomas DurantDurant created a company called Credit Mobilier of America to get profits from railroad construction. He wanted a fortune from the railroads without the high-stake risks. He said building a railroad would be more profitable then running one.

The Scamstarted when Durant payed Herbert M. Hoxie to submit a construction bid to the Union Pacific. It was the only bid received so Hoxies offer was unamiously approved. He signed the contract over to Durant. Then Durant transfered it into the name of Credit mobilierDurant hired himselfHe payed Credit Mobilier He subcontracted railroad work to real construction crews while using inflated estimates to ensure significant profit. There was no liability so it didnt matter if the railroad got built. It started off making a lot of money.

Credit mobilier scandal

Thomas Durant

After 3 years later construction is at a stand still. The scandal erupted in election. No criminal or civil charges were filed against any of the credit mobilier scoundrels. The capitol was in shame.

EndingCharles Adams said its a mystery that theres a missing 180,000,000 of capital stock. He said financial improperties would result in higher taxes on the trade carried by the railroad in the future. Charles Adams said Durant planned for them to clean up the mess.

Major stockholders in the union pacific railroad formed a company, the credit mobiler of America, and gave ti contracts to build the railroad. They sold or gave shares in this construction to influential congressman. 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 a huge profit. When the New York Sun broke the story of 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 Repersentative 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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