Crédit Mobilier of America a construction company formed in 1863 by officers and leading stockholders of the original Union Pacific railway company. These officials made excessive profits for themselves at the expense of taxpayers and minor stockholders of the railway. This notorious example of large-scale graft involved leading members of the Republican party. Public confidence in business methods was shaken by the affair.
Thomas C. Durant, vice president of Union Pacific, set up Crédit Mobilier (named after a French construction company) in 1863, but soon lost control to Congressman Oakes Ames of Massachusetts and his brother, Oliver Ames. Since the men who ran Crédit Mobilier also controlled the Union Pacific, they were able to award themselves contracts to build the remaining 667 miles (1,073 km) of railway for $94,000,000. (Actual construction costs were less than $50,000,000.)
One quarter of the money involved had been supplied to the railway by Congress, through loans and land grants. As the Union Pacific plunged into debt, Oakes Ames sought to prevent Congressional investigation by permitting leading members of Congress to buy Crédit Mobilier stock at greatly reduced prices. Congress finally investigated in 1872. The resulting scandal disgraced Vice President Schuyler Colfax, Senator James W. Patterson (New Hampshire), Representative James Brooks (New York), and Oakes Ames himself. But no one was expelled from office or tried in court. The Union Pacific was reorganized in 1897, and the present Union Pacific Railroad Company has no connection with the earlier company.