17 Edward Winslow Martin

Excerpt from "A Complete and Graphic Account of the Crédit Mobilier Investigation" from Behind the Scenes in Washington

Published in 1873; reprinted on Making of America Books (Web site)

Evidence mounts against the vice president of the United States

"The people do not wish to believe him guilty; but they are appalled by the terrible mass of circumstantial evidence against him.…"

Ulysses S. Grant (1822–1885; served 1869–77), the Union general who led the North to victory in the American Civil War (1861–65), was pressed into politics by those seeking a fresh start after the troubled presidency of Andrew Johnson (1808–1875; served 1865–69) (see Chapter 11). Grant had never run for office, nor did he seek the presidency, but the war hero was nominated by the Republican Party in 1868 and won. His simple slogan, "Let us have peace," spoke to a weary nation still torn over race issues and the army occupation of the Southern states. In reality, however, the Grant administration would find itself embattled in some of the worst scandals in U.S. presidential history.

Grant was never personally implicated in (blamed for) any of the scandals, but the crooked ways of some of his closest associates would cloud his two terms in office. The general prized loyalty above all else, clinging to his friends with "hooks of steel," in the words of Major General Greenville M. Dodge (1831–1916), as quoted in the Prologue magazine article, "Grant, Babcock, and the Whiskey Ring." At times, it seems, Grant's loyalty blinded him to the faults of his friends.

Grant's brother-in-law, Abel Rathbone Corbin (1808–1881), was a player in the first disaster of Grant's presidency, the 1869 stock market panic known as "Black Friday." Businessmen Jay Gould (1836–1892) and James Fisk (1834–1872) hatched a get-rich-quick scheme to buy large amounts of gold, drive up the price, then sell for a huge profit. It was a daring plan, as gold in those days was not just an investment, but the backbone of the currency system. Corbin used his influence to make sure the president and the U.S. Treasury Department did not interfere with the plan until it was too late: Gould and Fisk made their profits, but many honest investors lost their fortunes as the gold price later plummeted.

It was the first of several scandals that would taint the administration. Secretary of the Treasury William Richardson (1821–1896) resigned in 1874, after officials learned that a man Richardson hired to collect back taxes was pocketing hundreds of thousands of dollars for himself. Secretary of War William W. Belknap (1829–1890) resigned in 1876 after officials learned he was accepting bribes from the man he appointed to a profitable Indian trading post in the Oklahoma territory. "Fighting scandal was practically a state of being in the Grant White House," as noted in Prologue magazine.

By no means was the corruption limited to the White House. In New York City, William Marcy "Boss" Tweed (1823–1878) charged the city $11 million for a courthouse that actually cost $3 million to build, pocketing the rest. In several cities, political powerbrokers bought the votes of poor immigrants with food or fuel. Congress gave vast tracts of valuable land to railroad or mining companies—often the very businesses in which members of Congress owned stock. And since U.S. senators were elected by the state legislatures at that time, the right bribes could even buy a seat in Congress.

In some ways, the corruption was simply a sign of the times. While the South was busy rebuilding entire cities destroyed by the war, the rest of the country was building personal and financial empires. Scores of settlers headed for the West to create new ranches and trading posts. Northern factories, built up by the war, churned out better goods for a cheaper price. Railroad companies began criss-crossing the country to transport materials and link once far-away places. The opportunities for striking it rich seemed endless, and the temptation to accept a few bribes or pocket some of the profits along the way was immense.

One of those tempting schemes would ultimately drag down Grant's first vice president, Schuyler Colfax (1823–1885), and taint the careers of several other congressmen. The Crédit Mobilier scandal was actually pretty simple: The Union Pacific railroad created a spinoff (smaller) company, called Crédit Mobilier, to build the nation's first transcontinental (coast-to-coast) railroad. The company would significantly overcharge the U.S. government for the work, charging $94 million for a railroad that actually cost about $44 million to build. The Crédit Mobilier stockholders would pocket the extra money as dividends, or profits from the stock.

To make sure the government did not raise questions about the high-priced railroad, the company bribed several key congressmen by selling them stock at favorable prices. U.S. representative Oakes Ames (1804–1873) of Massachusetts helped place the railroad stock in the hands of his colleagues, including Colfax, who was Speaker of the House of Representatives in the late 1860s. When the scandal broke in 1872, Ames provided the damaging testimony before the Poland Committee (named after U.S. senator Luke Poland [1815–1887] of Vermont) linking the other congressmen to the scheme. Newspapers reported each day's stunning revelations of corruption at the highest levels of government, and ultimately it was revealed that public officials had pocketed about $33 million in taxpayer money from the overpriced railroad. Writing under the pen name of Edward Winslow Martin, contemporary author James Dabney McCabe (1842–1883) compiled the events in his 1873 book, Behind the Scenes in Washington.

Things to remember while reading an excerpt from "A Complete and Graphic Account of the Crédit Mobilier Investigation":

• Ulysses S. Grant was a moral man who campaigned on a promise to bring peace to the war-torn country. But his presidency was plagued by scandals involving some of his closest associates, including his first vice president, Schuyler Colfax.
• Railroad lines grew at an astonishing pace after the Civil War, aided by Congress, which gave vast tracts of land and generous construction contracts to the railroad companies. In some cases, congressmen owned stock in the very companies they were helping.
• The Union Pacific railroad company created a spinoff company, called Crédit Mobilier, to build the transcontinental railroad and overcharge the U.S. government for the work. The stockholders, including congressmen turning a blind eye to the corrupt scheme, would pocket millions of dollars in profits.

Excerpt from "A Complete and Graphic Account of the Crédit Mobilier Investigation"

When the charge was made that Mr. Colfax had been a purchaser of Crédit Mobilier stock from Mr. Ames, that gentleman denied it.… The substance of this sworn statement [before the Poland Committee investigating the scandal] may be thus stated in Mr. Colfax's own words:

"I state explicitly, that no one ever gave, or offered to give me any shares of stock in the Crédit Mobilier or the Union Pacific Railroad. I have never received, nor hadtendered to me anydividends in cash, stock, or bondsaccruing upon any stock, in either of said organizations."

Mr. Ames had from the first included Mr. Colfax in his list of the Congressmen who had purchased stock from him. Upon Mr. Colfax's denial of the charge, he declared his ability to prove hisassertion.

On the 24th of January, Mr. Ames testified that he had purchased twenty shares of Crédit Mobilier stock for Mr. Colfax, in December, 1867, at the request of that gentleman. Mr. Colfax not having the money at the time, Mr. Amesadvanced it. Soon after this, there was an eighty per cent dividend declared in Union Pacific bonds. Mr. Ames stated that he had sold these, and had applied the proceeds to paying for the stock bought for Mr. Colfax, afterdeducting theinterest. Mr.Colfax then gave him a check on theSergeant-at-Arms for $534.72, the balance of the purchase money. Mr. Ames further stated that in June there was a cash dividend on the Crédit Mobilier of $1200, which he gave to Mr. Colfax by a check payable to "S. C. or bearer," drawn on the Sergeant-at-Arms of the House.

Mr. Colfaxemphatically denied Mr. Ames's statement, and declared that he had never received the $1200, or any of the stock or money to which Ames referred. The books of the Sergeant-at-Arms were produced, and exhibited to the Committee. It was found that in June, 1868, Mr. Ames had drawn a check on the Sergeant-at-Arms to "S. C. or bearer," and that this check had been paid to some one. This much of Mr. Ames's statement beingsustained, Mr. Colfax found himselfobliged to show that the check in question had not been paid to him.…

The Committee decided to examine the accounts of the First National Bank of Washington City, where Mr. Colfax's accounts were kept. The books were produced before the Committee on the 28th ofJanuary [1873], and Mr. Colfax's account examined. [According to the committee,] "There appeared a credit of $1968.63, dated June 22, 1868, two days after the date of Ames's check to 'S. C.' on the Sergeant-at-Arms, and one day after that check was paid. This furnished onlypresumptive proof of the deposit of $1200, but all doubt was removed when the cashier produced a deposit ticket, bearing Mr. Colfax's signature, in which the $1968.63 wasitemized, $1200 being cash, and the remainderdrafts or checks.…"

Thecircumstantial evidence against him [Colfax] wasappalling. His best friends stoodaghast, and pitied him from their very souls.

Mr. Colfax repeated his denials respecting the stock, and declared that he would show that the $1200 deposited by him was received from another source. If he could succeed in doing this, hisvindication would be complete.… On the 11th of February [1873], he appeared before the Committee, accompanied by Judge Hale, whom he had retained as hiscounsel, and made a statement under oath that the $1200, which he had deposited in cash in the First National Bank of Washington, on the 22d of June, 1868, was composed of two sums, of $1000 and $200 respectively. The $1000, he stated, he had received from a Mr. George F. Nesbitt, of New York, who had written him a letter congratulating him upon his nomination for the Vice-Presidency, and enclosing a $1000 bill to be used for political purposes during the campaign. The sender of the gift, Mr. Nesbitt, died a few years ago, and the letter in which the money was sent had, Mr. Colfax stated, been destroyed. Mr. Colfax submitted the evidence of several members of his family in proof of thereception of Nesbitt's letter. They swore to a recollection of it, and stated the incidents connected with its reception. The other $200 Mr. Colfax stated was received from his step-father, Mr. Matthews, in payment of money borrowed from Mr. Colfax some time before. Mr. Colfax repeated his former denials concerning the stock and Ames's check.

This statement of Mr. Colfax was not accepted by the public assatisfactory. It amounted to this, in part: That a leading business man of New York had entrusted to the mail in a letter, a bill for $1000 dollars, without making any note of it, the man was dead, and the letter could not be found. Against this explanation was Oakes Ames's sworn statement, the proofs afforded by the books of the Sergeant-at-Arms, and the suspicious deposit of the exact amount of Ames's check.…

In order to get at the facts of the case, for it was clear to all that either Oakes Ames or Schuyler Colfax was guilty ofperjury, a member of the Poland Committee made an investigation of Mr. Colfax's deposits in the First National Bank of Washington. He found that two checks or drafts from Mr. Nesbitt to Mr. Colfax had been deposited by the latter in 1868, one in April, and the other on the 13th of July, of that year. Each of these drafts was for $1000. This discovery did not help Mr. Colfax much. It showed that Mr. Nesbitt had twice sent Mr. Colfax the sum of $1000, and had taken theprecaution to insure the money against loss by sending each sum in the form of a draft payable to Mr. Colfax's order. This very precautioninclined people to doubt that Mr. Nesbitt would have been so reckless as to send Mr. Colfax a thousand dollarnote in anun-registered letter, only a short while before he took the precaution to send a similar sum by a draft.…

There the case rests at present. Mr. Colfax has still before him the task of proving that he received $1000 from Nesbitt in June, and did not receive $1200 from Oakes Ames. He is still entangled in the terrible web of circumstantial evidence against him. That he may escape from it and vindicate himself is the wish of all good men. There is not a public man in America whose vindication would be morecordially hailed by the people. The people do not wish to believe him guilty; but they are appalled by the terrible mass of circumstantial evidence against him, and he must, in justice to himself, destroy this. It is the earnest wish of the writer, who has sought to present a simple statement of the facts of the case as far as they have been developed, that he may succeed.

What happened next …

Some members of Congress wanted to get rid of Ames and Colfax by impeachment, a process of removing people from office for wrong-doing. But they backed off in both cases. Congress censured (formally criticized) Ames three months before his death in 1873. Colfax finished his term as vice president, but his political career was ruined. When Grant ran for reelection in 1872, Colfax was replaced by U.S. senator Henry Wilson (1812–1875) of Massachusetts—ironically, another official linked by Ames to the Crédit Mobilier scandal.

It would not be the last time the Grant administration faced a humiliating scandal. Grant's close friend and long-time assistant, Orville E. Babcock (1835–1884), was charged in 1875 as a member of the Whiskey Ring, an intricate conspiracy in which St. Louis alcohol distillers avoided paying millions of dollars in federal taxes on whiskey. Some of the profits from this scheme helped finance Grant's 1872 reelection campaign, bringing yet another scandal into the heart of the White House. Grant once again displayed his undying loyalty to his friends—and, it seems, his obliviousness to their misdeeds—by testifying to Babcock's good character in a deposition that was read aloud at the sensational trial. It worked: Although other prominent members of the Whiskey Ring were convicted, Babcock was acquitted.

The scandals of the Grant administration distracted the president at a time when his attention was desperately needed: The South was torn by racial tensions, the West was the scene of various Indian wars, and the North was awhirl in economic expansion, partly fueled by the underpaid labor of European immigrants. The corruption also discouraged many African American voters who originally supported Republicans as the party that freed them. They saw the government give away millions of acres of land to railroad companies, even as officials denied land to African Americans starting their new lives, as noted in Reconstruction: America's Unfinished Revolution. Freedman Anthony Wayne asked, "Whilst Congress appropriated land by the million acres to pet railroad schemes … did they not aid poor Anthony and his people starving and in rags?"

Did you know …

• Grant often walked from the White House to the ornate Willard Hotel for an evening drink, a cigar, and a chance to relax. As people learned of his routine, however, they stopped by the hotel lobby to pitch a piece of legislation or ask the president for help. In time, these favor-seekers hanging around the hotel became known as lobbyists, a term still used today.
• Grant's testimony in the Whiskey Ring case was the first, and so far only, time a sitting U.S. president has voluntarily testified in a criminal trial.
• Born in Ohio to a family of modest means, Grant did not plan to enter the military. But his father enrolled him at the U.S. Military Academy at West Point, recognizing it as an opportunity to give his son a first-rate education at no cost to the family. Grant graduated from West Point as the finest horse-rider in his class, setting a high-jump record that lasted twenty-five years.
• Adding to the perceptions of a corrupt administration, Grant signed a bill in 1873 doubling his salary from $25,000 to $50,000 a year. According to biographer Richard Goldhurst, Grant "was outraged that people accused him of a salary grab."

Consider the following …

• Why did members of Congress get drawn into the Crédit Mobilier scandal?
• Contrast the accounts given by Oakes Ames and Schuyler Colfax. Who would you believe, and why?
• How does the corruption of the Grant administration compare to modern-day political scandals?

For More Information

Foner, Eric. Reconstruction: America's Unfinished Revolution. New York: HarperCollins Publishers, 1988.

Goldhurst, Richard. Many Are the Hearts: The Agony and the Triumph of Ulysses S. Grant. New York: Reader's Digest Press, 1975.

Johannsen, Robert W. "Crédit Mobilier of America." The American Presidency.http://ap.grolier.com/article?assetid=0112820-00&templatename=/article/article.html (accessed on September 20, 2004).

Martin, Edward Winslow. "A Complete and Graphic Account of the Crédit Mobilier Investigation." Behind the Scenes in Washington. New York: Continental Publishing Company, 1873. Also available at Making of America Books.http://www.hti.umich.edu/cgi/t/text/text-idx?c=moa;idno=AFJ8728.0001.001 (accessed on September 20, 2004).

Perret, Geoffrey. Ulysses S. Grant: Soldier & President. New York: Random House, 1997.

Rives, Timothy. "Grant, Babcock, and the Whiskey Ring." Prologue: Quarterly of the National Archives and Records Administration (Fall 2000). Also available at http://www.archives.gov/publications/prologue/fall_2000_whiskey_ring_1.html (accessed on September 20, 2004).

Simpson, Brooks D. The Reconstruction Presidents. Lawrence: University Press of Kansas, 1998.

Tendered: Offered.

Dividends: Profits.

Accruing: Collecting.

Assertion: Claim.

Advanced: Loaned.

Deducting: Taking out.

Interest: Fee charged on loaned money.

Sergeant-at-Arms: The doorkeeper of Congress who provided banking and other services for members.

Emphatically: Strongly.

Sustained: Upheld.

Obliged: Compelled.

Presumptive: Supposed.

Itemized: Listed as an individual item.

Drafts: Money orders.

Circumstantial: Suspicious, but not conclusive.

Appalling: Shocking.

Aghast: Horrified.

Vindication: Effort to clear his name.

Counsel: Attorney.

Reception: Act of receiving.

Satisfactory: Good enough.

Perjury: Lying under oath.

Precaution: Security measure.

Inclined: Led.

Note: Cash.

Unregistered: Not secured by the post office.

Cordially: Warmly.