The Crédit Mobilier of America scandal entered the annals of American business as an example of corruption typical in post-Civil War commerce, especially in railroad construction.
During the 1860’s, westward expansion of the railroad system was of prime importance to the economy of the United States, and the government was prepared to provide substantial subsidies to ensure the project’s completion. In 1862, George Francis Train, a vice president for publicity of Union Pacific Railroad, created two companies, Crédit Mobilier of America and Crédit Foncier, to oversee the railroad’s western expansion. Both companies were modeled after French companies and introduced new concepts of corporate organization into the American system. Crédit Mobilier was one of the first companies to take advantage of limited liability in its financial structure. Stockholders were liable only for the amount of their investment in the company, rather than to the full extent of their personal assets.
Seeing an opportunity for enormous profit, Thomas C.
When construction failed to proceed at a reasonable pace, President Abraham Lincoln asked U.S. representative Oakes
In 1872, Ames got into a serious disagreement with one of his associates, Henry Simpson
Crawford, Jay Boyd. The Crédit Mobilier: Its Origin and History, Its Work of Constructing the Union Pacific Railroad, and the Relation of Members of Congress. Providence, R.I.: AMS Press, 1980. Martin, Edward Winslow. Behind the Scenes in Washington: Being a Complete and Graphic Account of the Crédit Mobilier Investigation. Whitefish, Mont.: Kessinger, 2007.