The Only Source from Which He Gets Absolution

Illustration, 1884

Joseph F. Keppler, Austrian-born American, 1838–1894


The story of the Crédit Mobilier scandal was broken by the New York Sun in 1872. Thomas Durant, vice president of the Union Pacific, falsely established Crédit Mobilier as an independent construction company. Using federal money, the Union Pacific grossly overpaid Crédit Mobilier to construct the eastern portion of the transcontinental railroad. The construction company’s millions of dollars in profits went back to Durant and his investors and were also given as bribes to powerful Washington politicians including the Vice President, Secretary of the Treasury, and the Speaker of the House (pictured center). 


Courtesy of the Library of Congress

The proposed transcontinental railroad represented a colossal amount of resources in labor, materials, and expenses. With the signing of the 1862 Pacific Railway Act, an answer materialized: an innovative, public-private partnership to complete the railroad.

Through the Act, the U.S. government attempted to create a system of checks and balances that would allow investors to make a profit while the country would receive a transcontinental railroad in return. The public-private partnership included the creation of a private corporation, the gifting of approximately 200 million acres of public lands to build on, and federal loans from the U.S. Treasury to investors providing resources for the project.

While generous in spirit, the Act in retrospect was a lesson in mismanagement and oversight. Wealthy investors benefited from the Act’s later revisions; corporate abuses were common during the “Gilded Age” and the expansion of the railroad system in the late nineteenth century. The signed 1862 Pacific Railway Act presents an idealistic narrative to the creation of the railroad.

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Every Public Question with an Eye Only to the Public Good

Wood engraving, 1873

Thomas Nast, German-born American, 1840–1902


Some two and a half years after the meeting of the rails at Promontory, the U.S. Congress began investigating corporate and investor fraud related to the railroad. This political cartoon shows “Lady Justice” enraged over the misuse and abuse of public resources.


Courtesy of HarpWeek

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