Professional Southerner 403 collector of the port of New Orleans-James F. Casey, a relative of Grant by marriage. This Casey made himself notorious in Louisiana through his political activities. His brother Peter got himself appointed postmaster at Vicksburg, Mississippi. Old Jesse Root Grant held the job of postmaster at Covington, Kentucky, but he had been given the place by Andrew Johnson. The President's father-in-law-Colonel Frederick Dent, the elder was a sort of professional Southerner. He lived at the White House for weeks and months at a time, reading newspapers, smoking cigars and mixing mint juleps. Grant's friends found the Colonel's discourses on damned Yankees and upstart "niggahs" rather amusing. It is interesting to observe that Grant's father never became friendly with Colonel Dent. When old Jesse visited Washington he used to stay at a hotel. The White House, he declared, was full of the tribe of Dents, and he did not like them. Grant frequently invited his mother to visit him at the White House, but she never came; in fact, she was not in Washington at any time while her son was President. T CHAPTER XXVII ADVENTURES IN HIGH FINANCE § 1 HE atmosphere was heavy with problems that required the most adroit and experienced statesmanship for their solution; and the honest soldier in the White House was not a statesman. It was Grant's misfortune that he was put at the head of the government at this time. The job really needed a man who combined the best qualities of Thomas Jefferson, Abraham Lincoln and Lord Beaconsfield-with perhaps a dash of Alexander Hamilton added to the mixture. The moral standards of the nation had touched low water mark. All the great altruists had been quietly lifted over the backyard fence of public affairs and sent home, but their sentiments-hammered out in the shape of crisp slogans-were still carefully cherished. Phrases took the place of honesty. The spiritual decay of the time ate its way through the tissue of events. It was an epoch of rusty souls. Money had become the measure of human values, and most of the men who possessed money in large quantities did not possess anything else. War profiteers, contractors in shoddy goods, manipulators of the stock market, vendors of quack medicines, brazen promoters of fake enterprises . . . it was people of this type who filled the public eye. Millionaires without taste, suavity or ordinary common decency. Money was a raw force, untempered by taste or elegance.. In the councils of the nation finance clamored for a leading place-not because it represented wisdom, service or produc U. S. Helps Financiers 405 tivity, but simply because it owned and controlled. And why not?—said the stalwart, red-faced thimble-riggers of the stock market. You may talk all you please, but everything comes back to money in the end. We've got money; and money talks. It speaks louder than all your highfaluting ethical views and social standards. "The public be damned!" said Commodore Vanderbilt. Almost every well-known man in political life represented a financial interest and everybody had an ax, to grind. § 2 A large job of ax-grinding was going on when Grant became President, but it was being done so quietly in back-rooms amid whispers that he did not know anything about it until it was over. It appears in history as the Credit Mobilier scandal, and it concerned the building of the Union Pacific Railroad. During the Civil War there was much discussion in the North about the need of a railroad across the continent to connect California with the east, and before the war was over a company was formed for the purpose of building such a road. It was generally conceded that the railroad could not be built without government aid, so Congress put the national treasury behind the undertaking. Twelve million acres of government land along the road's right of way were given outright to the Union Pacific Company. Besides, the government agreed to lend the company twentyseven million dollars in United States bonds. These bonds were turned over to the promoters in various lots from time to time, according to the mileage that had been completed. But the loan of approximately twenty-seven million dollars was not made a first lien on the property. The organizers of the enterprise persuaded Congress to permit the road to issue twentyseven million dollars of first mortgage bonds, and this obligation took precedence of the loan from the government. Their plan had gone through Congress so smoothly that they were inspired by its success to attempt an even more ambitious operation. Why turn all this wealth of land and money over to the company? Why not secure it for themselves by contracting to build the road? They looked around for ways and means to accomplish this desirable end, and before long they acquired the ownership of a small Pennsylvania corporation called the Credit Mobilier. This strangely named concern was engaged in financial enterprises, but under its liberal charter it was empowered to do practically anything and to take anything that it could get. The promoters then made a contract with themselves, as owners of the Credit Mobilier, to build the railroad. The price per mile that was agreed upon gave the Credit Mobilier more than three times the actual cost of the work. But even before they entered into the contract with the construction company the promoters had mortgaged the road-which was nonexistent at that time-for $27,000,000, and the land grants for $10,000,000. Most of the proceeds of these mortgages was turned over to the Credit Mobilier, through some financial hocus-pocus. The Union Pacific began its existence flat broke, or virtually so, with all its actual assets in the hands of the little Pennsylvania corporation, and the government holding a worthless second mortgage. These financial jugglers felt that, to be on the safe side, they would have to pass a little sugar to the leading members of Congress, for at any time somebody might rise in that august assembly and want to know exactly what had become of the government's contribution. Oakes Ames, a member of the House of Representatives, was one of the directors of the Credit Mobilier. He was put in charge of the Congressional sugar-bowl. Mr. Ames' plan was sleek and subtle. He did not offer anybody a bribe. No; his method was a much better one. He sold stock in the Credit Mobilier to his fellow-members... Water into Wine 407 to a carefully selected list of them... at par. at par. In selling the stock he explained that he was simply letting them in on a good thing which had come his way. Most of those whom he approached bought the stock. A few hesitated; they were too poor to make an investment and would have to decline his offer. Ames whispered a little secret to them. He was on the inside of the Credit Mobilier, he said, and he knew for a certainty that the concern would soon declare one or more dividends large enough to pay for the stock. They could buy the shares he offered them without making any investment at all. He would simply turn the stock over to them on memorandum. Then, when the dividends came they could pay him out of the proceeds. Very attractive, indeed. A chance to make money without any risk at all. Some of the members refused to take the stock on any terms, but not one of those who declined thought of mentioning the matter on the floor of the House. During the year 1868, when these intimate transactions took place, the Credit Mobilier paid dividends on this gorgeous scale: Jan. 4. 80 per cent in first mortgage bonds of the Union June 17. 60 per cent in cash; 40 per cent in Union Pacific July 3. 75 per cent in first mortgage bonds of the Union Sept. 3. 75 per cent in first mortgage bonds of the Union Pacific Railroad; 100 per cent in Union Pacific Railroad stock. Dec. 19. 200 per cent in Union Pacific Railroad stock. Exposure of Mr. Ames' methods came about as an incident of a family row in the small circle of insiders, which |