The Railroad, part 6

When the American Civil War at last came to an end little more than a brief pause elapsed before the young nation was once again marching forward toward progress and expansion. And the railroad was a big part of that expansion with steamboats plying the Missouri River towards Omaha. Many of these boats were loaded with iron rails, locomotives, shovels, plows and pikes. Most of these boats also carried restless young men that were heading west, seeking a new life. All this railroad equipment and men naturally came together in the languid little town of Omaha. Soon this burg was a thriving boomtown of grog shops, trading posts, and gambling saloons. And the name of the game was Money, Money and more Money.

Thomas Durant was one of many men who did not wait until the war’s end to start stirring the money pie. Back in the fall of 1864 a fancy dressed gentleman by the name of Colonel Silas Seymour arrived in Omaha. He was there to inspect the twenty-three miles of grading that chief engineer Peter Dey had already completed. He also informed Dey that Durant had appointed him as consulting engineer of the Union Pacific. The truth was that Durant distrusted Dey because of Dey’s honesty.

During 1864, Durant had accomplished two clever maneuvers that made it possible for him and his associates to loot the people’s treasury and plunder the national land resources. There was no place in Durant’s plans and schemes for Dey’s honesty.

Durant’s first scheme came about after a conversation with a man by the ironical name of George Francis Train. Both of these men were aware that railroad money was really made by construction contractors, not by the operators or stockholders.

Train had been to France and recalled a financial organization he’d encountered there. It was called the Societe Generale de Credit Mobilier. Its purpose was to act as a holding company that could siphon off profits from construction of public works. Putting the same principle into action, Durant was able to make contracts with himself at any price per mile for construction of the railroad as it crossed the country. He called it the Credit Mobilier of America.

Durant’s second scheme that same year was to secure passage of a new Pacific Railway Act. This act granted the railroad twice as much land per mile, upping the anti to 12,800 acres instead of the previous 6,400. It gave rights to all iron and coal deposits under this land to the railroad as well as permitting it to sell first-mortgage bonds to the public. It was a grand steal and he had help in the bill’s passage from another scheming railroad man from the Central Pacific, Collis Huntington. These two men also had some help from two shovel manufactures, Congressman Oakes Ames and his brother Oliver. When the pie was finally divided and served the Union Pacific was guaranteed a land grant of 19,000 square miles. This was an area larger than the states of Massachusetts, Rhode Island, and Vermont combined. Oakes and Oliver Ames were invited into the circle of Credit Mobilier stockholders.

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