Dr. Durant is still here and of all men to mix accounts and business he is the chief . . . No one can tell by Durant's talk what he thinks of a man, his best friends may not know what he means when talking to them. . . . Samuel B. Reed in a letter to his wife (1868).
Throughout the winter and spring of 1867‑8 the feud between the Ames Brothers-Dillon faction and Thomas C. Durant was as melodramatic, and furtive, as Cheyenne's struggle toward law-and‑order. There were lawsuits and counterlawsuits, bribes, blackmail, pay-offs to Congressman, and the stealthy transfer of official papers to Boston.
Most of it boiled out of the Ames-Dillon decision to remove Durant from Crédit Mobilier's board because "there is no pleasure, peace, safety or comfort with him unless he agrees to abide the decision of the majority, as the rest of us do." In retaliation Durant fought the award of the master contract west of the 100th meridian with a series of court injunctions. The situation became even more critical when Jim Fisk, the infamous market gambler, began a campaign of blackmail against Crédit Mobilier. Rumor said that Durant was Fisk's silent partner in the effort. Fisk's power over New York politicians p284 was obvious. In partnership with Jay Gould and Daniel Drew, he had recently wrested control of the Erie railroad from Cornelius Vanderbilt via an audacious pay-off of New York's Legislature. Oakes and Oliver Ames smuggled record books and other documents that would expose details of the Union Pacific-Crédit Mobilier agreements across the Hudson river to New Jersey, then obtained permission from the Department of the Interior to transfer them to Massachusetts — beyond the jurisdiction of Fisk's cronies.
The Fisk threat frightened them into new overtures to Durant. During September, agreement was reached to award Union Pacific's master contract for construction •667 miles west of the 100th meridian to Oakes Ames, but with the stipulation that Ames assign it to a board of seven trustees representing Crédit Mobilier. The seven were: Oliver Ames, Thomas C. Durant, Sidney Dillon, Cornelius Bushnell, John B. Alley, Henry S. McComb, and Benjamin F. Bates. Ames, Dillon and Alley were allied against Durant. Bushnell and McComb had been Union Pacific and Crédit Mobilier directors since 1863 and were acknowledged Durant allies. Bates, a neutral, held the balance of power.
The Union Pacific directors approved the contract on October 1. That day the Casements' work train was •228 miles west of the 100th meridian. Statistics were available to prove that construction costs west of Omaha had averaged $27,500 a mile, including erection of stations, water tanks, side tracks, woodyards and roundhouses. Still, the Ames contract specified payments by Union Pacific of $43,500 a mile for the trackage between the 100th meridian and Cheyenne. Obviously it assured Crédit Mobilier of a clear profit of $16,000 a mile for the 228 miles already constructed — a total of $3,658,000. Neither Government directors nor the press questioned the fact that this contract was being awarded to the brother of Union Pacific's president, who was also a Member of Congress — hence, by oath of office, a guardian representative of the p285 Federal Government and of its loans and land grants to Union Pacific.
During the second day of the meeting Oliver Ames entertained a motion that Durant be dropped from Union Pacific's board of directors. The motion failed by a narrow margin. Any effort to remove Durant as vice-president and general manager would have gone the same way. The gesture merely assured furtive and sadistic plots by both the pro-Ames and pro-Durant groups.
Grenville Dodge had received a block of Crédit Mobilier stock when he became chief engineer. This plus the Crédit Mobilier Scandal of 1873‑4 and Union Pacific's bankruptcy in 1893 certainly influenced the speeches and writings he prepared between 1900 and 1912. Yet he was honest in emphasizing the poverty and desperate financial struggles of Union Pacific. By the time the Ames contract was approved a total of •475 miles of trackage had been built; all of it had been constructed on the flatland rate of $12,000 worth of Federal bonds a mile. The railroad's total cash income accruing from the Federal loans, then, was $5,700,000, plus the alternate sections of the land grants. But construction of 475 miles of track at an average cost of $27,500 a mile totals $13,062,000, plus overhead. Overall, Union Pacific's accumulated costs totaled in the neighborhood of $20,000,000 by the time the Ames contract was signed. And the $5,700,000 worth of government bonds were, after all, a 30‑year loan, compounding 6 per cent interest, while the land grants were for virgin land long reputed to be "useless desert" and worth not more than $1.50 an acre before development. Hence, the Federal loan plus the value of the land grants totaled a third — certainly not more than half — of the actual construction costs on that initial 475 miles.
Consequently the Ames-Dillon group was forced to pursue the same dire policies that Durant originated when he tricked the Union Pacific Railroad & Telegraph Company into existence in 1863‑4, invented Crédit Mobilier of America, and p286 persuaded Herbert Hoxie to be the stooge for the •247‑mile Hoxie contract. Routinely through 1867 and 1868, the railroad's first-mortgage bonds were sold or pledged at 15- and 20‑per‑cent discounts; a series of future-income bonds was sold at 40- and 50‑per‑cent discounts (an average of $700 in cash accepted and $1,000 to $1,400 pledged in repayment); and a third bond series on the land grants was sold at an average 40- to 45‑per‑cent discount. Just as consistently, Union Pacific's common stock refused to budge above 30 per cent of its face value.
Yet these were the only methods by which cash could be raised to build the line. Between 1867 and 1872, Union Pacific paid $13,755,000 in interest on its loans. The railroad's net earnings for the same five years totaled $13,736,000 — $19,000 less than the debt interest. But the Ames-Dillon faction, while indignantly questioning the behavior and greed of Durant, grubbed the $3,658,000 "bonus" for Crédit Mobilier by rigging a 37‑per‑cent increase on charges for the completed trackage between the 100th meridian and Cheyenne; and then rigged future dividends via the same technique.
Back in Washington after October 15, Oakes Ames dived into other treacherous waters by offering Crédit Mobilier bonds to Congressmen without margin payments. Since these "sales" led to his formal censure before an open session of the House in 1873 and are held responsible for his fatal heart attack a few weeks later, the humane term for his behavior is "sale without margins" rather than "bribery." The Fisk raid and Durant's suspected role in it convinced the Ames brothers and Dillon that Durant and Fisk might move into Washington and force a Congressional investigation of Crédit Mobilier's activities. "We want more friends in this Congress," Ames wrote H. S. McComb on February 22, "& if a man will look into the law (& it is difficult for them to do it unless they have an interest to do so), he can not help being convinced that we should not be interfered with." Testimony before two House committees during 1873 revealed that Congressmen p287 who accepted Ames's offer of stock with of margin payment included: Schuyler Colfax, Speaker of the House; James A. Garfield of Ohio (20th President of the United States); William D. Kelley of Pennsylvania; William B. Allison of Iowa; and James Brooks of New York. Another score of Representatives and Senators, including General John Logan of Illinois and James G. Blaine of Maine, developed fears about the political hazards involved and either decided against acceptance of the stock or changed their minds and returned it with requests that their names be removed from Ames's list.
Oakes Ames's dealings with Congressman James Brooks of New York were most flagrant violations of ethics and law. Brooks was one of the government-appointed directors of Union Pacific, hence was specifically forbidden by the Railway Acts to hold stock in the enterprise. Sometime during 1865, Brooks had told Durant that he wanted to "get" $15,000 or $20,000 of Crédit Mobilier stock. Durant put him off. In December, 1867, Brooks again demanded — or Ames offered — 200 shares of Crédit Mobilier. Finally 150 shares were delivered to Charles H. Neilson, Brooks's son-in‑law. The 1873 testimony indicated that Brooks paid $10,000 for 100 of the shares, but soon received a "dividend" of $5,000 worth of Union Pacific common, plus the other 50 Crédit Mobilier shares.
The majority of these Congressional "sales" took place between mid-October and January with Ames fully aware of the fact that his contract included the $3,658,000 overcharge on completed trackage. Consequently he knew that Crédit Mobilier was about to "cut the melon." On December 12, Crédit Mobilier declared its first dividend of $2,244,000 (face value) in first-mortgage bonds and $2,244,000 in Union Pacific common, or a total worth of 80 per cent of the face value of Crédit Mobilier shares. Another dividend of 60 per cent was declared on June 23, 1868. Thus, typically, Congressman William D. Kelley of Pennsylvania received a check for $329 plus p288 his paid-up shares in Crédit Mobilier without having invested a penny of "margin." If Grenville Dodge took part in any of the Crédit Mobilier "sales" to the 40th Congress, he managed to hide it. Two other Iowa Congressman were involved. Dodge must have known what was going on.
Sometime that winter, too, Collis Huntington set a trap for Federal loans to Central Pacific across all Utah Territory to Echo Canyon. His device was arrogantly simple. He ordered Montague to prepare maps and charts for a Central Pacific right of way across Nevada and Utah to Echo Canyon, then filed them with the Secretary of the Interior as a "routine projection for the next section of our line." A few weeks later Huntington brisked back to Interior with a document that stressed the financial emergency confronting Central Pacific. He requested an advance payment of $2,400,000 worth of Federal bonds on "our new line." The request was referred to Attorney General for an opinion. The Attorney General ruled that it was legally sound, according to the 1866 Pacific Railway Act. At that point the story leaked back to Dodge or Ames. Frantic requests went from Union Pacific to both President Johnson and Secretary of the Treasury McCulloch to "personally investigate Huntington's trick."
Meanwhile Huntington, Ames and Dodge joined forces to lobby against a bill introduced on December 9, 1867, by C. C. Washburn of Wisconsin, that would empower Congress to fix the freight and passenger rates on the Pacific Railroad. They succeeded in killing the bill in committee. Allegations were made then and later that the Ames "sales" of Crédit Mobilier stock influenced the vote. Dodge and Huntington became friends during this lobbying stint. Yet throughout the winter and spring, the Ames, Dodge and Huntington discussions about the Washburn Bill and other legislation deemed unfriendly to the Pacific Railroad would end with Huntington going off to a conference to demand the $2,400,000 trans-Utah p289 bonds for Central Pacific while Ames and Dodge hurried to another conference to argue against the scheme.
Durant had his own scouts in Washington. If he was in alliance with Jim Fisk these "pipelines" were excellent. Hence suspicions began to plague him about Grenville Dodge. Then his temper flared, as it had against Peter Dey, George Francis Train, and a score of others. Silas Seymour, meanwhile, remained the pompously affable yes-man, ever ready to propose a plausible alternate for the construction decisions reached by Dodge and the field crews. And now there were indications that his brother Horatio had an excellent chance to win the Democratic nomination for the Presidency in July. The Republicans were being forced, by the bitterness spewed up from the Johnson impeachment trial, to resort to the weary old trick of nominating a successful general. Grant was willing to run and would probably be nominated on the first ballot. If the country reacted as violently to the Johnson trial as Congress had, Horatio Seymour might beat Grant. With the President's brother as chief engineer of Union Pacific, Durant dreamed, all would be well again; the Ames-Dillon clique would surrender.
As for the decision to move division shops from Cheyenne to Laramie, Durant had twin reasons. Seymour logically pointed out that Laramie stood between the steep run over Sherman Summit and Wyoming's Red Desert; division shops there would be in a more desirable spot than they would be at Cheyenne. Secondly, real-estate sales weren't moving as briskly as they should. A shift of shops from Cheyenne to Laramie would bring hundreds of lot buyers across the Black Hills.
Defiantly, Durant and Seymour rode off to Laramie. Dodge raced after them. Again the telegraph chattered. A delegation of merchants was waiting for Dodge on the Cheyenne platform. "The shops will remain in Cheyenne," he promised, and rode on to Laramie where the station agent filled him in on p290 developments. Sam Reed had stayed in town only long enough to talk with Durant about details of the grading contract to Brigham Young, then coached off toward Salt Lake City; Theº Casements had rail down almost to Cooper Lake; Seymour was upcountry bossing the regrade toward Carbon; Mr. Durant was around somewhere — likely at the Frontier House. Dodge strolled over to Hell on Wheels. A German band tootled waltzes from a platform at the center of the big tent. Cribhouse Row sported ruby-glass chandeliers in some of the front parlors. The gambling halls and saloons were flashier and noisier than Julesburg's. General Gibbons was still in command at Fort Sanders. Again, come pay night, a taste of martial law might be necessary. But first he'd have it out with Durant. And in public. He wanted the gossip to get around.
Dodge packed his saddlebags next morning, put on Army "fatigues" and an officer's slouch hat, and told the hostler at the Casements' warehouse that he'd need a horse before 10 o'clock. Durant, he had learned, was uptown talking with the Town Lots salesmen. The meeting that followed was a moderately good model for a "Gunsmoke" climax. Durant stood in front of the Town Lots tent at the end of Main Street, arguing promotion strategies. He was an executive visiting the frontier, and dressed for the role in a slouchy suit of black corduroy with a heavy gold watch chain looped in a "Flying W" across its vest, a dapper string tie, a white shirt and straw sailor hat — effective foils for his VanDyke beard and curly pompadour.
Dodge strode up the dusty street, arms swinging. The real-estate salesmen muttered to Durant and sidled away. Durant turned, scowled, and walked slowly out into the street too. But neither "reached." Durant coldly detailed his decision to change the Cooper Lake-Carbon Summit route and transfer the division shops from Cheyenne to Laramie. In view of developments, he probably gritted a threat to demand Dodge's dismissal at the next meeting of Union Pacific's board. p291 Dodge roared his reply loudly enough for every gawker on the street to hear — and repeat. "You are now going to learn," he quoted himself as shouting, "that the men working for the Union Pacific will take orders from me and not from you. If you interfere there will be trouble — trouble from the Government, from the Army, and from the men themselves."
The result was precisely what Dodge wanted and far more effective than a shooting match would have been. The telegraphers gossiped. New York and Washington had the news within a day or two. Sidney Dillon went to Washington to join Oakes Ames in a conference with General Sherman. West through Carbon, Fort Steele and the Red Desert, the grade gangs and bridge crews greeted Dodge with grins and a spontaneous "Hurrah for you, General."
Union Pacific's first tunnel was being blasted out of the brown sandstone at Mary's Creek near the section Durant and Seymour were rerouting. The brown stone showed a tendency to crack and flake; the entire tunnel would have to be timbered. The Casements were building a temporary switchback over the hill to by-pass it. Temporary pile trestles, •200 to 600 feet long, were hammering up for the crossings of the Laramie River, Rock Creek, Medicine Bow River, the North Fork of the Platte, and Bitter Creek. Bitter Creek looped like a sidewinder; the route stakes called for twenty crossings, a total of •2,450 feet of spans. Truss bridges were on order from Boomer in Chicago, but only a few had reached the Laramie warehouse. Anyway, the desert haul was too impossible a task via wagons; after the Casements laid track the trusses could be hauled out by rail and placed.
At new Fort Fred Steele on the North Platte crossing, Dodge heard the latest gossip about Central Pacific. Early in June the first engine had crept down that final seven miles of •116‑foot grade into Truckee Canyon. Behind it had creaked a work train that was a carbon copy of the Casements', even to water cars, a blacksmith shop on wheels, bunk cars, and a segregated diner for Irish ironmen. All down the Sierra slope the p292 coolie gangs waved their spades and cheered. Central Pacific was in business from Sacramento to a base camp •40 miles beyond Reno. Crocker was keeping his promise of "a mile a day in '68."
Back east the feud went into full gear again. Ames and Dillon stormed into the New York office soon after Durant's return. Washington was gossiping, they claimed, that Seymour's line shift into Carbon Summit had been a deliberate trick to obtain more Federal bonds and land grants; Congress was fretting about the mutters of "corruption" coming from the Secretary of the Interior and the White House. Durant's decision to move workshops out of Cheyenne was almost as bad politically. A bill for creation of Wyoming Territory was in committee and due for passage within the month; Cheyenne would be named the capital. Where could Union Pacific hope to stand with Territory officials after it ordered repair shops, hundreds of jobs, and millions of dollars worth of local trade out of the capital city?
Durant held his ground: Seymour was a better engineer than Dodge; the changes would stand. Moreover, he repeated, he intended to go before the October board meeting with a list of charges against Dodge and a request for his dismissal.
Oakes Ames nodded, glanced at Dillon, then played their ace. General Grant, he said, planned to join General Sherman and the other commissioners at the Fort Laramie treaty talks in July. It was, of course, excellent campaign strategy for the Republican candidate to take this keen interest in the Indian Question. Generals Grant and Sherman had also expressed a desire not only to inspect the Union Pacific trackage but to hear both sides of the argument about General Dodge. They would be at Fort Sanders late in July. Durant and Seymour were expected there too.
Jacob Blickensderfer's location stakes spread over the Green River plateau to a junction with the Overland Mail road at p293 Church Butte, veered north of Fort Bridger to the valley of the Bear, then beelined alongside Castle Rock toward the gloom of Echo Canyon. Dodge found Blickensderfer and his crewmen cursing Nature's handiwork. Echo Canyon was crumbly shale and clay; a •772‑foot tunnel would have to be blasted through one of the ridges. The job couldn't possibly be finished before the Casements arrived. The entire bore must be timbered, and the approaches cleared back •50 feet or more to diminish the danger of rock slides. The chain crews were staking a tortuous right of way •eight miles long for a temporary by-pass track.
Down Weber Canyon the surveys called for two more rock bores, less than a mile apart. Tunnel Number 3 was to be •508 feet long through a cliff of black limestone and blue quartzite. Tunnel 4 — and strangely enough it would have a four-degree curve — would bore •297 feet through the same tough rock. The bridge problem wasn't too bad. The survey hopscotched Weber River a half-dozen times. All jumps could be made via wood trestles until the permanent Boomer trusses arrived from Chicago.
Jogging out to these locations, the division chief gave Dodge a report on his spring surveys across Utah and Nevada. The level of Great Salt Lake was rising. One assistant engineer had almost drowned trying to take soundings. The only sensible route was north of the lake over that •7,500‑foot-high desert range the Mormons called Promontory Ridge. Blickensderfer didn't see how Montague and the Central Pacific crews could reach any other decision.
Dodge groaned. Brigham Young had his grading and timber contracts. But there would be oratory when he learned that Salt Lake City, like Denver, was to be by-passed. Best to go over there and break the news as soon as they'd reached decisions on these tunnel jobs. Or could he? Dodge puzzled again over the mysterious message from Ames telling him to be ready for an emergency trip back to Laramie. Did this mean that Sherman and his retinue were planning an inspection p294 of Union Pacific on their way home from the Fort Laramie treaty talks? Had Durant hoodwinked Ames into accepting Seymour as Chief Engineer?
They were taking sights along one of Echo's bluffs on July 23 when an orderly rode in from Fort Bridger. The telegram he delivered was from Dillon at Fort Sanders. Generals Grant, Sherman and Sheridan and the Peace commissioners were due back at Fort Sanders on the 26th. Durant and Seymour were already there. Grant and Sherman wanted to hear both sides of the argument between Durant and Dodge.
The Casements' railhead was east of Rawlins Springs. That meant, for Dodge, a •275‑mile gallop in two days, then a •200‑mile engine ride east through the maze of construction trains. The orderly saluted and grinned. An ambulance was on its way from Bridger to base camp, he explained, "courtesy of the Army." The General could sleep all the way across Wyoming if he wished.
At Fort Bridger, Dodge caught up on desert gossip. Red Cloud had won the three-year battle against Forts Phil Kearny and Reno and the bullyboy traffic up the Bozeman Trail. The Treaty Council at Fort Laramie brought in the most impressive array of Army brass ever seen in the West — Grant, Sherman, Sheridan, Harney, Kautz, Potter, Dent, Hunt and Slemmer. Red Cloud led in hundreds of lodges of Oglalla, Northern Cheyennes, Arapaho and Sioux. The calumet made its grave round; the chiefs spoke; the commissioners replied. Finally the generals nodded agreement. Red Cloud's hands trembled as he put his "X" on the treaty that closed the Bozeman Trail, pulled all troops out of Phil Kearny and Reno, and re-established the Big Horn country north of Wind River as land inviolate to the white man. The Wyoming Desert was as peaceful as an Ohio farm.
Jack Casement rode his black stallion out from the Latham junction, looped the lead over the ambulance tail gate, and clambered in for more gossip. He had heard that Durant actually intended to make a case for Dodge's dismissal during the p295 talks with Grant. In a way it was a devilishly shrewd move. On July 9, the Democrats had nominated Horatio Seymour as their Presidential candidate. Durant would, it seemed, urge brother Silas's promotion from consulting to chief engineer. If Grant so much as winked an eyebrow in defense of Dodge, the Democratic National Committee could howl "favoritism" and make a pretty campaign issue out of it. Ames, Casement growled on, hadn't even had the guts to countermand Durant's order on those twenty extra miles into Carbon Summit, and it looked now as though he'd compromise on the Cheyenne-Laramie squabble, too, by approving division shops and a roundhouse for each town. Anyway, if Durant won, there just might be a strike at railhead and all along the line; payrolls were six weeks late again. Personally General Jack fancied a long fishing trip. His contract called for $3,000 a day during "unaccountable delays," didn't it? It was an enlightening chat on an auspicious day; that same afternoon Congress created the Territory of Wyoming.
The powwow that convened in the big log bungalow of the Fort Sanders Officers Club on the afternoon of July 26 was as impressive as the council with Red Cloud. Grant, Sherman and Sheridan were in "civies." General Harney wore his black cape and silk topper. The rest of the generals wore field dress splendid with gilt buttons and braid. Durant, again in the black corduroy, sat beside Silas Seymour on one side of the circle. Dodge sat across from them, with Dillon and Jesse L. Williams, the Government commissioner. If Grant, Sherman, Sheridan and Dodge found time for a private conference, no hint of it was ever made by the press or in memoirs.
General U. S. Grant and party at Fort Sanders,º Wyoming, at the time of the "showdown" between Dodge and Durant, summer, 1868. Some of those in the picture are: General Phil Sheridan (second from the left with his hands in his pockets), General U. S. Grant (seventh from the left with his hands on the fence), General Sherman (at the center with his coat over his arm), General Harney (the tall bearded man in the cape), and Thomas C. Durant (slouched behind General Harney in the black suit and sailor hat).a Union Pacific Railroad
Grant put the questions. One of the major reasons for giving in to Red Cloud, he pointed out, had been to calm the north country tribes and enable Union Pacific to build through to Salt Lake Valley without fighting war parties all across the high plain. Under the circumstances the Army hoped for a comparable peace among the executives of the railroad. p296 There was too much at stake. If Mr. Durant had charges, let him state them.
Durant unfolded a piece of paper and began reading. General Dodge, he charged, had selected "impossible routes," had held up construction while "tinkering" over tunnel and bridge projects, and had failed to locate the line into Salt Lake City.
Grant chewed his cigar and nodded toward Dodge. Dodge summarized his annual report, recounted the changes made by Seymour and Durant while he was in Washington, and detailed the work under way between Rawlins Spring and Great Salt Lake and the reasons for by-passing Salt Lake City.
The group tensed. Grant's hands slipped down to his knees. He leaned forward, staring at Durant and Seymour. "The Government," he rasped, as though the November election was assured, "expects the railroad company to meet its obligations . . . And the Government expects General Dodge to remain with the road as its chief engineer until it is completed."
General Harney's cape rustled as he turned to stare at Durant. Sherman, Sheridan and the full circle turned with him. Silas Seymour licked his lips and managed a weak smile. Durant's fingers dabbed at the black cravat; the watch chain slithered like a gold snake as he rose. "I withdraw my objections," he mumbled. "We all want Dodge to stay with the road." He walked across the room toward Dodge, right hand extended.
General Harney whipped his cape back across his belly, turned to Sheridan, and winked.
a This wonderful photograph is also available large enough for the faces to be fully readable (0.4 MB). Of interest also on the larger version is the Dog so grandly posed in the center foreground and seeming to draw General Grant's attention: if you look closely, you will see that she/he is double-exposed. Dogs will be Dogs, and finally it was too much for him: he seems to have loved his little girls, and he got up and stood by them. On the historical plane, this is a witness to the length of photographic exposures at the time, accounting (as has of course been pointed out many, many times) for the hieratic look of the people in so many of these old photographs: our Dog had the time to register rather well on the plate as he sat, then to get up and go to his people, and register a bit as he stood. Similarly, if less touching, the woman behind Sherman is blurred: she had to deal with her baby. As they say in show business, never work with children or animals if you can avoid it.
Images with borders lead to more information.
The thicker the border, the more information. (Details here.)
A page or image on this site is in the public domain ONLY if its URL has a total of one *asterisk. If the URL has two **asterisks, the item is copyright someone else, and used by permission or fair use. If the URL has none the item is © Bill Thayer.
See my copyright page for details and contact information.
Page updated: 20 Aug 16