The Story of the First Trans-Continental Railroad | Page 9

for the reason that investors could not feel any assurance
that they or their friends would have any voice in the management of
affairs or control of the Company. The capital of the Company was
fixed by the supplementary act at one hundred million dollars, (one
million shares at one hundred dollars each), consequently any interest
holding over fifty millions of the stock would be paramount and vice
versa. Until it was determined who would be in control, investors
fought shy. Under the Charter the subscription books must remain open
until the completion of the road, making it possible for outsiders to wait
until the road was near completion and then step in and by large
subscriptions acquire control.
As there were some funds available, a contract was entered into in May,
1864, with H. M. Hoxie, to build the first hundred miles. This contract

was extended to cover from Omaha to the hundredth Meridian, two
hundred and forty-seven miles, on October 3rd, 1864, and on the 7th of
the same month assigned to a company (simple partnership) composed
of Vice-President Durant and six others, all stockholders of the
Railroad Company. The capital of this partnership consisted of four
hundred thousand dollars (but a small percentage of the amount
necessary to carry out the Hoxie contract). The members of the firm
were unable or else unwilling, owing to the immense personal liability
involved, to put up further funds and some other action was necessary.
Durant and his friends accordingly purchased the Charter of a
Pennsylvania Corporation of limited liability and elastic powers,
known as the "Pennsylvania Fiscal Agency" changed its name by
legislative enactment to the Credit Mobilier of America. Subscribers of
the two million one hundred and eighty thousand dollars of Union
Pacific Stock were given the option of either exchanging Union Pacific
stock for that of the Credit Mobilier, sell their Union Pacific stock to
the Credit Mobilier, or turn it back to the Union Pacific Railroad
Company and have it redeemed. By this the stockholders of the Credit
Mobilier became the sole holders of the Union Pacific stock.
The Hoxie contract was reassigned to the Credit Mobilier who duly
completed the work, finishing the line to the point specified October
5th, 1866. Owing to their inability to raise funds, it seemed as though
the two companies, Union Pacific and Credit Mobilier, would fall down.
There was no sale for the First Mortgage bonds of the railroad, the
Government bonds were but little better, being worth but sixty-five
cents on the dollar. Durant and his friends were not men of wealth nor
did they command the confidence of wealthy men. The Company had
become greatly involved and was compelled to sell some of its rolling
stock to pay pressing debts. It was at this junction that Oakes Ames
entered the field, being persuaded, it is said, to do so by President
Lincoln who desired to enlist his well-known executive ability and
capital in the enterprise. Through the efforts of himself and associates
the paid up subscriptions were increased to two and a half million
dollars.

The original or first contract made with Hoxie for a hundred miles had
been extended to cover up to the hundredth Meridian, and the line to
that point, two hundred and forty-seven miles from Omaha, was
completed October 5th, 1866.
The second contract made was with a Mr. Boomer for one hundred and
fifty-three and thirty-five hundredths miles from the hundredth
Meridian west, at the rate of nineteen thousand five hundred dollars per
mile for that part of the distance East of the North Platte River and
twenty thousand dollars per mile west thereof. Bridges, station
buildings, and equipment to be additional. This contract was also
assigned to the Credit Mobilier. On this, fifty-eight miles were
completed when dissensions arose, occasioned by financial stringency
among the stockholders of the Credit Mobilier. Vice-President Durant
going into court, compelled suspension of action on the third contract,
made March 1st, 1867, with one J. M. Williams who had assigned it to
the Credit Mobilier. This covered two hundred and sixty-six and
fifty-two hundredths miles, commencing at the hundredth Meridian at
the rate of fifty thousand dollars per mile. For a time matters were at a
standstill, injunctions preventing the completion of present or the
making of new contracts.
Finally a compromise was affected between the two factions, Durant
and his friends on the one side, and the Ames interests on the other.
Under this, a fourth contract was made with Oakes Ames for which he
was to receive from forty-two thousand to ninety-six thousand dollars
per mile or forty-seven million nine hundred and fifteen thousand
dollars for six hundred and sixty-seven miles, commencing at the
hundredth Meridian. This it is supposed is the largest contract ever
made by