DURING the election of 1872 many rumors appeared in the press of the country that there had been great corruption in the management of the affairs of the Union Pacific Railroad. It was charged that members of the House and Senate, some of whom were named, had been bribed by gifts of stock in the Credit Mobilier to secure their influence in legislation affecting the Union Pacific Railroad.
The Credit Mobilier Co. had been formed to take the contract for building the Union Pacific Railroad. The stockholders of the two companies were identical. Each stockholder of the Credit Mobilier owned a number of shares of the Union Pacific Railroad proportionate to his holding in the former company.
The Union Pacific Railroad Company and Central Pacific Railroad Company received liberal land grants from the Government of the United States, that they might each build a part of a line which should connect the Atlantic States with the Pacific Ocean. In addition to the land grants, each road was to receive a loan of Government bonds, payable in thirty years, of $27,000,000, for which the Government was to pay interest, which interest was not required to be repaid by the roads. The roads were also authorized to give a mortgage on their properties for a like amount, of $27,000,000 each, which mortgage was to be prior to the Government's lien for its loan. The charter of the Union Pacific Railroad was granted by the Government of the United States. That of the Central Pacific was from the State of California. The Government undertook to remove all Indian titles from the public land granted to the Union Pacific Railroad for a space of 200 feet in width on each side of its entire route, and conferred the right to