Three committees of Congress, two in the House and one in the Senate (the Poland Committee, the Wilson Committee, and the Senate Committee), subsequently investigated the charges.Their investigations disclosed the fact that Ames, then a member of the House of Representatives, the principal stockholder in the Union Pacific, and the soul of the enterprise, had organized, under an existing Pennsylvania charter, a construction company called the Credit Mobilier, whose shares were issued to Ames and his associates.To the Credit Mobilier were issued the bonds and stock of the Union Pacific, which had been paid for "at not more than thirty cents on the dollar in road-making."* As the United States, in addition to princely gifts of land, had in effect guaranteed the cost of construction by authorizing the issue of Government bonds, dollar for dollar and side by side with the bonds of the road, the motive of the magnificent shuffle, which gave the road into the hands of a construction company, was clear.Now it was alleged that stock of the Credit Mobilier, paying dividends of three hundred and forty per cent, had been distributed by Ames among many of his fellow-Congressmen, in order to forestall a threatened investigation.It was disclosed that some of the members had refused point blank to have anything to do with the stock; others had refused after deliberation;others had purchased some of it outright; others, alas!, had "purchased" it, to be paid for out of its own dividends.
* Testimony before the Wilson Committee.
The majority of the members involved in the nasty affair were absolved by the Poland Committee from "any corrupt motive or purpose." But Oakes Ames of Massachusetts and James Brooks of New York were recommended for expulsion from the House and Patterson of New Hampshire from the Senate.The House, however, was content with censuring Ames and Brooks, and the Senate permitted Patterson's term to expire, since only five days of it remained.
Whatever may have been the opinion of Congress, and whatever a careful reading of the testimony discloses to an impartial mind at this remote day, upon the voters of that time the revelations came as a shock.Some of the most trusted Congressmen were drawn into the miasma of suspicion, among them Garfield; Dawes;Scofield; Wilson, the newly elected Vice-President; Colfax, the outgoing Vice-President.Colfax had been a popular idol, with the Presidency in his vision; now bowed and disgraced, he left the national capital never to return with a public commission.
In 1874 came the disclosures of the Whiskey Ring.They involved United States Internal Revenue officers and distillers in the revenue district of St.Louis and a number of officials at Washington.Benjamin H.Bristow, on becoming Secretary of the Treasury in June of that year, immediately scented corruption.He discovered that during 1871-74 only about one-third of the whiskey shipped from St.Louis had paid the tax and that the Government had been defrauded of nearly $3,000,000."If a distiller was honest," says James Ford Rhodes, the eminent historian, "he was entrapped into some technical violation of the law by the officials, who by virtue of their authority seized his distillery, giving him the choice of bankruptcy or a partnership in their operations; and generally he succumbed."McDonald, the supervisor of the St.Louis revenue district, was the leader of the Whiskey Ring.He lavished gifts upon President Grant, who, with an amazing indifference and innocence, accepted such favors from all kinds of sources.Orville E.Babcock, the President's private secretary, who possessed the complete confidence of the guileless general, was soon enmeshed in the net of investigation.Grant at first declared, "If Babcock is guilty, there is no man who wants him so much proven guilty as I do, for it is the greatest piece of traitorism to me that a man could possibly practice." When Babcock was indicted, however, for complicity to defraud the Government, the President did not hesitate to say on oath that he had never seen anything in Babcock's behavior which indicated that he was in any way interested in the Whiskey Ring and that he had always had "great confidence in his integrity and efficiency." In other ways the President displayed his eagerness to defend his private secretary.The jury acquitted Babcock, but the public did not.He was compelled to resign under pressure of public condemnation, and was afterwards indicted for conspiracy to rob a safe of documents of an incriminating character.But Grant seems never to have lost faith in him.Three of the men sent to prison for their complicity in the whiskey fraud were pardoned after six months.
McDonald, the chieftain of the gang, served but one year of his term.
The exposure of the Whiskey Ring was followed by an even more startling humiliation.The House Committee on Expenditures in the War Department recommended that General William W.Belknap, Secretary of War, be impeached for "high crimes and misdemeanors while in office," and the House unanimously adopted the recommendation.The evidence upon which the committee based its drastic recommendation disclosed the most sordid division of spoils between the Secretary and his wife and two rascals who held in succession the valuable post of trader at Fort Sill in the Indian Territory.
