Crédit Mobilier Scandal Emerges
The Crédit Mobilier was positioned as a supposedly independent, and thus impartial, company that Union Pacific could hire for construction and contract management of the railroad. Instead, UP directors funneled projects through Crédit Mobilier — of which they were also investors — paying the transparent holding company inflated prices and pocketing the difference. The fraud came to a head when the New York Sun revealed that several members of Congress had accepted cash bribes or shares of Crédit Mobilier stock. The scandal resulted in a Congressional investigation that censured two participants and caused a financial collapse that left UP on the verge of bankruptcy.