The Crédit Mobilier Scandal and the Supreme Court: Corporate Power, Corporate Person, and Government Control in the Mid-nineteenth Century.
In 1867, Francis Train, a powerful director of the Union Pacific Railroad, devised a surefire way to make some money. Train established a trust company, Crédit Mobilier of America, which was completely owned by a small group of directors of the Union Pacific. The group soon became known as the Pacific Railroad Ring. Because they controlled the board of directors of the Union Pacific, the ring was able to award building contracts to Crédit Mobilier, giving wildly favorable terms and paying exorbitant prices for the work. They used this scheme to siphon money out of the Union Pacific and into the coffers of their own company. In actuality, the primary function of the Crédit Mobilier Company was to shift money—money that came from the U.S. Treasury and the pockets of the Union Pacific's minor shareholders.