Oakes Ames (1804–1873) was a U.S. manufacturer and five-term member of the United States House of Representatives. He was the principal financier of the Union Pacific Railroad, the eastern half of the first transcontinental railroad. Unfortunately, in his zeal to complete this railroad project, Ames made several errors in judgment. His questionable business practices eventually led to his censure by Congress.
Oakes Ames was the eldest son of Oliver Ames, Sr. and Susannah Angier, born on January 10, 1804, in Easton, Massachusetts. His father was a socially prominent manufacturer who owned a well-known shovel factory. Ames attended local schools until he was sixteen and then spent some months at the Dighton Academy.
Ames had an early interest in business. As a teenager he and his younger brother, Oliver, Jr. (1807–1877), began working for their father as general laborers. They started at the bottom of the company and worked long hours at a variety of tasks. Both boys worked their way up to management positions. When their father retired in 1844, Oakes and Oliver, Jr. reorganized the company under the name Oliver Ames and Sons and served as co-presidents.
The Ames brothers rapidly expanded the already successful business. The California gold rush, the settlement on the Western frontier, and the growth of the railroad industry all fueled demand for their products. In addition, the company was awarded several government contracts to supply equipment during the American Civil War (1861–1865). By 1865 Oliver Ames and Sons was worth over $8 million.
A successful businessman, Oakes Ames became involved in politics as a member of the Republican Party when he was in his fifties. He served as a close business advisor to the governor of Massachusetts. In 1862, at age of fifty-eight, Ames ran successfully for the Massachusetts second district seat in the United States House of Representatives. He was reelected four times and served in Congress until his death. As a Congressman Ames served on committees related to manufacturing and railroads.
The Ames brothers shared an interest in railroads and, in 1865, extended that interest to business ventures. Oliver Ames and Sons built the four-mile long Easton Branch Railroad. It began at a shovel works in Stoughton, Massachusetts, and continued to a connection with a line bound to Boston. Railroad-related business pursuits continued. In 1865, the brothers became interested in the Union Pacific Railroad, the eastern half of the first transcontinental railroad under construction. They joined a company called the Crédit Mobilier, the construction company and investment project for the railroad.
The Crédit Mobilier was organized by T.C. Durant, vice president of the Union Pacific to solve the rail-road's financial difficulties and to complete the building of the railroad. It was a complex and corrupt scheme in which a small group of financiers contracted with themselves or their associates to construct the railroad, charging exorbitant prices for their services. Durant and his cronies pocketed huge profits for construction that was often faulty.
Dissention within the ranks of the Crédit Mobilier led to a reorganization of the company and its railroad interests. Oakes Ames stepped into the leadership of the Crédit Mobilier and his brother Oliver became president of Union Pacific Railroad. Oakes Ames won contracts to construct the Union Pacific railroad line. He then reassigned the contracts to trustees who served as stockholders of the Crédit Mobilier. The Union Pacific gave cash to the Crédit Mobilier to construct the railroad. The Crédit Mobilier instead used much of the money to buy stocks and bonds in Union Pacific at face value. These were later sold in the open market at a large profit for the investors, who all served the Crédit Mobilier company.
Thus, while the Union Pacific railroad line was slowly being built, the Crédit Mobilier investors were getting rich. This labyrinthine way of doing business garnered large profits for the investors. It was a cutthroat way of doing business, but was not uncommon at the time. The practices, however, did draw the attention of the United States Congress. As a Congressman, Oaks Ames was expected to support free market activities. In reality, his business practices appeared more like that of a monopoly. When Congress started to raise questions about this practice Ames sold Union Pacific stock to other members of Congress, also at face value. When this was revealed he was then accused of buying political support for his business interests.
In 1872 two Congressional committees were formed to investigate whether or not the government had been defrauded by the Crédit Mobilier. Certain members of Congress wanted Ames expelled for illegal business practices. Ames defended himself by claiming his motives were purely patriotic because the railroad was important for the development of the country. He also argued that he had not become wealthy from the business dealings because the railroad was $6 million in debt at the time of its completion. Many members of Congress and the public agreed that while Ames had compromised legal principles he was not consciously corrupt. However, his desire to complete the Union Pacific project had clouded his ethical judgment. In the end Ames was not expelled from Congress, but he was censured.
After the Crédit Mobilier scandal, Ames returned to his hometown, depressed and in poor health. He suffered a stroke and died a few days later, on May 8, 1873. The memorial hall in North Easton was dedicated to him in 1881, and in 1883 the Union Pacific erected a monument in his name in Sherman Summit, Wyoming.
See also: Oliver Ames, Railroad Industry, Transcontinental Railroad, Union Pacific Railroad
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"Ames, Oakes." Gale Encyclopedia of U.S. Economic History. . Encyclopedia.com. (February 22, 2018). http://www.encyclopedia.com/history/encyclopedias-almanacs-transcripts-and-maps/ames-oakes
"Ames, Oakes." Gale Encyclopedia of U.S. Economic History. . Retrieved February 22, 2018 from Encyclopedia.com: http://www.encyclopedia.com/history/encyclopedias-almanacs-transcripts-and-maps/ames-oakes
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Oliver Ames (1807–1877) was a successful manufacturer, businessman, and politician. He is best known for his role as director of the Union Pacific Railroad, the eastern half of the first transcontinental railroad. Ames helped finance the project and oversaw its construction.
Oliver Ames was born on November 5, 1807 in Plymouth, Massachusetts, one of six sons born to Oliver Ames and Susanna Angier. His father owned a successful shovel manufacturing company in Bridgewater, Massachusetts. Ames was raised in North Easton, 20 miles south of Boston. At the age of 21 he went to study law at the Franklin Academy at North Andover. He studied there for 18 months and worked briefly in an attorney's office. After this short introduction to law, Ames decided that he did not enjoy working in an office and joined his father's company.
Oliver Ames and his brother Oakes Ames joined their father at the Ames Shovel Works. They entered the company at the bottom, working 10-hour days, six days a week. By the early 1840s, both boys had worked their way up to management positions. In 1844, Oliver Sr. retired and Oliver Jr. and Oakes reorganized the company as Oliver Ames and Sons. The boys served as co-presidents of the firm.
The company owned a water-powered plant that produced several types of tools, but specialized in shovels. They established a foothold in the market by creating a lighter shovel. At first the new product was thought to be less durable than the older, heavier shovels. But the lighter shovels allowed workers to be more productive and the product proved a great success. The company supplied shovels to thousands of western settlers and California gold miners. In addition, the growth of the railroad industry fueled the demand for the Ames' products. By 1860 the company was worth over 4 million dollars.
Oliver Ames also had an interest in politics. In 1852 he was appointed as a Whig to the Massachusetts State Senate. In 1857 he was popularly elected to the same position. His stint in politics, however, was brief. After his second term, Ames chose not to run for reelection and instead returned to his business interests.
In the 1850s Oliver and his brother became increasingly interested in the budding railroad industry. In 1855 they built the four-mile Easton Branch Railroad from the shovel works in Stoughton, Massachusetts, to a point where it connected to a Boston-bound line. Ames later served as director of the Old Colony and Newport Railroad, which took control of the Easton Branch Railroad.
During the American Civil War (1861–65) Oliver Ames and Sons won several government contracts to supply shovels, swords, and other equipment. By 1865 the firm's worth had increased to 8 million dollars and the Ames brothers had surplus money for investing. They decided to invest their money in the railroad industry, particularly in the Union Pacific Railroad, which was the eastern half of the first transcontinental railroad. Oliver and Oakes purchased large quantities of stock in the Union Pacific Crédit Mobilier, a construction company and investment project for the Union Pacific. Ames was able to invest a large amount of money in the project. He invested more than 1 million dollars of his own money into the railroad and raised an additional 1.5 million dollars on the credit of the family business. In addition, the Ames brothers placed the resources of their factories at the disposal of the railroad.
In 1866 Oliver Ames became acting president of the Union Pacific Railroad and was elected as president from 1868 to 1871. With Oliver's careful management and financial backing, the railroad flourished., Four-fifths of the line was built during his tenure as president. Despite engineering difficulties, rough terrain, and labor problems, the project was finally completed on May 10, 1869, when the Union Pacific Railroad met with the Central Pacific Railroad at Promontory, Utah. The company's success, however, was marred by a financial and political scandal involving Oakes Ames and the Crédit Mobilier. While Oliver Ames was never directly involved in the affair, the events occurred during his presidency of the company. In one sense it was tribute to him that the railroad was completed in spite the enormous loss of revenue because of graft.
In 1871 Ames left the presidency of Union Pacific, though he remained a director until his death. He returned his attention to the shovel company, which was on the verge of bankruptcy because of the extensive financing of the railroad. Oliver put that company back in order and also pursued business interests with banks and other railroads.
Ames was not only a successful businessman, but also a philanthropist. He was a devout Unitarian and donated a large sum of money for a new Unity church and parsonage in North Easton. He also contributed funds for a Catholic church and a Methodist meeting house. In his will Ames left money for a library, public schools, and local roads in his hometown of North Easton. Oliver Ames died in that town on March 9, 1877.
See also: Oakes Ames, Central Pacific Railroad, Union Pacific
Galloway, John Debo. The First Transcontinental Railroad: Central Pacific, Union Pacific. New York: Simmons-Boardman, 1950.
Garraty, John A., and Mark C. Carnes. American National Biography, Volume 1. New York: Oxford University Press, 1999.
Griswold, Wesley S. A Work of Giants: Building the First Transcontinental Railroad. New York: Mc-Graw Hill, 1962.
Union Pacific Railway Archives, Fact Figures and History. Massachusetts, 1997.
Utley, Robert H. "Golden Spike: Chapter 2: Building the Pacific Railroad," US History, September 1, 1990.
"Ames, Oliver." Gale Encyclopedia of U.S. Economic History. . Encyclopedia.com. (February 22, 2018). http://www.encyclopedia.com/history/encyclopedias-almanacs-transcripts-and-maps/ames-oliver
"Ames, Oliver." Gale Encyclopedia of U.S. Economic History. . Retrieved February 22, 2018 from Encyclopedia.com: http://www.encyclopedia.com/history/encyclopedias-almanacs-transcripts-and-maps/ames-oliver