Thomas Clark Durant

As a financier and an executive of the Union Pacific Railroad in the early 1860s Dr. Thomas C. Durant (1820–1885) was instrumental in building the first railway spanning the western United States. He ended his career, however, in scandal and financial disaster, having greatly enriched himself at the public's expense.

The Durants were a wealthy and distinguished western Massachusetts family. Bowing to the wishes of his parents, Thomas Durant graduated from Albany Medical College in upstate New York in 1840. But he never practiced medicine, choosing instead to devote his career to business.

After a period of working in his uncle's grain and flour export business, Durant moved to New York City and became involved in the stock market. The 1850s saw the wide-spread building of railways, the "superhighways" of that time. Durant recognized railroads as a good investment, and soon he began to concentrate his entire resources on financing railroad construction.

Together with engineer Henry Farnum, he orchestrated the construction of numerous major rail lines, including the Mississippi and Missouri railroad across Iowa. In 1862 he negotiated a contract with the U.S. government to build the Union Pacific. a rail line that would go westward from Omaha, Nebraska. It was expected to join the Central Pacific, which was moving eastward from California to create a transcontinental railroad. Durant joined the company as vice president and general manager mainly in order to protect and extend his own financial interests.

The Union Pacific soon fell into financial difficulties. Durant attempted to solve the problem by creating a construction and finance company called the Crédit Mobilier of America to complete the building of the railroad. The Crédit Mobilier 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. Crédit Mobilier became a symbol of corruption in an era when illegal manipulation of large contracts was often the standard operating procedure.

From the 1850 federal census, Thomas Durant lived at Brooklyn, Kings County, New York, with his wife. The family at the time consisted of:

• Head Thomas Durant 28
• Wife Heloise Durant 25

Durant was instrumental in obtaining support and financing at every level of government. He lobbied President Abraham Lincoln (1861–1865) and both houses of Congress and with every favorable decision he pocketed more cash. He played on the fascination with the West during the war-torn 1860s and also exploited people's ignorance of the value of the vast area of land between the Mississippi River and California, which maps called the "Great American Desert." Therefore he was able to persuade Congress to pass the Pacific Railway Act of 1862 with a promise that the railroad would receive 10 square miles of land for every mile of track it laid.

In 1864 Crédit Mobilier took over the Union Pacific's construction contracts. Durant persuaded Congress to double the size of the land grants the railroad was previously awarded. He later sold some of this land but retained much more. This land holding added greatly to his wealth as did an elaborate scheme for padding his expenses. The original estimates for construction of the Union Pacific line had accurately set the cost at around $30,000 per mile of track. The Crédit Mobilier doubled this figure, with Durant and a few others pocketing the difference. Construction methods were shoddy. Shortly after the 1869 track completion ceremonies construction crews were forced to undertake several years' worth of additional work rebuilding the tracks.

Durant's reign as the leading robber baron of the Union Pacific and Crédit Mobilier did not last long. In 1865 Durant and his associates faced a severe financial problem, which Oakes and Oliver Ames, who amassed a fortune in the pick and shovel business, promised to ameliorate. They invested more than a million dollars of their own money in the railroad and raised an additional $1.5 million upon the credit of their businesses. Shortly thereafter it was discovered that Oakes Ames, a member of Congress from Massachusetts, distributed shares of Crédit Mobilier stock as political favors. He and a colleague were censured by the House of Representatives. Vice President Schuyler Colfax, Speaker of the House James C. Blaine, and future U.S. President James A. Garfield (1881) were all implicated but were later absolved in the scandal.

From the 1880 federal census, Thomas C. Durant lived at Johnsburg, Warren County, New York, with his wife, daughter, and son. The family at the time consisted of:

• Head Thomas C. Durant 60
• Wife Heloise Durant 54
• Son William Durant 30
• Daughter Ella Durant 26

Durant had managed to accumulate some $23 million by defrauding the railroad's investors with his Crédit Mobilier scheme. An associate later called him "the most extravagant man I ever knew in my life." But, deeply involved in the worst financial scandal of his time and justifiably accused of bribery and fraud, Durant saw his fortune dwindle to virtually nothing following the financial Panic of 1873. He spent his latter days living quietly on his property in upstate New York, where he died on October 5, 1885.

https://en.wikipedia.org/wiki/Thomas_C._Durant

Thomas Clark Durant, (February 6, 1820 – October 5, 1885) was an American financier and railroad promoter. He was vice-president of the Union Pacific Railroad (UP) in 1869 when it met with the Central Pacific railroad at Promontory Summit in Utah Territory. He created the financial structure which led to the Crédit Mobilier scandal.

He was successful in building railroads in the Midwest, and, after the UP was organized in 1862 by an act of Congress, John A. Dix was elected president and Durant vice president of the company. The burden of management and money raising was assumed by Durant, and, with much money at his disposal, he helped to secure in 1864 the passage of a bill that increased the land grants and privileges of the railroad. He organized and at first controlled the Crédit Mobilier of America, but in 1867 he lost control of the company to Oakes Ames and his brother, Oliver Ames, Jr. Durant, however, continued on the directorate of the Union Pacific and furiously pushed construction of the railroad until it met the Central Pacific RR on May 10, 1869. The Ames group then procured his discharge.

Biography

Durant was born February 6, 1820 in Lee, Massachusetts. He studied medicine at Albany Medical College where, in 1840, he graduated cum laude and briefly served as assistant professor of surgery. After he retired from this field, he became a director of his uncle's grain exporting company: Durant, Lathrop and Company in New York City.

While working with the prairie wheat trade, Durant discovered the need for improved inland transportation, a discovery that led him to the railroad industry. Durant got his start in the railroad industry working as a broker for the Chicago and Rock Island Railroad. It was during this time that Durant became professionally acquainted with Henry Farnam.

The two men created a new contracting company under the name of Farnam and Durant. In 1853 they were given the commission of raising capital and managing construction for the newly chartered Mississippi and Missouri Railroad (M&M). The M&M Railroad acquired major land grants to build Iowa's first railroad (planned to go from Davenport on the Mississippi River to Council Bluffs on the Missouri River).

The centerpiece of the M&M was a wooden railroad bridge, which, in 1856 when completed, was the first bridge to cross the Mississippi River. The bridge linked the M&M to the Chicago and Rock Island Railroad. After a steamboat hit the bridge, boat operators sued to have the bridge dismantled. Durant and the Rock Island hired private attorney Abraham Lincoln to defend the bridge. This association later played to Durant's favor when in 1862 President Lincoln selected Durant's new company, the Union Pacific, and its operation center in Council Bluffs, Iowa as the starting point of the First Transcontinental Railroad.

"Like Samson he would not hesitate to pull down the temple even if it meant burying himself along with his enemies." Durant had a ruthless reputation for squeezing friend and foe for personal gain. As general agent for the UP Eastern Division, Durant was also charged with the tasks of raising money, acquiring resources and securing favorable national legislation for the company. In addition to securing an enlarged land grant from Congress in 1864 as part of the legislature’s subsidizing distribution of 100 million public acres, Durant effectively reacted to the Union Pacific’s failure to sell significant stock in light of the Pacific Railway Act of 1862 ruling that merchant holding would be limited to 200 shares per person. Proposing to finance the required ten percent down payment on stock himself, Durant campaigned to brokers and merchants in the New York and Philadelphia areas on the condition that he would be reimbursed at a later date. Persuading various politicians to invest as limited stockholders, amongst others, Durant successfully issued $2.18 million of UP stock to subscribers.

At the same time, Durant manipulated the stock market, running up the value of his M&M stock by saying he was going to connect the Transcontinental Railroad to it. He was secretly buying competing rail line stock, and then said the Transcontinental Railroad was going to go to that line.

Since the government paid for each mile of track laid, Durant overrode his engineers and ordered extra track to be laid in large oxbows. In the first 2½ years the Union Pacific did not extend further than 40 miles (64 km) from Council Bluffs. As the federal government was waging the Civil War, Durant avoided its oversight on railroad construction.

During the war, Durant made a fortune smuggling contraband cotton from the Confederate States, with the help of Gen. Grenville M. Dodge. When the war ended in 1865, the Union Pacific put extra labor on. It completed nearly two thirds of the transcontinental route. Durant employed Dodge as the chief engineer along the Platte River route.

One of Durant's biggest coups was the creation of Credit Mobilier of America. Durant and entrepreneur George Francis Train joined together in March 1864 in a business venture to buy out the Pennsylvania Fiscal Agency, changing its name to Credit Mobilier. The company was one of the first to take advantage of the new limited liability financial structures. Previously, investors were responsible for the finances of a company if it had problems. Under limited liability, their only responsibility was for money paid in. Durant created this limited liability company to encourage UP investors to agree to take on the railroad's construction after contracted employee Herbert Hoxie announced that he would fail to meet his deadline for building 247 miles of track. Investors thought that this contract, given the high construction cost, was too great a risk, but the protection offered by Credit Mobilier convinced them to take on the construction. Durant then manipulated Credit Mobilier's structure so that he wound up in control of it. UP was effectively paying him via Credit Mobilier to build the railroad. Durant covered his tracks by having various politicians, including future President James Garfield, as limited stockholders. Things got worse for Durant when it came clear that he had violated the 1862 Pacific Railroad Act by using his control of the Credit Mobilier to become the majority stockholder in the Union Pacific Railroad. There was also suspicion that Durant had taken money from the company, yet it seems that his co-workers were too fearful of him to meet clandestinely to discuss this possibility. Oakes Ames, a manufacturer of tools and shovels, who was involved with Credit Mobilier and Union Pacific, decided that Credit Mobilier could not work with Durant anymore. Ames took Durant to court and fired him from Credit Mobilier in May 1867. In 1867 Durant was ousted from his position managing Credit Mobilier. President Ulysses S. Grant fired Durant from Union Pacific soon after. The company Credit Mobilier had been increasingly associated with corruption and secrecy and the government was fed up with not being paid back for loans and the swindling that went on at each company.

Like many others, he lost a great deal of his wealth in the Panic of 1873. He sold his remaining stock in Union Pacific and started a new railroad company, Adirondack Railroad. He spent the last twelve years of his life fighting lawsuits from disgruntled partners and investors.

Marriage and family

Durant was married to Hannah Heloise Trimble. Together they had two children: William West Durant, who became an architect, and Héloïse Durant Rose (1854?-1943).

Héloïse attended private schools in Europe and the United States, and was fluent in Arabic, French, German, and Italian. She became an American author, playwright, and book reviewer for The New York Times, and she wrote in addition to articles and plays essays, poems, and short stories. Her dramatic poem Dante (1910) was translated into Italian and is believed to be the first American play produced on the Italian stage.[citation needed] Additionally, Héloïse founded the Dante League in 1917 "for popular propaganda for the study of Dante" and was a signatory of the "Memorial to the Columbia College Board of Trustees", an 1883 petition to allow female students to attend lectures and examinations at Columbia College. (Other prominent signers included Susan B. Anthony, Caroline Sterling Choate, Chauncey M. Depew, Parke Godwin, Emma Lazarus, Josephine Shaw Lowell, Theodore Roosevelt, Georgina Schuyler, and Charles Comfort Tiffany.)

Death

Durant died in Warren County, New York on October 5, 1885. He is buried in Green-Wood Cemetery in Brooklyn, New York.

Legacy and honors

Durant, Iowa was named after him.

Additionally, he endowed that eastern Iowa community with several hundred dollars to establish the first school there; today, the school is also named after him.

He achieved the construction of a wooden railroad bridge in 1856, the first to cross the Mississippi River.

Durant, Polk County, Nebraska is an unincorporated community in the United States that was established when the Union Pacific Railroad was extended to that point, during the building of the First Transcontinental Railroad.

In 1870, Durant was elected a Fellow of the American Society of Civil Engineers.

In popular culture

Actor Forrest Fyre portrayed Durant in the mini-series, Into the West (2005), in episode 4, "Hell On Wheels".

Actor Colm Meaney depicts a fictionalized version of Durant, who is a main character, in the AMC television program Hell on Wheels. The series portrays the UP's construction of the eastern portion of the First Transcontinental Railroad. Additionally, Virginia Madsen plays a fictionalized version of Hannah Durant, in Hell on Wheels (season 2).