Thomas C. Durant

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Thomas Clark Durant

Dr. Thomas Clark Durant, 1820–1885, was an American financier and railroad promoter. He was vice-president of the Union Pacific in 1869 when it met the Central Pacific railroad at Promontory Summit in Utah Territory. He was also a chief architect of what would become the Crédit Mobilier scandal.

Durant was born in Lee, Massachusetts. He studied medicine at Albany Medical College and briefly served as assistant professor there. He was to quit medicine and became a director of a grain exporting company in New York City. Durant was to use the "Doctor" honorific throughout his life.^[1]

In the 1852 he founded the Mississippi and Missouri Railroad which landed major land grants to build Iowa's first railroad (planned to go from Davenport, Iowa on the Mississippi River to Council Bluffs, Iowa on the Missouri River).

The centerpiece of the M&M was Government Bridge, which was the first bridge to cross the Mississippi River when it opened in 1856. The bridge linked the M&M to the Chicago and Rock Island Railroad. After a steamboat hit the bridge, steam boaters sued to have the bridge dismantled. Durant and the Rock Island hired private attorney Abraham Lincoln to defend the bridge -- a decision that was play 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.

Durant had a ruthless reputation for squeezing friend and foe for personal gain. The Pacific Railroad Act authorizing the government subsidies for building the railroad required that the Union Pacific not have concentrated ownership. Durant got around the restriction by persuading cohorts that if they put their names on the stock he would make the initial payment for the stock. Then he enforced his ownership and controlled almost half the Union Pacific stock.

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 while at the same time secretly buying competing rail line stock and then saying the Transcontinental Railroad was going to go to that line.^[2]

Since the government paid for each mile of track laid, Durant overrode his engineers and ordered extraneous track to be built in large oxbows so that in the first 2 1/2 years the Union Pacific did not go further than 40 miles from Omaha. Durant did not have to worry about government oversight because it was preoccupied with the Civil War. When the war ended in 1865 the Union Pacific made a mad dash and was to complete nearly two thirds of the transcontinental route.

One of biggest coups was 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 the only responsibility was for money paid in. Credit Mobilier was created to actually build the track. Durant manipulated its structure so that he wound up in control of it and thus his own company Union Pacific was paying him via Credit Mobilier to build the railroad. Durant was to attempt to cover his tracks by having various politicians including future President James Garfield as limited stockholders.

He is buried in Green-Wood Cemetery in Brooklyn, New York.