Thomas C. Durant
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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.
[edit] Biography
Durant was born in Lee, Massachusetts. He studied medicine at Albany Medical College where he graduated cum laude and briefly served as assistant professor of surgery. He later stopped teaching medicine and became a director of his uncle's grain exporting company,Durant, Lathrop and Company in New York City. Durant was to use the "Doctor" honorific throughout his life.[1]
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 and were given the job of construction and raising capitol for the newly-chartered Mississippi and Missouri Railroad in 1853. 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). Thomas Durant is the namesake of Durant, Iowa, which he endowed with several hundred dollars to establish the first school in the Eastern Iowa community that today bears his name.
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 authorized 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 at the time 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. Thomas Durant and George Francis Train joined together in a business venture to buy out the Pennsylvania Fiscal Agency and change its name to Credit Mobilier in March of 1864. 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. Durant would later be ousted from his position in the management of Credit Mobilier in 1876.
In 1870 Thomas Durant was elected a fellow of the American Society of Civil Engineers. However, he lost a great deal of his wealth in the panic of 1873. He spent the last twelve years of his life fighting lawsuits from disgruntled partners and investors before he died in Warren County, New York on October 5th, 1885.[3] Durant was married to Hannah Heloise Trimble, he was the father of William West Durant and Heloise Durant. He is buried in Green-Wood Cemetery in Brooklyn, New York.
[edit] References
- ^ A Great & Shining Road: The Epic Story of the Transcpoopontinental Railroad by John Hoyt Williams - ISBN 0803297890 - University of Nebraska Press 1996
- ^ People & Events: Thomas Clark Durant (1820-1885) - American Experience - Transcontinental Railroad
- ^ Charles E. Ames, Pioneering the Union Pacific, (New York: Appleton-Century Crofts, 1969), 25
