Scandals of the Grant Administration
The Scandals of the Grant Administration refer to a series of corruption scandals that emerged during Ulysses S. Grant's presidency from 1869 to 1877, a period marked by significant political strife at various levels of government. While Grant himself is often considered to be personally honest, his administration was plagued by the unethical actions of close associates, leading to widespread corruption. Notable scandals include the Gold Ring, which involved his brother-in-law and high-profile financiers attempting to manipulate the gold market, ultimately causing a financial panic known as Black Friday. Another infamous incident was the Crédit Mobilier scandal, in which key political figures were implicated in a scheme that siphoned off government funds intended for railroad construction.
The "Whiskey Ring" scandal closely implicated Grant’s inner circle, revealing how officials conspired to evade federal taxes, and led to significant public distrust. Additionally, the "Salary Grab" Act, which granted Congress a substantial pay increase during a financial crisis, further tarnished the reputation of the administration. Despite these issues, Grant was re-elected in 1872, largely due to his status as a Civil War hero, yet the prevailing corruption ultimately discredited the Republican Party and shaped the political landscape of the era. The complexities of these scandals reflect the greater challenges of governance during a period of rapid industrialization and political realignment in the United States.
Scandals of the Grant Administration
Date September 24, 1869-1877
Although President Ulysses S. Grant was himself an honest politician, the scandals in which members of his administration and other government officials were involved diminished the stature of the presidency, undermined the Republican Party’s credibility, and prompted a movement to reduce political corruption.
Also known as Whiskey Ring scandal
Locale United States
Key Figures
Ulysses S. Grant (1822-1885), president of the United States, 1869-1877Orville E. Babcock (1835-1884), Grant’s private secretaryWilliam Worth Belknap (1829-1890), secretary of war, 1869-1876George S. Boutwell (1818-1905), secretary of the Treasury, 1869-1873Abel Rathbone Corbin (fl. mid-nineteenth century), Grant’s brother-in-law, who was involved in the Black Friday gold speculationJay Gould (1836-1892) andJames Fisk (1834-1872), stock speculatorsOakes Ames (1804-1873), congressman censured for his role in the Crédit Mobilier scandal
Summary of Event
During President Ulysses S. Grant’s two terms in office, much corruption was exposed at all levels of government—national, state, and local. Even allowing for exaggeration or misrepresentation by the various political opponents, such as southern conservatives and liberal reformers, or by sensation-mongering journalists, the record of Grant’s administration is arguably the worst in U.S. presidential history.
Grant himself was personally above reproach, but he lacked essential qualities of political leadership. A poor judge of character, he gathered around him clever politicians with little regard for their moral reputation. His sense of loyalty to his subordinates limited his effectiveness in dealing with their corruption. The way in which he understood the Constitution depreciated the power of the presidency, and in his exercise of the office, he diminished its respect.
Grant’s close associates were often involved in acts of doubtful legality. For example, his brother-in-law Abel Rathbone Corbin participated in a scheme with speculators Jay Gould and James Fisk to corner the gold market in 1869. To be successful, the manipulators needed assurance that the government would not interfere by selling gold from the Treasury. When Corbin implied that he had the necessary promise from the president, Gould and Fisk began buying gold with the intention of forcing the price up and selling at high profits to those who had made commitments payable only in gold. This manipulation led to a stock exchange panic on what became known as Black Friday, September 24, 1869. Grant authorized George S. Boutwell, then secretary of the Treasury, to sell government gold to protect business, and the scheme to corner the gold market was broken. Nevertheless, many brokers went bankrupt because of the actions of Gould and Fisk.
Although the most serious scandals of the Grant administration were not exposed until after Grant’s reelection in 1872, there was significant opposition within the Republican Party to Grant’s renomination. Civil service reformers, opponents of Radical Reconstruction, and party leaders disappointed with their shares of federal patronage joined forces in an attempt to deny Grant a second term. When they failed to prevent his renomination by the Republican Party, they formed the Liberal Republican Party and nominated newspaper editor Horace Greeley for president. The Democratic Party also nominated Greeley. However, Greeley’s eccentric behavior and Grant’s stature as a Civil War hero combined to secure Grant’s reelection with an impressive 286 electoral votes out of a possible 352.
Although neither Grant nor his close associates were involved directly, the Republican Party was discredited by the investigation in 1872-1873 of the Crédit Mobilier affair, a scandal that seemed to epitomize the Grant era. Crédit Mobilier was a construction company designated to build the transcontinental railroad for the Union Pacific Company. To ensure the continuation of generous government grants, stock in the Crédit Mobilier was given, or sold at a favorable price, to important politicians, including Grant’s two vice presidents, Schuyler Colfax and Henry Wilson , and to many senators and congressmen. The stock paid an annual dividend several times greater than its original cost, as the Crédit Mobilier bilked the Union Pacific and the government of millions of dollars. Congressman Oakes Ames of Massachusetts was censured after a congressional investigation for having been a leader in the scheme, and the episode undermined the reputations of both Congress and the administration.
Suspicions about the greed of congressmen were not allayed by the “Salary Grab” Act of March 3, 1873, by which Congress voted itself not only a needed raise but also, through a retroactive clause, a large cash bonus. This act later seemed even more inappropriate after the Panic of September 18, 1873. The financial crisis brought on a depression and the repeal of the Salary Grab Act. The Panic of 1873, which was largely precipitated by international financial conditions beyond the control of the Grant administration, was linked with the corruption of the time in the mind of the public.
Grant’s Treasury Department, under William Richardson, carried common corruption to remarkable levels of audacity. John D. Sanborn, a protégé of Benjamin Franklin Butler , a Massachusetts congressman, was rewarded for campaign contributions with contracts for the collection of delinquent taxes. His commission was an exorbitant 50 percent. Sanborn even “earned” $213,500 for collecting taxes that would have been paid if he had done nothing.
Among the many scandals of the Grant administration, none came closer to implicating the president himself than the exposure of the activities of the Whiskey Ring. General John McDonald, an old friend whom Grant had appointed supervisor in the Internal Revenue Service at St. Louis and from whom Grant received political contributions, was indicted in 1875 for having defrauded the government of millions of dollars by conspiring with the distillers to avoid federal taxes. Colonel Orville E. Babcock, Grant’s trusted private secretary, was also involved. Grant defended Babcock and allowed him to continue in an official position, although he no longer served as presidential secretary.
Another serious scandal of the Grant administration implicated Secretary of War William Belknap, who had accepted bribes to keep an Indian post trader in office. Belknap resigned and the House of Representatives impeached him, but the Senate failed to find him guilty because a number of senators believed that they lacked jurisdiction over a resigned officeholder.
Significance
Much of the corruption of the Grant era was beyond the control of the president. He depended for political support upon the Stalwarts within the Republican Party, a group that included party bosses such as Roscoe Conkling of New York and Oliver Morton of Indiana, whose state organizations dispensed vital federal patronage. State governments, both North and South, were characterized by astounding corruption: Senate seats were sometimes purchased from the members of state legislatures who elected the U.S. senators. Local government was no better. The Tweed Ring of New York City plundered the city of millions of dollars.
An industrial and urban United States was emerging. The transitional character of the era, with its uncertain rules of conduct, encouraged corruption. Hampered by a misguided sense of loyalty, obstinacy, and lack of competence, Grant was unable to cope with the tendencies of his time.
Bibliography
Bunting, Josiah, III. Ulysses S. Grant. New York: Times Books, 2004. Part of a series on presidential administrations, this study acknowledges Grant’s flaws but grants him high marks for “nobility of character” and for his achievements in attaining civil rights for African Americans.
Cashman, Sean Dennis. America in the Gilded Age: From the Death of Lincoln to the Rise of Theodore Roosevelt. 3d ed. New York: New York University Press, 1993. A well-rounded and lively account of the economic, social, and political history of the late nineteenth century.
Korda, Michael. Ulysses S. Grant: The Unlikely Hero. New York: Atlas Books/HarperCollins, 2004. Brief but well-written and balanced biography that covers Grant’s early life, military career, and presidency.
McFeely, William S. Grant: A Biography. New York: W. W. Norton, 1981. An authoritative study of Grant as a common man with uncommon ambition that places Grant in his times and offers a detailed account of the scandals of his administration.
Summers, Mark Wahlgren. The Era of Good Stealings. New York: Oxford University Press, 1993. A well-documented study of the Grant era that challenges its reputation for common or systemic corruption.
Trefousse, Hans L. Carl Schurz: A Biography. Knoxville: University of Tennessee Press, 1982. As senator from Missouri and advocate of civil service reform, Schurz spoke out against the corruption of the Grant administration. He also was active in the Liberal Republican Party of 1872.
Van Deusen, Glyndon G. Horace Greeley: Nineteenth Century Crusader. New York: Hill & Wang, 1964. The last part of this biography deals with the period after the Civil War and the 1872 presidential campaign, in which corruption in the Grant administration was a major issue.