by H. W. Brands
Grant told the bankers that he would neither bend the law to provide them aid nor ask Congress for extraordinary rescue powers. “The Government is desirous of doing all in its power to relieve the present unsettled condition of business affairs, which is holding back the immense resources of the country now awaiting transportation to the seaboard and a market,” he explained in a letter that was immediately and widely published. “Confidence on the part of the people is the first thing needed to relieve this condition of affairs and to avert the threatened destruction of business with its accompanying disasters to all classes of people. To re-establish this feeling the Government is willing to take all legal measures at its command.” But the bankers would have to do the heavy work. “It is evident that no Government efforts will avail without the active cooperation of the banks and moneyed corporations of the country.” The liquidity the government had already provided ought to be sufficient. “The banks are now strong enough to adopt a liberal policy on their part, and by a generous system of discounts to sustain the business interests of the country.”
After two weeks the panic showed signs of being contained. Grant gave an interview to the Associated Press. He registered the puzzlement many felt at this particular panic, considering its context. “Panics generally occur when the country lacks prosperity, such as from the failure of crops, over-purchases from abroad, and such causes,” he said. “In this instance the panic has occurred in the midst of the greatest general prosperity.” Exports were up; the balance of payments was in America’s favor. “Everything we produce is in great abundance, and the demand for it abroad is beyond the supply we have to spare. Our manufactories are prosperous, and many articles which have been imported are, to a large extent, not only being produced at home, but we are actually competing in the supply of foreign markets.” The panic was primarily a psychological phenomenon, Grant said. “The fact is, the money corporations have become stampeded, and in turn startled and stampeded the whole country.” The administration’s response reflected this perception. The modest extra liquidity the Treasury provided was “not so much real as moral,” he said. This was as it should be, for some good might come out of these harsh developments. Grant chose his words with care, not wishing to seem callous. “The effect is going to be beneficial in many ways to the country at large, though the cost to some individuals, deserving of a better fate, may be severe.” The country was still paying for the Civil War, not simply in its bonded debt but in the excess money represented by the greenbacks. Until the nation resumed support of all its currency in specie—gold or silver—the money system would be unstable; the present crisis, with its sudden demand for money of any kind, brought resumption closer by lifting the greenbacks nearly to par with specie. “Return to a specie basis can never be effected except by a shrinkage of values,” Grant said. “This always works hard to a large class of people who keep all they are worth in margins. This shrinkage has now taken place.”
Grant’s view reflected conventional wisdom. “Pure fright more than any real danger to our industry produced the panic from whose effects we are rapidly recovering,” the New York Times editorialized in October. The paper cited statistics demonstrating that the productive part of the economy, as distinct from the financial part, had been thriving at the time of the panic. The crisis was a bankers’ crisis. The paper likewise applauded Grant’s measured response. The bankers should work things out among themselves. “It is well that Government should not be mixed up with the matter.”
Unfortunately for all concerned, though the panic proper subsided, the effects of the currency contraction spread throughout the country. The overextended railroad sector took the most damaging blows, with dozens of lines folding and spreading attendant misery to their employees, vendors and customers. The bankers’ panic, the first since the full onset of the industrial revolution, became the nation’s first industrial depression. The transition from agriculture to industry leveraged worker productivity in good times, but the leverage reversed wickedly in bad times. Industrial workers lacked the garden plots and farmhouses that had long sheltered farmers from the worst effects of financial panics. Industrial workers lived in a cash economy, having to buy food and rent homes. When demand fell for their products and they lost their jobs, they soon went hungry and homeless. Industrial failures fed on themselves; the suppliers to a failed company often failed too, as did the bakeries, butcher shops, clothing stores, transit lines and myriad other businesses that had furnished goods and services to now jobless workers.
No one knew it in the autumn of 1873, but the depression would last the rest of the decade. Tens of thousands of businesses would close their doors; millions of workers would lose their jobs. The homeless and hungry would haunt the land; workers would strike for higher wages and riot when their wages fell. Angry and fearful voters would punish incumbent politicians. The last crisis of the slavery era—the crisis of the Civil War and Reconstruction—would end amid the first crisis of America’s industrial age.
70
UNDER THE CIRCUMSTANCES GRANT ALMOST WELCOMED A WAR scare. The Virginius was a British-built blockade runner employed by the Confederates until its capture by the Union navy in 1865. Subsequently auctioned, it was put into service on behalf of the Cuban insurgency against Spanish rule and was captured again, in October 1873, by the Spanish navy. The Spanish government, declaring the ship a pirate, ordered it taken to Santiago de Cuba, where Spanish officials summarily executed more than fifty of its crew and passengers, including several Americans.
The news reached the United States in early November and immediately sparked an uproar. Individuals and groups already inclined toward intervention in the Cuban conflict shouted that the American government must defend America’s citizens. Protest meetings were held in several cities; even Wall Street, craving distraction from its troubles, grew patriotically vehement. Governor Horace Austin of Minnesota was one of many who prayed for war. “Minnesota will furnish you as many regiments of troops as she may be permitted to raise,” Austin promised Grant. “They will respond on short notice and many of them will be veterans.”
More poignant were the plaints of those personally touched by the affair. “I appeal to you, in behalf of my daughter, the betrothed of General W. A. C. Ryan, who so bravely met his death at the horrible massacre at Santiago de Cuba, in the noble cause of Liberty,” a distraught Mrs. J. G. Gebhard wrote Grant. “Mr. President, I have confidence in you that our martyred dead are not to be forgotten.… The days are long, and the nights sleepless, until every satisfaction that remains is given.” Most moving were words from beyond the grave written by the American captain of the Virginius before his execution. Joseph Fry’s call for a nationalistic response was complicated by the fact that upon Southern secession he had abandoned the U.S. Navy for that of the Confederacy. But with death impending he wrote to Grant as a fellow officer. “The United States are weak,” he chided the president, “when a vessel can be captured on the high seas, with perfectly regular papers, and her captain, crew, and passengers shot without appeal to the protection of the United States.”
In fact the vessel’s papers were not perfectly regular. Doubts surrounded the ownership and registry of the Virginius, which proved, upon examination, to be the property not of the professed owner, an American, but of Cubans linked to the New York junta. Consequently the American papers the ship carried were invalid.
Grant didn’t mind the war talk, but he had no more desire for actual war with Spain than previously, and less reason. Roughly coincident with Grant’s reinauguration, Spain’s monarchy had given way to a republic. The new government was well meaning but weak, and it lost control of the Spanish regime in Cuba. The Cuban Spaniards were the ones behind the Virginius executions, but Grant could deal with them only indirectly, through Madrid.
He moved to tamp down the war talk. He sent a message to the Spanish government registering America’s concern. “The summary infliction of the death penalty upon the prisoners ta
ken from the Virginius will necessarily attract much attention, and will be regarded as an inhuman act, not in accordance with the spirit of the civilization of the nineteenth century,” he said. Then, having made his point, he let the Spanish know that diplomacy, not force, was his preference. He directed Hamilton Fish to explain that if Madrid disavowed the actions of the responsible officials in Cuba, released the Virginius and the surviving crew and passengers and apologized to the United States by ordering a salute to the American flag, the matter could be resolved. Grant gave the Spanish two weeks to comply.
The time limit was intended to focus the Spanish mind but also to conclude the matter before Congress returned to Washington. The last thing Grant wanted was for the legislature to take up the Cuban question again. He conspicuously prepared for war in case Spain resisted reason and justice. He sent American naval vessels to Florida and had the War Department plan an invasion of Cuba.
The theatrics worked. The Spanish government accepted his terms. Madrid quibbled only about the flag salute, pointing out that it would reserve this gesture until the questions about the ship’s registry were resolved. “This seemed to be reasonable and just,” Grant explained to Congress a few weeks later in a message in which he declared the case closed and the nation’s honor satisfied.
Salmon Chase had thought he would make a better president than Abraham Lincoln, and he repeatedly threatened to resign his position as Lincoln’s Treasury secretary to show his displeasure at Lincoln’s handling of the war. Lincoln repeatedly rebuffed the threats, not wishing to give Chase the opportunity to challenge him for the 1864 nomination. But once Lincoln secured the nomination for himself, he surprised Chase by accepting his next resignation offer, and then he surprised the country by nominating Chase for chief justice. Chase didn’t abandon his presidential hopes after donning the robe, but he couldn’t resist the tide in Grant’s favor in 1868. He often found himself in the minority on his own Supreme Court, not least in the so-called Slaughterhouse Cases of 1873, when the majority ruled that the “privileges and immunities” clause of the Fourteenth Amendment applied only to federal civil rights and not to state civil rights. The consequence was a rapid erosion of African American rights in the South.
The decision angered Chase and doubtless raised his blood pressure, but whether it contributed to the stroke that killed him weeks later, in May 1873, was impossible to determine. “His family and the nation have my condolence in mourning the loss of a distinguished and faithful public officer,” Grant declared on hearing the news.
The death presented Grant with the opportunity and the burden of selecting a successor. He took his time, not least since the Senate wouldn’t return to Washington till December. He could appoint an interim replacement, but the Senate could turn that person out. “A chief justice should never be subjected to the mortification of a rejection,” Grant observed in explaining his delay. During the next several months he received much advice and not a few applications before deciding on Roscoe Conkling of New York. “My dear Senator,” he wrote Conkling in November: “When the chief justiceship became vacant I necessarily looked with anxiety to someone whose appointment would be recognized as entirely fitting and acceptable to the country at large. My own preference went to you at once.” He said that he had withheld the appointment on account of not wanting to risk rejection, before adding inconsistently, “The possibility of your rejection of course was not dreamed of.”
It wasn’t dreamed of because Conkling, as a leader of the Republican majority in the Senate, would certainly be confirmed without a struggle. In those days neither presidents nor the Senate much scrutinized the judicial philosophies of nominees to the Supreme Court; as a solid Republican, Conkling suited the Republican Senate. Grant didn’t want a fight over the appointment, and Conkling was a sure bet not to provoke one.
But Conkling declined the offer. “My transfer now from the Senate to the bench involves considerations not only beyond my own interest and wishes, but I think beyond those before you,” Conkling replied vaguely. “After much thought I am convinced that in view of the whole case, you would agree with me that another appointment should be made. I will not detain you with reasons, nor with expressions of the profound sense of obligation to you which will abide with me always, but instead I ask you to let your choice fall on another who, however else qualified, believes as man and lawyer, as I believe, in the measures you have upheld in war and in peace.”
Grant was disappointed but not so disappointed as his wife. “When the President, Roscoe Conkling, and I drove to the Capitol to attend the funeral services of our lamented Chief Justice, Salmon P. Chase,” Julia wrote later, “the Senate chamber was filled with the distinguished men of the country. When the officiating minister alluded to the mantle of the Chief Justice and invoked divine instruction as upon whose shoulders it should fall, I looked around and my choice, without hesitation, was Roscoe Conkling. He was so talented and so honorable, and I must say that woman-like I thought the flowing black robes would be becoming to Mr. Conkling.”
Had Grant possessed a grander vision of the presidency he might have taken the opportunity of Conkling’s declining to reconsider his opportunity to reshape the court. At the least he might have pondered the politics of an appointment more carefully, taking pains to test the waters for a nominee before putting a name forward. But Conkling’s refusal to adopt Grant’s own view of office—that when the nation called a man, he should accept or provide compelling reason why he couldn’t—irritated him, and in his irritation he reverted to his antipolitical mode.
He nominated George Williams, who had succeeded Amos Akerman as attorney general. Williams was happy to receive the honor, but members of the Senate were not happy to bestow it. Grant’s critics threw hurdles in the path of the nomination. “The Judiciary Committee is sitting listening to every idle story, every lie told by political opponents, who arrive every day to feed the fight,” Grant’s secretary Horace Porter wrote Benjamin Bristow, the solicitor general. “They will end by confirming him, but in the meantime they are scoring him till he will be scarcely fit for the race. He is quiet and dignified through it all, but it looks more like the political fight of ward politicians than a contest over the confirmation of a Chief Justice of the United States.… No one has touched upon the question of his ability. It is simply a slanderous rough-and-tumble political fight.”
The fight turned rougher than Porter predicted. Unable to find anything damning against Williams, the ward heelers dragged his wife into the fray. She was said to have extravagant tastes that led her to insist on a fancy carriage with elaborately attired footmen. Williams’s income as attorney general appeared too meager to support such style; he was alleged to have charged the carriage to the government. Williams denied any wrongdoing, and Grant was tempted to try to force the nomination through. But when Hamilton Fish and others in the cabinet conveyed word from the Senate that Williams lacked the votes for confirmation, Grant reluctantly asked him to step aside. He remained as attorney general.
Grant’s third choice was Caleb Cushing, who had been attorney general under Franklin Pierce and more recently counsel at the Geneva tribunal that awarded the United States its diplomatic victory in the Alabama claims. Grant assumed that Cushing’s part in the triumph would make his confirmation straightforward and swift.
But by now Grant’s foes were primed to resist any nomination, and when they began investigating Cushing’s past they discovered a letter of recommendation he had written in March 1861 to Jefferson Davis on behalf of a former clerk in his office. Cushing doubtless was simply trying to do the young man a favor, but the letter to the Confederate president cast doubt on Cushing’s common sense if not his loyalty to the Union. Grant had to drop him from consideration.
His fourth try was Morrison Waite, an Ohio lawyer and charter Republican from Ohio who had served with Cushing in Geneva and who shared the glow surrounding that success. Little else distinguished his career, leading Grant to hope the
bloodhounds of the Senate would wander back to their kennels, bored. They did, and Waite was confirmed.
71
GRANT’S FRONTAL ASSAULT ON THE KU KLUX KLAN IN SOUTH CAROLINA raised hopes among Republicans elsewhere in the South that he would come to their aid against their political rivals. Edmund J. Davis was a Texas Unionist who had fled his home state after secession and raised a cavalry regiment of Texans for the Union army. He ran for Texas governor as a Republican in 1869 and was elected to a four-year term. But his testy nature soon antagonized even many of his fellow Republicans, and when he tried for reelection in December 1873 he lost very badly to Democrat Richard Coke. Thereupon Davis, citing “great wrongs and frauds perpetrated by our opponents who controlled the registry and the ballot boxes in much the most of the counties,” complained to Grant that the result had been rigged. The Texas supreme court stirred the dispute by invalidating recent elections to the state legislature, which had authority over the gubernatorial election. “This may cause here a conflict of authority,” Davis told Grant. Violence hadn’t occurred, he said, but it wasn’t out of the question. “A display of U.S. troops will be most likely to keep the peace till the trouble is settled. I therefore request that assistance.”