After Lincoln

by A. J. Langguth

  In those first weeks, Grant also bestowed the two appointments most notorious for potential corruption. As commissioner of Indian affairs, he named Brigadier General Ely S. Parker, a full-blooded Seneca from Galena. Grant had already checked with his new attorney general for reassurance that an Indian—not considered a citizen for tax purposes—was eligible for the appointment. Judge Hoar, finding no precedent to cite, ruled in Parker’s favor.

  To collect customs taxes at the Port of New Orleans—the office that had enriched Perry Fuller—Grant turned to Pete Longstreet. Besides being one of Grant’s oldest friends, Longstreet had been the one Confederate general to urge his fellow Southerners to accept the Reconstruction Acts.

  • • •

  In mid-April 1869, Grant attempted to fill another federal vacancy in Louisiana by appointing Pinckney Pinchback as register of the land office at New Orleans. Pinchback had been rising in Republican ranks from that day eighteen months earlier when he had served as a delegate to the state’s constitutional convention.

  When he showed up at the Mechanic’s Institute, Pinchback’s stylish suit and overcoat had distinguished him from many other black delegates who arrived in patched trousers and with holes in their shoes. Pinchback worried that the Democrats would mock the entire enterprise by seizing on the presence of some illiterate delegates and overlooking the many qualified black members.

  He argued that the convention officers should not be allotted on the basis of an equal number of whites and blacks but instead chosen for experience and ability, and he carried the day.

  During debates over civil rights, Pinchback first leaned toward the conservative position. “Social equality, like water, must be left to find its own level,” he said, “and no legislation can affect it.”

  But when he heard the insulting language from white delegates, he changed his mind and introduced a successful bill that guaranteed equal rights to all citizens in any business that required a municipal or state license.

  Pinchback held firm, however, in opposing the stripping of the right to vote from all white men who had joined the Confederacy. He explained that “I firmly believe that two-thirds of the colored men in this state do not desire disenfranchisement to such a great extent.”

  He lost that argument by a vote of forty-four to thirty and filed a protest, claiming that universal suffrage was “one of the fundamental principles of the Radical Republican Party.”

  The defeat did not slow his growing influence. Pinchback was one of five men mentioned as potential Republican candidates for governor in April 1868, but he stood instead for a more attainable seat in the state senate.

  Pinchback’s twenty-six-year-old white patron, Henry Clay Warmoth, went on to take the governorship, and his running mate, a former slave named Oscar James Dunn, became lieutenant governor. In the same election, John Willis Menard, the black publisher of The Free South newspaper, was elected to fill a vacancy in the U.S. Congress, but when his opponent challenged the result, the House refused to seat either man.

  Pinchback was astounded to lose his own race and charged fraud. It took until the end of August for the state senate—with seven black and twenty-nine white members—to rule on his challenge and find “ballot-box stuffings, fraudulent tallying and the substitutions of Democratic for Republican tickets.” Pinchback was seated and awarded back pay from the session’s opening.

  Three days later—in a repetition of his run-in with his brother-in-law—a mulatto Democrat aimed a pistol at Pinchback, who ducked and fired back. Both men were treated for minor wounds.

  The real injury came the next day from the opposition press, which charged that two Negroes firing weapons on a crowded street proved that blacks were unfit to hold public office.

  Pinchback was incensed. On the senate floor, he charged that the Democrats had sent the gunman to assassinate him, and he added that if those Democratic “outrages” continued, New Orleans would be reduced “to ashes.”

  He caught himself immediately and apologized for his tone but not for the sentiment. The New Orleans Crescent called his outburst “so despicable as to be beneath contempt.” Worse, in Pinchback’s view, the newspaper did not even credit his own fury but claimed he had merely “put into words the thoughts which the black arts of our enemies have taught him to think.”

  The episode left Pinchback subdued throughout the rest of the session, although he spoke out successfully for a law permitting marriage between black couples and for a “social equality” bill to open hotels and other accommodations to black patrons as well as white.

  The response from the white community promised trouble ahead. If “any Negro or gang of Negroes” attempted to take advantage of their new rights, the Commercial Bulletin warned, “no New Orleans audience will ever permit him to take his seat except in places allotted for colored persons.”

  Pinchback discovered that Governor Warmoth, despite pledges of equality, was reluctant to alienate the state’s wealthy white planters. When he vetoed the social equality bill, Pinchback began to assert his independence. The legislature ratified the Fourteenth Amendment, and Louisiana was readmitted to the Union. Military rule was extended in order to ensure an orderly transition to the new state government.

  As the first elections approached, however, angry confrontations with former Confederates left white Republicans roughed up and potential black voters afraid to leave their houses. As brawling increased, Republicans worried about the party losing its hold on the state. Throughout most of the tumult, Pinchback was in Chicago, casting his vote for Grant as the presidential nominee.

  On Election Day, the Democrats’ intimidation of black voters succeeded. Seven months earlier, more than ten thousand Republicans had voted for governor. Now fewer than three hundred dared to come out.

  Despite Grant’s epic loss in the state, he had prevailed nationally and could offer Pinchback the federal position in the land office. Pinchback declined. He had business prospects in mind that he could promote better from his senate seat.

  In November 1869, Pinchback joined with a natty former barber from their riverboat days and opened a money-lending business. Severing his last ties with Warmoth, he declared he was now a political independent and not “under the lash of any party.”

  Jay Gould

  CHAPTER 14

  GOLD AND SANTO DOMINGO (1869–1870)

  ULYSSES GRANT WAS CONTINUING TO learn that a general’s ready acceptance of favors from a grateful nation looked less innocent in a sitting president. He was also finding that the involvement of family members in public affairs had consequences beyond a few carping newspaper editorials. And that his respect for successful businessmen was not always reciprocated.

  Grant’s latest lesson came when he set out to resolve an early challenge with integrity and honor. As president, he was facing the $2.8 billion national debt run up by the war. Bankers in New York and Europe worried that he might listen to those who wanted him to repudiate the obligation.

  But Grant considered repayment, with interest, not only the ethical course for the nation but also essential to re-establishing faith in U.S. currency. On March 18, 1869, he received his first bill from Congress, the Act to Strengthen the Public Credit.

  The legislation promised that the United States would redeem its paper money and pay off its bonds in gold. When rebel troops had been scoring victories, the Union greenbacks had dropped in value and the price of gold had climbed to new heights. But once Grant signed the new guarantees, gold fell to its prewar level of $130 per ounce.

  The conversion was entrusted to the Treasury secretary, George Boutwell, who enjoyed the confidence of both the president and the nation’s business leaders. A former governor of Massachusetts and its first commissioner when the Internal Revenue Service was established in 1862, Boutwell had served more recently in the House of Representatives, where he led the campaign for the Fifteenth Amendment.

  Republicans maintained that the Thirteenth Amendment, which had abolished sla
very, and the Fourteenth Amendment of 1868, which extended Negro rights under its equal protection clauses, did not go far enough. Now Congress must act again, a year later, to guarantee that the right to vote not be “denied or abridged by the United States or any states on account of race, color or previous condition of servitude.”

  As first drafted, the amendment also would have granted all citizens the right to hold office. But Southern Republicans wanted to retain the restriction of a loyalty oath in order to keep former rebels out of power, and Republicans in the North and West did not want to risk the election of Irish or Chinese immigrants.

  In the Senate, Charles Sumner had derided the entire effort as unnecessary. He claimed that Congress could simply pass a law that enforced voting rights and not stir up new animosity with ratification debates.

  But if there was to be an amendment, he argued that the proposal did not go far enough to guard against poll taxes and literacy tests. Bypassing legal niceties, Sumner offered his own expansive interpretation of the U.S. Constitution: “Anything for Human Rights is constitutional.”

  When the Fifteenth Amendment was put to a vote, Sumner was among the fourteen members who were absent or abstained, but it passed thirty-nine to thirteen in the Senate. The vote in the House also had split along party lines, with no Democrats voting in favor.

  • • •

  At the Treasury, Boutwell was quickly proving his acumen with policies that reduced the national debt by $50 million while keeping the price of gold low. Well pleased, Grant announced that re-establishing of the nation’s credit was “policy enough for the present” and went on vacation.

  Two tireless speculators would not be taking a summer holiday. At thirty-three, Jay Gould might seem born for speculation. His New England family traced their roots in America to 1647. Their name had been Gold until it was changed in 1806. And as a young man, Jay had shortened his given name from Jason, ancient pursuer of the golden fleece.

  Abstemious, self-effacing, devoted to his wife and children, Gould made a striking contrast with his partner, portly and gregarious James Fisk, Jr. A year older than Gould, Fisk had been born in Vermont on April Fool’s Day, 1835. At fifteen, he had run away to join a circus and never shed traces of the midway.

  Joining his father as a peddler of pots and pans, Fisk made his first fortune during the war by smuggling Southern cotton to factories of the Jordan Marsh company, which supplied uniforms to the Union army.

  Both men had survived early failures. Gould made a bad investment in a tannery business, and even before the war ended Fisk had lost in the stock market what he had not lavished on champagne and diamond stickpins.

  They rebounded with a nervy scheme to wrest control of the Erie Railway Company from Cornelius Vanderbilt. Their methods were slippery enough that at one point they had to flee the New York police and hole up in New Jersey.

  Along the way, they had courted William Tweed of Tammany Hall. In a showdown, Boss Tweed cast off his past loyalty to Commodore Vanderbilt and, as a reward, accepted a lucrative position on Erie’s new board of directors.

  By the first month of the Grant administration, Gould had resolved to turn his Midas touch to the financial market. During an evening at the Metropolitan Opera, he put a proposal to Jim Fisk: If the two of them managed to drive up the price of gold during a fall harvest, the result would be cheap money that would stimulate overseas grain sales. But in London, export products were sold in gold. Farmers could charge gold-based prices abroad but earn paper-money profits at home at a better rate.

  Gold was measured in double eagle coins, with five weighing a total of 4.838 ounces and quoted against how many greenback dollars they would bring. As Fisk quickly detected, Gould’s plan had one flaw: Speculators might buy up the $15 million in gold coins that George Boutwell allowed to circulate, but the Treasury Department’s gold reserves approached a hundred million. At any sign of an attempt to corner the market, those reserves could be unloaded to drive the price back down.

  As Fisk told a friend, “Gould is a damned fool.” The government would never let him get away with it.

  Gould saw it differently. Although Grant and Boutwell appeared to be incorruptible, they might be outmaneuvered as Vanderbilt had been. He needed a well-placed ally, and during a trip to New Jersey to buy land, Gould met just the man, a fellow real estate speculator named Abel Rathbone Corbin.

  Corbin was both a recent widower and a bridegroom. His wife had died less than a year before Grant’s inaugural week in Washington, when Corbin, at sixty-one, charmed Jennie Grant, the new president’s unmarried sister.

  Julia Grant was generous in praising her thirty-seven-year-old sister-in-law, extolling Jennie’s complexion as “exquisitely fair with just a touch of pink” and adding that “this sweet girl was as good as she was beautiful.”

  Corbin, gray-haired and stoop-shouldered, launched a swift and determined courtship. Within two months, President Grant was giving the bride away to a man he had known and liked from his own scrambling days in prewar Missouri.

  For others, however, Corbin’s reputation had been compromised in 1856 when he was exposed for trying to extort a fifty-thousand-dollar bribe to guarantee favorable legislation. Leaving Washington, Corbin reinvented himself in New York as a retired diplomat who dabbled in real estate.

  When Corbin surfaced again in Washington during Andrew Johnson’s stormy term, he strengthened his ties to Grant by selling him his house on I Street. At the same time, he was advising the president not to appoint any of “Grant’s men,” since they might jeopardize Johnson’s re-election.

  • • •

  After their meeting in New Jersey, Corbin sought Gould out at his town house. As Gould recalled, Corbin “came to see me, wanted to make money in some way and asked my opinion, as one gentleman would meet another.”

  Gould laid out his scheme about gold but not as a way to turn a quick profit. He assured Corbin that their motive would be entirely patriotic. Letting gold prices go up would promote exports, which would raise the income of farmers and workingmen.

  By mid-July, Corbin had persuaded Grant to stop over in New York on his way to an appearance in Boston. The president would be sailing on Fisk’s steamer Providence and dining along the way with Fisk and Gould. Over a three-hour meal, their pitch for a change in policy could not budge Grant from his intention to return to the gold standard.

  But the president could still serve their purposes. The partners invited the Grants to a performance of La Périchole at a Fifth Avenue theater owned by Fisk. Opera was not an entertainment Grant would have chosen. He had joked about his tin ear and confessed, “I know two songs. One is ‘Yankee Doodle,’ and the other is not.”

  All the same, New York society was treated that night to a show of intimacy between the president and the notorious owners of the Erie Railroad.

  Meanwhile, Abel Corbin did his part by offering Julia Grant half-interest in the $250,000 bonds he had bought for his wife. Mrs. Grant refused the gift but was said to have appreciated the offer.

  With their White House credentials established, Gould and Fisk worked with Corbin to place Daniel Butterfield in Grant’s government as assistant U.S. Treasury secretary for the New York Sub-Treasury at an annual salary of eight thousand dollars. Gould assured Butterfield’s loyalty with a ten-thousand-dollar personal check “to cover expenses.”

  Gould also used a half million dollars he collected from Tweed’s cronies to buy a controlling interest in the Tenth National Bank of New York. It could provide the certified checks he would need during the pending frenzy.

  With the pieces in place on August 12, 1869, Gould bought $375,000 of gold at a rate of $135 for each hundred dollars of gold. Corbin was traveling with Grant and kept pressing Gould’s monetary theory. On another steamer ride, Fisk asked the closemouthed president directly for “a little intimation” of his policy.

  Grant refused the request but promised to set up a meeting with Treasury Secretary Boutwell. He rep
eated, however, that Boutwell would be announcing “any changes through the newspapers as usual” to avoid charges of favoritism.

  With the price of gold already down four dollars in nine days, Gould rounded up two other investors who joined him in buying up $10 million more. As his contribution, Abel Corbin wrote an anonymous article for the New York Times suggesting that Grant now endorsed a soft money policy.

  At the Treasury, although Boutwell refused to confirm or deny the speculation, gold prices began to rise. But at Corbin’s house, Grant confided to his brother-in-law that he had prevented Boutwell from selling $4 million to $6 million more gold in September than during the previous two months. As Grant was speaking, he did not know that Jay Gould was down the hall, listening and then leaving quietly to take advantage of the tip.

  At once, Gould put $1.5 million in gold in Corbin’s investment account and gave the same amount to Daniel Butterfield. At his office, Gould began borrowing heavily to buy immense quantities of gold. But without informing him, his new partners decided abruptly to take their profit and start to sell.

  Gould was not given to panic. He sent Fisk to call on Corbin for reassurance about Grant’s plans, and Corbin brought out Jennie to say that she was “quite positive there will be no gold sold” by the Treasury to depress the price. Fisk was convinced enough to raise his own stake to $7 million.

  • • •

  President Grant was back in New York for one final holiday before returning to Washington. His vacations were becoming a joke to his friends; his critics complained that Grant “recreates excessively.”

  On a boat ride up the Hudson River to West Point, Grant asked Daniel Butterfield to brief him on the New York financial world. The assistant Treasury secretary could hardly be candid. He had placed a side bet of $1.37 million that Gould’s scheme would succeed.