Centennial Crisis- the Disputed Election of 1876

by William H Rehnquist

  Reformers of various sorts coalesced into a Liberal Republican movement during the latter part of Grant’s first term. Alienated by Grant for a number of reasons, they formed a political organization in 1872. A Liberal state convention in Missouri under the leadership of Carl Schurz adopted a series of resolutions calling for “universal amnesty” (removal of political disabilities on ex-Confederates), a return to “local control” of government in the South, reduction of the tariff, and civil service reform. Those sympathetic to these proposals were urged to meet in Cincinnati on May 1, 1872. The convention which met in that city on that day was probably one of the most unusual in American political history. Grant’s most recent biographer, Jean Edward Smith, describes the event in these words:

  . . . the assemblage comprised a heterogeneous collection of free traders, disillusioned reformers, and civil libertarians, plus a considerable number of politicians who had lost factional struggles in the party and who expected to benefit from Grant’s defeat. They were joined by a fluttering of East Coast intellectuals who had tired of cigar smoke in the White House: Edwin L. Godkin of The Nation, William Cullen Bryant of the Evening Post, James Russell Lowell and David A. Wells of the North American Review, and a covey of Adamses. The aim of the gathering, as Carl Schurz phrased it in his keynote address, was to elect an administration “which the best people of this country can be proud of.”3

  None of the delegates had been chosen by anyone but themselves, but the convention indulged in all of the backroom maneuvering typical of more orthodox political gatherings. It ended up nominating as its candidate for President Horace Greeley, the longtime editorial voice of their Republican Party as editor of the New York Tribune. His party credentials were impeccable, but he had oscillated back and forth on the major questions of the day and had championed some rather odd movements in his long career. No sooner had the convention done its work than some of its most prominent members threw up their hands in dismay:

  Godkin was astounded when he heard the news. “We suppose,” he wrote in The Nation, “that a greater degree of incredulity and disappointment . . . has not been felt . . . since the news of the first battle of Bull Run.” Bryant was equally overwhelmed on learning of his old rival’s triumph: “I should at any time beforehand have said that that thing was utterly impossible—that it could not be done by men in their senses,” he wrote; “But bodies of men as individuals sometime lose their wits, and . . . the average reason of a large assembly is sometimes sheer insanity.”4

  The Democratic National Convention met in Baltimore in July. Remembering how poorly the party had performed in the presidential election of 1868, the delegates swallowed their pride and endorsed Greeley. The sixty-one-year-old editor waged an active campaign, but in vain. He did not carry a single northern state, and his only electoral triumphs occurred in winning three southern states and three border states. The campaign also ended in personal tragedy. His invalid wife, Mary, died shortly before the election, and he himself died on November 29, 1872, three weeks after the election.

  What the liberal Republicans and the Democrats had been unable to do to Grant and his Republican stalwarts in the election of 1872, a series of unfolding scandals and the Panic of 1873 bade fair to accomplish. The first of these scandals was the Crédit Mobilier affair, which broke just before the 1872 election. In no way did it implicate Grant, but it did implicate a number of prominent Republicans who had been members of the House of Representatives in 1868 and 1869 and were still active in politics.

  In September 1872, two months before the election, the anti-administration New York Sun broke the Crédit Mobilier scandal. Its page-one story was headlined “The King of Frauds. How the Crédit Mobilier Bought Its Way Through Congress.”

  All but one of the accused were Republicans: Henry Wilson was the Republicans’ vice presidential nominee; Schuyler Colfax was the sitting Vice President and previously had been Speaker of the House; George Boutwell had been Secretary of the Treasury. Congressman Oakes Ames of Massachusetts was charged with having given or sold at a discount to members of Congress stock in a corporation called Crédit Mobilier of America during the winter of 1867–1868.

  The Crédit Mobilier was a Pennsylvania corporation owned by men who controlled the Union Pacific Railroad, one of them Ames. The Union Pacific contracted portions of the building and equipping of the railroad to Crédit Mobilier at highly inflated prices, which was good for Crédit Mobilier but bad for the Union Pacific. After the distribution of the stock, legislation favorable to the Union Pacific had passed both houses of Congress, first in 1868 and then in 1871.

  The original account in the Sun, like many press reports, proved to contain major inaccuracies. But upon further sifting twelve congressman—eleven of them Republicans—were accused of having received Crédit Mobilier shares as a gift or at a discounted price. Two congressional committees investigated the matter at length and came to the remarkable conclusion that Ames had bribed members of Congress, but only one member— James Brooks of New York—was guilty of taking a bribe. The House, in a tumultuous session in March 1873, voted to censure Ames and Brooks, and let the matter drop there.

  Several days later, on the day before it was to adjourn, Congress passed a resolution raising the salaries of its members from $5,000 per year to $7,500 and making the increase retroactive to the beginning of that Congress two years earlier. This measure was styled by its detractors as the “Salary Grab.” Grant himself did not benefit from this law, but Republicans controlled both Houses of Congress, whose members did benefit. The considerable public outrage at the measure was directed largely at the Republican Party.

  After the Civil War the nation went on a spree of railroad building. At the same time, Europe was enjoying a similar industrial expansion. Railroads require a tremendous investment of capital before they earn a cent of revenue. The necessary capital is raised by the sale of bonds, and many railroad bonds had been distributed in Europe—so many that the supply of European cash for additional purchase was greatly diminished.

  Meanwhile, U.S. banks, exhilarated by the spending spree, were encouraged to lend money recklessly. An earlier-than-usual wheat crop in the summer of 1873 drew money away from the centers of capital. Banks were having difficulty marketing railroad acceptances, which were necessary for continued construction of rail lines. Depositors began to withdraw their money from banks. Jay Cooke & Company, a leading banking house which had almost single-handedly financed the Civil War for the Union, failed on September 18, and on September 20 the New York Stock Exchange simply closed for ten days. What had at first simply seemed a disaster for stock speculators soon became hard times for the nation as a whole, hard times which would last for several years.

  The Panic of 1873 revealed as nothing else could that Reconstruction had lost its primacy as the touchstone of party politics. American political life had been realigned. The political divide was no longer North versus South but East versus West, cities versus rural areas, and hard money—gold— versus soft money—greenbacks.5

  At first, “soft money” and “hard money” advocates could be found in both major political parties but could gain ascendancy in neither. The Greenback and Populist Parties were both third parties committed to an inflationary money supply.6

  When Congress convened in early 1875, both the House and the Senate agreed to pass a measure known as the Inflation Bill. It would markedly increase the amount of greenbacks in circulation to 400 million. The measure passed both houses by wide margins and was sent to the President for his signature. Grant considered it for a number of days, but finally—against the advice of a majority of his cabinet—vetoed it. He viewed it as the opening wedge in a congressional soft-money policy that would in the long run be very bad for the country. Administration forces in the Senate rallied enough votes to defeat a motion to override the veto; the motion carried by 34 to 30 but fell far short of the necessary two-thirds majority. The nation’s financial community voiced its hearty approval o
f the veto, as did most of the eastern press.

  SCANDAL AND HARD TIMES were a boon to the Democrats and a curse to the Republicans in the midterm elections of 1874. Normally Republican states such as Massachusetts, Wisconsin, and Michigan elected Democratic governors. The Republican majority of about a hundred in the House of Representatives turned into a Democratic majority of about two-thirds that amount. The Republicans held on to control of the Senate, but by a reduced margin. In May 1875, the Pennsylvania Republican Convention formally endorsed Grant for a third term as President. Grant quickly wrote the chairman of the state party, saying:

  I am not, nor have I ever been, a candidate for renomination. I would not accept a nomination if it were tendered, unless it should come under such circumstances as to make it an imperative duty—circumstances not likely to arise.7

  During Grant’s second term, scandals began to surface with what one writer has described as “clock-like regularity.”

  When Chief Justice Salmon P. Chase died in the spring of 1873, Grant nominated his Attorney General, George Williams of Oregon, to succeed Chase. Williams was scarcely an attorney of Supreme Court caliber, but the scrutiny which accompanied his nomination brought out improprieties in his conduct as Attorney General. He had paid personal expenses out of the contingency funds of the Department of Justice. Mrs. Williams had purchased the most expensive carriage in Washington and equipped it lavishly, all at government expense. Grant was forced to withdraw the nomination. He should have asked for Williams’ resignation as Attorney General, but he did not.

  Another scandal emerged in the Treasury Department in due course. For some time that department had paid informers who reported evasion of federal taxes, giving them half the amount collected from the delinquent taxpayer. The practice was obviously capable of abuse and was largely discontinued in 1872. But Congressman Benjamin “Spoons” Butler of Massachusetts inserted a rider to an appropriations bill which authorized its continuance in some cases.

  The Secretary of the Treasury, William Richardson, who had succeeded George Boutwell, then entered into an agreement with Butler’s friend John Sanborn, whereby Sanborn was authorized to collect delinquent taxes from entities such as railroads and distillers. Treasury officials told collectors not to pursue delinquent accounts so that Sanborn could go after them—and receive half of the amount collected. An investigation by the House Ways and Means Committee found that of the sum of more than $200,000 due Sanborn under the agreement, he had paid more than half that amount to unnamed “associates.” No solid proof was brought forward to find that either Richardson or Butler had personally benefited from Sanborn’s activity, but there were surely grounds for suspicion. Sanborn’s obdurate refusal to identify the unnamed associates stymied further investigation by the committee. Grant declined to call for Richardson’s resignation, but the Secretary quit under a cloud in May 1874.

  Next came Columbus Delano, who had succeeded his fellow Ohioan Jacob Cox as Secretary of the Interior. Department employees had been engaged in fraudulent land transactions, although there was no suggestion that the Secretary himself had profited from them. But he must have known of efforts by his son to obtain money from the Treasury by participating as a silent partner in companies hired by the department to survey federal lands. Young Delano was not only silent, but he apparently did no surveying. Secretary of State Fish urged Grant to ask for Delano’s resignation, but Grant defended him, saying if he were to resign it would be an admission of guilt. But by midsummer of 1875, Delano himself finally realized that his usefulness was at an end and submitted his resignation.

  Upon Richardson’s resignation as Secretary of the Treasury in 1874, Grant appointed Benjamin Bristow of Kentucky to succeed him. Bristow had been the first person to hold the office of solicitor general in the Department of Justice, an office created at the same time as was the department itself in 1870. Before then, the Attorney General was a member of the President’s cabinet but did not have a department of his own. After a stint as solicitor general, Bristow returned to the practice of law in Kentucky until the President called him back for the new assignment. Bristow brought both ability and a strong measure of somewhat rough-hewn ambition to the Treasury. He immediately reorganized the department to make it more businesslike, and less a haven for politically connected time-servers.

  He then turned his attention to the notorious “Whiskey Ring.” Producers and distributors of hard liquor were suspected of routinely bribing revenue agents to evade the stamp tax on distilled spirits. Investigators sent by Bristow audited outgoing shipments from cities such as St. Louis, Chicago, and Milwaukee, and confirmed to their satisfaction that such tax evasion was occurring. When Grant gave him the go-ahead, Bristow had Treasury agents descend on bottling plants in these and other cities, seize ledgers, books, and files, and impound tax receipts. Federal grand juries returned hundreds of indictments, and convictions followed. In St. Louis alone, evidence indicated that during the preceding two years more than $4 million in tax revenue had been evaded.

  Both General John McDonald and John A. Joyce, collector and deputy collector in St. Louis, respectively, were indicted and convicted. Unfortunately for Grant, some of the evidence suggested that General Orville Babcock, principal secretary to the President, was also involved in the Ring. The evidence against him was circumstantial: he was a friend of McDonald’s, he had visited St. Louis on occasion, and, most importantly, he had sent two cryptic telegrams to McDonald. They seemed to be in code, and were signed “Sylph.” Bristow thought they were sent to keep McDonald apprised of the status of the impending seizures.

  Babcock first asked for a military court of inquiry to clear his name. This seems to have been an odd request, since Babcock was acting in a civilian capacity as Grant’s secretary. Grant approved, and a court-martial was convened. But prosecutors in St. Louis declined to surrender the files, took the case to a grand jury, and Babcock was indicted. Grant testified by deposition for his secretary, and Babcock was acquitted by a jury.

  Babcock’s acquittal meant that he would suffer no criminal punishment, but not that he was blameless or discreet. Courts rightly require the government to prove its case beyond a reasonable doubt when a crime is charged because of the severity of the punishment of imprisonment. But failure to adduce evidence meeting that high standard against Babcock in his criminal trial does not mean that one should approve or endorse his conduct or his judgment. Even Grant apparently realized this, because when Babcock returned from St. Louis, he was not restored to his secretarial position; he was instead given the post of inspector of lighthouses.

  Early in 1876, William Belknap, another ex–Army general, who had succeeded Rawlins as Secretary of War, brought further criticism on the administration. His first wife, presumably with his connivance, had made a deal with the Army sutler at Fort Sill, a large post in Indian Territory, now Oklahoma. The understanding provided that in return for the lucrative job of feeding and supplying the troops stationed at the fort, the sutler would split his profits with her. When she died, Belknap married her younger sister, who continued the arrangement and proceeded to spend lavishly on clothing and personal effects. When this situation became public, Grant did demand and receive Belknap’s resignation as Secretary of War.

  GRANT WAS NOT an introspective man, and as he stood with Emperor Dom Pedro to start the steam engine at the Centennial Exhibition, it is doubtful that he thought about the successes and failures of his administration. He was already a lame duck, and it would be for history to judge him as a President. He had not been nearly as bad a President as various twentieth-century polls rating the occupants of that office would suggest. Out of seven polls described in Henry Abraham’s recent book Justice, Presidents, and Senators, Grant is rated below all occupants of that office except Warren G. Harding in five of them. And in the other two he was rated as a “failure” along with seven others. But surely Grant’s accomplishments exceed those of predecessors such as John Tyler and Millard Fillmore, ne
ither of whom are rated as “failures” in these polls. The arbitration of the Alabama claims, the enactment of the Ku Klux Act, the veto of the Inflation Act, and the successful prosecution of the Whiskey Ring were all to his credit.

  But his eight years in the White House had also been tainted by scandal, reaching into his official family if never implicating him personally. And scandals such as the Crédit Mobilier— which had no connection at all with Grant—had hurt the Republican Party. As federal troops were being withdrawn from the South, it became obvious that the former Confederate states would become a solid bloc of votes for the Democrats. The hard times brought on by the Panic of 1873 were sure to redound to the benefit of the party out of power. For the first time in twenty years, the Democratic Party in 1876 had at least an even chance of electing its candidate for President.

  — CHAPTER 2 —

  RUTHERFORD BIRCHARD HAYES was born on October 4, 1822, in Delaware, Ohio, a small town about thirty miles north of Columbus. His father and mother, Rutherford and Sophia Birchard Hayes, had migrated with their children Lorenzo and Sarah five years earlier to join other Vermonters who had settled in Delaware. Another daughter, Fanny, was born in 1820. But after Rutherford’s birth, misfortune struck. First his sister Sarah and then his father died. Sophia Hayes was left a widow. She was no stranger to sorrow; her father, mother, and a brother and sister had died of typhus in Vermont before she was twenty-one.

  Young Rutherford—called “Rud”—was a sickly child for the first two years of his life. He was very close to his sister Fanny, and his mother’s younger brother, Sardis, who had emigrated with the family, took a fatherly interest in him. Rud attended local schools until age fifteen, when with Sardis’s financial help he went east to attend Webb’s Preparatory School in Middletown, Connecticut. A year later he entered Kenyon College, in Gambier, Ohio. He was required to pass examinations in Latin, Greek, mathematics, and grammar in order to be admitted. At the beginning and end of each term, he walked the forty-mile distance between Delaware and Gambier.