, 1875 On March 4, 1869, Grant was sworn in as president by Chief Justice
Salmon P. Chase. In his inaugural address, Grant urged the ratification of the
Fifteenth Amendment; many African Americans attended his inauguration. He urged that bonds issued during the Civil War should be paid in gold, called for "proper treatment" of
Native Americans and encouraged their "civilization and ultimate citizenship". Grant's
cabinet appointments sparked both criticism and approval. He appointed
Elihu B. Washburne Secretary of State and
John A. Rawlins Secretary of War. Washburne resigned, and Grant appointed him Minister to France. Grant then appointed former New York Senator
Hamilton Fish Secretary of State. Rawlins died in office, and Grant appointed
William W. Belknap Secretary of War. Grant appointed New York businessman
Alexander T. Stewart Secretary of the Treasury, but Stewart was found legally ineligible by a 1789 law. Grant then appointed Massachusetts Representative
George S. Boutwell Secretary of the Treasury. Philadelphia businessman
Adolph E. Borie was appointed Secretary of the Navy, but found the job stressful and resigned. Grant then appointed New Jersey's attorney general,
George M. Robeson, Secretary of the Navy. Former Ohio Governor
Jacob D. Cox (Interior), former Maryland Senator
John Creswell (Postmaster-General), and
Ebenezer Rockwood Hoar (Attorney General) rounded out the cabinet. Grant nominated Sherman to succeed him as general-in-chief and gave him control over war bureau chiefs. When Rawlins took over the War Department he complained that Sherman was given too much authority. Grant reluctantly revoked his order, upsetting Sherman and damaging their friendship.
James Longstreet, a former Confederate general, was nominated for Surveyor of Customs of New Orleans; this was met with amazement, and seen as a genuine effort to unite the North and South. In March 1872, Grant signed legislation that established
Yellowstone National Park, the first national park. Grant was sympathetic to women's rights, including suffrage, saying he wanted "equal rights to all citizens". To make up for his infamous
General Order No. 11, Grant appointed more than fifty Jewish people to federal office, including consuls, district attorneys, and deputy postmasters. He appointed
Edward S. Salomon territorial governor of Washington, the first time an American Jewish man occupied a governor's seat. In November 1869, reports surfaced of
Alexander II of Russia penalizing 2,000 Jewish families for smuggling by expelling them to the interior of the country. In response, Grant publicly supported the Jewish American ''B'nai B'rith'' petition against Alexander. In 1875, Grant proposed a constitutional amendment that limited religious indoctrination in public schools. Schools would be for all children "irrespective of sex, color, birthplace, or religions". Grant's views were incorporated into the
Blaine Amendment, but it was defeated by the Senate. In October 1871, under the
Morrill Act, using federal marshals, Grant prosecuted hundreds of
Utah Territory Mormon polygamists. Grant called polygamy a "crime against decency and morality". In 1874, Grant signed into law the
Poland Act, which made
Mormon polygamists subject to trial in District Courts and limited Mormons on juries. Beginning in March 1873, under the
Comstock Act, Grant prosecuted
pornographers, in addition to
abortionists. To administer the prosecutions, Grant put in charge a vigorous anti-vice activist and reformer,
Anthony Comstock. Comstock headed a federal commission and was empowered to destroy obscene material and hand out arrest warrants to offenders. In September 1875, amidst pervading anti-Catholic sentiment within the Republican Party after its political losses in 1874, Grant gave a speech in Iowa before a reunion of veterans from the
Army of the Tennessee in which he opposed appropriations for "the support of any sectarian school"; the word "sectarian" was understood to mean Catholic. Within the same speech, he surmised that the Protestant-Catholic divide will be the source of potential national conflicts after the Civil War: "I predict the dividing line will not be Mason and Dixon's but between patriotism and intelligence on the one side, and superstition, ambition and ignorance on the other." The speech later became Grant's most reproduced speech from his presidency.
Reconstruction , appointed Attorney General by Grant, who vigorously prosecuted the
Ku Klux Klan Grant was considered an effective civil rights president, concerned about the plight of
African Americans. On March 18, 1869, he signed into law equal rights for black people, to serve on juries and hold office, in Washington D.C., and in 1870 he signed the Naturalization Act that gave foreign black people citizenship. During his first term,
Reconstruction took precedence. Republicans controlled most Southern states, propped up by Republican-controlled Congress, northern money, and southern military occupation. Grant advocated the ratification of the
Fifteenth Amendment that said states could not disenfranchise African Americans. Within a year, the three remaining states—Mississippi, Virginia, and Texas—adopted the new amendment—and were admitted to Congress. Grant put military pressure on Georgia to reinstate its black legislators and adopt the amendment. Georgia complied, and on February 24, 1871, its senators were seated in Congress. With all former Confederate states represented, the Union was completely restored under Grant. Under Grant, for the first time in history, Black-American men served in the United States Congress, all from the Southern states. In 1870, to enforce Reconstruction, Congress and Grant created the
Justice Department that allowed the Attorney General and the new Solicitor General to prosecute the Klan. Congress and Grant passed three Enforcement Acts, designed to protect black people and Reconstruction governments. Using the Enforcement Acts, Grant crushed the Klan. By October, Grant suspended
habeas corpus in part of South Carolina and sent federal troops to help marshals, who initiated prosecutions. Grant's Attorney General,
Amos T. Akerman, who replaced Hoar, was zealous to destroy the Klan. Akerman and South Carolina's U.S. marshal arrested over 470 Klan members, while hundreds of Klansmen fled the state. By 1872, the Klan's power had collapsed and African Americans voted in record numbers in the South. Attorney General
George H. Williams, Akerman's replacement, suspended prosecutions of the Klan in 1873, but prior to the election of 1874, changed course and prosecuted the Klan. During Grant's second term, the North retreated from Reconstruction, while southern conservatives called "
Redeemers" formed armed groups, the
Red Shirts and the
White League, who openly used violence, intimidation, voter fraud, and racist appeals to overturn Republican rule. Northern apathy toward black people, the depressed economy and Grant's scandals made it politically difficult for the administration to maintain support for Reconstruction. Power shifted when the House was taken over by Democrats in the 1874 election. Grant ended the
Brooks–Baxter War, bringing Reconstruction in Arkansas to a peaceful conclusion. He sent troops to New Orleans in the wake of the
Colfax massacre and disputes over the election of Governor
William Pitt Kellogg. By 1875, Redeemer Democrats had taken control of all but three Southern states. As violence against black Southerners escalated, Grant's Attorney General
Edwards Pierrepont told Republican Governor
Adelbert Ames of Mississippi that the people were "tired of the autumnal outbreaks in the South", and declined to intervene directly. Grant later regretted not issuing a proclamation to help Ames, having been told Republicans in Ohio would bolt the party if he did. Grant told Congress in January 1875 he could not "see with indifference Union men or Republicans ostracized, persecuted, and murdered." Congress refused to strengthen the laws against violence but instead passed the sweeping
Civil Rights Act of 1875 to guarantee black people access to public facilities. However, there was little enforcement and the Supreme Court ruled the law unconstitutional in 1883. In 1876, Grant dispatched troops to South Carolina to keep Republican Governor
Daniel Henry Chamberlain in office. After Grant left office, the
Compromise of 1877 meant Republicans obtained the White House for
Rutherford B. Hayes in return for ending enforcement of racial equality for black people and removing federal troops from the South, marking the end of Reconstruction.
Financial affairs Soon after taking office, Grant took conservative steps to return the economy to pre-war monetary standards. During the War, Congress had authorized the
Treasury to issue banknotes that, unlike the rest of the currency, were not backed by gold or silver. These "
greenbacks" were necessary to pay the war debts, but caused inflation and forced
gold-backed money out of circulation. On March 18, 1869, Grant signed the
Public Credit Act of 1869, which guaranteed bondholders would be repaid in "coin or its equivalent". The act committed the government to the full return of the gold standard within ten years. This followed a policy of "hard currency, economy and gradual reduction of the national debt." Grant's own ideas about the economy were simple, and he relied on the advice of businessmen.
Gold corner conspiracy , showing the collapse of the price of gold In April 1869, railroad tycoons
Jay Gould and
Jim Fisk conspired to corner the gold market in New York. They controlled the Erie Railroad, and a high gold price would allow foreign agriculture buyers to purchase exported crops, shipped east over the Erie's routes. Boutwell's policy of selling gold from the Treasury biweekly, however, kept gold artificially low. Unable to corrupt Boutwell, the schemers built a relationship with Grant's brother-in-law,
Abel Corbin, and gained access to Grant. Gould bribed Assistant Treasurer
Daniel Butterfield to gain inside information into the Treasury. In July, Grant reduced the sale of Treasury gold to $2,000,000 per month. Fisk told Grant his gold selling policy would destroy the nation. By September, Grant, who was naive regarding finance, was convinced a low gold price would help farmers, and the sale of gold for September was not decreased. On September 23, when the gold price reached , Boutwell rushed to the White House and talked with Grant. On September 24, known as
Black Friday, Grant ordered Boutwell to sell, whereupon Boutwell wired Butterfield to sell $4,000,000 in gold. The
bull market at Gould's Gold Room collapsed, the price plummeted from 160 to , a
bear market panic ensued, Gould and Fisk fled, and economic damages lasted months. By January 1870, the economy resumed its post-war recovery.
Foreign affairs Grant had limited foreign policy experience, so relied heavily on his talented Secretary of State
Hamilton Fish. Grant and Fish had cordial friendship. Besides Grant, the main players in foreign affairs were Fish and the chairman of the Senate Foreign Relations Committee
Charles Sumner. Sumner, who hated Grant, led the opposition to Grant's plan to annex Santo Domingo, despite fully supporting annexation of Alaska. Grant had an expansionist impulse to protect American interests abroad and was a strong advocate of the
Monroe Doctrine. For instance, when
Tomás Frías became
President of Bolivia in 1872, Grant stressed the importance of maintaining good relations between the U.S. and Bolivia. Grant acted as international arbitror in the
Bolama Question between
Portugal and the
United Kingdom, ruling in favor of Portugal.
Treaty of Washington (1871) and Grant successfully settled the
Alabama Claims by treaty and arbitration. The most pressing diplomatic problem in 1869 was the settlement of the
Alabama Claims, depredations caused to Union merchant ships by the Confederate warship , built in a British shipyard in violation of neutrality rules. Fish played the central role in formulating and implementing the
Treaty of Washington and the Geneva arbitration (1872). Senator
Charles Sumner led the demand for reparations, with talk of British Columbia as payment. Sumner, among other politicians, argued that British complicity in arms delivery to the Confederacy via
blockade runners prolonged the war. Fish and Treasurer George Boutwell convinced Grant that peaceful relations with Britain were essential, and the two nations agreed to negotiate. To avoid jeopardizing negotiations, Grant refrained from recognizing Cuban rebels who were fighting for independence from Spain, which would have been inconsistent with American objections to the British granting belligerent status to Confederates. A commission in Washington produced a treaty whereby an international tribunal would settle the damage amounts; the British admitted regret, but not fault. The Senate, including Grant critics Sumner and
Carl Schurz, approved the Treaty of Washington, which settled disputes over fishing rights and maritime boundaries. The
Alabama Claims settlement was Grant's most successful foreign policy achievement, securing peace with Great Britain. The settlement ($15,500,000) of the
Alabama claims resolved troubled Anglo-American issues and turned Britain into America's strongest ally.
Korean expedition (1871) In 1871, a U.S. expedition was sent to
Korea to open up trade with a country which had a policy that excluded trading with foreign powers, and to learn the fate of U.S. merchant ship
SS General Sherman, which had disappeared up the
Taedong River in 1866. Grant dispatched a land and naval force consisting of five warships and over 1,200 men, under Admiral
John Rodgers, to support a diplomatic delegation, led by U.S. ambassador to China,
Frederick Low, sent to negotiate trade and political relations.
Santo Domingo (Dominican Republic) In 1869, Grant initiated his plan to annex the
Dominican Republic, then called Santo Domingo. Grant believed acquisition would increase the United States' natural resources, strengthen U.S. naval protection to enforce the
Monroe Doctrine, safeguard against British obstruction of U.S. shipping, protect a future oceanic canal and stop slavery in Cuba and Brazil, while black people in the United States would have a safe haven from "the crime of Klu Kluxism". Joseph W. Fabens, an American speculator who represented
Buenaventura Báez, the president of the Dominican Republic, met with Secretary Fish and proposed annexation. On July 17, Grant sent a military aide
Orville E. Babcock to evaluate the islands' resources, local conditions, and Báez's terms for annexation, but gave him no diplomatic authority. When Babcock returned to Washington with unauthorized annexation treaties, Grant pressured his cabinet to accept them. Grant ordered Fish to draw up formal treaties, sent to Báez by Babcock's return to the island nation. The Dominican Republic would be annexed for $1.5 million and Samaná Bay would be lease-purchased for $2 million. Generals
D.B. Sackett and
Rufus Ingalls accompanied Babcock. On November 29, President Báez signed the treaties. On December 21, the treaties were placed before Grant and his cabinet. Grant's plan, however, was obstructed by Senator
Charles Sumner. On December 31, Grant met with Sumner at Sumner's home to gain his support for annexation. Grant left confident that Sumner approved, but what Sumner actually said was disputed by various witnesses. Without appealing to the American public, Grant submitted the treaties on January 10, 1870, to the Senate Foreign Relations Committee, chaired by Sumner, for ratification, but Sumner shelved the bills. Prompted by Grant to stop stalling the treaties, Sumner's committee took action but rejected the bills by a 5-to-2 vote. Sumner opposed annexation largely on anti-imperialist grounds, fearing the United States was "engaged in forcing upon a weak people the sacrifice of their country." Sumner sent the treaties for a full Senate vote, while Grant personally lobbied other senators. Despite Grant's efforts, the Senate defeated the treaties. Grant was outraged, and on July 1, 1870, he sacked his appointed Minister to Great Britain,
John Lothrop Motley, Sumner's friend and ally. In January 1871, Grant signed a joint resolution to send a commission to investigate annexation. He chose three neutral parties, with
Frederick Douglass to be secretary of the commission, that gave Grant the moral high ground from Sumner. Although the commission approved its findings, the Senate remained opposed, forcing Grant to abandon further efforts. Seeking retribution, in March 1871, Grant maneuvered to have Sumner deposed from his powerful Senate chairmanship. The stinging controversy over Santo Domingo overshadowed Grant's foreign diplomacy. Critics complained of Grant's reliance on military personnel to implement his policies.
Cuba and Virginius Affair American policy under Grant was to remain neutral during the
Ten Years' War (1868–78) in Cuba against Spanish rule. On the recommendation of Fish and Sumner, Grant refused to recognize the rebels, in effect endorsing Spanish colonial rule, while calling for the abolition of slavery in Cuba. This was done to protect American commerce and to keep peace with Spain. This fragile policy was broken in October 1873, when a Spanish cruiser captured a merchant ship,
Virginius, flying the U.S. flag, carrying supplies and men to aid the insurrection. Treating them as pirates, Spanish authorities executed 53 prisoners without trial, including eight Americans. American Captain Joseph Frye and his crew were executed and their bodies mutilated. Enraged Americans called for war with Spain. Grant ordered U.S. Navy Squadron warships to converge on Cuba. On November 27, Fish reached a diplomatic resolution in which Spain's president,
Emilio Castelar y Ripoll, expressed his regret, surrendered the
Virginius and the surviving captives. Spain paid $80,000 to the families of the executed Americans.
Free trade with Hawaii meets President Grant at the White House on his
state visit, 1874. In the face of strong opposition from Democrats, Grant and Fish secured a free trade treaty in 1875 with
Hawaii, incorporating its sugar industry into the U.S. economic sphere. To secure the agreement, King
Kalākaua made a 91-day
state visit, the first reigning monarch to set foot in the United States. Despite opposition from Southern Democrats, who wanted to protect American rice and sugar producers, and Democrats, who believed the treaty to be an island annexation attempt and referred to the Hawaiians as an "inferior" race, a bill implementing the treaty passed Congress. The treaty gave free access to the U.S. market for sugar and other products grown in Hawaii from September 1876. The U.S. gained lands in the area known as Puu Loa for what would become known as the
Pearl Harbor naval base. The treaty led to large investment by Americans in
sugar plantations in Hawaii.
Federal Indian policy , appointed by President Grant as the first
Native American (
Seneca) Commissioner of
Indian Affairs When Grant took office in 1869, the nation's more than 250,000
Native Americans were governed by 370 treaties. Grant's faith influenced his "peace" policy, believing that the "Creator" did not place races of men on earth for the "stronger" to destroy the "weaker". Grant was mostly an assimilationist, wanting Native Americans to adopt European customs, practices, and language, and accept democratic government, leading to eventual citizenship. At Grant's 1869 Inauguration, Grant said "I will favor any course towards them which tends to their civilization, Christianization and ultimate citizenship." On April 11, 1873, Major General
Edward Canby was killed in North California by
Modoc leader
Kintpuash. Grant ordered restraint. The army captured Kintpuash and his followers, who were convicted of Canby's murder and hanged on October 3, while the remaining Modoc were relocated to the
Indian Territory. The beginning of the Indian Wars has been dated to this event. In 1874, the army defeated the
Comanche at the
Battle of Palo Duro Canyon, forcing them to settle at the
Fort Sill reservation in 1875. Grant
pocket-vetoed a bill in 1874 protecting bison and instead supported Interior Secretary
Columbus Delano, who correctly believed killing bison would force
Plains Indians to abandon their nomadic lifestyle. In April 1875, another setback occurred: the U.S. Army massacred 27 Cheyenne Indians in Kansas. With the lure of gold discovered in the
Black Hills and the westward force of
Manifest Destiny, white settlers trespassed on
Sioux protected lands.
Red Cloud reluctantly entered negotiations on May 26, 1875, but other Sioux chiefs readied for war. Grant told the Sioux leaders to make "arrangements to allow white persons to go into the Black Hills" and that their children would attend schools, speak English, and prepare "for the life of white men." , 1876 On November 3, 1875, under advice from Sheridan, Grant agreed not to enforce excluding miners from the Black Hills, forcing Native Americans onto the Sioux reservation. Sheridan told Grant that the U.S. Army was undermanned and the territory involved was vast, requiring many soldiers. During the
Great Sioux War that started after
Sitting Bull refused to relocate to agency land, warriors led by
Crazy Horse massacred
George Armstrong Custer and his men at the
Battle of the Little Big Horn. Angry white settlers demanded retribution. Grant castigated Custer in the press, saying "I regard Custer's massacre as a sacrifice of troops, brought on by Custer himself, that was wholly unnecessary." In September and October 1876, Grant persuaded the tribes to relinquish the Black Hills. Congress ratified the agreement three days before Grant left office in 1877. In spite of Grant's peace efforts, over 200 battles were fought with Native Americans during his presidency. Grant's peace policy survived Custer's death, even after Grant left office in 1877; Indian policy remained under the Interior Department rather than the War Department. The policy was considered humanitarian for its time but later criticized for disregarding tribal cultures.
Election of 1872 and second term on Grant's opponents in the reelection campaign The
Liberal Republicans—reformers, men who supported low tariffs, and those who opposed Grant's prosecution of the Klan—broke from Grant and the Republican Party. The Liberals disliked Grant's alliance with Senators
Simon Cameron and
Roscoe Conkling, considered to be
spoilsmen politicians. In 1872, the Liberals nominated
Horace Greeley, a
New York Tribune editor and enemy of Grant, for president, and Missouri governor
B. Gratz Brown, for vice president. The Liberals denounced
Grantism, corruption, and inefficiency, and demanded withdrawal of federal troops from the South, literacy tests for black voters, and amnesty for Confederates. The Democrats adopted the Greeley-Brown ticket and the Liberals' party platform. Greeley pushed the themes that the Grant administration was failed and corrupt. The Republicans nominated Grant for reelection, with Senator
Henry Wilson of Massachusetts as the vice presidential nominee. The Republicans shrewdly borrowed from the Liberal platform, including "extended amnesty, lowered tariffs, and embraced civil service reform." Grant lowered customs duties, gave amnesty to Confederates, and implemented a civil service merit system, neutralizing the opposition. To placate the burgeoning
suffragist movement, the Republican platform said women's rights would be treated with "respectful consideration." Concerning Southern policy, Greeley advocated that local government control be given to white people, while Grant advocated federal protection of black people. Grant was supported by
Frederick Douglass, prominent abolitionists, and Indian reformers. Grant won reelection easily thanks to federal prosecution of the Klan, a strong economy, debt reduction, and lowered tariffs and taxes. He received 56% of the vote and an Electoral College landslide (286 to 66). Most African Americans in the South voted for Grant, while Democratic opposition remained mostly peaceful. Grant lost in six former slave states that wanted an end to Reconstruction. He proclaimed the victory as a personal vindication, but felt betrayed by the Liberals. Grant was sworn in by
Salmon P. Chase on March 4, 1873. In his second inaugural address, he focused on what he considered the chief issues: freedom and fairness for all Americans and the benefits of citizenship for freed slaves. Grant concluded his address: "My efforts in the future will be directed towards the restoration of good feelings between the different sections of our common community". Wilson died in office on November 22, 1875. With Wilson's loss, Grant relied on Fish's guidance more than ever.
Panic of 1873 and loss of House Grant signed the
Coinage Act of 1873, effectively ending the legal basis for
bimetallism. The Coinage Act discontinued the
standard silver dollar and established the
gold dollar as the monetary standard; because the gold supply did not increase as quickly as the population, the result was deflation. Silverites, who wanted more money in circulation to raise the prices farmers received, denounced the move as the "Crime of 1873", claiming deflation made debts more burdensome for farmers. Economic turmoil renewed during Grant's second term. In September 1873,
Jay Cooke & Company, a New York brokerage house, collapsed after it failed to sell all the bonds issued by
Northern Pacific Railway. Other banks and brokerages that owned railroad stocks and bonds were ruined. Grant, who knew little about finance, traveled to New York to consult leading businessmen on how to resolve the crisis, which became known as the
Panic of 1873. Grant believed that, as with the collapse of the Gold Ring in 1869, the panic was merely an economic fluctuation. He instructed the Treasury to buy $10 million in government bonds, which curbed the panic, but the
Long Depression, swept the nation. Eighty-nine of the nation's 364 railroads went bankrupt. In 1874, hoping inflation would stimulate the economy, Congress passed the
Ferry Bill. Many farmers and workingmen favored the bill, which would have added $64 million in
greenbacks to circulation, but some Eastern bankers opposed it because it would have weakened the dollar. Belknap, Williams, and Delano told Grant a veto would hurt Republicans in the November elections. Grant believed the bill would destroy the credit of the nation and vetoed it despite their objections. Grant's veto placed him in the Republican conservative faction and began the party's commitment to a gold-backed dollar. Grant later pressured Congress for a bill to strengthen the dollar by gradually reducing the greenbacks in circulation. When the Democrats gained a majority in the House after the
1874 elections, the
lame-duck Republican Congress did so before the Democrats took office. On January 14, 1875, Grant signed the
Specie Payment Resumption Act, which required reduction of greenbacks allowed to circulate and declared that they would be redeemed for gold beginning on January 1, 1879.
Reforms and scandals The post-Civil War economy brought on massive industrial wealth and government expansion. Speculation, lifestyle extravagance, and corruption in federal offices were rampant. All of Grant's executive departments were investigated by Congress. Grant by nature was honest, trusting, gullible, and loyal to his friends. His responses to malfeasance were mixed: at times appointing cabinet reformers, at others defending culprits. praises Grant for rejecting demands by Pennsylvania politicians to suspend civil service rules. Grant in his first term appointed Secretary of the Interior
Jacob D. Cox, who implemented civil service reform, including firing unqualified clerks. On October 3, 1870, Cox resigned after a dispute with Grant over handling of a mining claim. Authorized by Congress on March 3, 1871, Grant created and appointed the first
Civil Service Commission. Grant's Commission created rules for competitive exams for appointments, ending mandatory political assessments and classifying positions into grades. In November 1871, Grant's appointed New York Collector,
Thomas Murphy, resigned. Grant replaced him with
Chester A. Arthur, who implemented Boutwell's reforms. A Senate committee investigated the New York Customs House in 1872. Previous Grant-appointed collectors Murphy and
Moses H. Grinnell charged lucrative fees for warehouse space, without the legal requirement of listing the goods. This led to Grant firing warehouse owner George K. Leet, for pocketing the exorbitant freight fees. Boutwell's reforms included stricter record-keeping and that goods be stored on company docks. Grant ordered prosecutions by Attorney General
George H. Williams and Secretary of the Treasury Boutwell of persons accepting and paying bribes. On March 3, 1873, Grant signed into law an
appropriation act that increased pay for federal employees, Congress (retroactive), the judiciary, and the president. Grant's annual salary doubled to $50,000. Critics derided Congress's two-year retroactive $4,000 payment for each Congressman, and the law was partially repealed. Grant kept his much-needed pay raise, while his reputation remained intact. In 1872, Grant signed into law an act that ended private moiety (
tax collection) contracts, but an attached rider allowed three more contracts. Boutwell's assistant secretary
William A. Richardson hired
John B. Sanborn to go after "individuals and cooperations" who allegedly evaded taxes. Sanborn aggressively collected $213,000, while splitting $156,000 to others, including Richardson, and the Republican Party campaign committee. During an 1874 Congressional investigation, Richardson denied involvement, but Sanborn said he met with Richardson over the contracts. Congress severely condemned Richardson's permissive manner. Grant appointed Richardson judge of the
Court of Claims, and replaced him with reformer
Benjamin Bristow. In June, Grant and Congress abolished the
moiety system. Bristow tightened up the Treasury's investigation force, implemented civil service reform, and fired hundreds of corrupt appointees. Bristow discovered Treasury receipts were low, and launched an investigation that uncovered the notorious
Whiskey Ring, that involved collusion between distillers and Treasury officials to evade millions in taxes. In mid-April, Bristow informed Grant of the ring. On May 10, Bristow struck hard and broke the ring. Federal marshals raided 32 installations nationwide, leading to 110 convictions and $3,150,000 in fines. '' cartoon on Bristow's Whiskey Ring investigation Grant appointed
David Dyer, under Bristow's recommendation,
federal attorney to prosecute the Ring in St. Louis, who indicted Grant's friend General
John McDonald, supervisor of Internal Revenue. Grant endorsed Bristow's investigation, writing on a letter "Let no guilty man escape..." Bristow's investigation discovered Babcock received kickback payments, and that Babcock had secretly forewarned McDonald, the ring's mastermind, of the investigation. On November 22, the jury convicted McDonald. On December 9, Babcock was indicted; Grant refused to believe in Babcock's guilt and was ready to testify in Babcock's favor, but Fish warned that doing so would put Grant in the embarrassing position of testifying against a case prosecuted by his own administration. Instead, on February 12, 1876, Grant gave a deposition in Babcock's defense, expressing that his confidence in his secretary was "unshaken". Grant's testimony silenced all but his strongest critics. The St. Louis jury acquitted Babcock, and Grant allowed him to remain at the White House. However, after Babcock was indicted in a frame-up of a Washington reformer, called the Safe Burglary Conspiracy, Grant dismissed him. Babcock kept his position of Superintendent of Public Buildings in Washington. The Interior Department under Secretary
Columbus Delano, whom Grant appointed to replace Cox, was rife with fraud and corruption. The exception was Delano's effective oversight of
Yellowstone. Grant reluctantly forced Delano's resignation. Surveyor General Silas Reed had set up corrupt contracts that benefited Delano's son, John Delano. Grant's Secretary of the Interior
Zachariah Chandler, who succeeded Delano in 1875, implemented reforms, fired corrupt agents and ended profiteering. When Grant was informed by Postmaster General
Marshall Jewell of a potential Congressional investigation into an extortion scandal involving Attorney General
George H. Williams's wife, Grant fired Williams and appointed reformer
Edwards Pierrepont. Grant's new cabinet appointments temporarily appeased reformers. After the Democrats took control of the House in 1875, more corruption in federal departments was exposed. Among the most damaging scandal involved Secretary of War
William W. Belknap, who took quarterly
kickbacks from the
Fort Sill tradership; he resigned in February 1876. Belknap was impeached by the House but was acquitted by the Senate. Grant's brother Orvil set up "silent partnerships" and received kickbacks from four trading posts. Congress discovered that Secretary of the Navy Robeson had been bribed by a naval contractor, but no articles of impeachment were drawn up. In his December 5, 1876, Annual Message, Grant apologized to the nation: "Failures have been errors of judgement, not of intent."
Election of 1876 The abandonment of Reconstruction played a central role during the 1876 election. Mounting investigations into corruption by the House, controlled by the Democrats, discredited Grant's presidency. Grant did not run for a third term, while the Republicans chose Governor
Rutherford B. Hayes of Ohio, a reformer, at their convention. The Democrats nominated Governor
Samuel J. Tilden of New York. Voting irregularities in three Southern states caused the election to remain undecided for several months. Grant told Congress to settle the matter through legislation and assured both sides that he would not use the army to force a result, except to curb violence. On January 29, 1877, he signed legislation forming an
Electoral Commission, which ruled Hayes elected president; to forestall Democratic protests, Republicans agreed to the
Compromise of 1877, in which the last troops were withdrawn from Southern capitals. With Reconstruction dead, 80 years of
Jim Crow segregation was launched. Grant's "calm visage" throughout the election crisis appeased the nation. ==Post-presidency (1877–1885)==