George Hoar, a Republican representative and U.S. Senator in the post-Civil War Congress, wrote that corruption is a by-product of war in his autobiography. Hoar was in a first-hand position to comment on the rampant corruption during the two-term administration of President Ulysses S. Grant, corruption that touched high ranking Republican Congressional leaders, Grant’s Cabinet, and other appointed officials. As writer Lloyd Robinson commented in his book on the 1876 presidential election, “…all of this was standard procedure in this era of rough, raw business practice.”
Corruption tied to Reconstruction and Federal Partnerships with Big Business
The Civil War produced the fist billion dollar budget. Along with vast government expenditures, the partnership between Northern business interests and the federal government expanded, eventually resulting in Gilded Age “trusts” that all but owned many key Congressional leaders.
Ulysses Grant was elected president in 1868 and reelected in 1872, largely due to the Southern black vote as well as his near complete naivety regarding the ever growing scandals coming out of his administration. These scandals, involving bribery, fraud, kick-backs, and bogus loans, touched numerous departments such as Treasury, Interior, the War Department, and Postal services.
Railroads, the Whiskey Ring, and Financial Kickbacks to Government Employees
One of the most notorious scandals in American history involved Congressional treatment of the railroad industry. The Credit Mobilier scandal ensnared some of the most prominent Republicans in government, including Henry Wilson, James Garfield, Schuyler Colfax (who was the sitting Vice President when the scandal broke), and Henry Dawes. The involvement of Republican stalwart Senator Roscoe Conkling damaged his chances at winning the Republican nomination in 1876.
Through a series of highly complicated deals, Congress awarded railroad companies federal land through grants, receiving company stock and other perks. James Blaine, a former House Speaker, was not only implicated in the Credit Mobilier scandal, but a separate, non-related bribe from the Union Pacific valued at $64,000.
The “Whiskey Ring,” uncovered by a Treasury Department secret investigation, charged several high ranking treasury agents with skimming tens of thousands of dollars from federal liquor taxes. Several of those agents had close ties to Benjamin Butler of Massachusetts who had served in the Civil War as general and would be the Greenback presidential candidate in 1884.
Corruption Splits the Republican Party in 1872
Historian Page Smith cites an article from January 1872 (Leslie’s Weekly) that commented on the Republican leadership: “…Since the formation of this government there has never been such a series of frauds, defalcations, and peculations…shall we have four more years of such misrule…?” Missouri Senator Carl Schurz became the catalyst, forming the Liberal Republicans intent on challenging Grant.
Although Grant won the election of 1872, reformist Republicans, later dubbed mugwumps in 1884, continued their crusade to expose corruption and challenge Republican leaders like James Blaine from attaining the White House. Liberal Republicans decried the cozy relationships enjoyed by Republican leaders and the money interests. In the wake of Credit Mobilier, for example, a Republican Congressional committee exonerated all of the prominent figures mentioned in the scandal.
The Panic of 1873 Helps to Publicize Government Corruption
“Grantism” was further exposed during the Panic of 1873, a national economic downturn precipitated by the failure of the Northern Pacific Railroad due to over extension and stock manipulation on the part of Jay Cooke & Company. This corporate failure led to bankruptcies and had effects on other businesses, shuttering industries, creating unemployment, and exposing the sordid details of capitalism out of control.
Liberal and reformist newspapers as well as influential cartoonists like Thomas Nast helped to expose scandals on both the federal and local levels. In New York, Governor Samuel Tilden, who would become the Democratic nominee in 1876, helped to end corruption in New York City, a community held hostage by political dictators and opportunists like Boss Tweed.
War-Time Corruption and Post War Financial Scandals
The numerous scandals of the Grant years reflected human nature in terms of greed and power. Robinson refers to post Civil War “Bribery of legislatures, manipulation of stock markets, secret deals among the multi-millionaires to squeeze out competitors…” This was also true in the Reconstruction South where carpetbagger state governments took bribes and profited handsomely from Northern investors such as railroad interests.
Scandals tied to war are still evident today. Wars in Iraq and Afghanistan are costing hundreds of millions of dollars each year and in some cases federal money allocated for various aspects of the conflicts remain unaccounted for. Although the Grant years are associated with some of the most egregious scandals in American history, Senator Hoar may have been right. Corruption as a by-product of war is at least one explanation for the loss of integrity on the part of elected and appointed government officials.