(November 20, 2019) For at least the past twenty years, historians and Ulysses Grant biographers have increasingly attributed the corruption infecting his Presidency to personal naivety. They portray him as an honest President, but one unable to discern the moral defects in the men he chose to serve with him. In truth, after the Civil War ended in 1865 he became increasingly enamored with businessmen of the Gilded Age, some of dubious and even corrupt reputations. More importantly, he also became accustomed to leveraging such relations for personal monetary gain. By the time he became President in 1869, he fully realized how politicians could reciprocate indirectly for the generosity of wealthy “friends.”
Between 1865 and 1869 he received four homes as gifts. In 1865 Galena, Illinois purchased the $16,000 home that his family was renting during the Civil War and presented it as a gift. Since he was then working in Washington as General of the Army, however, Philadelphia also bought the Grant family a grand home at 2009 Chestnut Street that same year. It included closets full of snowy linen and dining tables set with fine silver. Grant planned to commute to Washington but the five-hour train ride quickly rendered the plan impracticable.
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As a result, future brother-in-law Abel Corbin bought Grant a Washington home on “I” Street in exchange for a $30,000 ten year note. Only four months later, however, Daniel Butterfield led a group of wealthy New Yorkers that raised a $105,000 purse, which enabled Grant to pay off Corbin and invest the balance in government bonds. After becoming President in 1869, he immediately signed a bill requiring that all federal bonds be repaid in gold, even though investors bought them with paper money that traded at a fluctuating discount to gold. During the Civil War the discount got to be as steep as 65%. Although Boston was too far away for a home, fifty citizens of that city gave him a personal library valued at $75,000.
Shortly before Grant moved his family into the White House in 1869 he sold the “I” Street home for $40,000. Although that would have yielded a $10,000 (33%) profit, he hoped for more. Consequently, he urged Daniel Butterfield to raise another $100,000 for army buddy William T. Sherman who would become the new General of the Army and need a substantial home. After Butterfield raised the money, Grant returned the $1,000 buyer’s deposit and instead sold the “I” Street home to Sherman for $65,000. The scheme yielded the President a $35,000 profit instead of only $10,000. Grant next appointed Butterfield to head the New York Treasury Office where Jay Gould bribed him to provide advance notice of Treasury gold sales during Gould’s attempt to corner the gold market in September 1869.
Only a few months after becoming President, Grant accepted a $35,000 Long Branch, New Jersey vacation “cottage” with twenty-seven rooms as a gift. He later appointed one of the donors as tax collector of the Port of New York, where about 70% of America’s tariffs were collected. Whenever large amounts of money funneled through a government agency in that era, some of it tended to stick to the fingers of the administrators. Grant was well aware of the tendency. He had already appointed a brother in law as tariff collector in New Orleans, the South’s biggest duty collection point.
Grant also accepted undervalued stock in the Seneca Sandstone Company, which was scheming to be a major building materials supplier as Washington City modernized under Republican rule. Grant got stock valued at $20,000 for half price the year before he became President. He sold his shares four years later, which was nine months after he appointed the company’s founder to head the District of Columbia’s government.
Following two terms in the White House, Grant and his wife went on a triumphal World tour for thirty months. After he returned, the ex-President received the income from a $250,000 trust, which was raised through a subscription headed by the notorious Jay Gould.
President Grant’s personal secretary, Orville Babcock, was indicted as a ringleader for a group of tax collectors that took bribes from distilled spirits producers in exchange for allowing them to evade excise taxes. In response to the indictment, Grant forbade the prosecutors to strike plea bargains with participants lower in Babcock’s alleged pyramid. He fired a prosecutor who convicted an underling in the organization and was deterred from firing the replacement when his attorney general advised it would be impolitic. Although Babcock was acquitted, Grant’s conduct dismayed Treasury Secretary Benjamin Bristow. One of Bristow’s clerks told future Supreme Court Justice John Harlan: “What has hurt Bristow worst of all and disheartened him is the final conviction that Grant himself is in the [corruption] Ring and knows all about [it].”
Grant was an overnight guest in Jay Cooke’s Philadelphia mansion and had breakfast there the very morning that Cooke’s financial empire collapsed late in 1873, triggering a five year economic depression. Cooke was the biggest contributor to Grant’s 1872 re-election campaign. Jay’s brother, Henry, headed the Seneca Sandstone Company noted above and was also on the Board of Directors of the Freedmen’s Savings Bank, which went bankrupt partly because of defaulted loans to Seneca and other Cooke companies.
In short, Grant repeatedly benefitted from crony capitalism, which appears to have tempted him to greater unethical and possibly illegal actions.
To learn more about Grant’s presidency and support this blog read:
U. S. Grant’s Failed Presidency by Philip Leigh