Miller Center

American President

A Reference Resource

Domestic Affairs

When Ulysses S. Grant came into office, he sought to remain above politics. When he announced his first cabinet appointments, he dismayed Republican Party leaders who thought the President owed them cabinet positions for their support in the election. However, Grant kept his own counsel and balked at using his appointments for political leverage. He wanted to surround himself with people he could trust and to whom he could delegate responsibility.

The result was a decidedly mixed cabinet. While he made some good selections, most notably Hamilton Fish as secretary of state, he made many mediocre appointments. His cabinet also had a high turnover rate. In addition, Grant was extremely loyal to those who had helped him or worked with him in the past; this loyalty prevented him from ruthlessly purging his administration of ineffective or corrupt politicians, and his administration was often noted for its scandals, although the President was never personally implicated in any of them.

Reconstruction

Grant came into office during an incredibly difficult time in American history. The Civil War was over, and the country was grappling with how to rebuild and reunite in the war's aftermath. As President, Grant was determined to follow Lincoln's policy of reconciliation with the South rather than one of retribution or appeasement. He also wanted to make sure that the federal government preserved the sacrifices of the war by sustaining a strong Union while at the same time protecting the newly freed slaves and preventing former unreconstructed Confederates from regaining power in the South. Those goals proved difficult, if not impossible to reconcile.

A majority of Americans—both Northerners and Southerners—rejected civil and political rights for blacks. Racism plagued much of American society, and although the North supported abolishing slavery to hasten the end of the war, many whites did not equate black freedom with racial equality. In this social climate, the President faced a unique challenge: How could he actively protect the rights of the newly freed slaves without alienating a large segment of the American public?

In the beginning of his presidency, Grant continued the policies of congressional Reconstruction, and he used both the military and federal legislation to protect black citizens. He also wanted to help the Republican Party flourish in the South, a goal unattainable without black voters and at least a portion of the white voters. In his inaugural address, he urged the ratification of the Fifteenth Amendment, which would give citizens the right to vote regardless of race or previous servitude. He proudly signed off on the Amendment in 1870, declaring that it was "a measure of grander importance than any other one act of the kind from the foundation of our free government to the present day."

Beginning in 1870, Congress passed a series of laws known collectively as the Enforcement Acts to help protect the right to vote. One of these was the Ku Klux Klan Act, which Grant signed in April 1871 to counter the rise of terrorist activity in the South. When white Southerners could not prevent blacks from voting legally, they terrorized them to try to keep them away from the polls. The President used South Carolina as an example to prove that the federal government would intervene in extreme cases of violence. In October 1871, he instituted martial law in nine counties in South Carolina and used federal troops to restore law and order in those areas.

However, there were many examples when the President did not interfere in the South, especially when such intervention became increasingly unpopular in the North, threatening the Republican electoral majority. He did not always want the federal government to become the arbiter of state conflicts. He believed in a federal system in which the states maintained much of their autonomy separate from the federal government. So when conflicts arose in states such as Louisiana, Arkansas, Georgia, or Mississippi, Grant did not always intervene. He sometimes provided federal troops to maintain law and order but often refused to decide which state authority was paramount.

Eventually much of the country, especially people in the North, lost interest in Reconstruction. White Southerners, who wanted the federal government to stay out of what they considered internal state affairs, were only too pleased with this development. The Panic of 1873 and the subsequent depression generated an even more heightened desire by Americans to focus on their own individual needs. Many were also disgusted by the corruption of Southern governments, both Democratic and Republican.

This political climate did not augur well for Republicans. Already the Democrats had regained control of many Southern state governments, and the Republicans had little chance of reestablishing power in the South. But if they continued to push federal intervention in the South, they might lose votes in the North as well. Many Republicans, therefore, including those within the Grant administration, began to turn away from the South in order to maintain their strength in the North.

Critics have assailed Grant's policy toward Reconstruction as either doing too much (by sending federal troops into Southern states) or by doing too little (not effectively protecting black rights). Grant wanted to meet the needs of the newly freed slaves and, at the same time, entice white Southerners into a Republican Party dedicated to creating jobs and solid businesses in the defeated region. However, it proved impossible for him to achieve these two competing goals. When he used federal troops or legislation to defend the rights of blacks, whites assailed him as a tyrant trampling states' rights. Yet it went against his personal and political goals to abandon the freed slaves and the Republican Party in the South. In the end, Grant had little chance to take his good intentions and make them into effective policy.

Fiscal Policy

Grant was essentially a fiscal conservative, a hard-money man who believed that the country's currency should be backed by gold. During the Civil War, the government had issued an excess of paper money, known as greenbacks, to finance its wartime spending. Greenbacks were backed by faith in the federal government and therefore had more value after the Union won the war. However, this currency was an inflationary force and helped to destabilize the economy.

In 1869, two New York speculators, Jay Gould and James Fisk, hatched a plan to corner the gold market. If they could convince the Grant administration not to sell any of the government's gold, the gold that they owned would become more valuable. So they plotted with Grant's brother-in-law to convince the President to withhold gold from the market. However, Gould and Fisk overestimated their agent's influence with Grant. When the President and his treasury secretary, George Boutwell, realized what was at stake, they ordered the sale on Friday, September 24, 1869, of $4 million in gold to break the speculators. This action caused a crash in the price of gold and resulted in financial ruin for many investors. The event, which became known as Black Friday, tarnished the administration's reputation, although Grant played no part in the scheme.

After his reelection in 1872, Grant faced a new fiscal challenge when the Panic of 1873 touched off a nation-wide depression. The economic downturn had many causes, including an economic depression in Europe, rapid industrial and agricultural growth, overexpansion of the railroads, and the effects of the Civil War and the Franco-Prussian War in Europe. The panic began when various Wall Street firms started going under and led to failing banks, increased bankruptcies, rising unemployment, and lost farms.

In the midst of this depression, President Grant vetoed what was known as the inflation bill, which would have injected more greenbacks into the economy. Many people argued that expanding the money supply would improve the economic situation and help end the depression. Although Grant initially intended to sign the bill, he later changed his mind and vetoed it. In 1875, the President signed the Specie Resumption Act, which resulted in the government once again placing its currency on specie (gold) following Europe's example and gradually removing the remaining greenbacks from circulation. These two important actions by Grant resulted in the United States following a hard-currency course for the rest of the nineteenth century. They also established the Republican Party as the party of economic conservatism and fiscal restraint.

Native American Policy

In his first inaugural address, Grant pledged to rethink the treatment of Native Americans, referring to them as "the original occupants of this land." He wanted to shift federal Indian policy toward what became known as the Peace Policy. This approach attempted to move Indians closer to white civilization (and ultimately U.S. citizenship) by housing them on reservations and helping them become farmers. Grant appointed a former military aide and Seneca Indian, Brigadier General Ely S. Parker, as Commissioner of Indian Affairs. Parker was the first nonwhite appointment to a major federal position. To address corruption in federal Indian affairs, Grant also created a new Board of Indian Commissioners headed by philanthropic leaders. The board recommended the government stop using political appointees as Indian agents. Grant adopted that recommendation and turned to missionaries—especially Quakers—and Army personnel to serve as agents.

However, these changes fell short of radically altering conditions for Native Americans in the United States. White settlers, with governmental support, continued to push Indians aside to take land, and they relied on the Army to prevent Indian attacks. At the same time, Native Americans on reservations had little chance of creating farms out of desolate pieces of land and were beset by poverty and desperation. While Grant's approach marked an improvement in U.S. Indian policy, it is remembered more for its good intentions than for lasting changes.

Scandals

Historically, much has been made of the scandals that rocked the Grant administration. There is no denying that the President was not a great judge of character when it came to the men who served under him. He was too loyal to those who were dishonest and opportunistic. However, Grant himself was never a target of investigation. His honesty was never questioned, and he did not personally benefit from any of the scandals. Still the charges of corruption damaged his presidency in the eyes of the American people.

In 1872, the Credit Mobilier scandal was exposed. Although the bulk of the charges predated Grant's presidency, it involved railroad companies overcharging millions of dollars for government contracts. Previously, when Congress was about to launch an investigation into the overcharging in 1867, the company's directors bribed various government officials with company shares to prevent it. When Congress finished a subsequent investigation in 1873, it had a negative impact on the Grant administration. Indeed, in the run-up to the 1872 presidential election, Grant had taken his vice president, Schuyler Colfax, off the Republican ticket in part because of his ties to this scandal.

In 1875, Secretary of Treasury Benjamin Bristow investigated distillers in the Midwest who were swindling the national government out of excise taxes with the help of federal agents. When Bristow presented Grant with evidence of the fraud, the President encouraged him to prosecute what became known as the Whiskey Ring. However, the prosecution soon implicated Grant's personal secretary, Orville Babcock, who had known about the fraud. Babcock was indicted and brought to civil trial in 1876. Grant then took the unusual step of giving a deposition in his defense. Babcock was found not guilty but had to leave his position as private secretary.

In the midst of these scandals, Grant focused on the problem of patronage, becoming the first President to recommend a professional civil service to combat the vices of the spoils system. He appointed the first Civil Service Commission, which recommended administering competitive exams and issuing regulations on the hiring and promotion of government employees. Grant put their recommendations into effect in 1872. However, Congress thwarted long-term reform by refusing to enact the necessary legislation to make the changes permanent.