As the presidential election of 1868 drew near, Republicans nominated Civil War hero Ulysses S. Grant. Although Grant had never held public office, he had been a successful Union general, was popular in the North, and served as a reminder that Republicans had won the war. Democrats nominated Horatio Seymour, a former governor of New York who opposed emancipation, supported states’ rights, and wanted to regain control of Reconstruction from Congress. Although Grant received 214 electoral votes to Seymour’s 80, he won the popular vote by only 300,000, a slim margin. Republicans maintained control of Congress.
Grant’s presidency marked the beginning of the Gilded Age—the name that novelist Mark Twain gave to the postwar, post-Reconstruction era of big business, graft, and scandal that lasted until about 1900. The Gilded Age was enabled partly because most presidents during this era, including Grant, were weak in relation to Congress. The U.S. government’s economic policy became lax during these years, allowing Americans to take advantage of the laissez-faire economics via increased speculation, investment, and corruption.
Indeed, Grant had not even completed his first year in office before scandal hit. In 1869, financial tycoons Jim Fisk and Jay Gould bribed officials in Grant’s cabinet, including Grant’s own brother-in-law, to turn a blind eye while the two wealthy businessmen attempted to corner the gold market. Fisk and Gould even conned Grant himself into not releasing any more of the precious metal into the economy.
Fisk and Gould’s attempt to corner the gold market led to the panic of September 24, 1869, “Black Friday.” Congress was able to restore gold prices only after releasing more gold into the economy, despite Grant’s promise that more gold would not be released. Though Grant was unknowingly part of the scandal, no formal charges were filed against him.
Historians also associate the Grant presidency with corrupt political bosses and “machines,” the most notorious of which was the Tammany Hall machine in New York City, led by William “Boss” Tweed. Tweed, more than anyone else, was the symbol of corruption during the Gilded Age: he controlled nearly every aspect of political life in New York City; used bribery, extortion, and fraud to get what he wanted; and even sponsored phony elections to put his associates in office. Historians estimate that he may have fleeced as much as $200 million from New Yorkers. Though it could be argued that Tweed preyed on recent immigrants, he also provided valuable services for them: Tammany Hall often gave newly arrived immigrants housing, jobs, and security in exchange for votes.
The law finally caught up with Tweed in 1871, when New York prosecutor Samuel J. Tilden helped expose the Democratic politician’s corrupt dealings and sent him to jail. Tweed ultimately died in prison. Tilden, for his part, capitalized on his sudden fame and entered politics; within five years, he ran for president of the United States.
Grant’s presidency also saw a flurry of railroad construction throughout the United States, meaning big business for railroaders both North and South. American industrial production was booming (mostly in the North), and the demand for railroad lines to transport manufactured goods throughout the country had rapidly increased. During the Civil War, the U.S. government had granted subsidies to large railroad companies like the Union Pacific Railroad and the Central Pacific Railroad to lay rail tracks throughout the North and West. In 1869, these northern and western railroad systems were finally united when Union Pacific and Central Pacific lines were joined at Promontory, Utah, forming a transcontinental rail link.
This booming railroad industry quickly attracted corporate corruption. In the 1860s, corrupt Union Pacific Railroad executives had created a dummy railroad construction company called Crédit Mobilier. The executives contracted themselves out as tracklayers for the phony company and earned huge profits, bribing several Congressmen and even Grant’s vice president, Schuyler Colfax, to keep quiet about Crédit Mobilier’s unlawful profiteering. In 1872, the scandal was exposed, and Colfax resigned. Again, though Grant had not been knowingly involved in the scandal, he suffered a major blow to his political reputation.
Two years later, in 1874, Grant was hit by yet another scandal when several federal employees whom he had appointed embezzled millions of dollars of excise tax revenue. The president vowed to hunt down and punish all those involved in the Whiskey Ring but was forced to eat his words when he discovered that his own personal secretary was involved in the ring. Although Grant ended up pardoning his secretary, the Whiskey Ring left yet another stain on his presidency.
Fed up with scandals in the Grant administration, a significant number of Republicans broke ranks with the radicals and moderates in Congress before the 1872 presidential elections, forming a breakaway party called the Liberal Republican Party. These congressmen wanted to put an end to governmental corruption, restore the Union, and downsize the federal government.
The Liberal Republicans were largely businessmen, professionals, reformers, and intellectuals who disliked big government and preferred a laissez-faire economic policy. Some historians argue that the Liberal Republicans opposed democracy; indeed, they did not support universal manhood suffrage or the enfranchisement of blacks. They also believed that the widespread corruption and graft in American big business and politics were the result of too much democracy and governmental interference.
The Liberal Republicans nominated New York Tribune editor Horace Greeley as their candidate for president. The Democratic Party also nominated Greeley as their candidate, because he opposed the army’s presence in the South and wanted to end Reconstruction. Radical and moderate Republicans once again nominated Ulysses S. Grant, despite all the scandals during his term. Grant won the election, 286 electoral votes to Greeley’s 66, and took the popular vote by a margin of more than 700,000.
Grant’s second term was as difficult as his first, this time due to economic problems rather than scandals. During the economic boom of his first term, Americans had taken out too many bad loans and overspeculated in the railroad and business industries. This activity led to the Depression of 1873 , the first major economic collapse in U.S. history. The depression lasted for roughly five years, and millions of Americans lost their jobs.
In response to dire economic conditions, the poor clamored for cheaper paper and silver money to combat day-to-day hardships. Afraid of driving up inflation, however, Republicans in Congress stopped coining silver dollars in 1873 and passed the Resumption Act of 1875 to remove all paper money from the economy. These economic policies helped end the depression in the long run but made the interim years more difficult for many Americans.
The Depression of 1873 was politically damaging to radical and moderate Republicans in Congress. Many long-time supporters of the Republican Party, especially in the North, voted Democrat in the congressional election of 1874 , angry that radical and moderate Republicans adhered so rigidly to hard-money policies even when unemployment in the United States reached nearly fifteen percent.
These northern votes, combined with white votes in the South, ousted many Republicans from Congress and gave the Democratic Party control of the House of Representatives for the first time since 1856. The remaining Radical Republicans in Congress who had not lost their seats suddenly found themselves in the minority party, unable to pass any further legislation concerning southern Reconstruction efforts. The 1874 elections thus marked the beginning of the end of Radical Reconstruction.