The Civil War, which shocked the country into a new national consciousness and rearranged the elements of its economic life, also brought about a new era in political activity and management. The United States after Appomattox was a very different country from the United States before Sumter was fired upon. The war was a continental upheaval, like the Appalachian uplift in our geological history, producing sharp and profound readjustments.
Despite the fact that in 1864 Lincoln had been elected on a Union ticket supported by War Democrats, the Republicans claimed the triumphs of the war as their own. They emerged from the struggle with the enormous prestige of a party triumphant and with "Saviors of the Union" inscribed on their banners.
The death of their wise and great leader opened the door to a violent partizan orgy. President Andrew Johnson could not check the fury of the radical reconstructionists; and a new political era began in a riot of dogmatic and insolent dictatorship, which was intensified by the mob of carpetbaggers, scalawags, and freedmen in the South, and not abated by the lawless promptings of the Ku-Klux to regain patrician leadership in the home of secession nor by the baneful resentment of the North. The soldier was made a political asset. For a generation the "bloody shirt" was waved before the eyes of the Northern voter; and the evils, both grotesque and gruesome, of an unnatural reconstruction are not yet forgotten in the South.
A second opportunity of the politician was found in the rapid economic expansion that followed the war. The feeling of security in the North caused by the success of the Union arms buoyed an unbounded optimism which made it easy to enlist capital in new enterprises, and the protective tariff and liberal banking law stimulated industry. Exports of raw material and food products stimulated mining, grazing, and farming. European capital sought investments in American railroads, mines, and industrial under-takings. In the decade following the war the output of pig iron doubled, that of coal multiplied by five, and that of steel by one hundred. Superior iron and copper, Pennsylvania coal and oil, Nevada and California gold and silver, all yielded their enormous values to this new call of enterprise. Inventions and manufactures of all kinds flourished. During 1850-60 manufacturing establishments had increased by fourteen per cent. During 1860-70 they increased seventy-nine per cent.
The Homestead Act of May 20, 1862, opened vast areas of public lands to a new immigration. The flow of population was westward, and the West called for communication with the East. The Union Pacific and Central Pacific railways, the pioneer transcontinental lines, fostered on generous grants of land, were the tokens of the new transportation movement. Railroads were pushing forward everywhere with unheard-of rapidity. Short lines were being merged into far-reaching systems. In the early seventies the Pennsylvania system was organized and the Vanderbilts acquired control of lines as far west as Chicago. Soon the Baltimore and Ohio system extended its empire of trade to the Mississippi. Half a dozen ambitious trans-Mississippi systems, connecting with four new transcontinental projects, were put into operation.
Prosperity is always the opportunity of the politician. What is of greatest significance to the student of politics is that prosperity at this time was organized on a new basis. Before the war business had been conducted largely by individuals or partnerships. The unit was small; the amount of capital needed was limited. But now the unit was expanding so rapidly, the need for capital was so lavish, the empire of trade so extensive, that a new mechanism of ownership was necessary. This device, of course, was the corporation. It had, indeed, existed as a trading unit for many years. But the corporation before 1860 was comparatively small and was generally based upon charters granted by special act of the legislature.
No other event has had so practical a bearing on our politics and our economic and social life as the advent of the corporate device for owning and manipulating private business. For it links the omnipotence of the State to the limitations of private ownership; it thrusts the interests of private business into every legislature that grants charters or passes regulating acts; it diminishes, on the other hand, that stimulus to honesty and correct dealing which a private individual discerns to be his greatest asset in trade, for it replaces individual responsibility with group responsibility and scatters ownership among so large a number of persons that sinister manipulation is possible.
But if the private corporation, through its interest in broad charter privileges and liberal corporation laws and its devotion to the tariff and to conservative financial policies, found it convenient to do business with the politician and his organization, the quasi-public corporations, especially the steam railroads and street railways, found it almost essential to their existence. They received not only their franchises but frequently large bonuses from the public treasury. The Pacific roads alone were endowed with an empire of 145,000,000 acres of public land. States, counties, and cities freely loaned their credit and gave ample charters to new railway lines which were to stimulate prosperity.
City councils, legislatures, mayors, governors, Congress, and presidents were drawn into the maelstrom of commercialism. It is not surprising that side by side with the new business organization there grew up a new political organization, and that the new business magnate was accompanied by a new political magnate. The party machine and the party boss were the natural product of the time, which was a time of gain and greed. It was a sordid reaction, indeed, from the high principles that sought victory on the field of battle and that found their noblest embodiment in the character of Abraham Lincoln.
The dominant and domineering party chose the leading soldier of the North as its candidate for President. General Grant, elected as a popular idol because of his military genius, possessed neither the experience nor the skill to countermove the machinations of designing politicians and their business allies. On the other hand, he soon displayed an admiration for business success that placed him at once in accord with the spirit of the hour. He exalted men who could make money rather than men who could command ideas. He chose Alexander T. Stewart, the New York merchant prince, one of the three richest men of his day, for Secretary of the Treasury. The law, however, forbade the appointment to this office of any one who should "directly or indirectly be concerned or interested in carrying on the business of trade or commerce," and Stewart was disqualified. Adolph E. Borie of Philadelphia, whose qualifications were the possession of great wealth and the friendship of the President, was named Secretary of the Navy. Another personal friend, John A. Rawlins, was named Secretary of War. A third friend, Elihu B. Washburne of Illinois, was made Secretary of State. Washburne soon resigned, and Hamilton Fish of New York was appointed in his place. Fish, together with General Jacob D. Cox of Ohio, Secretary of the Interior, and Judge E. Rockwood Hoar of Massachusetts, Attorney-General, formed a strong triumvirate of ability and character in the Cabinet. But, while Grant displayed pleasure in the companionship of these eminent men, they never possessed his complete confidence. When the machinations for place and favor began, Hoar and Cox were in the way. Hoar had offended the Senate in his recommendations for federal circuit judges (the circuit court was then newly established), and when the President named him for Justice of the Supreme Court, Hoar was rejected. Senator Cameron, one of the chief spoils politicians of the time, told Hoar frankly why: "What could you expect for a man who had snubbed seventy Senators!" A few months later (June, 1870), the President bluntly asked for Hoar's resignation, a sacrifice to the gods of the Senate, to purchase their favor for the Santo Domingo treaty.
Cox resigned in the autumn. As Secretary of the Interior he had charge of the Patent Office, Census Bureau, and Indian Service, all of them requiring many appointments. He had attempted to introduce a sort of civil service examination for applicants and had vehemently protested against political assessments levied on clerks in his department. He especially offended Senators Cameron and Chandler, party chieftains who had the ear of the President. General Cox stated the matter plainly: "My views of the necessity of reform in the civil service had brought me more or less into collision with the plans of our active political managers and my sense of duty has obliged me to oppose some of their methods of action." These instances reveal how the party chieftains insisted inexorably upon their demands. To them the public service was principally a means to satisfy party ends, and the chief duty of the President and his Cabinet was to satisfy the claims of party necessity. General Cox said that distributing offices occupied "the larger part of the time of the President and all his Cabinet." General Garfield wrote (1877): "One-third of the working hours of Senators and Representatives is hardly sufficient to meet the demands made upon them in reference to appointments to office."
By the side of the partizan motives stalked the desire for gain. There were those to whom parties meant but the opportunity for sudden wealth. The President's admiration for commercial success and his inability to read the motives of sycophants multiplied their opportunities, and in the eight years of his administration there was consummated the baneful union of business and politics.
During the second Grant campaign (1872), when Horace Greeley was making his astounding run for President, the New York Sun hinted at gross and wholesale briberies of Congressmen by Oakes Ames and his associates who had built the Union Pacific Railroad, an enterprise which the United States had generously aided with loans and gifts.
Three committees of Congress, two in the House and one in the Senate (the Poland Committee, the Wilson Committee, and the Senate Committee), subsequently investigated the charges. Their investigations disclosed the fact that Ames, then a member of the House of Representatives, the principal stockholder in the Union Pacific, and the soul of the enterprise, had organized, under an existing Pennsylvania charter, a construction company called the Credit Mobilier, whose shares were issued to Ames and his associates. To the Credit Mobilier were issued the bonds and stock of the Union Pacific, which had been paid for "at not more than thirty cents on the dollar in road-making." * As the United States, in addition to princely gifts of land, had in effect guaranteed the cost of construction by authorizing the issue of Government bonds, dollar for dollar and side by side with the bonds of the road, the motive of the magnificent shuffle, which gave the road into the hands of a construction company, was clear. Now it was alleged that stock of the Credit Mobilier, paying dividends of three hundred and forty per cent, had been distributed by Ames among many of his fellow-Congressmen, in order to forestall a threatened investigation. It was disclosed that some of the members had refused point blank to have anything to do with the stock; others had refused after deliberation; others had purchased some of it outright; others, alas!, had "purchased" it, to be paid for out of its own dividends.
* Testimony before the Wilson Committee.
The majority of the members involved in the nasty affair were absolved by the Poland Committee from "any corrupt motive or purpose." But Oakes Ames of Massachusetts and James Brooks of New York were recommended for expulsion from the House and Patterson of New Hampshire from the Senate. The House, however, was content with censuring Ames and Brooks, and the Senate permitted Patterson's term to expire, since only five days of it remained. Whatever may have been the opinion of Congress, and whatever a careful reading of the testimony discloses to an impartial mind at this remote day, upon the voters of that time the revelations came as a shock. Some of the most trusted Congressmen were drawn into the miasma of suspicion, among them Garfield; Dawes; Scofield; Wilson, the newly elected Vice-President; Colfax, the outgoing Vice-President. Colfax had been a popular idol, with the Presidency in his vision; now bowed and disgraced, he left the national capital never to return with a public commission.
In 1874 came the disclosures of the Whiskey Ring. They involved United States Internal Revenue officers and distillers in the revenue district of St. Louis and a number of officials at Washington. Benjamin H. Bristow, on becoming Secretary of the Treasury in June of that year, immediately scented corruption. He discovered that during 1871-74 only about one-third of the whiskey shipped from St. Louis had paid the tax and that the Government had been defrauded of nearly $3,000,000. "If a distiller was honest," says James Ford Rhodes, the eminent historian, "he was entrapped into some technical violation of the law by the officials, who by virtue of their authority seized his distillery, giving him the choice of bankruptcy or a partnership in their operations; and generally he succumbed."
McDonald, the supervisor of the St. Louis revenue district, was the leader of the Whiskey Ring. He lavished gifts upon President Grant, who, with an amazing indifference and innocence, accepted such favors from all kinds of sources. Orville E. Babcock, the President's private secretary, who possessed the complete confidence of the guileless general, was soon enmeshed in the net of investigation. Grant at first declared, "If Babcock is guilty, there is no man who wants him so much proven guilty as I do, for it is the greatest piece of traitorism to me that a man could possibly practice." When Babcock was indicted, however, for complicity to defraud the Government, the President did not hesitate to say on oath that he had never seen anything in Babcock's behavior which indicated that he was in any way interested in the Whiskey Ring and that he had always had "great confidence in his integrity and efficiency." In other ways the President displayed his eagerness to defend his private secretary. The jury acquitted Babcock, but the public did not. He was compelled to resign under pressure of public condemnation, and was afterwards indicted for conspiracy to rob a safe of documents of an incriminating character. But Grant seems never to have lost faith in him. Three of the men sent to prison for their complicity in the whiskey fraud were pardoned after six months. McDonald, the chieftain of the gang, served but one year of his term.
The exposure of the Whiskey Ring was followed by an even more startling humiliation. The House Committee on Expenditures in the War Department recommended that General William W. Belknap, Secretary of War, be impeached for "high crimes and misdemeanors while in office," and the House unanimously adopted the recommendation. The evidence upon which the committee based its drastic recommendation disclosed the most sordid division of spoils between the Secretary and his wife and two rascals who held in succession the valuable post of trader at Fort Sill in the Indian Territory.
The committee's report was read about three o'clock in the afternoon of March 2, 1876. In the forenoon of the same day Belknap had sent his resignation to the President, who had accepted it immediately. The President and Belknap were personal friends. But the certainty of Belknap's perfidy was not removed by the attitude of the President, nor by the vote of the Senate on the article of impeachment—37 guilty, 25 not guilty-for the evidence was too convincing. The public knew by this time Grant's childlike failing in sticking to his friends; and 93 of the 25 Senators who voted not guilty had publicly declared they did so, not because they believed him innocent, but because they believed they had no jurisdiction over an official who had resigned.
There were many minor indications of the harvest which gross materialism was reaping in the political field. State and city governments were surrendered to political brigands. In 1871 the Governor of Nebraska was removed for embezzlement. Kansas was startled by revelations of brazen bribery in her senatorial elections (1872-1873). General Schenck, representing the United States at the Court of St. James, humiliated his country by dabbling in a fraudulent mining scheme.
In a speech before the Senate, then trying General Belknap, Senator George F. Hoar, on May 6, 1876, summed up the greater abominations:
"My own public life has been a very brief and insignificant one, extending little beyond the duration of a single term of senatorial office. But in that brief period I have seen five judges of a high court of the United States driven from office by threats of impeachment for corruption or maladministration. I have heard the taunt from friendliest lips, that when the United States presented herself in the East to take part with the civilized world in generous competition in the arts of life, the only products of her institutions in which she surpassed all others beyond question was her corruption. I have seen in the State in the Union foremost in power and wealth four judges of her courts impeached for corruption, and the political administration of her chief city become a disgrace and a byword throughout the world. I have seen the chairman of the Committee on Military Affairs in the House rise in his place and demand the expulsion of four of his associates for making sale of their official privilege of selecting the youths to be educated at our great military schools. When the greatest railroad of the world, binding together the continent and uniting the two great seas which wash our shores, was finished, I have seen our national triumph and exaltation turned to bitterness and shame by the unanimous reports of three committees of Congress—two in the House and one here—that every step of that mighty enterprise had been taken in fraud. I have heard in highest places the shameless doctrine avowed by men grown old in public office that the true way by which power should be gained in the Republic is to bribe the people with the offices created for their service, and the true end for which it should be used when gained is the promotion of selfish ambition and the gratification of personal revenge. I have heard that suspicions haunt the footsteps of the trusted companions of the President."
These startling facts did not shatter the prestige of the Republicans, the "Saviors of the Union," nor humble their leaders. One of them, Senator Foraker, says: * "The campaign (1876) on the part of the Democrats gave emphasis to the reform idea and exploited Tilden as the great reform governor of New York and the best fitted man in the country to bring about reforms in the Government of the United States. No reforms were needed: but a fact like that never interfered with a reform campaign." The orthodoxy of the politician remained unshaken. Foraker's reasons were the creed of thousands: "The Republican party had prosecuted the war successfully; had reconstructed the States; had rehabilitated our finances, and brought on specie redemption." The memoirs of politicians and statesmen of this period, such as Cullom, Foraker, Platt, even Hoar, are imbued with an inflexible faith in the party and colored by the conviction that it is a function of Government to aid business. Platt, for instance, alluding to Blaine's attitude as Speaker, in the seventies, said: "What I liked about him was his frank and persistent contention that the citizen who best loved his party and was loyal to it, was loyal to and best loved his country." And many years afterwards, when a new type of leader appeared representing a new era of conviction, Platt was deeply concerned. His famous letter to Roosevelt, when the Rough Rider was being mentioned for Governor of New York (1899), shows the reluctance of the old man to see the signs of the times: "The thing that really did bother me was this: I had heard from a great many sources that you were a little loose on the relations of capital and labor, on trusts and combinations, and indeed on the numerous questions which have recently arisen in politics affecting the security of earnings and the right of a man to run his own business in his own way, with due respect of course to the Ten Commandments and the Penal Code."
* "Notes from a Busy Life", vol. I., 98.
The leaders of both the great parties firmly and honestly believed that it was the duty of the Government to aid private enterprise, and that by stimulating business everybody is helped. This article of faith, with the doctrine of the sanctity of the party, was a natural product of the conditions outlined in the beginning of this chapter—the war and the remarkable economic expansion following the war. It was the cause of the alliance between business and politics. It made the machine and the boss the sinister and ever present shadows of legitimate organization and leadership.
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