10-3 Reconstruction Ends
The Grant Administration
As commander of the Union forces, Ulysses S. Grant had led the North to victory in the Civil War. His reputation then carried him to the presidency in the election of 1868. Unfortunately, Grant had little political experience. He believed that the president’s role was to carry out the laws. He left the development of policy to Congress. This made him weak and ineffective. In time, his lack of political experience helped split the Republican Party. It also damaged public support for Reconstruction.
The Republican Split
During Grant’s first term in office, the Republican-controlled Congress continued to enforce Reconstruction. It also expanded its economic programs. It kept tariffs high, tightened banking rules, and increased federal spending on infrastructure. Taxes on alcohol and tobacco, nicknamed “sin taxes” and begun as emergency measures during the war, were kept.
Democrats attacked these Republican economic policies. They argued that wealthy Americans had
too much influence in Grant’s administration. Some Republicans, known as Liberal Republicans,
agreed. The Liberal Republicans tried to prevent Grant from being nominated for president again in
1872. When that failed, they split the Republican Party by nominating their own candidate, publisher
Horace Greeley. To attract Southern support, the Liberal Republicans promised to pardon nearly all
former Confederates. They also promised to remove Union troops from the South. Then, believing that
only a united effort would defeat Grant, the Democratic Party also nominated Greeley. Despite the
split in his own party and Greeley’s passionate campaigning, Grant won the election easily.
A series of scandals hurt Grant’s administration during his second term. Grant’s secretary of war,
William Belknap, had taken bribes from merchants at Western army posts. Belknap quit his job to
avoid impeachment. In 1875 the Whiskey Ring scandal broke. Government officials and distillers in St.
Louis, Missouri, had filed false tax reports. They had cheated the government out of millions of dollars.
Reportedly, Grant’s private secretary, Orville E. Babcock, was involved. However, this was never proven.
The Panic of 1873
In addition to the political scandals of Grant’s second term, the nation went through a deep economic crisis.
The turmoil started in 1873. That year, a series of bad investments forced the powerful banking firm of Jay Cooke and Company to go bankrupt. A wave of fear known as the Panic of 1873 quickly spread. Dozens of smaller banks closed. The stock market fell sharply. Thousands of businesses shut down, and unemployment soared. The administration scandals and the growing economic depression hurt the Republicans politically. In the 1874 midterm elections, the Democrats won control of the House of Representatives. They also made gains in the Senate.
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