On March 3, 1873, as Grant's first term was drawing to a close, Congress passed a measure increasing the salary of public officials from the President to the members of the House of Representatives. The increase for Congressmen was made retroactive, so that each of them would receive $5,000 for the two years just past. To a country whose fears and suspicions had been aroused by the Credit Mobilier scandal, the "salary grab" and the "back pay steal" were fresh indications that corruption was entrenched in Washington. Senators and Representatives began at once to hear from their constituencies. Many of them returned the increase to the treasury and when the next session opened, the law was repealed except so far as it applied to the president and the justices of the Supreme Court.
The congressional elections of 1874 indicated the extent of the popular distrust of the administration. In New York, where Samuel J. Tilden was chosen governor, and in such Republican strongholds as Massachusetts and Pennsylvania the Democrats were successful. In the House of Representatives the Republican two-thirds majority was wiped out and the Democrats given complete control. Even the redoubtable Benjamin F. Butler lost his seat.
Further apprehensions were aroused by rumors concerning the operations of a "Whiskey Ring." For some years it had been suspected that a ring of revenue officials with accomplices in Washington were in collusion with the distillers to defraud the government of the lawful tax on whiskey. Part of the illegal gains were said to have gone into the campaign fund for Grant's re-election, although he was ignorant of the source of the revenue. Benjamin H. Bristow, who became Secretary of the Treasury in 1874, began the attempt to stop the frauds and capture the guilty parties. This was no simple task, because information of impending action was surreptitiously sent out by officials in Washington. Finally Secretary Bristow got the information which he sought, and then moved to capture the criminals. One of the most prominent members of the Ring was an internal revenue official in St. Louis who, it was recollected, had entertained President Grant, had presented him with a pair of horses and a wagon, and had given the General's private secretary a diamond shirt-stud valued at $2,400. Public opinion was yet further shocked, however, when the trail of indictments led to the President's private secretary, General Babcock. On first receiving the news of Bristow's discoveries, Grant had written "Let no guilty man escape"; but later he became secretly and then openly hostile to the investigation. During the trial of Babcock, the President asked to be a witness in his behalf. A verdict of acquittal was given, but afterwards the two men had a private conference, and when "Grant came out, his face was set in silence." Babcock never returned to the White House as Secretary, but was given the post of Superintendent of Public Buildings and Grounds. Several of the members of the Ring were imprisoned but were later pardoned by the President. In the meanwhile Grant seems to have been brought to believe that Bristow was persecuting Babcock with a view to getting the favor of the reform element in the party and eventually the presidential nomination. Relations between the two became strained and Bristow resigned.
The last year of Grant's second administration was blackened by the case of W.W. Belknap, who was then Secretary of War. Investigation by a House committee uncovered the fact that since 1870 an employee in the Indian service had paid $12,000 and later $6,000 a year for the privilege of retaining his office. The money had been paid at first to Mrs. Belknap, who had made the arrangement, and after her death to the Secretary himself. The House unanimously voted to impeach him, but on the day when the vote was taken he resigned and the President accepted the resignation. Only the fact that he was out of office prevented the Senate from declaring him guilty, and critics of the administration noted that the President had saved another friend from deserved punishment.
It would be easy to over-estimate the responsibility of General Grant for the political corruption of his administrations. For the most part the wrong-doing of the time began before his first election. Democrats as well as Republicans participated in many of the scandals. Politicians in the cities, the states and the nation seemed to be determined to have a share in the enormous wealth that was being created in America, and they got it by means that varied from the merely unethical and indiscreet, to the openly corrupt. As for the President, his own defence, given in his last message to Congress, may be taken as the best one: "Failures have been errors of judgment, not of intent."
Under the circumstances, however, it was natural that the presidential campaign of 1876 should turn upon the failings of the administration. Popular interest in the southern issue was on the wane. Early in the election year, nevertheless, James G. Blaine, Republican leader in the House, made a forceful attack on Jefferson Davis, as the wilful author of the "gigantic murders and crimes at Andersonville," the southern prison in which federal captives had been held. Instantly the sectional hatred flared up and Blaine, already a well-known leader, became a prominent candidate for the nomination. Republican reformers generally favored Bristow. A third-term boom for Grant was effectively crushed by an adverse resolution in the House.
The Republican nominating convention met on June 14. The virtues of Blaine were set forth in a famous speech by Robert G. Ingersoll in which he referred to the attack on Davis: "Like an armed warrior, like a plumed knight James G. Blaine marched down the halls of the American Congress and threw his shining lance full and fair against the brazen forehead of every traitor to his country." The "plumed knight," however, was open to attack concerning a scandal during the Grant regime, and the convention turned to Governor Rutherford B. Hayes, of Ohio, a man of quiet ability who had been unconnected with Washington politics, was relatively unknown and, therefore, not handicapped by the antagonisms of previous opponents. The platform emphasized the services of the party during the war, touched lightly on the events of the preceding eight years, advocated payment of the public debt, and favored import duties and the reform of the civil service.
The Democrats met on June 27. There was little opposition to the nomination of Governor Samuel J. Tilden, of New York, a wealthy lawyer who had made a record as a reformer in opposition to "Boss" Tweed and a corrupt canal ring. The platform was distinctly a reform document. It demanded reform in the governments of states and nation, in the currency system, the tariff, the scale of public expense, and the civil service. An eloquent paragraph exhibited those corruptions of the administration which had caused such general dismay.
There was little in the campaign that was distinctive, and on November 8, the morning after the election, it seemed clear that Tilden had been successful. He had carried the doubtful states of Connecticut, New York, New Jersey and Indiana. When the figures were all gathered, it was found that his popular vote exceeded that of his rival by more than 250,000. But there were disputes in three states, Florida, Louisiana and South Carolina. Hayes would be elected only if the electoral votes of all these states could be obtained for him. If, however, Tilden received even one electoral vote from any of the states, the victory would be his. Hayes was conceded 166 electoral votes; Tilden 184. Nineteen were in dispute. The Republican leaders at once claimed the nineteen disputed votes, and asserted that their candidate was elected. The Democrats had no doubt of the victory of Tilden.[3] The capitals of the three doubtful states now became the centers of observation. Troops had long been stationed in South Carolina and Louisiana, and others were promptly sent to Florida. Prominent politicians from both parties also flocked thither, in order to uphold the party interests.
In South Carolina it became evident that a majority of the popular vote was for Hayes, although both the Democratic and the Republican electors sent in returns to Washington. In Florida there was a board of canvassers which had power to exclude false or fraudulent votes. It was composed of two Republicans and one Democrat. When all ballots had been sent in, the Democrats claimed a majority of ninety; the Republicans a majority of forty-five. The board went over the returns and by a partisan vote threw out enough to make the Republican majority 924. Republican electoral votes were thereupon sent to Washington, but so also were Democratic votes. The situation in Louisiana was still more complicated. Political corruption and intimidation had been commonplaces in that state. On the face of the returns, Tilden's electors had received majorities varying from 6,000 to 9,000. As in Florida there was a board of canvassers which was here composed of four Republicans, three of whom were men of low character. The vote of the state was offered to the Democrats, once for $1,000,000 and once for $200,000, but the offer was not taken. The board then threw out enough ballots to choose all the Hayes electors. As in the other cases, Democratic electors also sent ballots to Washington.