CHAPTER III. THE TIDE OF MATERIALISM

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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