Scandals of the Grant Presidency: Gold Panic and Whisky Ring

Introduction

Ulysses S. Grant, the 18th President of the United States, had a reputation as a very honest man, but one who exercised poor judgment in his choice of companions. Evidence of Grant's poor judgment can be found in the sheer number of scandals that occurred during his presidency. One notable scandal during Grant's tenure was the Black Friday Gold Panic of 1869. Another was the Whisky Ring. Examining both scandals reveals that Grant did not personally profit from them, but was willing to use his position as president to help out less scrupulous acquaintances. Unfortunately, that willingness to use his power and influence on behalf of questionable friends — even without any personal benefit — tainted his presidency just as surely as if he had profited directly from those scandals.

The Black Friday Gold Panic of 1869

The Black Friday Gold Panic of 1869 began as an attempt by Jay Gould and Jim Fisk, two notoriously crooked financiers, to influence Grant's monetary policy. Grant's fiscal position had been that he would try to improve the economy by using gold to buy dollars from citizens and replacing them with currency backed by gold (WGBH Educational Foundation, 2010). Gould and Fisk did not want the government to buy gold because they intended to speculate in gold futures, watch the value of gold rise, and then sell their personal holdings at tremendous profit. If Grant proceeded with his proposed greenback buy-back program, the price of gold would not rise sufficiently for them to make a significant return.

The two men enlisted the aid of Grant's brother-in-law, Abel Rathbone Corbin, to try to sway Grant's monetary policy. However, Grant uncovered the scheme and ordered the sale of $4,000,000 in government gold (WGBH Educational Foundation, 2010). This massive release of government gold caused gold prices to plummet as investors rushed to unload their holdings — triggering the panic that gave the episode its name. The Black Friday crisis sent shockwaves through financial markets and remains one of the most dramatic episodes of Gilded Age corruption.

The Whisky Ring Scandal

The Whisky Ring scandal involved a group of whisky dealers who conspired to defraud the government by diverting liquor tax revenues for their own benefit (Encyclopaedia Britannica, 2013). Although the scheme was relatively well known, the connections and influence of those involved led many to assume they would go unpunished. After hiring private contractors to investigate the fraud, "in 1875 Secretary of the Treasury Benjamin H. Bristow struck down the infamous Whisky Ring" (The University of Richmond, 2009). There were allegations that the diverted funds had been earmarked for Grant's reelection campaign, though those allegations were ultimately found to be unsubstantiated.

What did prove damaging was the indictment of Grant's private secretary, Orville E. Babcock, in connection with the conspiracy (Encyclopaedia Britannica, 2013). Grant chose to testify on Babcock's behalf, and Babcock was eventually acquitted. The episode illustrated, once again, that Grant was prepared to use his presidential standing to shield those within his inner circle.

Conclusion

By most accounts, Grant was an ethical man with a strong moral compass. However, he consistently exhibited poor judgment in his choice of companions, which left him vulnerable to the taint of scandals occurring during his presidency. The Black Friday Gold Panic and the Whisky Ring are two clear examples of scandals that ensnared Grant. Though he did not profit personally from either episode, he did maintain established relationships with the men who orchestrated them, and he used his influence to assist at least one of those implicated. Taken as a whole, these scandals demonstrate that Grant was not the astute judge of character one might have expected from his celebrated wartime record.