Grant, Babcock, and the Whiskey Ring
Fall 2000, Vol. 32, No. 3
By Timothy Rives
|President Ulysses Grant on the cover of Fall 2000 Prologue: Quarterly of the National Archives and Records Administration. (National Portrait Gallery, Smithsonian Institution)|
I always knew when I was in trouble that Grant was thinking about me and would get me out. And he did.
- Gen. William Tecumseh Sherman 1
Bound with "hooks of steel." That's how Maj. Gen. Greenville M. Dodge described Ulysses S. Grant's loyalty to his country, his God, and his friends. The same loyalty that pulled Grant, who had fought in the Mexican War in the 1840s, back to active army service in 1861 to win the Civil War called him in 1868 to the presidency to win the peace.
"I have been forced into it in spite of myself," he complained to his friend, Gen. William Tecumseh Sherman. But the Savior of the Union feared that the blood-bought gains of the Civil War were threatened by the depredations of the "mere trading politicians" whom he now felt duty bound to defeat. So he ran and won on a platform constructed largely on his moral authority as the Hero of Appomattox.2
In his inaugural address, Grant pledged to be a "purely administrative officer" who would "have a policy to recommend but none"— he asserted in pointed contrast to President Andrew Johnson— "to enforce against the will of the people." Grant proposed laws to ensure " the security of person, property, and free religious and political opinion in our common country." He advocated hard money policies "to protect the national honor" (and his rich friends, critics then and now charge), ratification of the Fifteenth Amendment to enfranchise African Americans, and surprisingly, "the proper treatment of the original occupants of this land— the Indians."3
All in all, Grant promised peace, prosperity, and progress. But that was not to be his legacy of his White House years.
In December 1875, a grand jury in St. Louis indicted Gen. Orville E. Babcock, who as the private secretary of the President of the United States, his friend and patron Grant, was one of the most powerful and influential persons in the federal government. He was charged with conspiracy to defraud the Treasury of the United States.
Babcock's indictment as one of the "Whiskey Ring" co-conspirators and his protestation of innocence would inspire Grant to take unprecedented executive action in defense of a man who had been one of his closest associates since the Civil War. And the indictment and subsequent trial would cause the greatest "national excitement" since the fall of Richmond in the war more than a decade earlier. The President, against almost everyone's advice, would make a mark in history that has yet to be matched.4
This is the story of how far Grant went— and how much further he almost went— to defend his good friend Babcock against criminal charges. It is drawn from long-overlooked records in the holdings of the National Archives and Records Administration in Kansas City, the accounts of contemporary trial observers, and the work of other historians of the Grant administration.
Grant's White House years coincided with a period of painful change and transition in the country. The South resisted Reconstruction; the rest of the country resisted nothing. Turning from war to peace with a vengeance, Americans busied themselves conquering the western territories, laying great webs of railroad, forming powerful combinations of capital, and manufacturing an unprecedented number of goods. It was a sumptuous and acquisitive age.
Historian Vernon Parrington likened its patronage politics and "come and get it" morality to a "Great Barbeque." "It was sound Gilded Age doctrine," he wrote. " To a frontier people what was more democratic than a Barbeque, and to a paternalistic age what was more fitting than that the state should provide the beeves for roasting. Let all come and help themselves. As a result the feast was Gargantuan in its rough plenty."5
Friends, family, and officials of the Grant administration embodied this corpulent spirit conspicuously, attracting charges of financial and political corruption unrivalled perhaps until recent times. Its many scandals are well known: the Gold Conspiracy, Santo Domingo, the Sanborn Contract, to name but a few. Grant, incorruptible but politically naïve, largely escapes blame for the failings of his subordinates, many of whom were investigated at one time or another. A man with uxorious-like devotion to his friends, Grant often failed to see the worst in his associates, even when it was laid before his eyes. Grant's offense is ignorance at best, pettifoggery at worst. Grant's great private virtue— loyalty— could be a public vice when proffered liberally.6
The various Grant scandals had little in common except for the hand of the ubiquitous Babcock. "The eternal cabal— with Babcock always at the centre!" wrote one despairing historian of the administration. Born in 1835 in Franklin, Vermont, Babcock joined Grant's staff at Vicksburg, two years after graduating West Point. By war's end, he wore a brevet star and had joined Grant's circle for good. It was Babcock who was waiting for Grant with Confederate Gen. Robert E. Lee at the Appomattox courthouse in 1865 so Lee could surrender to Grant and end the Civil War. When Grant entered the White House four years later, Babcock followed.7
Fighting scandal was practically a state of being in the Grant White House, but the Whiskey Ring indictment was trouble, perhaps the worst the President— and certainly Babcock— had seen since the war.
Republican party operatives formed the Whiskey Ring in 1871 to raise funds for political campaigns in Missouri and other western states. Liberal Republicans, led by Grant foe Senator Carl Schurz, had conquered the Missouri state party, putting Grant's 1872 reelection plans in jeopardy. Once an admirer of the President, Schurz— a former German revolutionary, Union Army general, and journalist— had grown disappointed with Grant. By early 1871, he was in open rebellion and stated confidently that the "superstition that Grant is the necessary man is rapidly giving way. The spell is broken, and we have only to push through to the breach."8
To keep the Schurz forces in check, Grant sent an ally, Supervisor of Internal Revenue Gen. John McDonald, to hold Missouri Republicans in his camp. "Soon," wrote historian William Hesseltine, "[McDonald] was unearthing a new source of revenue for Republican campaigns." Illicit whiskey money began to fill campaign stores and finance partisan newspapers to print articles favorable to the Grant administration.9
Complex in detail, but simple in design, the ring made money by selling more whiskey than it reported to the Treasury Department. Its success required collusion at every point of the production, distribution, and taxation process. To pull it off, ring leaders recruited, impressed, and blackmailed distillers, rectifiers, gaugers, storekeepers, revenue agents, and Treasury clerks into the operation. They split the seventy-cents-a-gallon tax money they had stolen a number of ways. U.S. Attorney David P. Dyer, the man who would one day prosecute the whiskey thieves, later explained the arrangements of the ring to congressional investigators:
They kept an account at the distillers of all the illicit whisky that was made, and the gaugers and store-keepers were paid from one to two dollars for each barrel that was turned out . . . and every Saturday reported to the collector of the ring the amount of crooked whisky, and either the distiller or the gauger paid the money over as the case might be. The arrangement between distiller and rectifier was that thirty-five cents . . . was divided between him and the rectifier. That division was made by the distiller selling crooked whisky . . . at seventeen cents a gallon less than the market-price. That is how the rectifier got his share of the amount retained by the distiller. The amount paid to the officers was on each Saturday evening taken to the office of the supervisor of internal revenue and there divided . . . and distributed among them.10
From November 1871 to November 1872, the five principal members of the Ring received between $45,000 and $60,000 each. Four participating distilleries received the same amount. It was a profitable venture. Coincidentally, perhaps, Grant won reelection in 1872.11
Although the Whiskey Ring could rejoice in Grant's victory for a second term, the conspirators would soon find themselves on the defensive— from a source within the very administration they had helped keep in office.
The ring survived its humble slush fund origins to become by 1873 a purely criminal enterprise, defrauding the federal treasury of an estimated million and a half dollars a year. It operated as long as Treasury Department officials ignored it. The thievery might have continued had Grant not appointed Benjamin H. Bristow as secretary of the treasury in June 1874. An aspiring reformer with an eye on the White House himself, Bristow, in the words of Grant biographer William S. McFeely, "possessed that sticky double commodity, principle and ambition, and he was in the uncommon position of being able to rise to the first while advancing to the second."12
Bristow made the destruction of the whiskey rings (rings for the scheme operated in a number of different cities) his personal and political crusade, but early efforts to unravel the corruption failed. He later recounted, "Although I did receive further evidences of the existence of combination and conspiracies to defraud the Government, in which there was reason to believe that certain officers of the Government were participants, I still was unable through the medium of the Internal Revenue office to a get hold of a thread by which we could be enabled to follow it to the end."13
On January 26, 1875, in an attempt to end the fraud, Bristow ordered the transfer of Internal Revenue supervisors, an act he believed would catch crooked officers off guard and uncover their misdeeds. Grant initially supported the order but forced its suspension within a week. Grant opposed the transfers because, he reasoned, it gave the crooked distillers and agents too much time to redress their accounts and erase evidence of fraud. Furthermore, it would remove trusted political allies like the able McDonald. Why give Schurz and the Liberal Republicans an inexperienced man to abuse in Missouri? Grant's decision would appear suspicious in the light of subsequent revelations, but it made good political sense.14
Bristow blamed Grant's change of mind on high-level interference. The investigation might have foundered in the aftermath of Grant's order, but opportunity— and opportunists— soon arrived, bringing new life to the inquiry. George W. Fishback, owner of the St. Louis Democrat, wrote to Bristow, "There has been much talk of late of the fraudulent whisky traffic in the west. If the Secretary wants to break up the powerful ring which exists here, I can give him the name of a man who, if he receives the necessary authority and is assured of absolute secrecy about the matter, will undertake to do it, and I will guarantee success."15
Frustrated with the course of his department's investigation and the revoked transfer order, Bristow welcomed the offer of private assistance. Democrat commercial editor and Cotton Exchange secretary Myron Colony became Bristow's secret investigator in early March of 1875.
Well known in St. Louis business circles, Colony was a familiar, innocuous presence who routinely collected business information and statistics. The local business community was used to seeing Colony ask questions and write things down as the Democrat's commercial editor, so his "investigation" did not arouse any suspicions. He and his small group of spies began recording the quantity of grain arriving at each distillery, the amount of liquor arriving at the rectifiers, as well as illegal night distilling. Colony compared the records of the distillers and rectifiers with what he and his men had seen, what the producers and refiners reported, and what the shipping and tax records revealed. The discrepancies showed the fraud in bright relief. In just four weeks, Colony and his men had collected the information Bristow needed to arrest the whiskey thieves.16
Armed with the reports from Colony and other informers in principal distilling cities across the country, Bristow struck in May 1875. Federal lawmen arrested more than three hundred ring members and seized distilleries and rectifiers. U.S. Marshals in St. Louis arrested, among many others, Supervisor McDonald, Revenue Agent John A. Joyce, and Collector Constantine Maguire, as well as Fishback's competitor, William McKee, proprietor of the rival St. Louis Globe. Bristow had finally exposed the St. Louis Whiskey Ring.17
That night, Secretary of State Hamilton Fish recorded in his diary, "Bristow tells me that Babcock is as deep as any in the Whiskey Ring; that he has most positive evidence, he will not say of actual fraud, but of intimate relations and confidential correspondence with the very worst of them."18 Would Babcock prove to be the "high-level" interloper whom Bristow suspected to be meddling behind the scenes in Washington? Would his exposure of the insider be enough to carry Bristow to the White House in the 1876 election?
The law, in the form of Bristow, was now at Grant's door, poised to apprehend the President's closest and most trusted aide— if not the President himself.
A grand jury examined the evidence throughout the summer of 1875. Indictments of the "very worst of them"— including McDonald and Joyce— came in June. U.S. attorneys found cryptic telegrams traced to Babcock, which indicated his role in obstructing the early Bristow investigations. "I succeeded. They will not go. I will write you. Sylph," read one particularly suspicious dispatch.19 But Babcock remained free, at least for the time being.
In July, Attorney General Edward Pierrepont and Secretary Fish traveled to Grant's summer home in Long Branch, New Jersey, to discuss the evidence that linked Babcock to the scandal. Despite his affection for and confidence in his aide, Grant endorsed the work of the grand jury: "Let no guilty man escape if it can be avoided."20
By August, however, as the evidence drifted higher and higher around Babcock, Grant's attitude toward the investigation changed from overt approval to tacit disapproval. Confronted with the incriminating telegrams, Babcock denied wrongdoing. Grant believed him and even corroborated his absurd and risible explanation that the telegram in question referred to a past event that had not yet occurred at the time that Babcock wrote the message.21
If the trail led to Babcock, it entered the White House. Friends and advisers encouraged the President to believe the worst about the political ambitions of Bristow and the political agenda of the Whiskey Ring prosecutors. Grant's St. Louis associates also warned him that his enemies would not stop until they indicted the entire administration. "Grant," wrote one historian, "quickly imbibed these suspicions." Alarmed, he assigned C. S. Bell, a former postal department special agent, to spy on the government prosecutors. Back in St. Louis, jurors convicted McDonald and Joyce. The court sentenced them to three years in the state penitentiary, and fined them thousands of dollars.22
Meanwhile, the grand jury moved closer to Babcock.
The political battle simmering beneath the surface of the Whiskey Ring trials intensified with the conviction of W. O. Avery, the former chief clerk of the Treasury Department. In his closing argument, prosecutor John B. Henderson, a former U.S. senator from Missouri who had voted to acquit President Andrew Johnson, accused Babcock of obstructing justice. More important, he attacked Grant when he likened the position of a minor Treasury official allegedly pressured by Babcock and the President to call off his investigation of whiskey fraud to that of a slave. Attorney General Pierrepont fired the impolitic Henderson without pay.23
Although he would claim otherwise, Babcock strenuously avoided the opportunity to answer the charges raised by Henderson. He waited until the Avery trial was closed to the introduction of new evidence before demanding the right to explain the material against him.
Allan Nevins, one of the more insightful students of the Grant administration, described Babcock as "quick, alert, impetuous, daring, with the mien of a dashing soldier and the manners of a gentleman . . . dexterous at turning a compliment or launching a sarcastic shaft, he was a formidable foeman. He was full of resource; defeated at one point, he would spring to another." On the day of Avery's conviction, Babcock, who still held a Regular Army commission, requested a military court of inquiry. Babcock would do anything, and could do anything, his critics charged, to avoid a criminal trial in St. Louis.24
But U.S. Attorney Dyer steadfastly refused to surrender the court's evidence to the military board, which was convening in Chicago. With no evidence, the court adjourned. Babcock would not face a military court packed with personal friends and advisers; he would not avoid a civil trial. On December 9, 1875, the grand jury issued the dreaded indictment largely on the basis of the "Sylph" telegram. The court set his trial for February 7, 1876. In the interim, a St. Louis jury convicted Globe-Democrat proprietor McKee.25 Thus far, every man charged in the whiskey frauds had been convicted. Was there nothing to be done to save the President's secretary?
At Grant's command, Attorney General Pierrepont issued an order to prosecutors forbidding them to grant immunity to convicted criminals who turned states evidence. The Grant administration's "No Deal" policy, coming just ten days before Babcock's trial, circumscribed the evidence available to its own prosecutors. Babcock defense attorney Emory Storrs obtained a copy of the confidential circular and leaked it to newspapers in Chicago, site of other important administration-connected whiskey fraud cases. The next day, a young St. Louis reporter approached Dyer with a copy of the order translated from a German-language Chicago paper. Although Dyer refused to confirm it, the reporter, who was also publisher of the German-language Westliche Post, Joseph Pulitzer, nevertheless published the circular, thereby announcing to St. Louis witnesses they had nothing to gain by testifying against the President's secretary.26
In Washington, Secretary Fish feared that the President had undermined his own prosecutors' case on behalf of his aide, an ethically questionable if technically legal act. With help from his friends, perhaps Babcock could survive.27
The trial generated controversy before it began— or at least the intense press interest uncovered what passed for controversy— when Dyer accused marshals of attempting to load the jury with safe Republican men. "In this way," explained a New York Times reporter, "all the new jurors would be on the same political side, and the rebel element . . . eliminated." This would not mark the last appearance of the Bloody Shirt in the trial.28
Nor would it be the last time a controversial criminal trial became a form of mass entertainment. The attention transformed Babcock into an object of popular interest, a celebrity. The New York Times reported that "the Lindell Hotel, where General Babcock and his friends are stopping, is thronged with people eager to a get a glimpse of the defendant." And what did successful trial fans find? A reporter friendly to Babcock described him as "a man under the middle height, probably not more than five feet seven. His blue eyes shine from a ruddy, handsome countenance, which, itself, bespeaks the goodwill of all who behold it. His hair is dark, and a reddish military moustache and goatee adorn his lips and chin." But Babcock also betrayed "a certain nervousness as he passes his marvelously white hand over his lip. . . . This," the reporter continued, "arises from the effect of tremendous consequences of the accusation to which he has to answer."29
Babcock's trial would be a major event in St. Louis, then the nation's fourth largest city. "Except for the trial of Aaron Burr and the impeachment of President Johnson, no more important trial has been held in the United States," boasted the St Louis Globe-Democrat.30
A regional manufacturing and commercial capital, St. Louis had grown rapidly in the forty years prior to the Whiskey Ring trials. From a population of 20,000 in 1837, the city grew to 160,000 by the time of the Civil War. St. Louis survived the war unscathed, and from this foundation, the population more than doubled by 1880, as it developed from fur trader village to steamboat city to railroad metropolis.31 St. Louis had arrived. It deserved a trial of historic proportions. It deserved the undivided, if troubled, attention of its most important former resident, Ulysses S. Grant.
The nation's major newspapers responded to the Babcock trial by dispatching so many reporters to St. Louis that the courtroom had to be enlarged to accommodate them all. "Prominent civil and military dignitaries" and "leading business men of St. Louis" filled most of the courtroom, while outside the doors a crowd five times the room's capacity fought for the remaining few seats. "The majority of them," wrote a reporter critical of the proceedings, "showed neither traces of intelligence or comprehension beyond what might be seen any day in the gallery of a variety theater, and the wonder arose . . . why they should possibly take the trouble to be there." But try they did, and the court erected partitions in an attempt to keep them and the noise they made out. Everybody, it seemed, wanted to be in that St. Louis courtroom.32
The case they flocked to see hinged on the interpretation of telegrams alleged to have passed between General Babcock and the St. Louis conspirators, chiefly Supervisor of Internal Revenue McDonald and Revenue Agent Joyce. The correspondence began, prosecutors charged, at the death of Revenue Collector Charles W. Ford and the ring's effort to fill the vacancy with a man agreeable to the confines and rewards of their scheme.
The government accused Babcock of alerting Joyce to the arrival of Treasury Department investigators in the spring of 1874 in order to give him time to fix affairs in St. Louis. Prosecutors alleged that this sort of advice flowed copiously from Babcock to Joyce and McDonald over the course of the Bristow investigations, culminating with the now-famous December 13, 1874, dispatch heralding Babcock's triumph over the Treasury inspectors: "I succeeded. They will not go. I will write you. Sylph." The New York Times would later describe this message as Babcock's "crowning blunder." Additionally, the government presented this telegram, sent from Joyce to Babcock following the cancellation of the supervisor transfer order: "We have official information that the enemy weakens. Push things. Sylph." As The Nation's E. L. Godkin explained, "All of this was eminently natural if Babcock was guilty, but otherwise not."33
Although they objected "in a most extravagant manner" to the admission of Babcock's correspondence with the ring as evidence, the defense team, which included former Attorney General George H. Williams, offered jurors an innocent explanation. "Babcock felt safe in complying with almost any request they [McDonald and Joyce] made to him, being confident that to grant it was good for the public service and the Republican Party." Little did Babcock know, his defense team averred, that McDonald was the "keystone of the iniquitous arch" that formed the Whiskey Ring. Testimony to Babcock's good character and fidelity would prove his innocence.34
Grant knew the day would come when Babcock would have to face the charges against him in court, but the reality of that first day's proceedings both angered and moved the President to take unprecedented executive action.
He called a special cabinet meeting where he bitterly denounced the Babcock prosecution as being "aimed at himself." They are putting me on trial, Grant told his lieutenants. They already "had taken from him his secretaries and clerks, his messengers and doorkeepers," Hamilton Fish recorded in his diary. Now they threatened to take his beloved private secretary, the man who had been at his side at Vicksburg, at Appomattox, through the dark years of the Johnson administration, and the highs and lows of two rough terms in the White House. Now they wanted Babcock, and that was too much.
Babcock is innocent, the President insisted. Of this, he said, he was as "confident as he lived."35
Next, Grant, a man with a flair for the successful desperate measure, took one. He would testify for Babcock, he told his cabinet. He would get him out of trouble.
And he did.
Timothy Rives is an archives specialist at the National Archives and Records Administration–Central Plains Region in Kansas City, Missouri. He received his M.A. in history from Emporia State University and has been with NARA since 1998.
|Articles published in Prologue do not necessarily represent the views of NARA or of any other agency of the United States Government.|