The Grant Administration & the Abandonment of Reconstruction

1. Reconstruction and the New South The Grant Administration & the Abandonment of Reconstruction

2. Election of 1868 • Ulysses S. Grant (Republican) • “Let us have peace” • Endorsed Congressional Reconstruction • Black suffrage in the South, decided by states in the North • Payment of the national debt (war bonds) in gold • Horatio Seymour (Democrat) • “The Great Decliner” • Charged that Congressional Reconstruction was equivalent to despotism • War bonds should be paid with greenbacks, rather than gold • Grant swept the Electoral College, but the popular vote was much closer, with more than 500,000 African American voters contributing to Grant’s victory

3. Government Debt • The Treasury assumed that after the Civil War, greenbacks would be retired from circulation, and the nation would revert to hard currency • This plan was opposed by farmers and other debtor groups who feared that the elimination of soft currency would lower crop prices and make it more difficult to repay loans • Many Radical Republicans believed that high tariffs and inflation were necessary to stimulate economic growth • Grant aligned himself with moderate Republicans and signed the Public Credit Act (1869), stating that the federal debt mst be paid in gold

4. Scandals • The Run on Gold • Grant’s brother-in-law, along with 2 financial speculators, devised a plan to corner the nation’s gold market • They would buy massive quantities of gold, creating a public craze • As demand for gold soared, so did the price • Although Grant was suspicious, he had been seen in public with the speculators, so rumors swirled that be supported to run, causing prices to rise even higher • Finally, Grant ordered the Treasury to sell large quantities of gold, and the price dropped rapidly • Grant’s brother-in-law resorted to denial and thugs to escape his debt • Crédit Mobilier • A fake construction company was set up by executives of the Union Pacific Railroad • They charged outrageous fees to the Union Pacific under the guise of Crédit Mobilier and used the proceeds to get rich • Union Pacific shareholders lost most of their investments • Crédit Mobilier bought off congressmen with shares of stock, including Schuyler Colfax, who would go on to become Grant’s vice president and James A. Garfield who would later become president • Only 2 of the 13 members of Congress involved were ever disciplined • There is no evidence that Grant was involved in or profited from any of the many scandals during his presidency, but his poor choice of associates and his poor judgment of character earned him widespread criticism

5. White Terror • Ku Klux Klan • Started as a social club in 1866, this group quickly turned to terror by intimidating, harassing, and murdering blacks and white Republicans • The KKK and groups like it spread rapidly through the post-war South • The harassment and violence of the KKK led some to accuse the group of creating conditions in the South that were worse than slavery • Enforcement Acts • Fines for anyone who interfered with any citizen’s right to vote • Election of Congressmen was placed under the surveillance of federal election supervisors and marshals • Outlawed the characteristic activities of the KKK (forming conspiracies, wearing disguises, resisting officers, intimidating officials, etc.) and gave the President the right to suspend habeas corpuswhere necessary to suspend “armed combinations”

6. Election of 1872 • A new faction called Liberal Republicans split from the Republican ranks • Free trade rather than tariffs • Redemption of greenbacks with gold • End to Reconstruction • Restoration of the rights of former Confederates • Civil service reform • The Liberal Republicans banded together with the Democrats to try to defeat Grant • Their candidate, Horace Greely (Democrat), only carried 6 states, all in the Southern and border states

7. Conservative Resurgence • Groups like the KKK used terrorism to curtail Republican voting in the Deep South • In the North, people were quickly losing interest in enforcing Reconstruction in the South • Antebellum political leaders re-emerged to promote the pre-war ideals • Where Republicans couldn’t be persuaded or intimidated, deception entered the political arena • In January 1875, several Louisiana Democrats who were not officially elected, tried to take seats in the state legislature. Federal troops stepped in to suppress the riot that broke out. Even northern Republicans were outraged that troops interfered with the state legislature. • This incident caused support for Reconstruction to rapidly decline. The Republican party would soon virtually cease to exist in the South.

8. Panic & Redemption • Panic of 1873 • A slowdown in railroad investment caused the market for railroad bonds to go sour • 25 railroads defaulted on their interest payments • Prestigious banks went bankrupt, causing many investors to panic, trying to exchange their investments for cash • The stock market had to be shut down for 10 days • The Panic of 1873 was followed by 6 years of depression in which thousands of businesses went bankrupt and millions of people lost their jobs • Voters blamed the party in office • Because the value of greenbacks was lower than that of gold, many people were using them as the primary spending currency, holding on to their gold • The Treasury released more greenbacks during the depression to inflate the currency and make it easier for debtors to repay their debts • Specie Resumption Act (1875) • Redemption of greenbacks in gold, raising the value of greenbacks to par with gold • Those who supported inflation were furious, and they formed the Greenback Party, which won 14 seats in Congress in 1878

9. The Compromise of 1877 • In the Election of 1876, there were few issues to distinguish Rutherford B. Hayes (Republican) and Samuel Tilden (Democrat), so the parties resorted to mudslinging • Republicans waved the “bloody shirt” of the Civil War • It appeared as if Tilden was going to win the election, but the 19 electoral votes of Louisiana, Florida, and South Carolina were claimed by both sides • Rival election boards in each state sent in different results • In response, Congress established an Electoral Commission (5 Senators, 5 Representatives, 5 Supreme Court Justices) to decide what to do with the votes • They votes 8 – 7 along party lines to give the disputed votes to Hayes • After a filibuster by the Democrats Hayes was declared the winner with an electoral vote of 185 – 184 • Behind the scenes, a deal had been struck between Republicans and southern Democrats • Republicans promised that if Hayes was elected, he would withdraw the last federal troops from Louisiana and South Carolina, allowing the Republican governments to collapse there • Democrats promised to withdraw their opposition to Hayes , accept the Reconstruction amendments, and refrain for partisan retaliations against Republicans in the South

10. The End of Reconstruction • Hayes kept his promise to withdraw federal troops from Louisiana and South Carolina, and the Republican governments there soon collapsed • Protection of black civil rights crumbled • The 13th, 14th, and 15th Amendments went dormant in the South • While civil rights were far from being achieved in the South, the groundwork was laid during Reconstruction