Changes

His presidency was at the beginning of the "Gilded Age," a name given by the writer Mark Twain to describe a period that appeared golden on the surface but was the opposite underneath.  This period, and the Grant Administration, is criticized for corrupt business and government dealings.  We will discuss the Gilded Age more in the next lecture.

His presidency was at the beginning of the "Gilded Age," a name given by the writer Mark Twain to describe a period that appeared golden on the surface but was the opposite underneath.  This period, and the Grant Administration, is criticized for corrupt business and government dealings.  We will discuss the Gilded Age more in the next lecture.

But the American economy prospered enormously during this period, particularly in the 1870s and 1880s.  There was almost no government regulation that burdens business today.  It was a spectacularly creative and industrious period, with many of the greatest inventions (e.g., light bulb, telephone, motion pictures, and phonograph) developed then.

But the truth is that the American economy prospered enormously during this period, particularly in the 1870s and 1880s.  There was almost no government regulation that burdens businesses so much today.  It was a spectacularly creative and industrious period, with many of the greatest inventions (e.g., light bulb, telephone, motion pictures, and phonograph) developed then.

But historians emphasize business and government scandals that occurred in the absence of modern regulation.  In 1869, for example, there was the "Fisk-Gould Scandal," in which financiers ("Wall Street" types) tried to corner (monopolize) the gold market.  This caused "Black Friday," with the price of gold first going way up, and then going way down.  The Grant Administration broke up the scheme by selling gold reserves.

Nevertheless, historians emphasize business and government scandals that occurred in the absence of modern regulation.  In 1869, for example, there was the "Fisk-Gould Scandal," in which financiers ("Wall Street" types) tried to corner (monopolize) the gold market.  This caused "Black Friday," with the price of gold first going way up, and then going way down.  The Grant Administration broke up the scheme by selling gold reserves.

Next there was government corruption occurred in the Credit Mobilier scandal, which consisted of bribery with a construction company that had been created by the powerful Union Pacific Railroad in the period of 1865-69.  This scandal, first uncovered in 1872 by Congress, symbolized the government corruption of the Grant Administration.  Specifically, owners of the Union Pacific Railroad formed a new company, the Credit Mobilier of America, in order to award it with profitable contracts to build a railroad out West.  Then stock in this construction company was given to influential congressmen, who next approved spending taxpayer money to pay for the railroad construction.  The result was huge profits for the owners of the railroad and the congressmen, at the expense of taxpayers.  A New York newspaper publicized the scandal just before the 1872 elections, and the Speaker of the House (the Republican James Blaine of Maine) set up congressional hearings to uncover the scandal.  The hearings lasted into 1873 and discredited the government.<ref>http://cprr.org/Museum/Credit_Mobilier.html</ref>  

 

Next government corruption occurred in the Credit Mobilier scandal, which consisted of bribery with a construction company that had been created by the powerful Union Pacific Railroad in the period of 1865-69.  This scandal, first uncovered in 1872 by Congress, symbolized the government corruption of the Grant Administration.  Specifically, owners of the Union Pacific Railroad formed a new company, the Credit Mobilier of America, in order to award it with profitable contracts to build a railroad out West.  Then stock in this construction company was given to influential congressmen, who next approved spending taxpayer money to pay for the railroad construction.  The result was huge profits for the owners of the railroad and the congressmen, at the expense of taxpayers.  A New York newspaper publicized the scandal just before the 1872 elections, and the Speaker of the House (the Republican James Blaine of Maine) set up congressional hearings to uncover the scandal.  The hearings lasted into 1873 and discredited the government.<ref>http://cprr.org/Museum/Credit_Mobilier.html</ref>  

Another scandal, the Whiskey Ring, was even worse.  It consisted of many government agents in the Grant Administration in a conspiracy or scheme to steal whiskey taxes for themselves.  To help pay for the Civil War, federal liquor taxes were increased to very high amounts.  But many distillers bribed officials in the Department of the Treasury to reduce the cost of their tax stamps.  An investigation resulted in the conviction of more than 100 officials in the Grant Administration, and even Grant's private secretary, Orville Babcock, was accused (but he was never convicted).<ref>http://www.u-s-history.com/pages/h234.html</ref>  As a result of these scandals, there was growing public pressure to end the "spoils system" first established by President Andrew Jackson.

Another scandal, the Whiskey Ring, was even worse.  It consisted of many government agents in the Grant Administration in a conspiracy or scheme to steal whiskey taxes for themselves.  To help pay for the Civil War, federal liquor taxes were increased to very high amounts.  But many distillers bribed officials in the Department of the Treasury to reduce the cost of their tax stamps.  An investigation resulted in the conviction of more than 100 officials in the Grant Administration, and even Grant's private secretary, Orville Babcock, was accused (but he was never convicted).<ref>http://www.u-s-history.com/pages/h234.html</ref>  As a result of these scandals, there was growing public pressure to end the "spoils system" first established by President Andrew Jackson.