Grant’s Whiskey Ring

As Killer History noted in our last blog post, the Grant Administration was rocked with many scandals that would have certainly brought down a lesser political figure. The ability of U.S. Grant to continue on in light of these political distractions is a credit to his popularity.  The fact that he had just so darn many of these little ankle biting scandals speaks volumes to not only the corruption of the Civil War and Reconstruction years as it does to Grant’s inability to effectively manage.  Today we examine the Whiskey Ring Scandal.

Taxing vice has always been a popular way to pay the bills.  Just as in our current political debates about increasing taxes on smoking, alcohol and perhaps even fast food in order to pay for health care reform, the government used a tax on Whiskey consumption during the 1870s in order to pay some of the bills incurred while saving the Union.  While it seems like a good idea, the tax was actually eight times what it cost to produce the liquor and caused quite a crimp on business.  The large distilleries were in the Midwest, Chicago, Milwaukee and St. Louis and they formed an informal union that bribed government inspectors so they could purchase the tax stickers at a discounted price.  The conspiracy was actually pretty extensive and included not only small shop keepers, but also high ranking government officials and cost the government several millions of dollars in tax revenue.

Secretary of the Treasury Ben Bristow, caught wind of the scandal and acting alone without informing the Grant administration or the attorney general in order to avoid drawing attention to his investigation he was able to break the scandal wide open in 1875.  One hundred ten individuals were convicted in the scandal and Bristow’s efforts recovered $3 million in diverted funds.  While Grant himself was not implicated in the scandal, his personal secretary or what we would call today his Chief of Staff, General Orville Babcock was indicted, but not convicted due to Grant’s intervention in the case.

Grant appointed a special prosecutor John Henderson to investigate the case, but then fired him due to complaints about Grant’s efforts to interfere with the investigation.  The scandals of the Grant Administration characterize this political era of Republican domination as being incredibly corrupt and endemic of mismanagement and greed.  While the Whiskey Ring scandal was certainly devastating to Grant’s reputation, as we will see tomorrow it was not even the worst scandal of his presidency.

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