Government Corruption
in the Second Half of the
th
19 Century
Objective 5.04
Scandals of Grant’s
Administration
•Credit Mobilier Scandal (1872)
–Construction company
–Owned by Union Pacific
stockholders
–RR complete, investors made
millions, RR was almost bankrupt
–RRs often built with the help of
government grants
–Congressmen were given shares
at low prices in return for more
grants
–Leaked to the press
–Caused investigation
–Slap on the wrist
•Whiskey Ring Scandal (1875)
–Began in St. Louis
–Conspiracy that diverted tax
money to people instead of
government
–Millions of dollars for those
involved before it was put down
Urban Corruption
•Political Machines and Party Bosses
–Informal political groups;
prospered due to cities growing
faster than gov’ts
–Run by party bosses
–Provided jobs, food, housing,
police and fire protection in
exchange for votes
Pyramid Scheme
City Boss
Ward bosses
Local precinct workers/captains
–Bosses controlled finances and
grew rich through graft—getting
money by illegal means
–Tammany Hall
•NYC
•Corrupt leader 1860s/1870s—
William “Boss” Tweed
•Arrested for stealing millions
through grafting
Thomas Nast
•Famous political
cartoonist
•Exposed corruption
of Tweed and
other urban
politicians
Response to Corruption
•Republicans split
–Stalwarts: supported patronage
(spoils system)
–Halfbreeds: supported
government reform
•Election of 1880
–Rutherford Hayes declines to run
again
–Mixed ticket for Republicans
•Halfbreed—James Garfield for
President
•Stalwart—Chester Arthur for Vice
President
–Republicans win
–Garfield assassinated by a Stalwart in
a few months
•Pendleton Act (1883)
–Assassination creates more public
opinion against patronage
–Created Civil Service
Commission— president chose
federal jobs to filled according to
rules
–Candidate now compete for jobs
through exams
–Government moves away from
spoils system
•Election of 1884
–With Republicans split,
–Dem. nominate NY Governor
Grover Cleveland
•Opponent of Tammany Hall
–“Mugwumps”—Rep. reformers
who backed Cleveland
Other items to know…
• Secret Ballot: Australian Ballot• Initiative- specified number of voters may
propose a statute, constitutional amendment
and compel a popular vote on its adoption.
• Referendum: the vote on the initiative.
• Recall: hold election for elected official
before term is up to elect a different person
to serve out the term.
U.S. v. E.C. Knight, Co. (1895)
• Sugar Trust
• First to challenge Sherman Anti-Trust Act
• Court decided that Congress could not
break this trust- was within state limits- not
an interstate issue.
• Reason why Sherman Anti-Trust act was
not effective in the early years.
Review questions- answer at the end of your notes
-Describe some of the corrupt practices of elected
officials/industrial leaders that called for a
change in the relationship between gov’t and
industry.
-Explain any significant legal action that was
implemented to challenge the power of industry
over gov’t.
-Describe public reaction to the various political
scandals that involved both politicians and big
business leaders.
-Assess the further need for change in the gov’t as it
related to industry at the turn of the century
(1900).