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 investigate and publicize the scandal. The hearings lasted into 1873 and discredited the government.
Another scandal, the Whiskey Ring, was even worse. It consisted of many government agents in the Grant Administration participating 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).[21] As a result of these scandals, there was growing public pressure to end the "spoils system" first established by President Andrew Jackson.
In 1873, the Republican-controlled Congress doubled the salary of the president to $50,000 a year (a great deal of money in those days), and increased the salary of many other officials in government. The public was outraged, and their outcry caused a partial repeal.
Grant had to deal with a big problem caused by the Civil War: inflation. Wars are expensive. Remember the French and Indian War and how Britain taxed the colonies afterward? Somebody has to pay all the bills from a war: the hospitals, the weapons, the food, the transportation, and even the meager wages for soldiers.
The revenue from tariffs was not enough to pay for the Civil War. Lincoln started an income tax for the first time (it expired in 1872). He suspended the payment by the government to citizens in gold and silver, to protect its reserves. He taxed manufacturers and the public through sales taxes. But most of all, Lincoln financed the Civil War by issuing "greenbacks", similar to our green dollar bills today. This was a change from monetary practices under Alexander Hamilton, when all currency was backed by gold or silver. Lincoln's greenbacks were not backed by anything at all. The government simply printed and distributed them.
Follow up tasks:
1. Explain what is “the Emancipation Proclamation”, “the Proclamation of Amnesty and Reconstruction”, “Copperheads”, "March to the Sea", "Scalawags".
2. What states seceded from the Union? Why? Which one was the first?
3. Comment upon the differences between the North and South before the Civil War.
4. In which way are Abraham Lincoln, Jefferson Davis, George McClellan, "Stonewall" Jackson, General Robert E. Lee, John Wilkes Booth, Andrew Johnson and Harriet Beecher Stowe important for the period?
5. What is the difference between "War of Northern Aggression" and "War Among the States”? What variant do we know and why?
6. Complete the table on the most significant battles of the Civil War.
| The name of the battle and its date | Casualties | The winner of the battle | Significance |
7. Why did the Union win?
8. Dwell upon the Reconstruction: what amendments wereratified?
9. What do you think was the most important development between 1861 and 1877? Why?
10. What facts about the period of the Grant Administration surprised you?
11. Find English equivalents for: выход из состава, единодушно, инаугурационная речь, быть у руля (управлять), отступление, неудачный манёвр (неполадка), совершать массовое убийство, почтение памяти, успокоить электорат, кабина для голосования, заочное голосование, ответный удар, потери на войне, возбуждать против высших должностных лиц дело об отстранении от должности, давать согласие, законодательство, процветание, взяточничество, превышение доходов над расходами в бюджете, инфляция.
12. Present Day: give a brief covering of a) ethnic profiling; b) Black Lives Matter organization; c) white flight.
13. Find a video interview of a politician speaking about racial relations in US, (appr. 5 minutes), bring it to class, give a brief summary in Russian before viewing.