Immediately after General Grant's inauguration as President, an incident occurred which revealed his inexperience in statesmanship. Among the names sent to the Senate as members of the cabinet was that of Alexander T. Stewart, of New York, the leading merchant of the country, for Secretary of the Treasury. Grant was unaware of the existence of his disqualification by a statute passed in 1789, on account of being engaged in trade and commerce. His ignorance is hardly surprising in view of the fact that the Senate confirmed the nomination without discovering its illegality. The point was soon made, however, and the reasonableness of the law was apparent to all except the President, who sent a message to the Senate suggesting that Mr. Stewart be exempted from its application to him by a joint resolution of Congress. This breaking down of a sound principle of government for the pleasure of the President was not favored, and George S. Boutwell of Massachusetts was substituted, Mr. Stewart having declined, in order to relieve the President of embarrassment.

For the rest, the cabinet was a peculiar one. It appeared to be made up without consultation or political sagacity, in accordance with the personal reasons by which a general selects his staff. Elihu B. Washburn, of Illinois, his firm congressional friend during the war, was Secretary of State; General Jacob D. Cox, of Ohio, Secretary of the Interior; Adolph E. Boise, of Pennsylvania, Secretary of the Navy; General John M. Schofield, of Illinois, Secretary of War; John A. J. Cresswell, of Maryland, Postmaster-General; and E. Rockwood Hoar, of Massachusetts, Attorney-General. It did not long endure in this form. Mr. Washburn was soon appointed Minister to France, and was succeeded by Hamilton Fish, of New York, in the State Department. General Schofield was succeeded in the War Department by General John A. Rawlins, who died in September, and was succeeded by General William W. Belknap, of Iowa. Mr. Boise gave way in June to George M. Robeson, of New Jersey. In July, 1870, Mr. Hoar was succeeded by A. T. Akerman, of Georgia, and he, in December, 1871, by George H. Williams, of Oregon. General Cox resigned in November, 1870, and was succeeded by Columbus Delano. Some of these changes, like that of Washburn to Fish, were good ones, and many of them were exceedingly bad ones,—men of high character and ability, like Judge Hoar and General Cox, conscientious and faithful even to the point of remonstrance with their headstrong chief, being succeeded by compliant men of a distinctly lower strain. Fish and Boutwell achieved high reputation by their conduct of their offices. The death of Rawlins deprived the President of a wise and staunch personal friend at a time when he was never more in need of his controlling influence.

Early in 1871 the work of reconstruction was completed, so far as the establishment of State governments and representation in Congress was concerned. But later in the year, the outrages upon the colored population in certain States were so general and cruel that Congress passed what became known as the "Ku-Klux Act," which was followed by a presidential proclamation exhorting to obedience of the law. On October 17, the outrages continuing, suspension of the writ of habeas corpus was proclaimed in certain counties of South Carolina, and many offenders were convicted in the United States courts. This severe proceeding had a deterring influence throughout the South, which understood quite well that General Grant was not a person to be defied with impunity.

In 1870 he sent to the Senate a treaty that the administration had negotiated with President Baez for the annexation of Santo Domingo as a territory of the United States, and also one for leasing to the United States the peninsula and bay of Samana. These treaties, it was said, had already been ratified by a popular vote early in 1870. The scheme precipitated a conflict that divided the Republican party into administration and anti-administration factions, the latter being led by Charles Sumner and Carl Schurz. Sumner had long been chairman of the Senate committee on foreign relations, but he was degraded through the influence of the President's friends in the Senate. Bitter personal animosities were aroused in this contest which never were healed. It was alleged that the sentiment of the people of Santo Domingo had not been fairly taken, and that they were in fact opposed to annexation. A commission composed of B. F. Wade, of Ohio, Andrew D. White, of New York, and Samuel G. Howe, of Massachusetts, was sent on a naval vessel to investigate the actual conditions. This committee reported in favor of annexation; but the hostile sentiment in Congress and among the people was so strong that the treaties were never ratified. By many it was considered a wrong to the colored race to so extinguish the experiment of negro self-government. Others were opposed to annexing such a population, thinking this country already had race troubles enough. Others regarded the whole business as a speculation of jobbers, and the stain of jobbery then pervading government circles was so notorious that the presumption was not without warrant. The annexation scheme brought to a head and gave occasion for an outbreak of indignant hostile criticism of the President and the administration.

In this term Grant appointed the first board of civil service commissioners, with George William Curtis at its head. The commissioners were to inquire into the condition of the civil service and devise a scheme to increase its efficiency. This they did; but later the President himself balked at the enforcement of their rules, and, in 1873, Mr. Curtis resigned.

The most conspicuous achievement of General Grant's first term was the settlement of the controversy with Great Britain growing out of the destruction of American commerce by Confederate States cruisers during the war. A joint high commission of five British and five American members met in Washington, February 17, 1871, and on May 8 a treaty was completed and signed, providing peaceable means for a settlement of the several questions arising out of the coast fisheries, the northwestern boundary line, and the "Alabama Claims." The last and most important subject was referred to an international court of arbitration, which met at Geneva, Switzerland, and on September 14, 1872, awarded to the United States a gross sum of $15,500,000, which was paid by Great Britain. This was the most important international issue that had ever been settled by voluntary submission to arbitration. It was long regarded as the harbinger of peace between nations.

Other important things done were the establishment of the first weather bureau; the honorable settlement of the outrage of Spain in the case of the Virginius, an alleged filibustering vessel which Spain seized, executing a large part of its crew in Cuba; and the settlement of the northwest boundary question. It should be said also that the President made a firm stand in behalf of national financial integrity.

But during the four years there was a steady deterioration in the tone of official life, and a steady growth of corruption and abuses in the administration of government. The President exhibited a strange lack of moral perception and stamina in the sphere of politics. Unprincipled flatterers, adventurers, and speculators gained a surprising influence with him. His native obstinacy showed itself especially in insistence upon his personal, ill-instructed will. He became intractable to counsels of wisdom, and seemed to be a radically different man from the sincere, modest soldier of the civil war. He affected the society of the rich, whom he never before had opportunity of knowing. He accepted with an indiscreet eagerness presents and particular favors from persons of whose motives he should have been suspicious. Jay Gould and James Fisk used him in preparing the conditions for the corner of the gold market that culminated in "Black Friday." He provided fat offices for his relatives with a liberal hand, and prostituted the civil service to accomplish his aims and reward his supporters.

In consequence of these things there was great disaffection in the Republican party, which culminated in open revolt. Yet he was supported by the majority. The Democratic party, meantime, making a virtue of necessity, proclaimed a purpose to accept the results of the war, including the constitutional amendments, as accomplished facts not to be disturbed or further opposed. This made an opportunity for a union of all elements opposed to the reËlection of Grant, leading Democrats having given assurance of support to a candidate to be nominated by what had come to be called the "Liberal Reform" party. That party held its convention in Cincinnati early in May, and named Horace Greeley as its candidate, a nomination which wrecked whatever chance the party had seemed to have. Grant was renominated by acclamation in the Republican convention. The Democratic convention nominated Greeley on the Cincinnati convention platform, but without enthusiasm. General Grant was elected by a popular majority of more than three quarters of a million, and a vote in the electoral college of 286 to 63 for all others, the opposing vote being scattered on account of the death of Mr. Greeley in November, soon after his mortifying defeat.