§ 712]

THE ALABAMA ARBITRATION

591

Mexico the payment of debts due their citizens. England and Spain soon withdrew from the movement because it became plain that Napoleon III of France was aiming at much more than collection of debts. Then Napoleon established Maximilian, an Austrian Archduke, as Emperor of Mexico, and maintained him there by a French army, in spite of vigorous protests from Washington.

At the close of the war, however, American troops were massed on the Rio Grande; and Napoleon withdrew his army. Then the "Emperor" was captured and shot by the Mexican Republicans (1867).

c. Much bitterness was still felt toward England for her government's conduct in the matter of the Alabama (§ 689). But in 1867 a franchise reform in that country put power at last in the hands of the workingmen, and a new British ministry showed a desire for a fair settlement between the two nations. In the Treaty of Washington (1871), England apologized gracefully for any remissness on her part in permitting the Confederate cruiser to escape, and the question of liability for damages was submitted to arbitration.

A Tribunal of Arbitration met at Geneva, one member appointed by each of the five governments, the United States, England, Switzerland, Italy, and Brazil. At first the American government claimed huge "indirect damages"- for the cost of pursuing the Alabama, the longer continuance of the war, and the increased rates of insurance on merchant shipping. The Tribunal threw out these claims; but it decided that England had not shown "due diligence" in preventing the sailing of the Alabama, and that she was therefore responsible for all damages to American commerce committed directly by that privateer. England paid to the United States the award of $15,500,000, to be distributed by us to the owners of destroyed property. The amount proved to be excessive, since claimants for much of it could never be found; but the settlement was honorable to both nations, and it made the greatest victory up to that time for the principle of arbitration.

FOR FURTHER READING. -The best one-volume account of Reconstruction is Dunning's Reconstruction (“ American Nation"); but that volume is rather long, and in many places, rather difficult, for the average high school senior. A briefer recent account may be found in the first eighty pages of Haworth's Reconstruction and Union (" Home University Library ") or in the last sixty of Dodd's Expansion and Conflict. Rhodes' great history (vols. V-VII) remains the standard authority. Desirable biographies for high school use are Woodburn's Thaddeus Stevens, or McCall's Thaddeus Stevens, and Hart's Chase, 319-435 (especially good for the matter of the Judiciary).

The best fiction, for the Southern side, is Page's Red Rock, which every Northern student should read. Mention should be made also of Tourgee's Fool's Errand, Cable's John March, and Octave Thanet's Expiation.

CHAPTER LX

THE CLOSE OF AN ERA

713. In 1872 the Republicans began to divide on the question of military rule in the South. The conviction was growing that the North needed its energies at home. A "Liberal Republican" Convention nominated Horace Greeley for the presidency, on a platform calling for civil-service reform and for leaving the South to solve its own problems. The Democrats accepted program and candidate; but they felt no enthusiasm for Greeley, a life-long, violent opponent, and the "regular" Republicans reelected Grant triumphantly.

714. His second term, however, proved a period of humiliation for the simple-minded soldier. His confidence was abused basely by political "friends," and he showed himself a babe in their unscrupulous hands. The public service had become honeycombed with corruption. In 1875 Benjamin H. Bristow, Secretary of the Treasury, unearthed extensive frauds whereby high officials had permitted a "Whisky Ring" to cheat the government of millions of the internal revenue. Babcock, the President's private secretary, was deeply implicated, and Grant. showed an ill-advised eagerness to save him from prosecution, while he allowed the friends of the convicted criminals to drive Bristow from office. Grant, himself, on a visit to St. Louis, had been lavishly entertained by a leading member of the "ring," and had even accepted from him a gift of a fine span of horses.

In 1876 Belknap, Secretary of War, was found to have accepted bribes, year after year, for appointments to officein the department of Indian affairs. Of course the officialswho paid the bribes had enriched themselves by robbing the Indians. The Democratic House (see elections of 1874, below)

began to impeach Belknap, but the President permitted him to escape punishment by hastily accepting his resignation. Low, however, as the honor of the government had fallen, no one imputed personal dishonesty to the President.

715. The main proof of corruption in Congress was connected with the Union Pacific Railroad. For ten years before the Civil War, ever since the discovery of gold in California, the country had discussed the building of a transcontinental railway. In 1862 Congress gave right of way through the Territories from Omaha to California, to a corporation known as the Union Pacific, - with a grant also of twenty square miles of land along each mile of road, and a "loan" of $50,000,000. In 1869 the two lines, building from the east and from the west, met in Utah.

The nation had been so dazzled by the romance of carrying an iron road from ocean to ocean through two thousand miles of "desert" that it had been exceedingly careless of its own interests. The fifty million dollar loan was inadequately secured, and never repaid. That sum, with the land grants, more than built the road — which, however, was left altogether in private hands.

The only new feature about this was the huge size of the grant. As early as 1850, Congress gave Illinois 3,000,000 acres from the Public Domain within that State for the Illinois Central Railroad. The State legislature then transferred the grant, as was intended, to the company building the road. Immense grants of like character were made to other Western States. In 1856 twenty million acres were given away. Mild attempts by the legislatures and by Congress to couple the gifts with conditions to secure the public interest achieved little success. After the war, still more immense gifts were made, by Congress directly, from the Domain in the Territories. In the shaded part of the map opposite, every alternate section was granted for the construction of some road. (Texas had no National land within it; and none was granted in Oklahoma, then Indian Territory.) The huge State grants are not shown on this

map.

716. Worse than this waste of the people's property was a steal within the Company. A group of leading stockholders of

§ 717]

CREDIT MOBILIER SCANDAL

595

the Union Pacific formed themselves into an "inside" company known as the Credit Mobilier. Then, as stockholders of the Union Pacific, they looted that company by voting their Credit Mobilier extravagant sums for constructing the road. This was

the first notorious use of a device that the coming decades were to make disgracefully familiar.

717. And worse than this steal by private individuals was the accompanying corruption in Congress. The Credit Mobilier feared that its robbery might be stopped by Congressional action. To prevent that, it gave shares of its highly profitable stock, or sold them far below market rates, to Congressmen. Oakes Ames, the agent of the Company, wrote his associates that he had placed the shares "where they will do us the most good." The matter leaked out; and Congress had to "investigate." It censured two members, against whom it found absolute proof of corruption, and excused from punishment various others, smirched in the transaction, on the peculiar ground that they had not understood that Ames meant to corrupt them.