Wednesday, July 30, 2014

The Great Whiskey Steal


After inception in 1854, it took the Republican party only 6 years to destroy sectional harmony in the Union, and 7 years to plunge the country into a war that would end the Founders' experiment of 1787.  By 1865, the South was devastated, subjugated, without a voice in its own government, and ruled by a Northern Republican political-military junta engulfed in a saturnalia of vice, corruption and outright fraud within the US government.  The corruption of the Gilded Age followed.

Bernhard Thuersam, Chairman

North Carolina War Between the States Sesquicentennial Commission

"Unsurpassed Valor, Courage and Devotion to Liberty"

"The Official Website of the North Carolina WBTS Sesquicentennial"

The Great Whiskey Steal

"A shoddy episode in the moral history of whiskey became a matter of public knowledge in the mid-1870s.  In this affair the United States Treasury was raided by its own high officers as well as minor functionaries who got their pinch, too, as a result of a cozy arrangement with large distillers in various urban centers who turned out "crooked" whiskey.

The federal excise tax on liquor had no more than gone into effect than a suspicion arose that distillers and rectifiers were cheating on their payments [and] Chicago, Peoria, Milwaukee, Cincinnati, Indianapolis and New Orleans were mentioned as centers of fraud.  St. Louis, after General Grant's inauguration in 1869, was especially under suspicion as the headquarters of a network of bribery, coercion and defiance of the law.

The whiskey frauds are a reminder that the North, as well as the South, had reconstruction problems.  The rapid progress of industrialization, the new economic power exercised by financial freebooters, the scramble for wealth by speculation, the philosophy prevailing among many politicians that public office existed for private gain, all signaled a general lowering of civic and business ethical standards.

This was the era of Boss Tweed in New York City, of the Gold Corner and Black Friday, of high-level public servants trading favors for a share in railroad construction contracts.  The veterans of the victorious armies, it seemed, having but recently saved the Union, were now to enjoy the privilege of looting it.

Once installed, [Grant's old Army comrades] acted in several capacities, as government officials, as party satraps and as adventurers preying upon the public purse. A notable personality in this concourse was a . . . brevet general [and Grant's personal secretary] named Orville E. Babcock.  With his flowing mustache and imperial . . . his dash and daring, his quick intellect, General Babcock was no ordinary operator, but a man of capacity who almost made it as one of the really great rogues of history.

It was through Babcock that the Whiskey Ring was able to operate a systematic fraud that riddled the revenue service and reached into the White House. The Treasury men out in the field and the distillers believed, not unnaturally, with Babcock so deeply involved, that the President was at least aware of the game if not an actual participant . . . and privy to the arrangements.  Some portion of the money did go to shore up Republican positions in closely contested elections.  But increasingly, since greed feeds upon greed, the graft was simply whacked up a personal plunder.

There is no evidence that Grant ever knew of these shenanigans . . . [though] Grant appointees purchased lavish homes, rented luxurious suites in the best hotels, enjoyed discreet suppers with ladies of the evening.  [Grant's White House table] was furnished with gifts of choice game, fruits and other delicacies . . . [a] team [of horses] and the handsome and ornamental buggy [with] gold breastplates [for the horses] engraved with the President's name.

In June, 1874, the Secretaryship of the Treasury was filled by the appointment of Benjamin Bristow, a tall, lean, honest Kentuckian with a passionate conviction that others in the public service should be honest . . . and set into motion a plan designed to trap the St. Louis racketeers.

President Grant at first gave vigorous support to the attack upon the whiskey conspiracy. Later he became increasingly reluctant to face unpleasant disclosures about his appointees.

"Well, Mr. Bristow," the President remarked to [Bristow], "there is at least one honest man in St. Louis on whom we can rely – [General] John MacDonald.  I know that as he is an intimate acquaintance and confidential friend of Babcock's."

"Mr. President," replied Bristow, tight-lipped, "McDonald is the head and center of all the frauds."

The strategy of those implicated was to drag the scandal to the White House door as their best chance of getting off . . . The hot pursuit of his dapper secretary convinced Grant that there was a plot against him [but he] accepted Babcock's explanation and clung to him only more stubbornly as the chase closed in.

The full weight of the presidential office thrown into the scales on his side, and since none of the whiskey thieves had peached on him, [Babcock] was acquitted . . . With the Republican palace guard under heavy obligation  to the members of the Ring for their silence, none of those who went to prison served his full term."

(The Social History of Bourbon, An Unhurried Account of Our Star-Spangled American Drink, Gerald Carson, University Press of Kentucky, 1963, excerpts pp. 114-126)