This article is a part of our series From Lighthouses to Electric Chargers: A Presidential Series on Transportation Innovations

In April 1861, former soldier and clerk Ulysses S. Grant organized a recruitment meeting of Illinois militia fighters, all eager to heed President Abraham Lincoln’s call for 75,000 volunteers to  “…execute the laws of the Union to suppress insurrection.” By 1865, Grant would earn the rank of “General of the Army of the United States,” besting Robert E. Lee and the Army of Northern of Virginia and eventually forcing the surrender of the Confederate States of America.  “I cannot spare this man,” Lincoln once said. “He fights.”

After the war, Grant served as President Andrew Johnson’s General of the Armies and enforced the laws of Reconstruction in the former Confederacy. However, he and Johnson disagreed bitterly on a number of high-profile issues, from Confederate clemency to the role of the federal government in executing Reconstruction. Republican party organizers, themselves frustrated with Johnson’s lack of action in the former Confederacy, recruited Grant as the Republican presidential candidate in 1868.

Grant won the 1868 election and was in office during one of the greatest economic crises of the 19^th century, spurred in no small part by the same industrial forces that helped him win the American Civil War: the railroads.

Keeping the Union On Track

The railroads played a crucial part in Grant’s wartime victories. Always looking for new advantages over his foes, Grant was quick to use the extensive 20,000-mile strong U.S. rail network. Railroads transported troops and material to the front lines efficiently and effectively without the general hassle of steamships or overland travel. Additionally, railroads permitted armies to move away from large population centers and engage each other more directly.

Map of the 1861 rail networks of the U.S. and Confederate States

The Union’s network was twice as large and had fewer gauge variations than its Confederate counterpart, which meant that goods could be moved between states directly without time-consuming unloading and reloading. In 1863 at the Battle of Chattanooga, for instance, Grant used the U.S. freight rail network to deliver 25,000 men and ten batteries of cannon in just 11 days. The 600-mile journey, though arduous, opened the Deep South for northern invasion and paved the way for Sherman’s March to the Sea. However, the wartime success of railroading did not translate to postwar prosperity.

How To Succeed in Railroading Without Really Trying

According to American Western historian Richard White, the “success” of the subsequent transcontinental railroad system was a case of the “the triumph of the unfit.” Railroads took the money of investors (both public and private) and only occasionally built usable infrastructure. Although renowned for their ability to “annihilate time and space,” railroads often inflated their revenues, deferred important maintenance, and involved themselves in costly wealth accumulation schemes. Since railroads knew they could make more money on lucrative construction contracts rather than operating railroads, their rail services suffered immensely.

The Credit Mobilier scandal, involving the Union Pacific Railroad, made headlines during the 1870s  due to its flagrant abuse of public finances. The deal involved a sham company (Credit Mobilier) making payments to officials and financial backers alike in exchange for government contracts.  The fallout of the bargain was far-reaching.  Up to 15 U.S. Senators and Grant’s vice president, Schuyler Colfax, were implicated in the turmoil.

The bad press made its way back to Grant, who grew frustrated with the actions of railroad companies. He even sought to do something about it. For instance, although Grant agreed with the Republican Party’s support for internal improvements, he still threatened the first transcontinental project by withholding federal funding and forcing the two relevant railroads (the Union Pacific and the Central Pacific) to select the location where they would connect. Grant’s intervention led to one of the most famous photos of the 19^th century: the depiction of railroad officials celebrating the 1869 Golden Spike Ceremony in Utah.

The Meeting of the Roads, 1869

The first transcontinental railroad did not entirely live up to its promises. For one, the 1869 celebration only acknowledged the completion of the route between Omaha, NE and Sacramento, CA. It would still take several more years for the route to make it to Chicago, and even then, passengers had to disembark in the city and get on another train. However, the first transcontinental railroad still reduced the travel time across the country from several months to a week.  Westward expansion continued at its breakneck speed, even though the very vehicles of this expansion fueled its economic problems.

On A Rail: The Panic of 1873

U.S. railroads in the 19th century were highly effective at enticing investors, both foreign and domestic, much like today’s tech companies. In the early 1870s, for instance, British and Dutch investors owned 75 percent of the Illinois Central Railroad. European financiers also invested in the Kansas City Southern, the Union Pacific, and the Great Northern railroads. However, high rates of investment of foreign capital meant that when a depression struck Europe’s financial markets in 1873, the effects were global.

One such effect was the collapse of banks across the U.S. Jay Cooke and Co., one of the largest investment firms in the U.S. and a key financier of the Union war effort, failed after getting into the railroad bonds business. Its failure in 1873 led to the full-onset panic of investors in New York, and then across the continent.

On September 20^th 1873, the New York Stock Exchange fully suspended trading and closed for 10 days. From 1873 to 1875, more than 100 banks failed, 24 percent of all  American railroads declared bankruptcy, and 18,000 businesses folded.  1876 would bring even worse news when the unemployment rate reached a shocking 14 percent.

The Panic of 1873 was, at the time, the worst economic disaster in U.S. history. The depression lasted until 1879, and wealth pooled into the hands of an ever-smaller group of people. Additionally, Northern fears of economic ruin soured their support for other government initiatives, such as Reconstruction efforts in the South.

Taken for Grant(ed)

Unfortunately for those looking for federal relief, they elected the wrong president. Grant was a believer in “resumption,” or the reestablishment of a U.S. currency backed exclusively by gold. “To protect the national honor,” Grant said in his 1869 inaugural address, “every dollar of Government indebtedness should be paid in gold, unless otherwise expressly stipulated in the contract.”

True to his word, Grant signed the Coinage Act of 1873, which formally disqualified silver as a legally recognized specie (following a similar move made by Germany in 1871). Grant continued his fiscal responsibility campaign by vetoing an “inflation bill” in 1874 that would have injected $400 million “Greenbacks” into the U.S. economy to ease financial burdens. Although the national debt decreased $400 million during Grant’s time in office, the economic situation of millions of Americans were imperiled by the Panic. Following a number of scandals and controversies, Grant decided not to run for a third term, paving the way for the nomination of Rutherford B. Hayes.

Horsing Around

Grant and his horse, Cincinnati, in 1864

Grant was an avid transportation user throughout his life. One of these instances even landed him in trouble with local Washington, D.C. police. In 1866, Grant was racing a horse (his “fast gray nag”) on 14^th Street and detained by two Metropolitan Police officers for fast driving. Grant offered to pay the fine for speeding, but doubted that the officers could seriously arrest a sitting general and rode off. Reports of Grant’s equine endeavors would last throughout the 1860s, with one particularly notable (but most likely apocryphal) arrest occurring in 1872 while he was running for reelection.

In 1908, retired Metropolitan police officer William West claimed he arrested President Grant (and six of his friends) for speeding back in 1872. Officer West said he fined Grant and his compatriots $20 and tried to bring them before a local judge. Although Grant failed to show up to any court proceedings, he allegedly remained good friends with West until the end of his presidency in 1877. Although the National Parks Service and other federal organizations are still unable to verify the accuracy of the story, no one could doubt that Grant had a taste for the racier things in life.

This article is a part of our series From Lighthouses to Electric Chargers: A Presidential Series on Transportation Innovations