The Grant Administration (1869-1877) and the Rise of U.S. Imperialism

Part One

We print below, in slightly edited form, a presentation by Don Cane to a Spartacist League educational in the Bay Area on March 14.

The German Social Democratic leader Karl Kautsky, in reference to the early English settlers in North America, wrote that they:

“carried the peculiar Anglo-Saxon mode of thought along with them across the ocean. They did not find anything on the other side that could have shaken them in their views. No class free from the work for a living was formed that could have cultivated arts and sciences for their own sake. We only find farmers and city dwellers whose maxim was that of the home country: Time is Money.... This also became the principle of the gradually arising proletariat for the simple reason that they did not feel as a proletariat, but considered their position only as a stage of transition for the purpose of becoming farmers, capitalists or at least lawyers....”

—“Socialist Agitation Amongst Farmers in America” (1902)

I will not be able to cover all subjects related to this class in a timely manner. I will address the Ulysses S. Grant administration (1869-1877) and imperialism in detail, Reconstruction in general and some details as well as the emergence of the organized labor movement and Populism.

In his classic book, Imperialism, the Highest Stage of Capitalism (1916), Lenin defined imperialism as:

“The monopoly stage of capitalism. Such a definition would include what is most important, for, on the one hand, finance capital is the bank capital of a few very big monopolist banks, merged with the capital of the monopolist associations of industrialists; and, on the other hand, the division of the world is the transition from a colonial policy which has extended without hindrance to territories unseized by any capitalist power, to a colonial policy of monopolist possession of the territory of the world, which has been completely divided up.”

It is generally accepted by Marxists that American capitalism entered the imperialist stage with the Spanish-American War (1898), when the U.S. took over the Spanish colonies of Cuba, Puerto Rico and the Philippines. But is it possible to fix a date for such a dynamic process? I do not believe it is possible to fix such a date. The following quote is from an American business journal:

“Excess capacity became a problem in a number of industries well before the depression of the 1890s. Efforts begun in the 1870s and 1880s to limit or regulate production were spurred on by the depression of the 1890s. Experiments with trade associations, pools, and trusts often culminated in the late 1890s with the creation of large holding companies. These companies concentrated control over production and pricing decisions in fewer hands, and they often bought out and closed down the most inefficient firms in their industries.”

—Quoted in William H. Becker, “American Manufacturers and Foreign Markets, 1870-1900,” Business History Review (1973)

The journal further asserts that by 1890, “America’s industrial might had reached a point where supply exceeded domestic demands and its need for foreign markets was sharply increasing.” Emily Rosenberg in Financial Missionaries to the World (1999) states that the American economist Charles Conant’s “theory, identifying overproduction and declining profits as the motive forces behind late-nineteenth-century imperialism, reappeared in the analysis of [J.A.] Hobson and ultimately became enshrined in the writings of V.I. Lenin.”

The thing that is most characteristic about U.S. imperialism is that it did not reach world dominance by a gradual ascent, but by leaps and bounds. American products were in demand in foreign markets. By 1900 American capitalism, firmly based on the gold standard, began the work of manipulating world finance away from London, transforming New York into a world financial center. J.G. Wright, in an article in the June 1936 issue of the Trotskyist New International covering much of this same material in detail, concluded, “In 1898 the United States was a world power conducting a colonial policy with the perfect consciousness of her major imperialist interests.”

With the Northern capitalist victory over the Confederate South in the Civil War all the elements compelling U.S. capitalism toward the imperialist stage cohered. Overproduction and the formation of finance capital were evident early on.

I would like to say a few words about Grant himself. The popular historical image of him is of a dimwitted and bloody drunk. But I believe that this image is a product of the same forces that wish to rewrite the history of the 1861-1865 American Civil War as a “war between the states” or, more grievously, “a struggle for Southern Independence.” Grant was an intelligent, politically astute and brilliant bourgeois military officer. It is for this reason much venom is directed at him. His administration was no more corrupt than the rest of the American political structure. I believe that Grant, himself, was too financially incompetent to be a good thief.

The Grant Administration and Emerging U.S. Imperialism

A closer examination of the Grant administration presents much evidence of the beginning consolidation of an American capitalist-imperialist class. However, a general understanding has prevailed (including among ourselves), to quote the first sentence of Lenin’s Imperialism, that “especially since the Spanish-American War (1898) and the Anglo-Boer War (1899–1902), the economic and also the political literature of the two hemispheres has more and more often adopted the term ‘imperialism’ in order to describe the present era.”

It was the Grant administration that took the first steps to convert the Caribbean into an American lake—recognizing the importance of securing an island with a large harbor and building the Panama Canal connecting the Atlantic Ocean with the Pacific Ocean. It was the Grant administration that anticipated the Anglo-American alliance—deferring to the British as the world’s superpower as it simultaneously sought to be both competitor and ally of British imperialism. It was the Grant administration that recognized the need for a strong navy to pursue Pacific Rim trade under the banner of “free trade.”

It was a politically moderate Grant administration that oversaw Radical Reconstruction—a turbulent decade of interracial bourgeois democracy in the South, the most egalitarian experiment in U.S. history, ultimately betrayed by the Northern bourgeoisie. It is today an accepted view that Grant was sympathetic to black demands. But this view is simply shallow. Grant both understood and accepted the legitimacy of what he referred to as the “governing classes.” For Grant, the bourgeois military officer, black people were allies in the struggle against a hated enemy, the Confederacy. Thus, he supported the recruitment of black troops into the Union Army as an effective military measure in the struggle to destroy the Confederate Army. Grant, the bourgeois politician, feared that the Johnson administration, which took over after Lincoln’s assassination in 1865, would surrender to the defeated Confederate enemy what had been gained by the Union Army on the battlefield. Thus, he supported black voting rights in the political struggle against a still hostile enemy.

The Grant administration came into power on the slogan, “Let there be peace.” But it also understood that the war had not ended with the surrender of Confederate general Robert E. Lee’s army. The Civil War, a military contest between two property classes—the capitalists and the slave masters—ended with the victory of the Northern-based capitalist class. Reconstruction was a struggle to consolidate this victory and reshape the whole of American society in the image of the bourgeoisie.

In an historical irony, Abraham Lincoln created the U.S. Secret Service the same day he was assassinated. When Grant entered the White House as president it was common for several Secret Service agents to be present on every floor of the White House. Nonetheless, it was also common that the general public was allowed use of the White House grounds and free entry into the White House to await the arrival of the president or other officials. It was the Grant administration that padlocked the White House gates, denying use of its grounds to the public. Under the Grant administration, access to the president was by appointment only. The Grant administration was the first to recruit military officers for the White House staff. Responding to the pressure of Republican Party politicians, Grant replied, “I am not the representative of a political party.” In a letter accepting the Republican nomination, he clearly stated the president was “a purely administrative officer,” elected “to execute the will of the people” (quoted in Geoffrey Perret, Ulysses S. Grant, Soldier and President [1997]). In all of this we see shades of the imperial presidency to come.

Grant strongly opposed the Tenure of Office Act (1867), which denied the president the power to remove from office anyone appointed by the president and approved by the United States Senate unless the Senate also approved the removal. He consistently fought for the power to hire and fire his appointed cabinet. At the same time, he supported the British model of civil service in opposition to party patronage. It was political tradition that the party that won the election carried out the wholesale firing of political opponents then in government employment, replacing them with its own supporters. This spoils system was a source of incompetence in government. In the British government it was those officials whose work concerned military affairs who first came to appreciate the advantages of a hiring and promotion system based on competitive examination—civil service. It should be no surprise that Grant, a professional soldier who witnessed firsthand the incompetence of politically appointed Union Army officers, would also appreciate the advantages of such a civil service system.

U.S. Expansion into Asia

In 1871 the Grant administration sent a naval force into Korean waters. Some of the senior officers of this force were experienced Civil War veterans. This naval force sent out survey teams to map the Korean coast. When this act was not sufficient to provoke a Korean response, survey teams armed with artillery and rifles were sent upriver in the direction of the Korean capital, Seoul. Needless to say, they were fired upon, and the Americans retaliated by killing over 250 Korean soldiers at a loss of only three of their own. Journalists wrote about the episode as a pivotal event in 19th-century U.S.-East Asian relations—as one wrote, “by far the most important political action undertaken by the United States in Asia until the occupation of the Philippines in 1898” (quoted in Gordon H. Chang, “Whose ‘Barbarism’? Whose ‘Treachery’? Race and Civilization in the Unknown United States-Korea War of 1871,” Journal of American History [March 2002]).

The war was one of the largest and bloodiest uses of military force overseas by the United States in the 50 years between the Mexican-American War of 1846-48 and the Spanish-American War of 1898. It was also the first time that American ground forces actually seized, held and raised the American flag over territory in Asia. The American objective was to “open” Korea for trade—just as Commodore Matthew C. Perry had “opened” Japan in the 1850s. Korea was a protectorate of China, paying tribute to the Chinese court in exchange for being left alone. American diplomats pressured Chinese officials to obtain a Korean invitation for this naval force. The Chinese officials reluctantly complied, but the Korean invitation never came. To the imperialists, a backward nation’s refusal to open itself up for trade was an affront to their “civilizing” mission of world conquest. The Koreans, of course, forced to capitulate, protested that it was the right of any nation to defend its borders. At an earlier time they had defeated a French military excursion attempting to accomplish similar objectives as the Americans. Indeed, the American officers consulted the French, following the same upriver route of the French forces.

In the summer of 1879, Grant and his wife were in the final stage of a two-year pleasure trip around the world following the end of Grant’s second term. In Grant’s words he was a “private citizen” touring the world on U.S. warships. With his arrival in China, a very revealing incident took place. The Japanese government had seized a group of islands belonging to the Ryukyu island chain (including Okinawa) claimed by China. The Chinese appealed to Grant to intercede on their behalf. Grant responded, “I have no knowledge on the subject, and no idea what opinion I may entertain when I have studied it.” But it is clear in Grant’s negotiations with the Japanese that he did, in fact, have some knowledge on the subject. To the Chinese he had nothing much to say, except to deplore the Europeans’ treatment of Asian nations. To the Japanese he had a lot more to say, first of all, urging them to come to a negotiated settlement with the Chinese—a settlement that they easily and readily came to.

Grant reminded the Japanese that the United States was their nearest neighbor in the West. He went on to state, “No nation needs from the outside powers justice and kindness more than Japan, because the work that has made such marvelous progress in the past few years is a work in which we are deeply concerned” (quoted in Horatio Wirtz, “General Ulysses Grant: Diplomat Extraordinaire,” in Wilson and Simon, eds., Ulysses S. Grant: Essays and Documents). This, of course, was in reference to Japanese capitalist modernization under the Emperor Meiji at the time (see “The Meiji Restoration: A Bourgeois Non-Democratic Revolution,” Spartacist [English-language edition] No. 58, Spring 2004).

Again, Grant deplored the European treatment of Asian nations. But Grant also raised the problem of extraterritorial rights forced on Japan by European powers, supported by the United States, which was now willing to revise these. These treaties limited to 5 percent the tariff Japan could place on imports. Grant urged the Japanese to defy the Europeans and claim a greater percentage of profit from commerce that they were rightly entitled to. He explained that such a move would make it possible to relieve the Japanese people of a great burden—the land tax. At the time only 3.8 percent of Japanese revenue came from customs duties while 64.8 percent came from the land tax. The land tax was clearly an obstacle to development. Furthermore, Grant advised the Japanese to avoid European bank loans. Grant explained to the Japanese that the British, after the experience of the Afghan and Zulu campaigns, were in no position to take counteraction.

In 1872 the United States Navy acquired a mid-Pacific coaling station at Samoa, Pago Pago Harbor. Such coaling stations were of immense importance for the extension of naval power. The Germans were alarmed and laid claim to an interest in the Samoan islands group. This solicited a response from the British. All three nations then sent battleships to the Samoan waters. But the American and British naval forces were clearly acting in concert to block the Germans. After some period of jockeying, these islands passed permanently under American control. At a later period, 1893, the American sugar plantation owners, supported by American military forces, staged a Texas-style revolt overthrowing the native monarchist government of Hawaii. The strategic Pacific islands were soon annexed by the United States.

U.S. Expansion in the Western Hemisphere

In 1869, seeking Caribbean harbors, Grant had concluded an annexation agreement with the dictator of Santo Domingo (the modern-day Dominican Republic). Grant’s administration also sought the purchase of the Caribbean islands of St. John and St. Thomas from Denmark. The purchase agreement of these islands was concluded at a later period. The annexation agreement of Santo Domingo failed in the Senate, which was angry that the Grant administration had negotiated it without consultation with the Senate. Grant envisioned the future of Santo Domingo as an annexed American state with a black majority. He also viewed it as a solution to the black question. He wrote of blacks that they were “brought to our shores by compulsion, and now should be considered as having as good a right to remain here as any other class of our citizens. It was looking to a settlement of this question that led me to urge the annexation of Santo Domingo.”

Grant explained that the island was capable of supporting 15 million people and he “took it that the colored people would go there in great numbers, so as to have independent states governed by their own race. They would still be states of the union, and under the attention of the general government; but the citizens would be almost wholly colored” (U.S. Grant, Memoirs and Selected Letters). But it was the race question that led ultimately to the Senate rejection of the annexation agreement. They did not desire more “colored” U.S. citizens. They felt the same way about Hawaii, but the strategic importance of these islands overcame race prejudice.

Grant played an active role in countering European influences in the Western Hemisphere. It was General Grant, in his military capacity, who urged the use of the American army to help expel the French from Mexico. In 1865, General Philip Sheridan was dispatched to the Mexican border with a large armed force prepared to do just this. The French withdrew from Mexico.

In 1867 the United States purchased Alaska from Russia. The purpose of this purchase was to contain the British. Grant, like many other representatives of the American ruling class, viewed Britain as a natural ally, but with wary bitterness. During the Civil War, the British government had permitted Confederate cruisers, built in British ports, to escape and prey upon the commerce of the U.S. The most famous of these Confederate cruisers was the Alabama. In 1871 the British and American governments entered into arbitration, known as the Alabama claims. Grant was the spokesman for a section of the American ruling class that demanded not only that the British pay a heavy fine but also that they concede Canada to the United States. It was rumored that the British were willing to give up Canada, though the Canadians objected. But other members of the American ruling class pointed out that London was still the center of world banking and the heavily indebted Americans coming out of the Civil War could not afford to confront them. The British paid a fine of $15.5 million and the matter was closed.

Marshall, Harrison County, Texas: A Microcosm of the Defeated South

We have always noted that imperialism abroad has a domestic reflection at home. Predatory imperialism’s devouring of smaller nations, in competition with other imperialist powers, requires the suppression of class struggle at home. The American Civil War unleashed a great expansion of wealth and democracy. However, this expansion of political democracy was short-lived, as the American ruling class quickly entered upon the imperialist stage.

Michael Goldfield in The Color of Politics (1997) uses the term “dual power” loosely to describe the short-lived period of expansion of democracy based on the class struggle as it presented itself at this time. But to pose the question as one of a dual-power struggle between the Northern capitalist class and the defeated slave-master class is wrong. The American Civil War ended with the destruction of the slave-master class as a class and with the class emancipation of the slaves. In other words, slavery was abolished. What ensued in the aftermath was a struggle of contending class forces to reshape American society, in particular the South. C. Vann Woodward’s Tom Watson: Agrarian Rebel (1963) described the time: “A few old heads recognized ‘Reconstruction’ for what it was––a Yankee euphemism for capitalist expansion.”

The essence of the struggles between the contending class forces after the Civil War was over control of the wealth created by labor—old wealth created by slave labor, new wealth created by the “free labor” of the freedmen. The following is a description of this struggle as it unfolded between 1865 and 1868 in Marshall, Harrison County, Texas (the home of Wiley College of The Great Debaters fame). [See “Communist Organizing in the Jim Crow South: What’s Not in The Great Debaters,” WV No. 925, 21 November 2008.]

General Sheridan, commander of the Union occupation troops in Texas, declared that if he owned both Texas and hell he would “rent out Texas and live in hell.” It was reported that 2,700 blacks were killed in Texas between 1866 and 1867. The Freedmen’s Bureau reported that between 1 January and 1 July 1867, 2,316 murders or assaults with attempt to kill occurred in Texas. The vast majority of victims of these assaults was black. There existed a state of lawlessness as senior Confederate officials fled to Mexico—from state to county to local towns, governmental authority ceased to function. Demobilized Confederate soldiers plundered Confederate and state properties, roaming the countryside robbing whites as well as blacks of anything of value.

The only semblance of law and order to prevail was with the Union Army deployed at county seats such as Marshall. In 1860 Harrison County was the wealthiest county in Texas and had the highest percentage of slave ownership. Of the total population of the county of 15,000 persons, 59 percent were slaves. Over 60 percent of white households owned at least one slave. The average slaveholding family possessed eleven slaves. Sixty-eight slaveowners owned 20 or more slaves; one slaveowner owned 104 slaves.

The emancipation of Harrison County’s 10,000 slaves meant an immediate loss of approximately $7 million to the slaveowners. The misfortunes of war—high taxes, high cost of living, loss of fugitive slaves and the inability to market cotton at a profit—forced many planters into bankruptcy. During the war, Harrison County residents had no access to Northern financial institutions and Texas, like much of the South, had few banks. The local economy, reliant on the Confederate dollar, was reduced to bartering since neither cash nor credit was available. Large land holdings enabled a significant number of pre-Civil War planters to retain their status after emancipation. They did, however, suffer a real loss of wealth.

Northern capitalist interests and Southern planter interests both wanted a stable black labor supply. The system of contract labor was introduced by the Union Army and overseen by the Army’s Freedmen’s Bureau. The purpose of the contract was to keep black labor in place. The freedmen’s desire to be paid in wages could not be met. Ready cash in the form of Union currency was still severely restricted. The Freedmen’s Bureau intervened to negotiate sharecropping in lieu of wages. What is revealed here is the beginning of the South’s notoriously oppressive sharecropping system of farming.

But one key element of the sharecropping system had not yet found its place. The planters sought to continue the work practices and organization that were typical of the slave system—to work gang labor under an overseer. The planters sought to continue working conditions similar to slavery—the planter possessed absolute authority and the worker no rights at all.

The freedmen resisted any work practice and organization similar to slavery. They resisted gang labor in preference to a division of the land to be worked individually. This breakup of the large plantations into smaller units was, of course, inefficient. But on this score the freedmen prevailed over the wishes of the planters with the planters retaining ownership of the land. The freedmen resisted any work contract that required the women and children of the family to work the fields. However, success on this point was entirely uneven. To the planters’ displeasure, the freedmen resisted work outside of the crop—the planters defined the work to encompass the whole of the farm operation.

The freedmen faced powerful class enemies. Cotton, the leading export crop in the U.S. during the 19th century, secured foreign exchange for the U.S. Treasury. With $1.5 billion in war debts, the U.S. government was under pressure by European creditors to resume the exportation of cotton.

Marshall, Texas, attracted large numbers of freedmen who sought the security and assistance offered by the Union Army and the Freedmen’s Bureau stationed there. Blacks who were either too young or too old for productive labor were simply dumped. Harrison County authorities refused to allocate funds to care for orphaned black children. County authorities devised a system of apprenticeship of black youth that committed them to labor for a master until the age of 21. This measure, of course, lessened the labor costs of white landowners. Oliver Otis Howard, the first Freedman’s Bureau chief, declared: “State laws with regard to apprenticeship will be recognized...provided they make no distinction of color” (quoted in Kenneth Hamilton, “White Wealth and Black Repression in Harrison County, Texas: 1865-1868,” Journal of Negro History [1999]). This color-blind approach of Howard’s masked forced labor of black youth under the title “apprenticeship.”

The initial Reconstruction government of Texas was composed of white pro-Union partisans exiled under the Confederate regime and now returned with the Union Army. Black Republicans entered the stage a little later, changing the character of the state government. Like the Northern capitalists, this state Reconstruction government recognized the benefits of a tax-supported education system; however, it established schools solely for white students. Blacks relied on the Freedmen’s Bureau school that, with a black staff, taught blacks who supported the school with a monthly fee of $1.50 per student. Whenever blacks attempted to establish schools outside of the county seat of Marshall and the protection of the Freedmen’s Bureau, their schools were broken up and the teachers forced to flee for their lives. This was Marshall, Harrison County, Texas, a microcosm of the defeated South in the period immediately following surrender—one can see why Sheridan preferred to live in hell than to live in Texas.

[TO BE CONTINUED]