A Republic No More - Jay Cost

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through them. This was a perfect place to install less-than-scrupulous agents who would skim a little off the top, taking care to kick back something to the party. By 1858, the collection of customs duties was a continental affair, stretching from Maine all the way to California. The major cities would have hundreds of customs officials, and New York had nearly 1,000 by the time of the Civil War. As Leonard White argues in his landmark study of public administration in the Jacksonian period: “The office of collector of the Port became one of the principal prizes in the patronage lottery.”45 And little wonder why: that officer had tens of millions of dollars pass through his office every year.

      Little wonder as well that the New York collectors were outright crooked through much of this period. Jackson appointed Samuel Swartwout to the position in 1829, and in a letter to a colleague Swartwout wondered, “whether or not I shall get anything in the general scramble for plunder.” He sure did. Swartwout pulled off a defalcation so great that it would make the Sopranos green with envy. By the time the federal government finally figured out what was going on, Swartwout escaped to England, having embezzled approximately $1.2 million in federal funds (or $25 million in today’s dollars). Van Buren appointed in Swartwout’s stead Jesse Hoyt—the recipient of the above-mentioned letter from Swartwout, no less!—who treated government investigators in a supercilious manner and was also guilty of embezzlement.46

      The land offices were a locus of similar fraud, because they—like the ports—were far-flung outlets where money changed hands with little oversight from Washington. Land officers would borrow federal dollars to speculate in public lands, take advantage of exchange rates to engage in arbitrage, and loan government money out for their own purposes.47 The most outrageous example of such fraud came from one W. P. Harris, a land receiver in Mississippi, who lost over $100,000 in government money by speculating. Harris recommended that his friend, Gordon Boyd, replace him, and the latter ended up losing $50,000 in a similar venture!48

      Corruption was not confined to the bottom of the rung, either. The Buchanan administration serves as a good case in point. Buchanan had to deal with the new Republican Party. Formed after the Whig Party collapsed, it won a House majority in 1858 and undertook an extensive investigation of the administration. The report of the Covode Committee (named after Congressman John Covode) was controversial in its day, but has since generally been accepted.49

      The Covode Committee found a widespread abuse of the patronage system, some of which is consistent with frauds already mentioned, others that went above and beyond. It accused the Buchanan administration of greatly overcharging on printing and bundling, at a loss to the government of tens of thousands of dollars per year, with kickbacks naturally delivered back to the party. It found that the collector of the port of Philadelphia used patronage to advance the Pennsylvania Democratic Party, and gave his own brother a shadow job (where he received a paycheck for no apparent work). It also discovered evidence of levies placed upon customs officials to help Buchanan carry Pennsylvania in 1856. In several of these instances, it suggested that President Buchanan knew what was going on, and even approved of some of these actions.50

      The most salacious charge from the Covode Committee, which if true would go beyond the sort of corruption discussed above, was that the Buchanan administration was responsible for distributing $30,000 to $40,000 worth of patronage to buy votes in Congress to pass the Lecompton Bill. This highly controversial measure would have approved the proslavery constitution written by a faction within Kansas; southern Democrats generally supported it, but northern Democrats and the Republicans were staunchly opposed. The main pieces of evidence in support of the Covode Committee’s accusation were the bank records and testimony of Cornelius Wendell, a disgruntled former press agent of the Buchanan administration. Additionally, two House Democrats opposed to the Lecompton Bill claimed to have rebuffed bribes made to them.51

      Whether the Buchanan White House was particularly corrupt, or if it just faced an intensely partisan opposition in the new Republican majority, is difficult to say. It is worth noting that one of the two minority Democrats on the committee agreed with the merits of the majority’s charges, though he did not sign on to its report.52 Even so, the broader story to tell here is how much patronage had corrupted the everyday functions of the government. Widespread inefficiency, the installation of second-rate characters in important positions, the skimming of government resources by party operatives, the many thefts, large and small, by governmental agents—all of this became par for the course by the time of the Civil War. The two parties had totally coopted the civil service, perverting public resources for their own ends. Buchanan and his henchmen might have quibbled at the margins of the Covode Committee’s discoveries, but there is no denying these fundamental truths.

      The story told in this chapter is a straightforward one. The rise of the two party system, combined with the popular election of the president, put enormous pressure on the Democrats and the Whigs to mobilize tens of thousands of people for the quadrennial campaign. To do that required some way around the public goods problem that such mobilization faces: how do you incentivize somebody to work for a collective goal when his own interests suggest he should merely free ride, leaving others to do the work? The most effective answer the parties came up with was patronage. Let the government foot the bill for the party effort in the form of jobs, sinecures, contracts, and other gratuities. This, in turn, upended the old, highly ethical system of retention in office across one administration to another, and led to widespread inefficiency and theft. Put simply, it corrupted the bureaucracy. As we shall see in Chapter Four, this type of corruption would last for half a century before the first reforms began to clean up the mess.

      There is a larger lesson to be learned from this story, as well as the story told in Chapters One and Two. In those earlier chapters, we saw the power of the government expand in ways that the Framers of the Constitution did not anticipate. Indeed, in the case of a federal power to charter corporations, the Framers had explicitly voted down such an authority. And for all of those innovations, there were no amendments to the Constitution ratified, which again was the mechanism by which the Framers anticipated the document would be altered. Even Madison himself came to adopt this attitude toward the Hamiltonian system, deciding that the precedent of a generation had vindicated the Bank. This bred corruption, as the original institutions were not capable of handling these new powers responsibly.

      Here, we have seen how ad hoc institutional changes can also disrupt the Madisonian balance, even if they may seem sensible at first appearance. A democratized presidency sounds like an essential ingredient of any republic to modern ears, and indeed it had an ineluctable appeal as early as the 1820s. But even so, it was not something the Framers anticipated; in 1787, they had designed an executive branch based on very different premises. The succeeding generation altered this without a full consideration for what that would do to the Newtonian design of the Constitution. As we saw, it bred a two-party system—something the Framers thought was antithetic to republican government—as well as the spoils, which was really the first of many instances of institutionalized, broad-based corruption. In other words, altering the presidency in seemingly benevolent ways meant that the constitutional regime was unable to balance properly the vast array of social factions to ensure a public-spirited outcome. Checks and balances began to break down.

      Thus, the story here is deeply consistent with our thesis. One cannot go altering this or that provision of the Constitution without serious consideration of how the change will affect the rest of the regime, for checks and balances are in fact quite delicate. This is true of creating new federal powers, like a national chartering authority, or altering structures, like democratizing the presidency. When these break down, corruption has room to grow.

      And, as we shall learn, political corruption is like a cancer. Once it is introduced into a system, it tends to spread. The public eventually becomes used to certain corrupt innovations, which empowers politicians to introduce more innovations that spread the corruption, which are often accepted in turn, and therefore encourage even more innovations. We saw a hint of that here, as the spoils system became progressively worse. Jackson’s use of the appointment power for political purposes was relatively limited, but twenty-five years later the fraud and abuse under the Buchanan administration

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