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U.S. Grant's Money Problems

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This article originally published on our Home Page in March 2012.

Hey! That's My Money!

Military Entitlements


In this time of everyone speaking out about America having set in place too many entitlement programs for its own good, few would complain about people receiving entitlements that they paid for out of their own pocket. Social Security comes to mind as one of these. It makes little sense to complain about people receiving Social Security payments after they retire, when you consider that the money they are receiving was previously deducted from their paycheck… all of their lives… in every job they held… for every paycheck they ever received… until the day they retired… and even after that if they continued to work on a part time basis. Their right to receive these funds, post-retirement, is clear and inviolable, especially when you consider that the government held all of that money in trust for the payer during all of those years, supposedly investing it over and over again down through time, so that the beneficiary would have it and its accrued interest available for their use once they got too old to work.

The same is true for military retirement benefits, as when you get right down to the facts the retired military personnel who receive these benefits paid for them out of their pockets during all of the years they served. Whether based on deductions or some other formula, military personnel have a right to receive their money back after they retire because the funds involved came out of the soldier’s pocket during all of the years he served. As an example, consider the average military Officer who during his years in service had an annual income equal to only 30–40% of what an equivalent executive would have made in private business. Who benefited from this cut in pay for 30 years of service? Clearly, the U.S. government. They got to use the money they saved by paying military personnel less than their civilian counterparts for all of those years that the serviceman worked. In return, they agreed to pay a retirement benefit to the Officer at the end of his career.

When viewed this way, it’s easy to see that a military Officer is paying for his future retirement benefits every year that he continues to willingly work for a lower income and let the government have the rest. Part and parcel of why people serve… this willingness to give so much of one’s earning potential over to the government for their own use is no less heroic or significant than the Officer or Enlisted Man’s willingness to sacrifice his own life for his country. Clearly, the funds that these people earned from the years that they served, but let the government keep and manage on their behalf, are rightfully theirs. And as such each such person should be entitled to receive these funds back, along with the interest they earned, when they retire.

So how are you doing with your benefits? Are you getting them on time?

Then you’re lucky, as some Officers have had to really struggle to get theirs. Some Officers far more important to America than any of us Officers ever were. Some... like Ulysses S. Grant.

Lieutenant General GrantYes, that’s right. Mortally ill, dying from cancer, on the verge of bankruptcy, and battling everyone from debtors to reporters, towards the end of his life Grant was in trouble and desperately needed money to keep himself and his family above water. Once granted to him, Grant lost his military retirement benefits in a strange way. A technicality related to his transition from General to President caused him to lose them… and while at the time he didn’t consider it important, by the time he retired this minor technicality ended up having a profound affect on his life.

Let us tell you the story.

First, let’s consider again how important Grant was to America. From the time of America’s revolution until the Civil War there were no Generals of the Army other than Washington and Grant. In other words, after Washington some 90 years passed before Grant was appointed to the position of General of the Army,  in 1866 (Winfield Scott, appointed in 1855, was a Brevet Lieutenant General, not a General of the Army). The reason for this was that after Washington, the position of General was considered an office of a special nature. Back then, it was not part of the standard ranks of military Officers. Instead it was only conferrable by a unique Act of Congress, and upon a person specifically named in that Act. Army Signal OCS graduates will recognize this as the forerunner and beginning of the tradition that caused us, when we were newly appointed as commissioned Second Lieutenants, to be so appointed by an Act of Congress that made each us “an Officer and a Gentleman of the United States of America.” Unlike in other countries, in America one could not inherit the rank of General, nor succeed to it by promotion from a lower ranking station when the position became vacant. And so when Washington passed from the scene the position went unfilled.

Grant earned his way to Congressional appointment in the position of General by his impressive victories. The first that brought him to the President’s and Congress’ attention was Vicksburg, in July 1863. As part of his Vicksburg campaign Grant moved his HQ to Chattanooga and from their set out in full force after the Confederate army. In what we all recognize Battle of Vicksburgas a series of brilliant actions, he lifted the siege, chased the Confederates into the countryside, and then from there forced them all the way back to Georgia. Congress was so grateful for his having turned the tide in the war that they struck a medal for him, and at the same time revived the rank of Lieutenant General and appointed him to it.

Clearly, Grant deserved the appointment, as he had up to that point won some 17 battles, imprisoned over 150,000 Confederate soldiers, opened up the Mississippi River for Union traffic, and cleared the entire state of Tennessee. In simple terms: he set the Civil War game board up for a final Union victory.

When he achieved his rank of Lieutenant General he received along with it a pension that Congress granted to him… provided of course that he stayed in the Army and served until his retirement… and then went into retirement as a reserve Officer.

Few could have imagined that instead of retiring Grant would end up running for President. And, of course, since at that time an individual could not be an active Officer in the Army at the same time that they were running for President, Grant ended up resigning his rank.

Vicksburg landingWhile few, including Grant, thought anything of this simple act, on the sidelines a close friend of Grant, William Tecumseh Sherman was watching and noticed this little slip. He immediately knew that by resigning his rank instead of simply retiring, Grant would be barred from being able to collect his pension.

Students of history will know that Grant went on to serve as President, being elected by a landslide in 1868. In 1872 he was again elected to a second term. After his second term, as a successful man and modestly wealthy, Grant spent two years touring the world with his family, after which he then returned and entered into business in New York City.

The qualities that Grant brought to Generalship did not transfer well to business. The firm he became associated with was named Grant & Ward, and was considered one of the darlings of Wall Street. Unfortunately, it overextended itself, practiced dubitable activities, and the Ward half of Grant & Ward even went about mismanaging the funds the firm received, to the point of illegality. On May 4, 1884, the firm collapsed into bankruptcy.

Subsequent investigations, both then as well as down through the ages, have shown that Ulysses S. Grant neither knew anything of nor was involved in any of the illegal activities of Grant & Ward. Grant’s partner Ward was the guilty party. Within a few months of the firms collapse he was arrested, charged with fraud, and found guilty. He spent 6 years in prison for his efforts.

A young Mark TwainGrant in the mean time suddenly found himself penniless, embarrassed, and suffering from both a wounded pride as well as a growing cancer of the throat that would end up killing him within 15 months.

It cannot be said too finely, Grant was in real trouble. The Homeric-like heroic life of the man that (with apologies to Abraham Lincoln) single handedly saved the Union, had gone from the proverbial hero to zero literally overnight. Sick, on the edge of dying, Grant had absolutely no way of supporting his wife after his death, nor paying for their cost of living while he was still alive.

Almost at the very last minute two people came to his rescue. Mark Twain (Samuel Clemens) befriended Grant and both encouraged and worked with him to help him capture his remembrances and pull his memoires together for publication. Because Clemens knew a bit or two about publishing, he was able to promise Grant that if he managed to succeed in writing his memoires before he died, Clemens would be able to get them published, market them, and collect enough royalties in the process to pay to either Grant or his wife at least $200,000. True to his word, Twain saw to it that Grant’s memoires were published, and that all of its royalties were paid… to the extent of over $450,000 being paid after Grant’s death to his wife Julia.

William Tecumseh Sherman, a man whose caricature fit his character to a tee, watched this whole scenario play out. And while he hoped that Twain would succeed, he realized that if Grant died before his memoires were in publishable form, he would die in penury. Sherman, with a pockmarked face, never seen smiling, ramrod straight, disciplined, direct, forceful, remote, with a voluble temper, and plagued by self-doubt, was nevertheless beyond true to his friends. An old West Point classmate of Grant’s, Sherman thought that it was a shame that the U.S. government wasn’t coming to the aid of this most important of America’s heroes.

General Sharman, AtlantaTo help change things, Sherman, who was quite vocal about his dislike for politicians, set about personally lobbying the House of Representatives to reinstate Grant’s military pension. While he put his all into it, somehow Congress was simply too preoccupied with other matters to consider the financial health of a great General who was literally on his death bed. Then, when it finally did decide to consider the matter, it found itself in a situation where it was forced to go into recess and not address the matter, because of the requirement that Congress could not be in session during the inauguration of a new President (Grover Cleveland). This set up a problem, because if Congress was not able to act before it went into recess, it would likely never act, as a new Congress would be seated, and by the time it would get around to acting Grant would be dead.

Sherman, frustrated and angry at the incompetence and lack of principles of the congressmen he met, mounted a frontal charge against the senators and representatives involved, just as he had done at Shiloh. Twisting elbows and letting his temper run, he manhandled congressmen into their chambers and pushed Samuel J. Randall, the Democratic Speaker of the House, to reintroduce the bill (Grant—S. 2530) that had been set aside, but this time for a vote.

General Grant before his deathEven so, things did not move fast enough and at the end of the day on March 3, 1885, the House recessed without having considered the matter. The next day, March 4, was to be the inauguration day for the new President, Grover Cleveland, and with Congress in recess Sherman was sure all had been lost.

But that wasn’t the end. Having made Sherman a promise that he would do his best to get Grant a pension, on the day of Grover Cleveland’s inauguration, with Sherman pushing from the background, Randall reconvened the House and ordered the clerk to date all business that might be transacted that day as having been done on the previous day, March 3. With little consideration for the gathering crowd getting ready for the inauguration at noon, Randall ran around the Capital buttonholing representatives wherever he could find them, dragging them back into the chamber for a vote.

Quickly moving the House through its parliamentary paces, and using the power that comes with being the Speaker of the House, he garnered the votes needed to pass the bill, and set in motion an effort to hold a vote. However, before a vote could be taken a challenge was mounted by a Republican claiming that the bill could not be considered until a prior matter was dealt with (an election dispute from Iowa that caused the Iowa Republican representative to claim that he was the rightful winner and not the Democrat that had been certified by the State).

Randall thought all was lost, as did Sherman. Amazingly, the Republican who had not been certified (James Wilson) rose and announced that he would withdraw his objection to the Iowa election result if the House would immediately move to consider Grant’s bill. In effect, he was turning his seat over to the Democrat who had been certified instead of himself, in order to gain a pension for someone he considered an American icon.

General U.S. Grants MemoiresHis announcement was met with astonished silence by the congressmen assembled. No one had ever seen such a gesture. Within a few seconds all present jumped to their feet and began to applaud. Applause broke out throughout the chamber and carried on for minute after minute. And yet while this salute to their compatriot raised good cheer and respect, as it carried on, so did the clock’s tick. Cleveland’s inauguration was scheduled for noon, sharp… and if the vote was not over and certified by then, Grant’s bill would fail to pass.

As the noise in the chamber continued, the clock moved to within a minute or two of noon. A clerk, recognizing that all of Randall’s efforts were about to be for naught, ran from the front of the chamber to a side closet, gathered a ladder, set it up against the clock wall, climbed to the clock, and set it back twenty minutes.

With moments to spare, everyone returned to their seats, the vote was taken, and was found in Grant’s favor. Seconds after the last name was called and the vote received, the clock began striking noon. Quickly, Chester A. Arthur, the outgoing President, as well as Samuel J. Randall, the outgoing Speaker, pushed the representatives from the chamber out onto the inauguration platform and Grover Cleveland was sworn in. While the world watched, Cleveland became President of the United States, 20 minutes later than he should have been.

News reached Grant at his home in New York City in the early afternoon on that same day. With a smile on his face, as a newly reinstated Officer of the U.S. Army, he turned to his wife Julia and said simply “I am grateful the thing has passed.” She smiled back at him and said “Hurrah, our old commander is back.”

As for Sherman, while few would recognize it as such, this battle was won just like all the others he commanded… with sheer guts, determination, and no quarter being given to the enemy.

The next morning Grover Cleveland made the reinstatement official by signing Grant’s commission. As a reinstated Lieutenant General, Ulysses S. Grant earned a salary of $14,500 each year, with his wife being provided an additional $5,000 a year. Best of all, because the reinstatement was made retroactive to the date on which Sherman first petitioned for it, nearly a year earlier, Grant was able to receive back pay that held him and his wife financially secure until his death on July 23, merely four and a half months after the vote.




Sources used in the writing of this article include:

Grant and Twain; by Mark Perry, Random House, 2004.

Memoires of William Tecumseh Sherman; New York, Library of America, 1999.

The Personal Memoirs of Julia Dent Grant; John Y. Simon, ed., New York: G.P. Putnam's Sons, 1975.

Grant In Peace, from Appomattox to Mount McGregor: A Personal Memoire; Badeu, Adam; 1881 (Hartford: D. Appleton).


This page originally posted 1 March 2012 

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