Grant's Whiskey Ring: The $3 Million Tax Fraud

In 1875, President Ulysses S. Grant's administration faced its most devastating scandal. A secret conspiracy between Treasury officials and whiskey distillers had been diverting millions of dollars in federal taxes—$3 million stolen through elaborate bribery schemes that reached into the White House itself. In St. Louis, the epicenter of corruption, distillers paid Treasury agents 35 cents per gallon in bribes to stamp illegal whiskey as tax-paid, pocketing the 70-cent federal tax.Treasury Secretary Benjamin Bristow launched an unprecedented undercover investigation using coded telegrams and private citizens operating in absolute secrecy. In May 1875, over 300 suspected ring members were arrested. The scandal exploded when evidence implicated Grant's own private secretary, Orville Babcock, forcing the President to choose between justice and loyalty.The aftermath revealed the true cost of corruption: 238 indictments, 110 convictions, and a presidential legacy forever tarnished. The Whiskey Ring didn't just steal money—it shattered America's faith in Reconstruction-era government and ultimately ended Grant's political influence through the Compromise of 1877.Subscribe to Hometown History for forgotten American history stories every week. New episodes release Tuesdays. Every hometown has a story—what's yours?In This Episode:How Civil War tax increases created opportunities for massive corruptionThe secret code used by investigators to expose the $3 million fraudPresident Grant's testimony that saved his friend from convictionWhy 110 conspirators went to prison while Grant's inner circle walked freeThe political compromise that ended Grant's presidency and ReconstructionKey Figures:President Ulysses S. Grant - Civil War hero whose administration was consumed by scandalBenjamin Bristow - Treasury Secretary who risked everything to expose corruptionJohn McDonald - St. Louis Revenue Collector and Whiskey Ring leaderOrville Babcock - Grant's private secretary indicted for conspiracyGeorge Fishback - St. Louis Democrat owner who helped crack the caseMyron Colony - Undercover investigator who used commercial statistics to trace fraudTimeline:1861-1865: Civil War leads to whiskey tax increases1869: Grant appoints McDonald as Missouri Revenue Collector1871: Whiskey Ring officially organized as "political fund"February 1875: Bristow launches secret coded investigationMay 1875: Over 300 arrests made, scandal becomes publicDecember 1875: Babcock indicted for conspiracyFebruary 1876: Grant's testimony saves Babcock from convictionJune 1876: Bristow resigns, 110 of 238 defendants convicted1877: Whiskey Ring fallout contributes to Compromise ending Grant presidencyThe Fraud Explained: Federal whiskey tax: $0.70 per gallon Bribe to Treasury officials: $0.35 per gallon Distillers' illegal profit: $0.35 per gallon on unstamped liquor Total recovered: $3 million (equivalent to ~$75 million today)Support this podcast at — https://redcircle.com/hometownhistory/exclusive-contentAdvertising Inquiries: https://redcircle.com/brands