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The Belknap Scandal: Fulcrum to Disaster

By John Koster
1/19/2018 • Wild West Magazine

In 1876 George Armstrong Custer testified to William Belknap’s trading post corruption. That stopped the secretary of war, but there was no stopping the Lakotas and Cheyennes, armed with store-bought repeating rifles, at the Little Bighorn.

Lieutenant Colonel George Armstrong Custer desperately needed a victory at the Little Bighorn, thanks to an act of terminal integrity. Testifying with indignant accuracy in March and April 1876, Custer blasted the corruption in the War Department that had only been rumored before he took the witness stand in Washington, D.C. Custer’s testimony—dismissed by some as speculation—was right on the money. His attack on graft, bolstered by a signed statement, sustained the resignation and impeachment of the secretary of war and, unfortunately for Custer, also tainted Orvil Grant, brother of President Ulysses S. Grant, triggering a violent animosity that nearly ended Custer’s military career on the spot. Custer was removed from command of the 7th U.S. Cavalry and had to pull strings to be allowed on the expedition against the Sioux. Only a smashing victory could restore his reputation and salvage his career. At the Little Bighorn in Montana Territory in June, Custer tried too hard—paying with his life and the lives of 267 others, shot to pieces with repeating rifles sold from the same trading posts Custer had denounced for cheating his soldiers with inflated prices. The catastrophe on the Little Bighorn actually started not in Sitting Bull’s tepee but in the White House.

On March 2, 1876, with the latest Sioux war brewing, Secretary of War William Belknap threw himself on his knees before U.S. Grant and begged the president to accept his formal resignation. Stunned, Grant tried to calm Belknap, a personal friend who had been a fine soldier during the Civil War. Belknap insisted he must resign immediately. Grant, according to his own account, told Belknap he retained confidence in him and would regret his leaving the cabinet. “At that,” Grant wrote later, “he burst into tears and took hold of my hand.…I understood that he was expecting an investigation that he could avoid by resigning; that the facts, if exposed, would not damage him so much as his wife. He spoke of his dead wife, too. I told him that he had a great many friends and that they would help him out, but he said it was impossible; that he had shouldered all the blame and would be ruined. He insisted it would save me and the government a great deal of trouble if his resignation was accepted.…So I wrote him a letter accepting the resignation.”

The House of Representatives impeached Grant’s secretary of war that same day, but the Belknap scandal was not about to fade away. The Senate voted to try him despite his resignation, and no less a Western figure than Custer testified against him. Custer would not live to regret that decision. The scandal was a fulcrum to disaster for him and the 7th Cavalry. The lucrative scam with which Belknap was charged sent Custer and his men into battle at the Little Bighorn that June with breechloaders that jammed after the third round, while the Lakota and Cheyenne opposition fought with better breechloaders and some 300 repeating rifles. Custer and all the men in his immediate command (except perhaps for Frank Finkel) died in a fight that might not have occurred when it did or have had such disastrous results for the Army if not for the Belknap scandal.

Belknap, who had been a lawyer before the war, defended himself by telling Grant and everybody else that his second and third wives had been the instigators and that he had been the innocent dupe of female chicanery. He was a liar. Although Belknap’s spring 1876 impeachment trial did not lead to conviction, 22 of the 25 Senators who voted for acquittal did so primarily because they felt the Senate had no jurisdiction over a resigned cabinet member. The evidence assembled by Congress proves that Belknap himself—in knowing partnership with his second wife, Carita, and third wife, Amanda—had been a willing participant in a scam that cheated soldiers, officers and officer’s wives while tangentially supplying Indians with rifles with which they would kill soldiers.

The late historian Dee Brown was almost fully convinced that Belknap was bamboozled by his tandem wives, and World War II–vintage Maj. Gen. Ulysses S. Grant III said the whole Grant family believed Belknap was ignorant of the bribes paid to his wives behind his back. Transcripts of the hearings before the House of Representatives and the Senate tell a different story. The secretary of war was clearly guilty of perpetuating a get-rich-quick scheme that made a travesty of the well-meaning President U.S. Grant’s attempt at a humane Indian policy. A man who had been a genuine hero of the Civil War had turned into a grafter and, arguably, a murderer by proxy during the Indian wars.

The scandal’s origins date to the beginning of the Civil War when many a Northerner sought to make his fortune by hawking non- issue supplies to Yankee soldiers fighting in the South. At times, desperate soldiers would simply tip over sutlers’ wagons and take what they wanted. Complaints and often-inflated demands for recompense flooded the War Department. A new system developed in which each regiment’s officers voted on a sutler, whose job was to supply the soldiers (at a fair price) with everything from whiskey and tobacco to canned peaches and replacement gear. The system changed again in 1870, now requiring that sutlers, or post traders, be appointed on approval of the secretary of war and operate under license of the War Department. It was the hour of Belknap.

William Worth Belknap, named for his general father’s own commanding officer (William Worth), was born in 1829 and grew up in Newburgh, N.Y. In the circumscribed Army of the 1840s and 1850s, nepotism ruled. Instead of sending his son to the U.S. Military Academy at West Point, the elder Belknap sent the boy to the College of New Jersey (the future Princeton University), where William forged connections with the Clymers and other prominent families. After graduation in 1848, William became a lawyer in Iowa. At the outbreak of the Civil War, he signed up and rose quickly through the ranks. “Major Belknap was always in the right place at the right time, directing and encouraging officers and men as coolly as a veteran,” Colonel H.T. Reid wrote after Shiloh in April 1862. At the Battle of Atlanta on June 22, 1864, Belknap lunged across a contested breastwork to bodily drag a Confederate colonel into captivity. Belknap helped Maj. Gen. William T. Sherman take Atlanta and won praise from Colonel William Hall for encouraging his men “by his personal disregard of danger.” By war’s end Belknap was a major general.

His first wife, Cora, had died in 1862, but after the war Belknap married Carita “Carrie” Tomlinson, a Kentucky belle and Union supporter. From 1865 to 1869, Belknap worked in Keokuk, Iowa, as an internal revenue collector—a plum political assignment based on his war record. Then, in fall 1869, after Secretary of War John Rawlins died, President Grant appointed Belknap to the cabinet position. The sharks of the Gilded Age shortly slipped into a feeding frenzy.

Carita Tomlinson Belknap’s sister, Amanda Tomlinson Bower, saw nothing wrong with offering businessman Caleb Marsh, who had married one of her dearest friends, a post tradership— the ultimate Gilded Age investment. Post traderships were, in effect, monopolies. Soldiers were required to do all their shopping at post stores. Indians shopped there, too, with their annuity money—yearly payments promised by treaty to keep them friendly.

Shortly after traveling to Washington, D.C., and filling out an application on August 16, 1870, Caleb Marsh received good news. He had been appointed post trader of Fort Sill in Indian Territory (present-day Oklahoma). The news did not sit well with John S. Evans, who already had the job. But they worked out a compromise: Evans would continue to man the actual trading post, but he would pay Marsh $12,000. Marsh would then kick back half the money to Carita Belknap, while Evans kept whatever he could steal. The soldiers and officers’ wives paid exorbitant prices (several hundred percent over retail), and local Indians apparently could buy rifles and revolvers over the counter. Similar situations existed at other Western forts. “Why, those fellows had things so that you couldn’t buy anything at the posts without getting it from them,” recalled Sergeant Daniel Kanipe of C Company, 7th Cavalry, destined to be the next-to-last white survivor of the Little Bighorn to see Custer alive. “Liquor was 25 cents a glass, and the glasses was mostly glass—mighty little whiskey.”

Enlisted men—42 percent of them immigrants, mostly from Ireland, Germany and England—were hit hardest, especially when in need of boots. Just after the Civil War, someone had discovered a process to make cardboard look and smell like real leather. Unscrupulous traders issued boots or shoes produced with this bogus leather to frontier soldiers. The cardboard boots disintegrated once they got wet, and the enlisted men were left with no choice but to buy real leather boots at the government-licensed post traders—at an abusive markup that consumed a month’s wages or more. For those who drank whiskey (and most of the soldiers did), the price of a drink was equally inflated. Many enlisted men were already broke by payday, only to sink further into debt. This peonage was commonplace under Belknap’s tenure as secretary of war.

As the soldiers went into debt, and the Indians bought rifles, Carita died giving birth to a child who also soon died. Amanda Tomlinson Bower, who had lost her husband and was helping to care for her sister, demonstrated enough value in all areas of life to become William Belknap’s third wife. Just like the fictional Scarlett O’Hara of Gone with the Wind fame, Amanda had decided she would never go hungry again, or live in poverty. She mourned her late sister and late husband on a trip to Paris, where she bought a trousseau from Charles Frederick Worth, the top fashion designer of the era. Worth once said his most generous clients were not the titled ladies of Britain, France and Germany, but Russian aristocrats and the wives of American millionaires. William Belknap was no millionaire—his U.S. government salary was $8,000 a year—but the Western post tradership kickbacks (from Caleb Marsh and others) were lucrative beyond belief. Amanda dropped $6,000 with Worth of Paris in one year; she also had an English butler, a French maid, 40 pairs of shoes and one of the best addresses and finest guest menus in Washington, D.C. Marsh and company were hardly complaining. They had gotten their share, and it mattered little to them that their post stores were selling repeating rifles to agitated Plains Indians.

One of the “investors” who, like Marsh, secured a monopoly in return for a large kickback was Orvil Grant, the president’s worthless brother, who owned a piece of three trading posts. The president’s brother-in-law owned another post under a behest bearing Grant’s own signature, while William Tomlinson (Carita and Amanda’s brother) was the only former Confederate officer to own a post tradership. The nepotism and corruption were evident, but someone had to make an issue of them.

Exposure came via an incongruous path: Othniel Marsh, a pre-eminent Yale paleontologist, encountered Sioux Chief Red Cloud when seeking approval to roam the Badlands in search of fossils. Red Cloud gave Marsh some specimens of his own—the sort of rations the Lakotas were receiving under the terms of the Sioux Treaty of 1868. Marsh showed the frayed blankets, rotten beef and concrete-hard flour to anyone who would look, including the president, who was understandably upset. Marsh’s disclosure led to the resignation of Interior Secretary Columbus Delano and convinced the New York papers to take a look at Belknap, too.

The New York Herald, a Democratic paper that enjoyed taking potshots at Grant’s administration, reported that “vague rumors have reached the capital” that post traders had to pay a “tax” in the form of kickbacks to the secretary of war. On March 1, 1876, Hiester Clymer, once Belknap’s college roommate and now chairman of the U.S. House Committee on Expenditures in the War Department, sent a message to this favorite cabinet member, saying he wanted to discuss testimony they had heard from a certain Caleb Marsh.

Clymer, a kindly man, apparently was the one who advised Belknap to resign, to keep from being sent to prison for two years for accepting bribes. Although a lawyer himself, Belknap hired an attorney, Montgomery Blair. Before the House, Belknap stated: “Some things are true, some things are not true, and some things I know nothing about. But make your charge and put anything in it you may please, it makes no difference what, as to my guilt, which I will acknowledge without reserve. Only grant my wish that this investigation shall be pursued no further as affecting any member of my family.”

Belknap’s defense was to admit the bribery took place but to claim that his second and third wives—sisters from the Tomlinson family of Kentucky, who were not federal officials and beyond indictment—had secured all the bribes behind his back. This tactic might have fooled some of the people some of the time, but it obviously didn’t convince Congress.

Belknap supporters said Caleb Marsh’s disclosures took William by surprise and that he was thunderstruck by the news his wives had staged the bribes. Nothing could be further from the truth. Neither was the House impeachment committee a cluster of vengeful Democrats on a Republican witch hunt. Hiester Clymer was one of Belknap’s oldest friends. Joseph Blackburn was a former Confederate officer, but his wife and Belknap’s wife were friends since girlhood in Kentucky. North Carolina congressman William McKendree Robbins had served as a major in an Alabama regiment during the war and would have been sympathetic to the honor of Southern ladies. Republican Lyman Bass hailed from Belknap’s home state of New York. And Republican Lorenzo Danford was a Belknap in miniature, a Midwestern lawyer-politician from Ohio who had volunteered for the Union Army in 1861 and moved up from private to captain before his honorable discharge in 1864. Every one of these men would probably have loved to see Belknap acquitted. What they heard made that difficult.

Before the actual hearings had started, Amanda Belknap and her brother William Tomlinson cornered timid little Caleb Marsh and told him to testify that only the Belknap women, not William himself, had known about the illegal purchase of post traderships. Marsh refused to comply. “I told [Amanda] the statement would not hold water before the committee, and even if it would, I could not make it,” Marsh told Congress at the official hearing. Marsh also revealed that under pressure from Tomlinson he had written a wish-washy letter exonerating Belknap of blame. Lying under oath was another matter. “Tomlinson,” Marsh said, “still insisted that if I could swear that General Belknap knew nothing of the arrangement with his sister, Mrs. [Carita] Belknap, deceased, and if I could swear that at the time I was at her funeral I made an arrangement with Mrs. Bower, the present Mrs. [Amanda] Belknap, by which I was to send her all the money through the Secretary [Belknap] that the whole thing could be settled. I replied, ‘I cannot state that, for it is not true.’” When Marsh got on the stand before the Clymer Committee, he told what Belknap had really known:

Clymer: State how the payments were made to the secretary of war subsequent to the funeral of his then wife [Clarita].…

Marsh: The money was sent according to the instructions of the secretary of war: sometimes in bank notes by Adams’ Express.…

Clymer: Did you receive letters from the secretary of war acknowledging the receipts of the sums forwarded to him…?

Marsh: Usually, when I sent money by express, I would send him the receipt of the company, which he would either return marked ‘OK’ or otherwise acknowledge the receipt of the same. Sometimes I paid it to him in person in New York, when his receipt was necessary.

Into the fray charged George Armstrong Custer, whose Civil War accomplishments dwarfed even those of Belknap. Custer, like Belknap, seemed to have felt the nation owed him respect and a handsome living after Appomattox. But Custer’s wife, Libbie, was an honest Christian, and George, while not averse to shady investments, never had any luck with them. Just how valuable Custer’s testimony against Belknap may have been is controversial: Journalist Cyrus T. Brady and Custer scholar Colonel W.A. Graham both dismiss Custer’s information as worthless hearsay, while historians Alan Nevins and Charles Kuhlman say Custer was right on the mark—and may have paid for his integrity with his life.

Custer had first encountered the consequences of official corruption on the 1873 Yellowstone Expedition, when the 7th Cavalry, armed with breechloaders, found themselves confronted by Lakota warriors with repeating rifles either bought in post trader stores or handed over as gifts from the Indian Service. “The arms with which they fought us (several of which were captured in the fight) were of the latest improved patterns of breech-loading repeating rifles,” wrote Custer, “and their supply of metallic rifle-cartridges seemed unlimited, as they were anything but sparing in their use. So amply have they been supplied with breech-loading rifles and ammunition that neither bows nor arrows were used against us.” Later, grieving widow Libbie appended Custer’s comment on the flow of repeating rifles and quality breechloaders to her 1885 memoir Boots and Saddles. George’s testimony before the Clymer Committee indirectly suggests the principal source of weapons—William Belknap.

Custer’s first run-in with Belknap had come about because of another Custer obsession: fashion. The Army had issued its cavalry troops huge Andrews’ hats, which folded up flat for storage and were fitted with hooks and eyelets to adjust the ample brim. These hats assumed all sorts of flamboyant shapes after the first rainstorm, leaving the troopers looking like buccaneers. Several companies of the 7th Cavalry— those commanded by Custer loyalists or the dapper but aloof Captain Myles Keogh—had chipped in to buy sharper hats from a civilian retailer off post. The officer sent to St. Paul also bought other items he hoped to resell to the soldiers at cost. Custer himself described the entire incident to the Clymer Committee: “The prices that were charged the officers and soldiers became so exorbitant that as many as could purchased what they desired elsewhere. They did so until Mr. [R.C.] Seip [the post trader at Fort Abraham Lincoln] made a written complaint to the secretary of war, claiming that under the privilege he held as trader, nobody, no officer even, had the right to buy anything elsewhere or bring it there, but must buy everything through him. The point came up this way: A captain who desired to provide these articles for his men at a lower rate purchased in St. Paul some of the classes of articles usually furnished by the trader and kept them in hand and let his men have them at cost. Mr. Seip learned of this and made a protest to the secretary of war. I forwarded Mr. Seip’s letter, and in return, among other replies that came back, was this, calling my attention to circulars issued from the War Department, prescribing the rights and privileges of traders.”

Custer then quoted what Belknap wrote on December 1, 1874: “‘They [traders] will be allowed the exclusive privilege of trade upon the military reserve to which they are appointed, and no other person will be allowed to trade, peddle or sell goods, by sample or otherwise, within the limits of the reserve!’ That clause is plain, clear and explicit and means what it says. In the opinion of the secretary of war, these circulars are clear enough for anyone to understand who deserves to do so, and he has only to repeat the statement made many times that ‘any violation of either of these circulars…will be promptly acted upon.’”

Custer had, in effect, produced the smoking gun—a statement above Belknap’s signature that post traderships were an illegal and unconstitutional monopoly under the secretary’s direct protection. Custer leaned on Seip and was told a massive kickback scheme existed, but that Seip himself, while he believed the money was going to Belknap, couldn’t swear to it: Seip was told only to pay Hedrick and Rice, two of Belknap’s political cronies from Iowa, where he had hoped to run for Senate before the roof caved in. Custer said Seip received $2,500 to $3,000 for actually running the trading post, which annually brought in about $15,000. “I asked him then if he knew of any other person to whom this money was paid. He said that he knew positively only that he paid to Rice and Hedrick, but he was always under the impression that a portion of it went to the secretary of war.”

Before Custer cornered him with the accusations, Seip had been so bold that he had repeatedly interfered in the attempts of officers at Fort Lincoln to beat the monopoly. Custer said he “had known the post trader at Fort Lincoln to go out and stop an officer’s wagon, driven by his servant, and inspect the wagon to see what was in it and threaten to use his influence with the secretary of war because we traded with a town five miles distant where we got things about half his price.” Custer also told Congress he had refused a bag of corn fodder stamped INDIAN DEPARTMENT until Maj. Gen. Alfred Terry ordered he take it. “I believe that it was paid for twice; but I cannot prove it any better than I have told you, because when they gave me the order to receive it, I considered that I was relieved from all responsibility in the matter.”

Grant was appalled by Belknap’s conduct, but he never forgave Custer for implicating his brother in the scandal. Orvil, who once swindled a widow and her two children out of $5,000 (Ulysses made up the money out of his own pocket), had become part owner of three government trading posts, acquired with Ulysses S. Grant’s signature on the necessary forms. When Orvil showed up at Custer’s post one day to ask for an ambulance (an Army passenger wagon) with which to visit his investments, Custer first tried to avoid him but later grudgingly granted his request. “I told him I would not give it to him as a trader,” Custer explained, “but that to any member of the president’s family visiting there, out of courtesy to the president of the United States, I would render any facility I could.”

Grant was outraged by the testimony. On April 17, Custer applied to leave the Clymer Committee hearing and return to his post, but Grant refused to see him. When Custer impulsively left Washington to rejoin his regiment without orders, Grant had him arrested. Custer had to use all his influence with Generals of the Army Phil Sheridan and William Sherman to get any part of his command back. Even then, he went to the Little Bighorn knowing he had to win big to hold onto his career.

Between them, the terrified Caleb Marsh and the indignant George Custer, with other witnesses, had given the Clymer Committee evidence the members themselves may not have wanted: Belknap was guilty, and while his wives may have been the instigators, he himself had accepted cash bribes and had signed letters mandating an illegal monopoly that cheated soldiers and covertly armed the Indians they might have to fight. Like Benedict Arnold, he had hurdled from hero to traitor. The Battle of the Little Bighorn that June might have resulted in a stalemate if not for the quality breechloaders and repeating rifles that the Lakotas and Cheyennes had purchased at government-licensing trading posts. And Custer might have lived to fight another day.

The Belknap scandal sent shockwaves worldwide. “The general effect, beyond denial,” said the London Telegraph, “has been and is to bring the blush of shame and anxiety into the face of all honest Americans and to make countless friends of the republic in this country silent and sorrowful, while its enemies rejoice over these recurring revelations.” The London Standard tacked on, “Happily, the countries are few where so gross an abuse of trust as appears to have just been confessed by the United States secretary of war would be possible.”

Confronted with international scorn and ridicule, The U.S. House of Representatives voted 137 to 127 to have Belknap tried by the Senate, despite his argument that he couldn’t be tried because he had already resigned. The Senate trial dithered on through the summer of 1876—and through the disaster in which Custer and five of his companies were annihilated. Perhaps because the newspapers vilified the Indians in the wake of Custer’s Last Stand, though more probably because Belknap had wisely chosen to resign before he could be tried, he was acquitted. The transcripts show he was guilty beyond any reasonable doubt. In the end, the Belknap scandal— now conveniently dismissed as an unproven allegation—was a microcosm of the Gilded Age: Money talked, and troopers and Indians alike died while it was talking.

 

John Koster wrote Custer Survivor. Suzie Koster and Minjae Kim assisted on research. For further reading: Legend into History, by Dr. Charles Kuhlman; and The Best of Dee Brown’s West.

Originally published in the June 2010 issue of Wild West. To subscribe, click here

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