Whiskey Ring: Orville Babcock's Sylph Telegrams and a Snatched Pen

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After the Civil War, a federal liquor tax of 70 cents a gallon wiped out many distillers' profits and invited fraud. In 1869 President Ulysses S. Grant appointed John McDonald revenue collector for Missouri, and around 1871 McDonald pitched St. Louis distillers on a scheme presented as a Republican campaign slush fund. By 1873 it was a straightforward criminal ring: distillers paid corrupt officials 35 cents a gallon, half the legal tax, and the Treasury got nothing. Gaugers recorded false proof readings, high-proof whiskey was shipped labeled as vinegar, and tax stamps were peeled off empty barrels and reused. McDonald's shield in Washington was Orville Babcock, Grant's private secretary and gatekeeper, who in 1874 got the Commissioner of Internal Revenue to revoke an order to investigate St. Louis by implying the president opposed it.

Treasury Secretary Benjamin Bristow, a Kentuckian appointed in 1874, saw that whiskey consumption was rising while tax receipts fell. With his own department compromised, he used an informant supplied by a St. Louis newspaper owner and a network of secret agents, and by April 1875 he had his proof. McDonald confessed and resigned, and in May 1875 federal raids swept the Midwest. In October, confronted with telegrams signed Sylph, Babcock was told to summon his St. Louis contact and was caught writing a warning instead, until the attorney general snatched the pen. Grant still kept him. At Babcock's 1876 trial in St. Louis, Grant's sworn deposition praising his integrity and character testimony from William T. Sherman helped win an acquittal, while Bristow and the attorney general were soon forced out of the cabinet.

• Babcock took his code name from Louise Hawkins, a St. Louis woman known as the Sylph whom he insisted on meeting after seeing her at the St. Louis Fair.
• Spectators needed signed passes to attend the trial, and Babcock appeared in a silk hat and sky blue trousers.
• McDonald served time in the federal penitentiary, and Grant pardoned him on his last full day in office in 1877.
• In 1880, as Grant weighed a third term, McDonald published a tell-all book about the ring, and Grant did not get the nomination.
• The episode links the scandal to Northern disillusionment with federal power that fed into the Compromise of 1877 and the end of Reconstruction.