John McDonald

JOHN MCDONALD (1832–1912)

John McDonald’s name was well known in St. Louis in the late 1870s for his involvement in the infamous Whiskey Ring scandal of 1875. Through the workings of the ring, he exercised a considerable amount of influence on national politics during the Grant administration.

Born in Rochester, N.Y., in 1832, McDonald was orphaned before he was 10 years old and forced to make his own way in life. He reportedly worked his way west, picking up whatever odd jobs he could along the inland waterways—the canals, lakes, and rivers—eventually arriving in St. Louis at about age 15.  Although lacking formal education, he moved into successively more responsible and better-paid positions within the river trade. By the 1850s, he was a passenger agent for steamboat companies in St. Louis and later owned and operated his own steamer, carrying freight and passengers on the Missouri River.  

At the outbreak of the Civil War McDonald, a strong Union supporter, raised and outfitted the Eighth Missouri Regiment, sworn in by Nathaniel Lyon at the arsenal at the beginning of the war. The Eighth Missouri saw action in many of the western campaigns, fighting in the Battles of Fort Henry, Fort Donelson and Shiloh. Elected major of his unit, McDonald was later appointed a brigadier general by President Lincoln and served under Gen. William T. Sherman. He was known as “General McDonald” for the rest of his life. 

Not long after the war ended, McDonald married Addie Hayes of Memphis, Tenn. The wedding was among the first postwar nuptials between a federal officer and a belle of an old Southern family. Compounding the irony, this friend of Lincoln, Grant and Sherman was also related by marriage to Confederate leader Jefferson Davis. 

After the war, McDonald earned his living as a claims agent, working on commission for clients who hired him to pursue their past-due claims against the federal government. His work often took him to Washington, D.C., where he renewed old friendships and forged new ones among incumbent Republican bureaucrats and politicians. 

When Congress created a new federal position of inspector of internal revenue in 1868, McDonald’s friends urged him to apply. Few were surprised when he received his commission to head the Missouri District in October 1869, over the strong objections of two leading Missouri Republicans, Sen. Carl Schurz and Radical Republican leader Charles Daniel Drake. In a highly unusual arrangement, McDonald, a relatively minor federal bureaucrat, wielded an extraordinary amount of power. Since Missouri’s two senators, Schurz and Democrat Frank Blair, who succeeded Drake, were out of favor with President Grant, and McDonald was Grant’s friend and ally, McDonald and his colleagues controlled federal patronage in the area. 

To show his appreciation for the appointment and on the pretext of building a “war chest” for Grant’s 1872 re-election campaign, McDonald and his friends devised a scheme to defraud the government of a percentage of the taxes he was responsible for collecting. What the president knew of this scheme is a matter of speculation. Some of the money did go to support Republican re-election efforts, but a good deal of it lined the pockets of the co-conspirators. The plan involved underreporting the amount of whiskey produced and reusing legitimate federal tax stamps that had been carefully affixed for easy removal. It required collusion among local businessmen and some minor federal officials. While some distillers willingly participated, others were coerced. Eventually, the government estimated that it had lost $3.5 million while the ring operated. 

When Grant was re-elected in 1872, the original stated reason for the ring’s existence was realized. By then, however, its operations were functioning so smoothly and the graft so rampant that ending its operations seemed highly unlikely. None of its leaders seemed concerned about the possibility of exposure and openly boasted of their influence in Washington. Periodic attempts to expose suspected fraud were unsuccessful: ring members always seemed to have advance warning and operated as they should when inspectors appeared.

The demise of John McDonald and the Whiskey Ring began in June 1874 when reform-minded Benjamin Bristow took over the Treasury Department and instituted his own secret investigation. The undercover investigators provided irrefutable evidence of the ring’s operation. McDonald and his colleagues went to trial. He was convicted and sentenced to three years in the state penitentiary and ordered to pay a $5,000 fine, while his co-conspirators received sentences proportionate to their level of involvement. Few served their full sentences. McDonald received a presidential pardon on Grant’s last day in office. He later wrote his version of how the ring operated and who was involved in a volume titled Secrets of the Great Whiskey Ring. After his term in prison he returned to St. Louis but later lived in Greenlake, Wisc. , and in Chicago, where he died in 1912.

Mary E. Seematter

Guese, Lucius E. “St. Louis and the Great Whiskey Ring.” Missouri HistoricalReview 36 (January 1942): 160–83. 
McDonald, John. Scrapbook of Clippings Concerning the Activities of John McDonald, 1876–1877. Scrapbook File. Missouri Historical Society, St. Louis.
Secrets of the Great Whiskey Ring: And Eighteen Months in the Penitentiary. St. Louis: W. S. Bryan, 1880.
Seematter, Mary E. “The St. Louis Whiskey Ring.” Gateway Heritage 8 (spring 1988): 33–42.

Excerpted from Dictionary of Missouri Biography edited by Lawrence O. Christensen, William E. Foley, Gary R. Kremer, and Kenneth H. Winn, published by the University of Missouri Press. To order this book, please call (800) 621-2736 or online at http://press.umsystem.edu/Catalog/ProductSearch.aspx?search=Dictionary+of+Missouri+Biography.