On May 10, 1876, Ulysses S. Grant pulled a lever to start the mighty 1,400-horsepower Corliss Steam Engine, powering acres of machinery for the nation's Centennial Exhibition in Philadelphia. Grant summed up a century of American progress by saying, "Whilst proud of what we have done, we regret that we have not done more. Our achievements have been great enough however to make it easy for our people to acknowledge superior merit wheresoever found."

That summer, Fourth of July celebrations coincided with early reports that Lieutenant Colonel George A. Custer and his Seventh Cavalry had been wiped out by Sioux. Grant resisted the subsequent clamor for volunteers to crush the Sioux, but his peace policy lay in shambles, and he later criticized Custer's unnecessary "sacrifice of troops." Soldiers sent to subdue Indians meant fewer available to help ensure a fair election in November. Grant's correspondents described a pattern of physical and economic intimidation throughout the South, as Democrats sought to keep blacks from the polls. After whites massacred black militia in South Carolina, Grant warned that unchecked persecution would lead to "bloody revolution." As violence spread, Grant struggled to position limited forces where they could do the most good.

Scandals diverted Grant's attention from larger policy questions. A series of Whiskey Ring prosecutions culminated in the February trial of Orville E. Babcock, Grant's private secretary. A new scandal erupted in March when Secretary of War William W. Belknap resigned, hoping in vain to avoid impeachment for selling post traderships. Grant drew fire for having accepted the resignation, a move that ultimately led to Belknap's acquittal by the Senate. An investigation also linked Grant's brother Orvil to the scandal.

Grant battled a Democratic House of Representatives until late that summer over issues as vital as the budget and as symbolic as the president's absences from the capital. He welcomed Rutherford B. Hayes as the Republican choice for his successor, despite private irritation at Hayes's pointed pledge to serve only one term. As his presidency waned, Grant planned a trip to Europe when he left office. Investments would finance his travels, and he staked his fortunes on western mining stocks. In June, a granddaughter born at the White House brought the family joy in an otherwise trying year.