Even before he was inaugurated, Baxter reportedly met secretly with William Woodruff, Jr., the editor of the Gazette, and Augustus Hill Garland, the leader of the Democrats in the legislature. By December 17, the Gazette formally praised the Baxter as "a man fully identified with the people of Arkansas" and cautioned Brooks that if he "knew of any fraud, he should bring it to the legislature, not start a fight." Meanwhile, in his inaugural address, Baxter promised to "banish existing partisan prejudice from our midst, and thereby relieve Arkansas of one of the worst evils with which she has ever been afflicted."
The emerging alliance between Baxter and the Democrats evidenced itself in the election to replace B. F. Rice in the U. S. Senate. McClure and the Minstrels supported Thomas Bowen. Baxter backed Stephen W. Dorsey. The Democrats supported Garland. Garland then threw his support to Dorsey who was elected.
Baxter also signed the constitutional amendment restoring voting rights to thousands of Democrats and scheduled a ratification election for March. It passed 25,199 to 3,695, all but guaranteeing Democratic domination of the 1874 election.
Tensions quickly mounted between Baxter and "Poker Jack" McClure, Justice of the Arkansas Supreme Court and editor of the Minstrel newspaper the Republican. Though Baxter was the nominal head of the faction, McClure considered himself the party boss in Arkansas following Powell Clayton's departure. The enmity began with Baxter's refusal to rubberstamp McClure's suggested appointees. In fact Baxter had other plans. Once the legislature adjourned he would make use of nearly 331 appointments, many to lucrative positions, to lure key Minstrels away from the legislature and critical election committees.
The real break between Baxter and McClure came over the so-called Railroad Steal Bill. This measure would have relieved railroads of the obligation to repay the state bonds issued to finance railroad construction. To compensate the state, the railroads would issue it stock. In addition a three-mill statewide property tax would be levied to pay for the bonds.
Baxter immediately opposed the measure on the grounds that the tax burden of the public was already too high and that no one could vouch for the value of the watered railroad stock the state was to receive. He threatened to veto the measure. This very public split in the Republican ranks produced some surprising realignments. The prominent black leaders William Grey and J. T. White, both members of Baxter's administration, sided with the governor. McClure denounced White and implied that he would face perdition for betraying the cause. White, a Helena minister, responded that if he should wind up in hell, he would be doubly damned if he found himself under McClure instead of the devil.
Though McClure's Minstrels had the votes in the Senate for their railroad measure, it fell short in the House. Two other bills supported by McClure met similar fates. One would have replaced the neutral Election Commission promised by Baxter with one composed of Lieutenant Governor Volney V. Smith, State Auditor Stephen Wheeler, and State Treasurer Henry Page, all cronies of McClure. The Metropolitan Police Bill would have placed the police departments of the state's largest towns under a commission composed of the same three men. Neither measure even made it to a vote.
Rumors began to circulate that McClure intended to have Baxter either arrested or assassinated. Baxter responded by replacing the Minstrel heads of the militia with W. W. Wilshire and R. C. Newton. Newton was an ex-Confederate, in fact he had been the officer who had arrested Baxter during the Civil War. Remarkably, U. S. Attorney General Williams contacted Baxter and urged that he call in federal troops for protection. This was followed by a letter from President Grant offering protection. Because the Grant administration followed Powell Clayton's lead where Arkansas matters were concerned, it was apparent the former governor was backing Baxter in his feud with McClure. This was confirmed on October 8, 1873, when the Arkansas Republican Central Committee issued a 500-word statement of support for Baxter signed by Clayton, Dorsey, and most of the prominent Radicals other than McClure. The statement came just as the Arkansas Supreme Court was ruling on Brooks's effort to overthrow the 1872 election. They voted 3 to 1 for Baxter, with one abstention. McClure's was the only vote for Brooks.
Next: The Brooks-Baxter War
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