Grant's cherished project to annex Santo Domingo, begun early in his administration, entered a crucial period. Grant agreed to a tactical compromise: Rather than vote the controversial treaty down, Congress sent a commission to investigate the island. Grant's message submitting the report, hammered out over labored drafts, bore a defensive tone and asked Congress to postpone any decision.

Closer to home, Grant sought legislation to facilitate federal intervention in the persecution of blacks by white extremists across the South. After much acrimony and stinging accusations of executive tyranny, Congress passed an Enforcement Act, hailed by Grant as "a law of extraordinary public importance.

The greatest accomplishment of Grant's first term came in foreign relations. After secret negotiations, the United States and Great Britain met in a Joint High Commission to settle long-standing grievances, from boundary and fishing questions to British complicity in the depredations of the Alabama and other Confederate raiders. The resulting Treaty of Washington established an international tribunal in Geneva, Switzerland.

At home, economic prosperity and consequent debt reduction meant that Grant could see "no reason why in a few short years the national taxgatherer may not disappear from the door of the citizen almost entirely". His Indian policy, influenced by Eastern Quakers and often ridiculed for its benevolence, augured well. Despitecontinued clashes between Indians and settlers, Grant maintained that compassion rather than force would answer the Indian problem.