[80] In that year, reform-minded Republicans formed the Liberal Republican party and voted against Grant, but he was re-elected in spite of their opposition.[81] Nevertheless, the movement for civil service reform continued to chip away at Conkling's patronage machine; in 1874 Custom House employees were found to have improperly assessed fines against an importing company as a way to increase their own incomes, and Congress reacted, repealing the moiety system and putting the staff, including Arthur, on regular salaries.[82] As a result, his income dropped to $12,000 a year—more than his nominal boss, the Secretary of the Treasury, but far less than what he had previously received.[82]

Clash with Hayes[edit]
A cartoon depicting President Rutherford B. Hayes kicking Arthur out of the New York Custom House
Arthur's four-year term as Collector expired on December 10, 1875, and Conkling, then among the most powerful politicians in Washington, arranged his protégé's reappointment by President Grant.[83] In 1876, Conkling was a candidate for president at the 1876 Republican National Convention, but the nomination was won by reformer Rutherford B. Hayes on the seventh ballot.