Throughout his presidency Hayes adhered to the policies enunciated in his letter of acceptance. He also demonstrated a political independence that regained for the presidency some of its lost authority and prestige. Furthermore, he set the tone for his administration right at the outset, when he named the men he wanted in his cabinet. For postmaster general (the richest patronage-dispensing position), he chose David M. Key of Tennessee; for secretary of the interior, Carl Schurz; and for secretary of state, William M. Evarts—respectively, a southern Democrat, a Liberal Republican, and the attorney for the defense in the impeachment trial of Andrew Johnson. Blaine, Conkling, and the other Republicans were outraged. Only the certainty that the Democrats would supply the necessary votes to confirm these choices if the Republicans did not gained their grudging acquiescence.
Almost immediately Hayes prepared to kick over another hornet's nest by implementing his pledge of civil service reform. He ordered an inquiry into the management of the New York Customhouse, the central component of Senator Conkling's machine. The resulting report described a pattern of overstaffing, incompetence, and petty bribery and sharply criticized the collector, Chester A. Arthur, and other officials. This faultfinding was not entirely fair: Conkling's allies in the customhouse were honest and capable, and Arthur had actually improved overall efficiency. When President Grant's short-lived Civil Service Commission proposed regulations to govern the appointment of civil servants, Arthur put them into effect, even though he still required custom-house employees to perform political services in addition to their regular jobs and continued to assess them 2–6 percent of their salaries for partisan purposes. On the whole, New York's merchants were satisfied with Arthur's performance. It was the patrician reformers who complained, because the existing system enabled the Conkling organization, and not them, to control the Republican party in New York.
After reading the report on the customhouse, Hayes wrote his secretary of the treasury, fellow Ohioan John Sherman, in May 1877:
The collection of the revenues should be free from partisan control, and organized on a strictly business basis.. . . Party leaders should have no more influence in appointments than other equally respectable citizens. No assessments for political purposes, on officers or subordinates, should be allowed. No useless officer or employee should be retained. No officer should be required or permitted to take part in the management of political organizations, caucuses, conventions, or election campaigns.
Hayes did not specify that employees should not be required to be Republicans, but only that they should not be allowed to use their official positions as a base from which to manage state and local politics. He aimed his blow at the Conkling type of organization, not against the Republican party itself. Moreover, he later made it clear that he did not object to the collection of "voluntary contributions" from officeholders, only forced assessments. In practice, this proved to be a distinction without a difference. Accordingly, Hayes's reforms, even when extended throughout the executive branch, represented no more than a modest beginning.