Reconstruction was the dominant issue of Johnson's presidency to which, both out of choice and necessity, he devoted most, sometimes all, of his attention and energy. Yet he also had to concern himself with a number of other matters that were highly important in their own right—indeed, would have held center stage under normal circumstances.
When Johnson became president, a war with France over Mexico was a distinct possibility. During the Civil War the French, then ruled by Napoleon III, flagrantly violated the Monroe Doctrine by establishing in Mexico a puppet regime headed by the Emperor Maximilian, an Austrian archduke. Initially Johnson seemed disposed to adopt the approach advocated by General Grant—namely, to tell Napoleon that unless he pulled his troops out of Mexico immediately, the United States Army would drive them out. Fortunately, Secretary of State Seward successfully asserted his control over foreign policy, something in which Johnson had no experience and scant interest. By means of skillful diplomatic prodding, Seward induced Napoleon, who was finding the Mexican intervention costly in money and men, to withdraw his forces beginning late in 1866. Once they all left, the Mexicans, led by Benito Juárez, had little difficulty overthrowing Maximilian. Thus, the greatest challenge to United States interest in the Caribbean prior to the Castro Communist takeover of Cuba was repelled. Ironically, an aggressive policy leading to war with France would have been enormously popular in the United States and would probably have assured the success of Johnson's Reconstruction program.
Seward, who long had been an advocate of Manifest Destiny, tried to pursue an expansionist policy, hoping thereby to gain public support for the Johnson administration and to advance his own presidential aspirations. In large part because of the bitter conflict over Reconstruction, his only solid achievement along this line was the acquisition of Alaska in 1867. Early that year the Russian government, having decided that Alaska was a financial and strategic liability, instructed its minister in Washington, Baron Edouard de Stoeckl, to sell it to the United States. Seward proved more than willing to buy it, and he and Stoeckl quickly negotiated a treaty whereby the United States agreed to pay $7.2 million in gold for the territory. The treaty easily passed the Senate, 37 to 2, on 9 April 1867, but the necessary appropriation bill encountered strong opposition in the House, where many Republicans opposed it simply because they hated Johnson. Finally, on 14 July 1868, after Stoeckl discreetly bribed several key representatives, the House approved it, 114 to 43. Thus, the expansion of the United States across the North American continent, which began in 1803 with the Louisiana Purchase, came to an end.
During the Civil War, Confederate warships, of which the Alabama was the most prominent, inflicted tremendous damage on northern merchant shipping. Since these raiders had been built in Britain, the United States government held the British government responsible for their depredations and demanded monetary reparation. In 1868, in an effort to settle these so-called Alabama Claims before he left office, Johnson sent a former senator named Reverdy Johnson to London, where he negotiated a treaty whereby the claims of both British and American citizens arising from the Civil War would be settled on an equal basis. It was a poor treaty, but thinking it the best that could be had, Johnson submitted it to the Senate early in 1869, only to see it rejected, 54 to 1. Two years later the United States obtained a much better settlement of the Alabama Claims.
On the domestic front the two main problems other than Reconstruction had to do with fiscal policy and the Indians of the western plains. Concerning the first, the Civil War had resulted in a federal debt of nearly $3 billion (an enormous sum by the standards of the day), the issuance of over $600 million in "greenbacks" (paper money unsupported by gold or silver), and unprecedentedly high taxes, especially the tariff. Johnson for the most part left financial policy to Secretary of the Treasury Hugh McCulloch, a holdover from Lincoln's cabinet. McCulloch generally cooperated with the Republican Congress in gradually reducing the number of greenbacks in circulation with a view to restoring a bullion-based currency.
Meanwhile, during the latter part of his presidency, when he was desperately casting about for political allies, Johnson toyed with the thought of embracing the "Ohio Idea," a scheme popular in the Midwest that called for increasing, rather than decreasing, the supply of greenbacks in order to pay off the national debt and stimulate the economy. But Johnson held fast to his fiscal conservatism; furthermore, the Ohio Idea had more opponents than proponents, and so he would have hurt, rather than helped, himself politically by advocating it. For similar reasons he made no serious effort to counter the Republican high-tariff policy, although verbally criticizing it.
As regards the Indians, Johnson's administration adopted a two-pronged approach: the army waged campaigns designed to pacify the hostile tribes and safeguard western settlers, and the Bureau of Indian Affairs responded to the demands of eastern reformers by endeavoring to place the Indians on reservations, where supposedly they would be protected from evil white influences and given an opportunity to acquire white civilization. Although the reservation policy fell far short of the expectations of its idealistic proponents, it was probably the most practical one the government could have adopted at that time, for the Indians' way of life was doomed by the westward push of the American people as incarnated in the construction of the transcontinental railroad, a project nearly completed by the time Johnson left office.