In the reform of the civil service Hayes proceeded from words to action. He reappointed as postmaster of New York City Thomas L. James, who had conducted his office on a thorough business basis and gave him sympathetic support. The New York Custom-house had long been a political machine in which the interests of politicians had been more considered than those of the public it was supposed to serve. The President began an investigation of it through an impartial commission and he and Sherman came to the conclusion that the renovation desired could not be effected so long as the present collector, Chester A. Arthur, and the naval officer, A. B. Cornell remained in office. Courteous intimations were sent to them that their resignations were desired on the ground that new officers could better carry out the reform which the President had at heart. Arthur and Cornell, under the influence of Senator Conkling, refused to resign and a plain issue was made between the President and the New York senator. At the special session of Congress in October 1877, he sent to the Senate nominations of new men for these places; but the power of Conkling, working through the "courtesy of the Senate" was sufficient to procure their rejection.
In December at the regular session, the President renewed the controversy. "I am now in a contest on the