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Arthur became known for his fashionable clothes and a lavish lifestyle. He was popular within the Republican party as he efficiently collected campaign assessments from the staff and placed party leaders' friends in jobs at the Custom House. Reformers criticized the patronage structure and the moiety system as corrupt and the issue would divide the party. Arthur was fired from the position by President Rutherford Hayes in 1878, but he would return triumphantly in 1880 as Garfield's running mate. A petulant Roscoe Conkling did not want any of his Stalwarts to take second place on the 1880 GOP ticket, but in a surprising show of independence, Arthur accepted the post and was elected as Garfield's Vice-President in the 1880 election.
Garfield did not consult much with Arthur, and Conkling's political enemy James G. Blaine had a stronger influence on the President. But when Garfield was shot by a mentally ill office seeker named Charles Guiteau in July of 1881, an died from his wounds (or more accurately from medical malpractice in the treatment of those wounds), Arthur became President.
Arthur arrived in Washington, D.C. on September 21 and the next day here-took the oath of office, this time before Chief Justice Morrison R. Waite because his oath had previously been administered by a state court judge and some questioned the validity of this process, He lived at the home of Senator John P. Jones, while an elaborate White House remodeling he had ordered was carried out. The renovation included the addition of an elaborate fifty-foot glass screen by Louis Comfort Tiffany.
Arthur quickly came into conflict with Garfield's cabinet, most of whom had been selected from Blaine's wing of the party (known as "half-breeds.") He asked the cabinet members to remain until December, when Congress would reconvene. Treasury Secretary William Windom submitted his resignation in October to enter a Senate race in his home state of Minnesota and Arthur was able to replace Windom with Charles J. Folger, his friend and a fellow New York Stalwart. James G. Blaine remained Secretary of State until Congress reconvened and then resigned immediately. Roscoe Conkling expected Arthur to appoint him in Blaine's place, but in another show of independence, Arthur chose Frederick T. Frelinghuysen of New Jersey, another Stalwart recommended to him by Ulysses Grant. Of the Cabinet members Arthur had inherited from Garfield, only Secretary of War Robert Todd Lincoln remained for the entirety of Arthur's term.
The key domestic issue that Artur had to confront was corruption and patronage in government. In the 1870s, a scandal came to light in which contractors for star postal routes were greatly overpaid for their services with the approval of government officials. Reformers believed that Arthur, as a former supporter of the spoils system, would not pursue the investigation into the scandal. But Arthur's Attorney General continued the investigations and hired Democratic lawyers William W. Ker and Richard T. Merrick to strengthen the prosecution team. An 1882 trial of the ringleaders resulted in convictions for two minor conspirators and a hung jury for the rest. When a juror came forward with allegations that the defendants attempted to bribe him, the judge set aside the guilty verdicts and granted a new trial. Before the second trial began, Arthur fired five federal office holders who were sympathetic with the defense.
Garfield's assassination by Guiteau, who was constantly referred to in the press as a disgruntled office seeker, publicized the issue of civil service reform and leaders in noth the Democratic and Republican parties realized that they could attract the votes of reformers by eliminating the spoils system. Arthur came to the same conclusion. In 1880, Democratic Senator George H. Pendleton of Ohio introduced legislation that required selection of civil servants based on merit as determined by an examination. In his first annual presidential address to Congress in 1881, Arthur asked Congress for civil service reform legislation and Pendleton once again introduced his bill, but Congress did not pass it. The public reacted at the ballot box in the 1882 mid-term elections.
Arthur's Republican Party was badly defeated in the mid-terms. Republicans lost 34 seats, while Democrats gained 68 seats. The 1880 census had increased the size of the House and after the mid-terms, Democrats held a majority of 196 seats to 117 for Republicans. (Previously, Republicans held a majority of 151 to 128.) Democrats had successfully campaigned on the resistance of Republican leaders to reforming the Spoils system of government patronage. As these elections were prior to ratification of the seventeenth amendment, Senators were still chosen by state legislatures, and the Senate was virtually deadlocked with 37 Republicans, 36 Democrats and 1 "Reaadjuster" (who caucused with the Republicans.)
After the election, Arthur became an even greater supporter of the Pendleton Civil Service Reform Act, establishing a professional civil service. But this was too little, too late. The Republican Party had developed an image in the minds of many voters as corrupt. This election also saw the decline of the pro-paper money Greenback Party, and the pick up of several Virginian seats by the Readjuster Party which promoted fiscal responsibility and populism. The lame-duck session of Congress was more amenable to civil service reform and the Senate approved Pendleton's bill by a majority of 38–5. The House also passed Pendleton's bill by a vote of 155–47. Arthur signed the Pendleton Civil Service Reform Act into law on January 16, 1883. It was ironic that one of the strongest Stalwarts and spoilsman was the president who ushered in civil service reform.