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I don't believe you're correct. He was ineligible because the law didn't change until the 1930's - at the time of Chester Arthur's birth and for that matter during the time of his Vice presidency and his Presidency, both parents had to be naturalized citizens for their children to be natural born citizens.
The law was most likely changed due to Arthur, although I don't know for sure.
If born in the States from the beginning made them a citizen. It was only those born outside of the States the 1930 change clear up .
There is case law that makes it clear that what you state can be at the very least considered "in doubt". This case has yet to be overturned:
Minor v. Happersett (1875)
The Constitution does not, in words, say who shall be natural-born citizens. Resort must be had elsewhere to ascertain that. At common-law, with the nomenclature of which the framers of the Constitution were familiar, it was never doubted that all children born in a country of parents who were its citizens became themselves, upon their birth, citizens also. These were natives, or natural-born citizens, as distinguished from aliens or foreigners. Some authorities go further and include as citizens children born within the jurisdiction without reference to the citizenship of their parents. As to this class there have been doubts, but never as to the first.
If one takes the common law definition as the backbone upon which the Framers depended, as opposed to the opinions of those experts who came later (and therefore who could not ask the dead authors of the Constitution what they meant), there is good reason to believe that Chester Arthur was not eligible to hold the two highest offices in the land.
Note, deerman, I am leaving ample room to say you might (but I hold fast to the "might") be right.