Battle Cry of Freedom: The Civil War Era (125 page)

Clandestine commerce between enemies is as old as war itself. Americans had proved themselves skilled at this enterprise in the Revolution and the War of 1812. The Civil War offered vastly greater scope for such activities. Free and slave states had lived in economic symbiosis before 1861; their mutual dependence became even more urgent in some respects during the war. "Physically speaking, we cannot separate," Lincoln had said in his first inaugural address. "We cannot remove our respective sections from each other . . . and intercourse, either amicable or hostile, must continue between them."
⁵⁴
Intercourse both hostile
and
amicable continued for the next four years in ways that neither Lincoln nor anyone else had anticipated. The South needed salt, shoes, clothing, bacon, flour, medicine, gunpowder, lead, and other necessities of war from the outside world. Since the blockade restricted the flow of these supplies from abroad, canny Confederates sought to flank the blockade by direct trade with the North. Enterprising Yankees were willing to exchange such goods for cotton. Both governments officially banned trade with the enemy. But when the price of a pound of cotton leapt from ten cents to a dollar in the North while the price of a sack of salt jumped from $1.25 to $60 in parts of the South, venturesome men would find a way to trade cotton for salt. An English resident of the Confederacy observed that "a Chinese wall from the Atlantic to the Pacific" could not stop this commerce.
⁵⁵

The war's first year witnessed a considerable amount of smuggling between the lines in Kentucky and through southern counties of Maryland. The real bonanza, however, began with the Union conquests in the Mississippi Valley during 1862. First Nashville, then New Orleans and Memphis became centers of a flourishing trade in this region. Some of this exchange was legitimate. Eager to restore commercial activities in occupied areas and to win their inhabitants back to unionism, the Treasury Department issued trade permits to merchants and planters who took an oath of allegiance. Having taken the oath a merchant in

54
.
CWL
, IV, 269.

55
. Coulter,
Confederate States
, 287.

Memphis, for example, could sell cotton for cash or credit which he could then use to purchase a cargo of salt, flour, and shoes from Cincinnati for sale within Union-occupied territory. The Treasury hoped that trade would follow the flag as northern armies moved south until the whole South was commercially "reconstructed."

The problem was that trade had a tendency to get ahead of the flag. Some southerners within Union lines swore the oath with mental reservations. Others bribed Treasury agents to obtain a trading permit. Having sold cotton and bought salt or shoes, these men in turn smuggled the latter to southern armies or to merchants serving the civilian market behind Confederate lines. Some northern traders paid for cotton with gold, which eventually found its way to Nassau in the Bahamas to pay for rifles shipped through the blockade. Traders sometimes bribed Union soldiers to look the other way when cotton or salt was going through the lines. A good many soldiers could not resist the temptation to get in on the profits directly. The "mania for sudden fortunes made in cotton," wrote Charles A. Dana from Memphis in January 1863, "has to an alarming extent corrupted and demoralized the army. Every colonel, captain, or quartermaster is in secret partnership with some operator in cotton; every soldier dreams of adding a bale of cotton to his monthly pay. I had no conception of the extent of this evil until I came and saw for myself."
⁵⁶

On the other side of the line a Confederate officer complained that the cotton trade had also "corrupted and demoralized" southerners who were subtly enticed into the Union web instead of burning their cotton to keep it out of Yankee hands. The
Richmond Examiner
spoke bitterly in July 1863 of "those rampant cotton and sugar planters, who were so early and furiously in the field for secession" but "having taken the oath of allegiance to the Yankees, are now raising cotton in partnership with their Yankee
protectors
, and shipping it to Yankee markets." This "shameless moral turpitude . . . inflicts a heavy injury upon the general cause of the South, which is forsaken by these apostates."
⁵⁷

In theory the Confederate War Department agreed that "all trade with the enemy" was indeed "demoralizing and illegal and should, of course, be discountenanced, but [and this was a big but] situated as the people to a serious extent are . . . some barter or trading for the supply of their necessities is almost inevitable." Even Jefferson Davis, incorruptible

56
.
O.R.
, Ser. I, Vol. 52, pt. 1, p. 331.

57
.
Ibid.
, Ser. IV, Vol. 3, pp. 646–48;
Richmond Examiner
, July 21, 1863.

to a fault, conceded that "as a last resort we might be justified in departing from the declared policy" against trade with the enemy, "but the necessity should be absolute."
⁵⁸
For the Confederacy the necessity was usually absolute. Trade with the Yankees prevented famine in some areas and kept Van Dorn's Army of Mississippi in the field during the fall of 1862. "The alternative," stated the secretary of war starkly, "is thus presented of violating our established policy of withholding cotton from the enemy or of risking the starvation of our armies."
⁵⁹

Believing that "we cannot carry on war and trade with a people at the same time," Sherman and Grant did their best to stop the illicit cotton trade through Memphis and western Tennessee in 1862.
⁶⁰
The two generals issued a stream of regulations to tighten the granting of permits for legal trade, banished southerners who refused to take the oath and imprisoned some who violated it, required that all payments for cotton be made in U.S. greenbacks (instead of gold that could be converted into guns at Nassau), and tried to prevent the access of unscrupulous northern traders to Memphis. But much of this was like Canute trying to hold back the waves. The order banning gold payments was overruled in Washington. And one of Grant's restrictive regulations was also rescinded after achieving an unhappy notoriety.

Several highly visible traders who defied Grant's orders were Jews. Grant and other Union generals had frequently complained about Jewish "speculators whose love of gain is greater than their love of country."
⁶¹
When Grant's own father brought three Jewish merchants to Memphis seeking special permits, his son the general lost his temper and on December 17, 1862, issued this order: "The Jews, as a class, violating every regulation of trade established by the Treasury Department, and also Department orders, are hereby expelled from the Department." Jewish spokesmen denounced this "enormous outrage" that punished a whole group for the alleged sins of a few. Sensing an issue, House Democrats introduced a resolution, but Republicans tabled it. Lincoln rescinded Grant's order, explaining through Halleck that while

58
.
O.R.
, Ser. IV, Vol. 2, pp. 334–35, 175.

59
. Ludwell H. Johnson, "Trading with the Union: The Evolution of Confederate Policy,"
The Virginia Magazine of History and Biography
, 78 (1970), 314.

60
.
O.R.
, Ser. I, Vol. 17, pt. 2, p. 141.

61
.
Ibid.
, 123. Although most traders were not in fact Jewish, harassed Union officers had come to use the word "Jew" in the same way many southerners used "Yan kee"—as a shorthand way of describing anyone they considered shrewd, acquisitive, aggressive, and possibly dishonest.

he had no objection to expelling dishonest traders, the order "proscribed a whole class, some of whom are fighting in our ranks."
⁶²
Grant said no more about Jews, but six months later he summed up the frustrations of his efforts to regulate a trade that "is weakening us of at least 33 percent of our force. . . . I will venture that no honest man has made money in West Tennessee in the last year, whilst many fortunes have been made there during that time."
⁶³

Fortunes were made in New Orleans, too, where Benjamin Butler ruled a restive city with a sharp two-edged sword. Cynical, clever, and apparently unscrupulous, Butler in New Orleans presented a paradox. On the one hand his Woman Order, his hanging of a southern gambler who had torn down the U. S. flag at the beginning of the occupation, and his imprisonment of several citizens who defied or displeased him earned everlasting southern hatred of "Beast" Butler. In December 1862, Jefferson Davis even issued a proclamation declaring Butler an outlaw and ordering any Confederate officer so lucky as to capture him to hang him straightway. On the other hand, Butler's martial law gave New Orleans the most efficient and healthy administration it had ever had. Rigorous enforcement of sanitary and quarantine measures cleaned the normally filthy streets and helped ward off the annual scourge of yellow fever. Butler was "the best scavenger we ever had," wryly commented a native. Before the war, conceded a local newspaper, New Orleans had been ruled by plug-ugly street gangs—"the most godless, brutal, ignorant, and ruthless ruffianism the world has ever heard of." After three months of martial law even the pro-Confederate
Picayune
had to confess that the city had never been "so free from burglars and cutthroats."
⁶⁴

The paradox extended to Butler's economic policies. The Union blockade by sea and the Confederate blockade of river commerce with the North had strangled the city's economy. Most workers were unemployed when Farragut captured the city. Butler distributed Union rations to the poor and inaugurated an extensive public works program financed in part by high taxes on the rich and confiscation of the property

62
. Documentation and details of this matter can be found in John Y. Simon, ed.,
The Papers of Ulysses S. Grant
, 14 vols. (Carbondale, Ill., 1967–85), VII, 50–56. See also Bruce Catton,
Grant Moves South
(Boston, 1960), 352–56.

63
. Grant to Salmon P. Chase, July 31, 1863, in
O.R
., Ser. I, Vol. 24, pt. 3, p. 538.

64
. Quotations from Gerald M. Capers,
Occupied City: New Orleans under the Federals
1862–1865 (Lexington, Ky., 1965), 89, 73, 71.

of some wealthy rebels who refused to take the oath of allegiance. These procedures earned the general another Confederate cognomen—"Spoons" Butler—for allegedly stealing southerners' silver for the enrichment of himself and his Yankee friends. Some truth stuck to this charge, as Union officers and other northerners who flocked to the city bought confiscated valuables at auction for nominal prices. The northerners included Butler's brother Andrew and other Yankee businessmen who helped the general with his project of obtaining cotton for northern mills. These speculators bribed their way through Treasury officials and army officers to make deals with planters and brokers beyond Union lines, trading salt and gold for cotton and sugar. Both sides sometimes used French agents as go-betweens to preserve the fiction of trading with a neutral instead of the enemy. Nothing illegal was proved against Butler himself—an unfriendly Treasury officer described him as "such a smart man, that it would, in any case, be difficult to discover what he wished to conceal"—but his brother Andrew returned home several hundred thousand dollars richer than he came.
⁶⁵

Butler's notoriety compelled Lincoln to recall him in December 1862. His successor was Nathaniel P. Banks, fresh from defeats by Stonewall Jackson in Virginia. Banks tried to ban trade with the enemy and to substitute conciliation for coercion in ruling the natives—with limited success in both efforts. Treasury regulations and congressional legislation in 1863–64 curtailed the permit system for private traders. The North also began obtaining more cotton from the cultivation of plantations in occupied territory by freed slaves. But none of this seemed to diminish the commerce between the lines. The Davis administration looked the other way out of necessity; the Lincoln administration looked the other way out of policy. The North needed the cotton for its own industry and for export to earn foreign exchange. To one angry general who could not understand this policy, Lincoln explained that the war had driven the gold price of cotton to six times its prewar level, enabling the South to earn as much foreign exchange from the export of one bale through the blockade as it would have earned from six bales in peacetime. Every bale that came North, even by means of "private interest and pecuniary greed," was one less bale for the enemy to export. "Better give him
guns
for it than let him, as now, get both guns and ammunition for it."
⁶⁶