Monthly Archives: September 2017

Speech at Palm Coast Civil War Roundtable

(September 25, 2017) Provided below is my speech about Confederate Private Sam Watkins to the Palm Coast Civil War Roundtable.

***

Margret Mitchell who authored Gone With the Wind once said of Confederate Private Sam Watkins:

Perhaps he did not contribute enormously to our store of information about military strategy and campaigns, but he certainly left a record to show what the dryly humorous foot soldier thought about it all…A better book there never was.

The chief aim of my annotated and illustrated version of Co. Aytch is to add the context that Ms. Mitchell felt was missing from Sam’s 1882 memoir. In contrast, there is little to be added to the humor, passion, and tragedy of Sam’s writings, which at times rise to a standard approaching Mark Twain. Partly that’s because Sam is telling a true story, and genuine adventures are often more compelling than fictional ones. As someone once cleverly explained, “It’s not an adventure until something goes wrong.” If nothing else, Sam’s memoir is a thorough documentation of how routinely war planning “goes wrong.”

Mark Twain first achieved fame seven months after Lee’s surrender at Appomattox with “The Celebrated Jumping Frog of Calaveras County,” a story about a shrewd frontier gambler who tricks a California prospector. The miner owns a pet frog that has out-jumped every competing frog in the county. While the miner is occupied catching a new frog for the gambler to wager against his champion, the gambler feeds the prospector’s frog buckshot. When the miner returns, the speculator declares the freshly caught frog a suitable contender and places his wager. To the dismay of all— save one—the champion frog won’t budge, and the cheater wins.

Watkins tells of a similar, but true, incident several years earlier when his Confederate army was idled for seven weeks in Tupelo, Mississippi. To overcome boredom the soldiers would bet on most anything, including how fast lice would run off of a tin plate. One soldier was constantly winning until the others figured out he always heated his plate before a race.

Unlike Twain’s, Watkins’s literature would go almost unnoticed for over a century. After his memoir was serialized in the Columbia (TN) Herald in 1881–82, fifteen hundred copies were printed as books. Between the author’s death in 1901 and the Civil War Centennial in the early 1960s, Co. Aytch was seldom reprinted and always in small editions. In 1962, Collier Books opportunistically published it along with seven other out-of-copyright Civil War books, such as the memoirs of Union Generals Ulysses S. Grant and William T. Sherman. However, in Ric and Ken Burns’s groundbreaking 1990 PBS documentary, The Civil War, Watkins’s memoir was quoted frequently and as a result the book has become quite popular.

Watkins came from a prosperous family and had some formal education. His memoir includes a number of Latin phrases. There are also multiple references to Shakespeare and Greek mythology, as well as numerous biblical ones. Sam was born in the summer of 1839, in Maury County, Tennessee, which is about forty-five miles south of Nashville. When he was twenty-two he enlisted in a company of Confederate soldiers that adopted the name “Maury Grays.” They were officially designated Company H of the 1st Tennessee Regiment.

Originally about one hundred men joined the company, but when it surrendered almost precisely four years later, only seven of the initial soldiers remained, including Watkins. During the war, Sam was wounded three times. He was also captured three times, but returned to his comrades by escaping. He fought in nearly all of the major battles of the principal Confederate army west of the Appalachians. Examples include Shiloh, Perryville, Murfreesboro (Stones River), Chickamauga, Lookout Mountain, Missionary Ridge, the 120-day Atlanta campaign, Franklin, and Nashville.

Aside from fighting, Sam endured the constant hardships of marching and camping in an ill-provisioned army. Like most of his fellow soldiers, he was often barefoot and hungry. It was especially hard to stay warm in winter. Sam’s death in 1901 at age sixty-two may have been premature as a lingering consequence of such deprivations.

Although Watkins was unmarried when he marched off to war, he had a sweetheart named Jennie Mayes who was his age. When the two were teenagers, their families owned adjacent farms. Two of the most touching entries in Co. Aytch are a poem and letter from Jennie, which Sam read “500 times.” They married shortly after the war, and Sam clerked at his father-in-law’s general store. Within a dozen years they had seven children, and Sam owned a general store in Columbia. Just before the end of the 1870s, their oldest child died of typhoid, which was thought to have originated from the household’s source of potable spring water. Consequently, Sam moved the family to a farm outside of town in1880 where he started work on the memoirs.

Eventually he had eight children, and the older ones recalled seeing him writing late at night and early mornings. They remembered he sometimes laughed and sometimes cried, depending on what he was writing. He continued to write thereafter, with stories appearing in magazines like Confederate Veteran and Southern Bivouac, in addition to articles in local newspapers.

Evidently Watkins shared a simple religious faith with most of the common soldiers. Seemingly crude to a modern reader, it was nonetheless a type that could quickly detect false devotion in others, no matter how elaborately disguised. The battle of Chickamauga provides an example. One Sunday shortly before the battle a distinguished preacher was invited to address the troops, a visit Watkins satirized in his memoir:

God is an abyss of light, a circle who is everywhere and His circumference is nowhere. Hell is a dark world made up of spiritual sulfur and other ignited ingredients.’

When the old fellow got this far I lost further run of his prayer … I don’t think anyone understood him but the Generals … About this time we heard the awfullest racket … tearing through the woods toward us … a mad bull … running and knocking down the divine … (bringing) the services to a close without the Doxology.

This same brave Chaplin rode with us at…Chickamauga, exhorting the boys to be brave [and] aim low…’Remember boys that he who is killed will sup tonight in Paradise’. Presently bullets started to smack into nearby trees…”and the parson put spurs to his horse and was seen to limber to the rear and almost every soldier yelled out, ‘The parson isn’t hungry and never eats his supper.’”

Yet Sam could also tell the poignant side of soldier life. On the evening after the battle of Chickamauga in northern Georgia, he experienced a heartrending sight. He was with a detail of soldiers looking for wounded when they were approached by a group of women with lanterns also searching for survivors:

Coming to a pile of our slain, we had turned over several . . . when one of the ladies screamed . . . ran to the pile . . . and raised [a] man’s head, placed it in her lap and began kissing him . . . saying ‘Oh, they have killed my darling, darling, darling! Oh, mother, mother, what must I do? . . . My darling! Oh, they have killed him, they have killed him!’

I could witness the scene no longer. I turned and walked away.

Several times Watkins narrowly missed becoming the object of such bereavement himself. Once during hand-to-hand combat at the battle of Kennesaw Mountain, a Yankee rushed me and said, ‘You have killed my two brothers and now I’ve got you’ … I heard a roar and felt a flash of fire and saw … William A. Hughes, grab the muzzle of the gun, receiving the whole (blast) … He died for me.

Watkins watched as litter carriers took Hughes away. The dying soldier kept telling them, “Give me Florence Fleming,” his name for his rifle, which was engraved on it with silver lettering. “It was the last time I saw him,” Watkins wrote. “But I know away up yonder … in the blue vault of heaven … we will sometime meet at the marriage supper of the Son of God.”

Shakespeare writes of combat transforming soldiers into a “band of brothers” who become more motivated to fight for one another than any political cause. Thus, during the hasty retreat from Missionary Ridge at the battle of Chattanooga in November 1863, Sam describes how four Rebels demonstrated brotherly affection for a comrade in a manner that would have been unthinkable under almost any other circumstances:

We saw poor Tom Webb lying . . . shot through the head, his blood and brains smearing his face and clothes, and he still alive. . . . We did not wish to leave the poor fellow in that condition and [four of us] got a litter and carried him . . . to Chickamauga Station. . . .

The next morning Dr. J. E. Dixon . . . told us that it would be useless for us to carry him any further [because] it was utterly impossible for him ever to recover. . . . To leave him where he was we thought best. We . . . bent over him and pressed our lips to his—all four of us. We kissed him goodbye.

Despite such experiences, Sam’s persistent eye for humor almost never failed him. One evening he and the louse-racing champion, T. C. Dornin, were instructed to infiltrate the nearby Union picket line and gather information about the opposing army. His identity obscured by darkness, Watkins pretended to be a federal infantryman as he quizzed a Union sentinel.

‘Captain, what guard it this?’ He answered, ‘Nien bocht, you bet,’ is what I understood him to say. ‘What regiment are you from?’ ‘Iet du mein got Donnermetter stefel switzer.’ I had to give up—I had run across the detail of a Dutch regiment.

Sometimes Sam might have been telling stories that he had heard from others but merely put himself into the narrative. One example is his description of getting friendly with a Union sentry the night before the Battle of Perryville, Kentucky. The opposing lines were not close enough to permit the following narrative, but it could have happened on another battlefield to someone else:

We [two enemy sentries] got very friendly … and made a raid upon a citizen’s pantry where we captured a bucket of honey, a pitcher of sweet milk, and three or four biscuits. The old citizen was not home—he and his whole household had gone visiting … In fact, I think all of the citizens of Perryville were taken with a sudden notion of promiscuous visiting about this time; at least they were not home to all callers.

Conversely, his description of the First Tennessee Regiment’s participation in the actual fighting the next day is a mixture of confusion and horror that leaves little doubt about its authenticity.

While we were marching through a cornfield they opened their war dogs upon us … from one end of the line to the other seemed to be a solid sheet of blazing smoke and fire. Here General Maney’s horse was shot. From this moment the battle was a mortal struggle. Two lines of battle confronted us. We had killed all in the first line and were charging over the second when … their third and main battle line … poured their deadly fire.

It was death to retreat now … we were soon in hand-to-hand fighting, using the butts of our guns and bayonets. The guns were discharged so rapidly, it seemed the earth itself was in volcanic uproar.

The next morning a wounded comrade … asked me to lay down beside him. When I awoke the poor fellow was stiff and cold in death.

Like other soldiers, Sam was constantly hungry on the march back to Tennessee from Kentucky. Since the enemy did not pursue them aggressively, the soldiers could purchase goods from farmers who offered items for sale along the side of the road. Alternately they might confiscate goods from Union-loyal citizens. Shortly after his unit crossed the Tennessee state line where the expected rations failed to appear, Sam “struck out through the country” in search of food.

I had gone but a short distance before I came across a group of soldiers clambering over something. It was Tom Tuck with a barrel of sorghum that he had captured from a good Union man. He was selling it out at five dollars a quart. I paid my five dollars, and by pushing and scrounging I finally got my quart. I sat down and drank it; it was bully…it was not so good…it was not worth a cent…I was sick, and have never loved sorghum since.

The next year while the army was preparing fortifications they would never use at Chattanooga, Sam’s father paid a visit. The soldiers were living on parched corn. Since Sam was ashamed to offer such a meal, he introduced his dad to the regimental commander, Colonel Feilds, who invited the two to have dinner with him.

Shortly thereafter, an African-American cook dumped a frying pan full of parched corn on an oilcloth and announced, “Master, dinner ready,” Watkins recalled. “He [the regimental commander] was living like ourselves—on parched corn.”

Watkins’ memoir rarely speaks of African-Americans or slavery. However, after the fall of Atlanta, the Army of Tennessee—then commanded by Lieutenant General John Bell Hood—was advancing toward its namesake state in hopes of forcing Union Major General William T. Sherman to backtrack. Along the route, Hood destroyed railroad track north of Atlanta to cut Sherman’s supply line.

At Dalton, Ga., a 750-man federal garrison that included 500 African-Americans guarded the track. The federal commander, badly outnumbered, felt compelled to surrender, but wanted assurances that the African-Americans would be fairly treated. Hood would make no promises, but in the end the blacks were put to work tearing up railroad track. As Watkins described it:

We marched the black rascals out. They were mighty glad to see us and we were kindly disposed to them. We said, ‘Now boys, we don’t want the Yankees to … blame you; so let’s us just go out here on the railroad track, and tear it up, and pile up the crossties, and then pile the iron on top of them and we’ll set the thing a-fire and when the Yankees come back they’ll say, ‘What a bully fight (you) did make.’

Although I’ve discovered no separate account to support Sam’s story at Dalton, there is no doubt that about 500 black soldiers were surrendered to the Confederate army there and there are no reports a racial massacre. Moreover, it seems plausible that Hood would use the captured blacks as laborers to tear up railroad track.

During one idle period in Tennessee Sam and some comrades “made a raid” on a farmhouse where they spied a fat hog. They decided to steal the hog by having two of the soldiers, which included Sam, distract the inhabitants of the house with a visit. Nobody was home except an old lady and her widowed daughter. But the women invited Sam and his comrade to lunch when the old lady disclosed that she had three sons in the army and two had been killed. Presently distant gunfire informed Sam that the hog had been killed. When he returned to the rest of his group Sam

…did not know how to act…The hog was cooked, but I did not eat a piece of it. I felt that I had rather starve, and I believe that it would have choked me to death if I had attempted to eat it.

A short time later an old citizen from Maury County visited me and gave me some money my dad sent. After getting the money…I could not rest. I took some back to the old lady and said:

“Madam, some soldiers were here a short time ago, and took your hog…I wish to pay you for it.”

“I would much rather have the hog.”

“Madam, that is an impossibility, your hog is eat up.”

The old lady’s eyes filled with tears. She said that she was perfectly willing to give the soldiers everything she had, and if she thought it had done us any good, she would not charge anything for it.

“Well, Madam, here is a hundred dollar, new issue, Confederate bill.”

I laid the money on the table and left. I have never in my life made another raid upon anybody else.

I am not familiar with any Civil War personality more worthy of respect for his commitment to his “band of brothers” and the civilians who depended upon them than Sam Watkins. Co. Aytch is one of the finest military memories ever written. Both general readers and historians can enjoy Sam’s story, “a better book,” as Margret Mitchell claimed, “there never was.”

My Amazon Author Page

Advertisements

Speech to Austin Civil War Roundtable

(September 24, 2017) Provided below is a copy of my recent speech about inter-belligernt trade between the North and South to the Civil War Roundtable of Austin, Texas. It was preceded with this preamble from a Texas novelist, which is pertinent to the current Confederate monument controversy.

Trading With the Enemy

By

Phil Leigh

Austin Civil War Roundtable

September 21, 2017

On June 7, 1863, the day before Robert E. Lee attended a cavalry review before starting his second northern invasion that culminated early the following month at Gettysburg, the Confederate commerce raider Clarence forced the US flagged Alfred H. Partridge to stop off the North Carolina coast. The raider anticipated Partridge would be the second of an eventual string of twenty-one prizes. Normally, seized merchant ships were burned or used to transport previously captured crews to a safe harbor. But upon boarding the schooner the Rebels discovered she was bound for Matamoros, Mexico out of New York with a cargo of arms and clothing for Texas Confederates. Consequently, the Partridge was set free.

Since Matamoros was a neutral Mexican port federal warships could not blockade it. Before the Civil War only about one ship annually cleared New York for the Mexican town. However, a year after the War’s first important battle at Bull Run the average was about one per week. Ships to Matamoros were also cleared from Boston, Philadelphia, and other Northern harbors. Cargoes included a multitude of Northern-made items that would have been considered contraband if shipped directly into the Confederacy. They encompassed weapons, munitions, and military uniforms, among other articles. For Yankees willing to help arm the Confederacy at a profit, Matamoros was little more than a legal fig leaf to cover dubious, if not treasonable, conduct.

In exchange, Southerners provided cotton from fields as far away as Arkansas, Louisiana, and east Texas. They typically loaded wagons with twenty bales and set out in caravans over crude trails ending in Brownsville, Texas, across the shallow Rio Grande River from Matamoros. En-route teamsters were vulnerable to unpredictable water shortages and attack from hostile Native Americans, and outlaws of all types. Next to specie (gold and sliver coins), cotton was the most acceptable international exchange medium available to Americans, whether in the Union or Confederacy. Adroit, clever, and sometimes ruthless contraband-for-cotton traders accumulated fortunes in Matamoros and Brownsville.

One example was Connecticut-born Charles Stillman who sold Rebel cotton at Matamoros to buyers in Northern states, including the United States government. After the War, Stillman was one of the wealthiest Americans. Before two of his granddaughters married into the Rockefeller family he was a major shareholder in New York’s National City Bank. His son, a grandson, and a great-grandson each served as National City’s Board Chairman. The great-grandson – James Stillman Rockefeller – held the post as late as 1967 and lived until 2004. Presently the bank is known as Citicorp.

Despite its legal circumvention advantage Matamoros was a comparatively minor part of Civil War intersectional commerce. More often, the exchange was directly across enemy lines. The practice became important in the spring of 1862 about a year after the opening shots at Fort Sumter as the cotton trading centers at New Orleans and Memphis were captured.

When Union Major General Benjamin Butler arrived in New Orleans with 15,000 occupation soldiers in May 1862, his net worth was about $150,000, but six years later it was $3 million. Although the lawyer-general was too shrewd to incriminate himself, there is little doubt that the gain was primary achieved by trading with the enemy.

By the summer of 1862 Union Major General William T. Sherman at Memphis complained that Northern traders were buying southern cotton for gold, which he believed the Rebels next used to buy weapons in the Bahamas and even at Cincinnati. A few months later Major General Ulysses Grant captured Confederate cavalry in northern Mississippi armed with modern carbines evidently purchased at occupied Memphis.

Ladies also participated in such trade and were sometimes especially effective. They were generally held less accountable for violations and soldiers were hesitant to physically search them. For example, while Union Captain Julius Ochs was assigned to a unit guarding the St. Louis-to-Cincinnati railroad, his wife was caught trying to smuggle quinine in a baby carriage across an Ohio River bridge to Rebels in Kentucky. Somehow Captain Ochs got the charges dropped, but his wife’s dedication to the South persisted. After the War she joined the United Daughters of the Confederacy while her husband became a member of the Grand Army of the Republic, a Union veterans organization.

Their eldest son, Adolph, became a Chattanooga newspaperman. Shortly before the turn of the nineteenth to the twentieth century, Adolph bought a failing New York newspaper, changed its masthead to “All the news that’s fit to print” and launched the New York Times toward national prominence.

Large numbers of men are seldom motivated to enlist as soldiers merely to fight a war for monetary compensation. A higher calling is required to justify leaving their homes and risking their lives in a fight requiring them to kill strangers who normally have done them no harm. In the spring of 1861 the concept of “Union” became sufficiently noble to qualify as such a calling in the North. Southerners simply rallied to the equally high-sounding notion of “independence.” Both terms were facades. The North wanted an intact Union in order to sustain its emerging economic supremacy whereas the South wanted independence with slavery.

Without the South’s raw materials and favorable export trade balance, northern businessmen justifiably worried that the economies of the states remaining in the Union after southern secession might collapse. As Lincoln said in his first inaugural address, “Physically speaking we cannot separate. We cannot remove our respective sections…[The two sides] cannot but remain face-to-face and intercourse, either amicable or hostile, must remain between them.” Its unlikely that Lincoln realized just how prophetic his conclusion would become as trade continued – and sometimes even flourished – during four years of bitter warfare between the two regions.

World cotton market characteristics at the start of the Civil War explain how a bisected Union bereft of between-the-lines trading could lead to economic collapse in the North. Cotton textile manufacturing was the World’s biggest industry and it was largely dependent upon the South for raw material. Southern cotton alone accounted for about two-thirds of all United States exports. A truncated USA composed solely of Northern states could not hope to maintain a favorable international balance-of-payments. The situation would be exacerbated if the South ceased to be a market for Northern manufactured goods, which would be likely given the Confederacy’s lower import tariffs.

However, the South also had intersectional dependencies. Its focus on cash crops, such as cotton and tobacco, left it with a resultant need to buy wheat, corn, and pork from states northwest of the Ohio River. Similarly the South was dependent upon outside sources for nearly all manufactured articles. While such goods could be imported from Europe, American protective tariffs often made domestically produced alternatives from the North more economical. Initially the South required provender from the Northwest more than the North needed cotton. That changed quickly as New England’s cotton inventories dwindled and Lincoln discovered he could sell cotton to Europeans for gold thereby curtailing the outflow of bullion from the Treasury.

Since inter-belligerent trade was almost a certainty, each side adopted regulations to control it in a manner optimal to their interests. Generally President Davis looked the other way out of necessity, whereas Lincoln looked the other way out of policy.

While the Confederate Congress tried to restrict shipment of specific commodities such as cotton into the North, it never outlawed trade with states remaining in the Union. It was silent on the matter of imports because the necessities of life were often more readily available to Southerners on the far side of enemy lines than through the blockade.

Lincoln’s regulations were more convoluted due to conflicting interests. Prohibition on trade would leave destitute whites and former slaves in federally occupied regions of the Confederacy with no means of economic support. But less altruistically, New England mills wanted feedstock to keep their factories running and workers employed. For diplomatic reasons, Lincoln wanted enough cotton to slip out of the country to avoid a cotton famine in Europe that might otherwise provoke Old World intervention in the American war.

The first opportunity for the North to secure significant quantities of cotton materialized about six months after the opening shots at Fort Sumter. In November 1861 a combined naval and army federal force occupied the Sea Islands near Port Royal, South Carolina. It was hoped the area’s ex-slaves could be more productively employed as free laborers on cotton plantations managed by capitalistic northerners. Although not sufficiently productive to suppress inter-belligerent commerce elsewhere, the Port Royal Experiment encouraged northern businessmen to advocate other military adventures designed to yield occasions to operate similar plantations in other parts of the Confederacy.

Former Massachusetts Congressman and abolitionist Eli Thayer targeted Florida for such Northern colonization. His plans were blocked in February 1864 when an invading US army was defeated at the battle of Olustee near Lake City. It was the sunshine state’s largest Civil War battle.

Edward Atkinson was another Bay State proponent of capturing and redistributing southern lands to Northern colonists, but he focused on Texas. Atkinson was an abolitionist, mill owner, and antebellum weapons supplier to John Brown. Partly because of persistent lobbying by men like Atkinson, Union forces eventually launched an ill-fated offensive up the Red River about a month after Olustee.

Following the occupation of Port Royal, the next surge of intersectional trade developed in Matamoros. Shippers from the Northern states used the legal loophole in the federal blockade explained earlier to circumvent prohibition against selling contraband to the enemy. They merely pretended their cargoes were destined for Mexico whereas they were actually used to supply the Confederacy.

Intersectional trade swelled after Memphis and New Orleans were captured shortly before the summer of 1862. Both cities were near the center of the World’s richest cotton-growing lands. When General Butler assumed command in New Orleans he became a vigorous proponent of trading with the enemy, partly because he was the biggest shareholder in one of the largest textile mills in Massachusetts.

Contrary to popular belief, cargoes running the Union blockade did not necessarily represent shipments between the Confederacy and Europe. About twice as much cotton reached the North across enemy lines as was shipped to Europe through the maritime blockade. But by using a variety of evasions northern merchants sometimes ran the Union naval blockade themselves instead of employing overland routes across enemy lines.

One method was to first ship cargoes to Halifax where they could be converted into “Canadian” merchandise prior to running the blockade. On return, Confederate bales could be transformed into “Canadian cotton” at Halifax and thereafter shipped to New York or other Northeastern ports.

After General Butler became the Maestro of wartime intersectional trade in New Orleans he transferred to occupied Norfolk in November 1863. Once again he utilized family members and earlier New Orleans associates to promote commerce across enemy lines in Virginia. After the fall of the South’s last major blockade-running port at Wilmington, North Carolina in the War’s final months, General Robert E. Lee’s besieged army at Petersburg received most of its vital supplies from Butler-controlled Norfolk.

Following Vicksburg’s surrender in mid-1863 Rebel states west of the Mississippi River were isolated. Union gunboats patrolling the river made it difficult for Confederates to transfer supplies across the stream. Consequently, the Rebel Trans-Mississippi became almost a nation unto itself. Commanding Lieutenant General Edmund Kirby-Smith was not only the ultimate military authority throughout the vast region, but also controlled important aspects of civilian life including a near monopoly on cotton trade. The territory evolved into a near free-for-all of inter-belligerent trade as a result of its inability to obtain adequate supplies of necessities by any other means.

In the War’s final year Lincoln threw the gates of intersectional trade wide open. Efforts by Congress and the military to throttle such commerce caused a decline in the Treasury’s gold reserves in the second half of 1864, because the restrictions reduced the amount of cotton Union traders had available to sell to Europe in exchange for gold. Lincoln concluded that he could slow the gold drain by requiring that domestic cotton buyers be limited to using greenback currency, which was not convertible into gold. He also believed that a proliferation of greenbacks in the South would provide a powerful economic incentive among residents to favor reunification with the Union.

In the end, wartime intersectional commerce was a greater benefit to the Confederacy than to the Union and likely prolonged the War. While there were admittedly some unselfish and diplomatic reasons for Northerners to engage in such trade, the chief motivation was mercenary. During the War cotton prices climbed as high as $1.90 per pound as compared to about $0.13 in 1860, which was the year before the War started. For those willing to set aside morality in exchange for personal economic advantage, the profits were irresistible — particularly when favored access to inventories could be secured by means of political connections, bribery, or military status.

One example involves a name currently associated with a prominent bank and credit card operation. Until he became Supreme Court Chief Justice late in the War, Treasury Secretary Salmon P. Chase was largely responsible for issuing cotton trading permits. Petitioners encompassing the full limits of the ethical spectrum continually hounded him for the profitable certificates. Although Chase had a reputation for honesty, he was a prideful man whose ambitions required money. For example, he hoped to unseat Lincoln in the 1864 Presidential election.

Chase relied upon banker Jay Cooke to sell most of the bonds required to fund the Civil War. While Cooke’s efforts were exceptional they also enabled the financier to become enormously wealthy.

When Cooke opened a branch of his bank in Washington in February 1862, Chase was one of the first depositors. The secretary soon asked the banker, “How can you invest a few thousand dollars for me so as to make the best possible profit?” Evidently Chase could mollify himself that he was merely asking for a favor instead of a bribe. He soon discovered that the profits from the morsels that Cooke set aside for him were rewarding.

Ellis Oberholtzer who was the biographer selected by Jay Cooke’s children shortly after the financier’s death wrote:

“Throughout the year 1862, at Chase’s solicitation, Cooke was investing various sums of money for the secretary, with a view to obtaining for him the largest possible income…Every few weeks he received checks, which represented the proceeds of various speculations in railway and industrial stocks conducted with a practical banker’s acumen plus a very generous regard for a friend’s best pecuniary interests.” Finally, Chase’s beautiful daughter, Kate, employed her charms to advance his ambitions.

Among those ensnared by her attractions was Rhode Island Senator William Sprague who was then one of America’s wealthiest men. His family owned some of the largest New England cotton textile mills as well as other businesses including sawmills and locomotive manufacturing plants. They married in 1863. Kate wore a $50,000 tiara gift from her husband at the wedding.

Although Sprague’s mills badly needed cotton Secretary Chase did not grant him special favors. Consequently, the Senator entered into a treasonous partnership to trade weapons for Confederate cotton in an episode known as The Texas Adventure.

When visiting Washington as a bachelor Sprague normally boarded at the Willard Hotel, which was then – as now – a center of political intrigue. William Russell, who was the Washington correspondent for The London Times wrote that Willard’s probably contained more “scheming, plotting, [and] planning…than any building the same size…in the world.”

In September 1862 a former Texan, Harris Hoyt, arranged to casually meet Sprague at the hotel. Hoyt claimed he was thrown out of the state because of his Union loyalties. He aroused Sprague’s interest when speaking of his many Union-loyal friends in Texas who were anxious to sell cotton if they could get it through the blockade.

Sprague asked Hoyt to travel to Providence where he would host a meeting to see what might be arranged. Hoyt brought along an experienced Texas skipper named Charles Prescott and Sprague called in an associate named William Reynolds who had previously been dismissed by Chase due to account shortages while Reynolds was in charge of the Port Royal cotton-growing venture explained earlier. During the meeting Hoyt declared that the Texas legislature authorized him to build a textile mill there if he could raise the funds. If Sprague and Reynolds would give him enough money to buy a shipload of weapons and other contraband, Hoyt would take it to Texas, sell the arms to the Confederate army, and use the proceeds to construct the mill. Mill profits would be used to buy cotton for shipment to the North. Sprague and Reynolds agreed to finance the venture. Prescott went to New York to buy the necessary ship while Hoyt bought the contraband cargoes.

The vessel and cargo were ready by December, but there was no official approval from Secretary Chase. As a hopeful alternative, Sprague wrote letters of introduction for Hoyt to Navy Secretary Welles, New Orleans occupation commander General Butler, and to Admiral David Farragut who commanded the west Gulf Blockading squadron. His letters represented Hoyt as a Union loyal citizen.

The venture supplied its backers with high-grade cotton for almost two years, until a shipment was caught in the blockade in November 1864. Although cargo ownership was disguised, English insurance records enabled investigators to trace it to Prescott who then lived in Troy, New York. On the same day that Chase was nominated to become Supreme Court Chief Justice, Prescott gave a confession implicating Hoyt, Reynolds, and the Senator’s cousin Byron Sprague.

An earlier unrelated examination of New York customs irregularities disclosed that some officials colluded with selected shippers thought to be blockade-runners. The top New York customs officer was Hiram Barney who was appointed by Secretary Chase and was also a close associate of Senator Sprague. In addition, Barney managed Secretary Chase’s New York real estate and had lent him $45,000, which may have never been repaid.

Hoyt originally hoped that Chase’s December 1864 appointment to Chief Justice would lead to Hoyt’s release. When it didn’t, he felt betrayed and confessed everything including Senator Sprague’s involvement. Prescott independently augmented his confession to support Hoyt’s version, thereby providing the two witnesses required for a treason conviction against the Senator.

Three weeks before President Lincoln was assassinated, the political hot potato was referred to War Secretary Edwin Stanton. While Stanton took no action, it is commonly believed he declined because an inquiry would have reflected poorly upon a Presidential Administration whose leader was martyred shortly after the Secretary received the charges. Stanton may have also wanted to avoid embarrassing Chase who had been a persistent Radical Republican ally when the two had served on Lincoln’s cabinet together. Finally, Stanton was politically cagey. He could undoubtedly foresee advantages in having a wealthy Senator obligated to him.

Nonetheless, the accusations resurfaced five years after the end of the Civil War in 1870 when a Rhode Island Congressman named Thomas Jenckes sought reelection against a Sprague-backed candidate during the Grant administration. Sprague asked for a Senate investigation to clear his name, which was launched early the following year. Conveniently, Grant’s Secretary of War was the corruptible William Belknap who later resigned for bribe taking. Suspiciously, Belknap had little interest in cooperating on the Sprague inquest. For example, he failed to locate a copy of Hoyt’s full confession given earlier to Stanton and implicating the Senator. Additionally, the committee did not call Jenckes as a witness until shortly before Congress adjourned thereby leaving the Congressman no time to gather corroborating witnesses who were geographically scattered. The perfunctory investigation cleared Sprague because “there was nothing in the paper[s] implicating Sprague.” But key papers were missing, including most notably Hoyt’s confession, which Jenckes could have corroborated with witnesses.

No doubt, Kate married William partly because his money could help get her father elected President. Even though he was a Republican cabinet member during Lincoln’s Presidency and a sitting Supreme Court justice from 1865 until his death in 1873, he sought the Democratic nomination in 1868. Kate was his campaign chairperson, although she was not permitted on the New York conventional floor. She managed her delegates from a Fifth Avenue hotel, but the effort failed.

Thereafter, the marriage of William and Kate gradually deteriorated amid mutual infidelities, among other problems. Kate’s affair was with New York Senator Roscoe Conkling.

Upon returning unexpectedly from a business trip in 1879, William discovered during breakfast the following morning that Conkling was a houseguest. Consequently, an enraged Sprague confronted the New Yorker with a shotgun.

Pulling out his watch he told Conkling to leave the house within thirty seconds or “I will blow your brains out.” Conkling approached Kate to speak privately, “Mrs. Sprague, your husband is very much excited and I think it better for all of us if I should withdraw. If my departure puts you in any danger, say so, and I will stay, whatever the consequence.” Kate asked Roscoe to leave. To finish with an exclamation point William told her lover “if you ever cross my path again I will shoot you on sight.” Three years later Kate and William divorced and Conkling no longer visited Kate.

Perhaps because the cast of Civil War trading-with-the-enemy characters provides no heroes, little is written on the topic. Nonetheless, study of Civil War intersectional commerce underscores the ancient wisdom: “Money make the World go ‘round.’”

My Amazon Author Page

 

President Grant’s Exploitive Economic Plan

(September 19, 2017) After the first transcontinental railroad connected Omaha with Sacramento during President Grant’s first year in office in 1869, other tycoons sought government financing to build additional lines. One was Jay Cooke whose investment company was the leading underwriter of federal bonds during the Civil War. Cooke backed the Northern Pacific Railroad, which was to connect Lake Superior with Puget Sound.

Originally chartered by Congress in 1864, the Northern Pacific had not built a mile of track by 1870. Cooke reasoned that he could buy the company at a bargain price if he could later get Congress to extend the life of its charter and provide him other concessions. After paying consulting fees to one of President Grant’s personal secretaries, Horace Porter, he learned that Grant was as “firm as a rock” on a bill tailor-made to his needs.

The 1870 act gave the company more time to complete construction without losing its rights to land subsidies, which were unusually generous. (The NP would eventually be given enough land to encompass all the acreage in a state the size of Missouri.) It also permitted Cooke to collect a $200 fee in stock for each $1,000 bond sold as well as a 12% cash commission.

As the railroad stretched westward from Minnesota rumors of corruption filtered back east. Civic leaders in the towns along the route competed to have their sites included on the line and contractors seemed to be inflating construction costs. Still, Cooke was selling about a million dollars in bonds every month. Overseas investors arrived on junkets to ride the rails to the ever-lengthening end of the line. By the late summer of 1873 it had reached Bismarck in present-day North Dakota.

But the railroad was generating little revenue. Nearly all its operations and construction were funded by debt. Anything that prevented Cooke from selling more bonds and stock would cause the Northern Pacific to coast to a halt. A March 1873 congressional report about corruption and political bribery involving the original transcontinental railroad was just such a factor. The public perceived the scandal as an indictment of widespread immorality within the railroad industry and the federal government.

Nonetheless, when Jay Cooke & Company collapsed on September 18, 1873 there could hardly have been a bigger blow to the public confidence. One Philadelphia newspaper reported, “No one could have been more surprised if snow had fallen during a summer noon.” Without new sales of Northern Pacific securities, Cooke & Company ran out of cash. The night before it shut down President Grant was a Cooke houseguest. The two shared a breakfast the very morning of the debacle.

Cooke’s failure triggered a panic and a five-year depression. The New York Stock Exchange closed for ten days, amplifying the panic. Business failures in 1873 climbed to 5,000, from 4,000 in 1872 and 3,000 in 1871. Track construction across the nation declined by a third in 1874, causing 500,000 layoffs within the railroad eco-system including the iron and steel industry. Prices fell. Pig iron dropped from $56 a ton in 1872 to $17 five years later. Wages fell about 50% from 1873 to 1877. The country seemed to be overrun with vagrants.

As the economy progressively weakened in the months following Cooke’s bankruptcy, President Grant reflected upon how earlier gold discoveries in California and the Rocky Mountains had promptly energized America’s economy. Thus, in the summer of 1874 he sent a military expedition into the Black Hills of present-day South Dakota to look for evidence of rumored gold deposits. Since the Hills were part of a Lakota Sioux reservation—officially off limits to white civilians—the expedition’s goal was falsely represented as a site search for a new military fort.

Lieutenant-Colonel George Custer led the thousand-man expedition that included President Grant’s eldest son as well as three newspaper reporters, a photographer and two gold miners. Although the group saw few Indians they discovered modest, but tempting, quantities of gold. Soon the first rush of prospectors began tearing through the Hills. Within two years the largest deposit in the continental United States—ultimately to become the Homestake Mine—was discovered. A year after discovery, George Hearst and two partners purchased the mine for $70,000. Before ending production in 2001, Homestake yielded over $1 billion in gold and helped finance the businesses of George’s legendary son, William Randolph Hearst, and modern publications such as Women’s Wear Daily, Elle, and Cosmopolitan.

Initially Grant made little effort to control the prospecting, but within a year there were so many prospectors that the he decided that the government must acquire the Black Hills from the Sioux. When chief Red Cloud learned of Grant’s intent in May 1875 he travelled with several other chiefs to Washington to meet with the “Great White Father.” The Indian leaders reminded Grant that the 1868 Treaty of Fort Laramie granted their tribes ownership of the Black Hills in perpetuity.

Grant told Red Cloud that the Indian leaders must confront two unpleasant truths. First, the government’s obligation of under the treaty to supply rations to the Sioux reservation had expired. They continued only because of the President’s kind feelings toward the tribes. Second, Grant could not prevent miners from swarming over the Black Hills. He concluded by telling his visitors that they must either agree to cede the Black Hills or risk losing their rations. Red Cloud returned to the Great Plains without an agreement.

In response Grant organized a civilian commission that travelled to the Dakota Territory in September 1875 to negotiate the purchase of the Black Hills. The Indians demanded more than ten times the amount the commission was authorized to pay. When the commission leader returned to Washington he recommended that the Sioux be starved until they agreed to cede the Hills at a price to be set by Congress.

But Grant settled on a more radical solution. He resolved to contrive a reason to start a war in order to justify seizing the Hills by force. His plan was to provoke the small minority of Lakota living off their reservation in “un-ceded” lands where the Fort Laramie Treaty granted them hunting privileges. Historian John Gray explained that, “A punishing terrifying campaign against these wild bands would certainly subdue them and at the same time so intimidate their…relatives [on the reservation] that a legal three-fourths might sign away the Black Hills. And failing that, the nation could seize the Black Hills as spoils of war without legal hindrance.”

In November 1875 Grant summoned the general commanding the region and the commissioner of Indian affairs to a White House meeting. Although the general and the commissioner were both on record as reporting that the Lakota had been peaceful in recent years, an inspector of the Indian Affairs Bureau issued a contrary report nine days later. According to historian James Donovan the report “cited various trumped-up accusations and smoothly worded falsehoods regarding Indian violations.” Accordingly, the “wild” Indians in the hunting territories were told that they must return to the reservation by January 31, 1876 or be declared hostile, which would thereby authorize the Army to force their return.

It was an impossible demand. The weather-weakened Indian ponies could not move entire villages that included women and children. One warrior later said, “It was very cold and many of our people and ponies would have died in the snow. We were in our own country and doing no harm.” Even the departmental military commander said the ultimatum “will in all probability be regarded as a joke by the Indians.”

After an abortive winter campaign, the Army launched a three-pronged offensive against the off-reservation Lakota in June 1876. They converged on the Powder River country in the southeastern part of present-day Montana. One column approached from the south out of Wyoming and a second approached downstream along the Yellowstone River from western Montana. A third column under General Alfred Terry marched upstream along the Yellowstone from the column’s starting point at present-day Bismarck, North Dakota. Terry’s force included the Seventh Cavalry Regiment under Custer’s command.

In response, the scattered Indian settlements concentrated into a single big village along a tributary of the Big Horn River blandly named the Little Big Horn. The Wyoming column was quickly turned back at the Battle of Rosebud Creek. As Terry continued marching westward along the Yellowstone with his infantry, he sent the Seventh Cavalry on a reconnaissance in force south of the river to find the Indian village, or villages. Custer located the Little Big Horn village on 25 June. He divided his command into three components and attacked the village with two of them. The third guarded the slower moving pack train but was also sent on a vague reconnaissance mission to the southwest, perhaps to search for unseen hostiles.

The village had about 1,800 warriors as compared to about 500 troopers in the entire Seventh Cavalry. Custer’s column totaled 225 men. He allocated 140 of the regiment’s men to Major Marcus Reno with orders to attack the village from the south, while Custer apparently intended to attack the village from either the east or the north. The pack train under Captain Frederick Benteen contained 125 men.

After Reno’s attack was repulsed his command was thrown into a disorderly retreat to a defensive position on the east side of the Little Big Horn on a bluff overlooking the stream where Benteen’s force joined him. The Indians annihilated Custer’s troopers, also east of the river but at points about four-to-five miles north of the Reno-Benteen hill. Reno and Benteen suffered 53 killed and 60 wounded. The Lakota moved their village beyond sight of the enemy the evening before General Terry’s infantry arrived on 27 June.

The Indian victory was merely temporary and only intensified white hostility. A new Indian commission led by George Manypenny arrived in Dakota Territory in September 1876 to annex the Black Hills from the Sioux who remained on the reservation. When the Indians replied that the Fort Laramie Treaty required a three-quarter supermajority vote by their adult males, the commissioners replied that the treaty had been abrogated when the Indians attacked the cavalry. This was hard for the Sioux who had remained on the reservation to understand since none of them had fired a shot. To compel acceptance some commissioners implied that unless the Indians signed they would be moved to present-day Oklahoma, forfeit their firearms and horses and no longer be supplied rations. Congress approved the resulting Manypenny Agreement in February 1877.

Sioux descendants litigated the agreement well into the twentieth century. In 1980 the U. S Supreme Court awarded eight Sioux tribes $106 million in compensation for “a taking of tribal property,” but the tribes refused it. The money has remained in escrow and by 2011 grew to $1.3 billion due to accumulated interest. Prior to the Supreme Court ruling, a lower court judge wrote in 1975 of the Manypenny Agreement: “A more ripe and rank case of dishonorable dealing will never, in all probability, be found in our history.”

My Amazon Author Page

Discarded peel cruelly unnerves school’s student leaders

The Cotton Boll Conspiracy

It’s a cliché as old, it would seem, as humanity: Each generation feels the one that follows isn’t doing its bit to uphold civilization.

That, of course, is questionable, as society has ebbed and flowed over the millennia. However, we would seem to be on a downward swing at present.

Consider: A randomly discarded banana peel at a University of Mississippi weekend event “designed to build leaders” resulted in “tears and frustration” as organizers “didn’t feel safe.”

Yes, Ole Miss Greek Life leaders cut short a three-day leadership retreat the weekend before last after black students discovered a banana peel dangling in a tree outside of one of the camp’s cabins.

“And then of course came the inevitable university action plans, flurry of letters exchanged, and sensitivity meetings,” the blogZero Hedge reported. “Bleary-eyed and shaken students had to text friends and family to come pick them up early (sounds…

View original post 432 more words

President Grant’s Gold Conspiracy

(September 5, 2017) The September 1869 attempted gold corner debacle began three months earlier in June when President Grant and his wife took a holiday trip to New York City to visit his sister and her husband, Abel Corbin, who had earlier sold Grant the “I” Street home in Washington. This time Corbin introduced Grant to Jay “The Mephistopheles of Wall Street” Gould, who together with Jim Fisk controlled the Erie Railroad. Along with the New York Central, the Erie was one of two trunk lines between New York and Chicago. Thus, began a series of conversations involving Gould, Fisk, Grant, and Corbin supposedly focused on boosting the economy and helping the western farmer.

Gould’s plan had a core of merit, if not corrupted for personal gain. He argued, correctly, that the vast majority of domestic transactions where unaffected by the price of gold in terms of Greenbacks. Since Greenbacks were legal tender they were widely accepted at face value among Americans transacting commerce with one another. Except in selected port cites where goods were imported, Greenbacks had driven specie (gold and silver coins) out of circulation. Even in port cities, Greenbacks were the main form of currency.

Conversely, international buyers purchased—imported into their countries—American goods by paying with specie. Therefore, the Greenback-to-gold exchange ratio was inconsequential to overseas buyers per se. Put another way, the price of grain in London was immune to the gold-to-Greenback ratio in New York. Therefore, Gould reasoned, manipulation of the gold-to-Greenback exchange rate might offer an opportunity to help the economy and the western farmer.

When he proposed the scheme, gold dollars traded at a value of about 130% to those of Greenbacks. Therefore, if he could induce gold to rise to 145% each shipload of grain sold in London would net American farmers about 12% (145/130) more in Greenbacks, even though the amount of gold Londoners would use to purchase the shipload would not change.

Eventually, Gould explained that he had enough money to execute his plan as long as the U. S. Treasury did not enter the New York gold market as a seller. He would simply buy gold on the exchange until it reached 145%. Since only about $20 million in gold was normally available to trade on the exchange, only sales from the $100 million Treasury reserve could disrupt Gould’s intentions.

In a partial “what-I-get-out-of-it” confession, Gould admitted that the plan would increase freight traffic for the Erie Railroad as grain was shipped from western states to the port of New York. He said nothing, however, about the capital gains he’d make as his gold holdings increased in price. It is likely he also realized that there was a good chance the premium would rise well above 145% as speculators began to comprehend that Gould had purchased all of the available market supply in a classic corner operation. Gould originally discussed the plan with Grant on 15 June when he was invited to meet the President at the Corbin household. Fisk joined Gould and Grant in a second discussion over dinner aboard a Long Island Sound steamer the following evening.

Although Fisk concluded from the conversation that Grant would not cooperate, Gould remained unconvinced. Together with Corbin the two successfully advised Grant to appoint General Daniel Butterfield to head the New York sub-Treasury office on 1 July where he could provide the conspirators with advance warning should Treasury Secretary George Boutwell send orders from Washington to sell gold. Grant made a second visit to Corbin’s household on 2 September where he wrote a letter to Boutwell explaining that it was “undesirable to force down the price of gold.”

Gould had been buying gold since 20 August with little affect on the market, but Grant’s letter to Boutwell implied that the market would soon do his bidding since the Treasury would not be a seller. Nonetheless, since Gould understood he was playing for big stakes he sought every possible advantage. Thus, using his own money he purchased $1.5 million in gold for the account of Abel Corbin. He intended to sell the contract later at a higher price, letting Corbin keep the profit while allocating the original $1.5 million back to his own account.

Next Gould started buying gold aggressively on 3 September. But on 7 September a member in his original conspiracy pool abandoned the operation and sold his holdings at 138, putting pressure on the price. Gould responded by purchasing $1.5 million in gold for the account of Daniel Butterfield. That gave the New York sub-Treasury officer a powerful incentive to warn Gould of any signs that Washington was on the verge of selling gold. Gould also offered a $500,000 contract to White House staff member Horace Porter who claimed he declined it. Seven years later, however, an investigation into presidential staff member Orville Babcock indicated that Babcock also had a gold contract but lost $40,000 when he sold it. Contrary to his earlier denial, evidence from the same investigation suggested that Porter also held gold contracts during the corner attempt.

By 14 September Gould concluded it was necessary to inform Fisk of the scheme and admit him into the pool because Fisk’s resources could finance enough gold purchases to lift the market price. According to historian William Hesseltine, “Fisk, went to Corbin, who whisperingly assured him that Mrs. Grant was in on the scheme. Gould had purchased gold for her at 131 and sold it at 137. Corbin himself had about $2 million in the market. Five hundred thousand of that was Mrs. Grant’s and a like amount belonged to General Porter. Gould confirmed that he had recently given Corbin a check for $25,000 and Corbin asserted that he had sent the money to Washington.” Basically, Fisk was led to believe that some of the gold contracts Corbin held in his name were really for the benefit of Julia Grant and Horace Porter.

Fisk’s buying power was needed to carry out the scheme because short sellers had artificially increased the market supply significantly by offering “phantom” gold on the market. He started buying on 15 September. By 22 September gold reached a price of 141. Meanwhile, on 12 September Grant departed on a private railcar owned by Gould for another vacation, this time in western Pennsylvania. Before leaving he wrote additional instructions to Boutwell basically directing that the secretary make no change in policy involving gold sales “until the present struggle [between bulls and bears] is over.” A traveling companion on Grant’s trip also noted that the President told him that he had instructed Boutwell “to beware of Wall Street and sell no gold” without Grant’s approval.

After Grant arrived at his Pennsylvania vacation spot, Corbin sent him another letter emphasizing that the Treasury refrain from selling gold. While Julia was writing a letter to Corbin’s wife (Grant’s sister) the President asked her to tell the couple that they must promptly end all speculations in the gold market. When Julia’s letter arrived in New York on 22 September, Corbin asked Gould to pay him $100,000 in unrealized profits from the $1.5 million contact and assume ownership of the underlying gold. Gould declined. Instead he offered to give Corbin a $100,000 check, which Corbin declined because he did not want to retain ownership of the underlying gold.[4]

The next day (Thursday) Fisk and Gould went to the exchange together. While Fisk bought aggressively and drove the price to 144, Gould was secretly selling. On Friday September 24, 1869 Gould and Fisk again went to the exchange together. Gould was promptly informed that bank examiners were heading to investigate the bank that provided most of his credit. He knew they would discover that his bank had improperly issued certified checks exceeding the value of all deposits connected with Gould’s operation. Essentially Gould had been using at least some amount of phony money to buy gold all along. As a result, he redoubled his furtive selling throughout the day.

Fisk, however, was as ostentatious a buyer as on Thursday. Trading volume was enormous. As the clock hands approached noon, gold was at 164, when news arrived that the Treasury would be putting $4 million on the market. Within fifteen minutes the price was down to 133. Gould was safely divested at the collapse.

Everyone assumed that Fisk was bankrupted, which may have been true. Later, however, he produced a (possibly bogus) document stating that he had been merely the agent for a brokerage firm owned by William Belden. The Belden firm, he averred, was financially responsible for his purchases. Since Belden did not have enough money to honor the transactions, all but one trade was repudiated and the firm was bankrupted. The majority report of a later congressional investigating committee, however, concluded “the conspirators [Fisk and Gould]…either before or after the fact…bought Belden’s consent to this villainy” thereby implying that Belden was paid-off personally even though his firm was ruined.

The comparatively moderate 23% gold price movement (130-to-160) resulting from Gould scheme caused a financial panic for two reasons. First, speculators normally used margin loans to execute their transactions. Put simply, they commonly bought and sold gold contracts by borrowing most of the money. Since gold was itself a form of money, banks would readily lend ninety percent or so on its market value. Thus, for example, a buyer needed only $100,000 to purchase a $1 million gold contract. If the price went up 10% the buyer doubled his $100,000 equity. But if it went down 10%, his entire investment was wiped out because the banks would sell the underlying gold to recapture its $900,000 (90%) loan.

A second reason it caused a crisis was because all but one of the sellers who sold gold to Belden through Fisk were unable to force Belden to make good on the transactions. The sellers were caught in a position similar to a homeowner who contracted to sell his home at an above-market price only to have the buyer belatedly renege after housing prices had tumbled.

After the September collapse, Congressman—later President—James A. Garfield headed the investigating committee noted above. The committee’s majority report concluded that Mrs. Grant never participated in the conspiracy. Fisk’s claim to the contrary was “denied by Corbin and unsupported by Gould.” Likewise, the majority report found that General Porter also never participated in the scheme, despite Fisk’s contrary statements.

Nonetheless, contemporary observer Henry Adams—grandson and great-grandson of two U. S. Presidents—concluded that Garfield led a whitewashed investigation, perhaps because he and other committee members were also vulnerable to criticism for low ethics. Garfield, it would later be disclosed, participated in the Crédit Mobilier corruption that emerged as the largest railroad finance scandal of the era. Years later Adams wrote:

The mystery that shrouded the famous, classical attempt of Jay Gould to corner gold in September 1869 has never been cleared up…

The Congressional Committee took…evidence, which it dared not probe and refused to analyze. Although the fault lay somewhere in the Administration…the trail always faded and died out at the point where any member of the Administration became visible.

At least one modern historian, Joseph Rose, shares Adams’s skepticism. In Grant Under Fire he notes several problems with the conventional Grant-was-a-naïve-victim interpretation.

First, Grant knowingly permitted the price of gold to rise and did nothing to prevent it until the financial markets were in crisis. Indeed, by blocking Treasury gold sales he assisted those driving the price up. Additional increases would have bankrupted the many short sellers and forced even more contract repudiations thereby even more severely disrupting commercial activities. Second, the committee did not permit testimony by a man who signed an Adams Express receipt ledger that he said showed Mrs. Grant had earlier received a $25,000 “money package” at the White House. Garfield, writes Rose, “concocted a phony explanation to hush this up.” Third, Grant persuaded Garfield not to subpoena Julia Grant or Virginia Corbin, his wife and sister respectively. Fourth, given the above circumstances, Grant’s post-report expression of his “good many obligations” to Garfield “for the Gold Panic investigation” suggests he was thanking the committee chairman for a whitewash.

My Amazon Author Page

Southern State Constitutions After Reconstruction

(September 3, 2017) Popular interpreters revisionists of American history often erroneously assume that the Southern state governments that immediately replaced the Carpetbagger regimes focused on preventing blacks from voting and removing their civil rights. But actual comparisons of the Carpetbagger state constitutions with those that replaced them tell a different story. Consider the case in Arkansas where the Republican constitution was adopted in 1868, but replaced by a new one in 1874 after the state’s infant GOP fell from power.

In 1868 power was concentrated in the governor’s office. The first Republican governor, who was a former Union general, quickly used his expanded appointive powers and the Republican-dominated legislature to control politics throughout the state. In one county, for example, his appointees for judge, clerk, sheriff, treasurer, coroner, and assessor were all former Union soldiers. He immediately formed a new militia composed of blacks, and whites that were not former Rebels. His legislature promptly increased property taxes three fold. Within a year, annual state government spending rose to $2 million compared to less than $100,000 before the war and the state’s bond debt increased five fold.

In contrast, the 1874 constitution cut the governor’s term from four years to two and dramatically reduced his powers. His salary, along with those of other officials, was kept low. The legislature could override gubernatorial vetoes with a simple majority vote and most state offices were made elective instead of appointive. The state’s power to tax was severely limited. The legislature was permitted to meet only every other year, instead of annually. Significantly the document also provided for the civil and political rights of all citizens, regardless of race.

Black disfranchisement would, however, come later during the 1890s as the Populist Party split the white vote.

Sources: Carl Moneyhon, The Impact of the Civil War and Reconstruction in Arkansas; Thomas DeBlack, With Fire and Sword

My Amazon Author Page