Tag Archives: Civil War Scandals

Sample Chapter: Trading With the Enemy

Provided below is the first chapter of my book, Trading With the Enemy, which is about intersectional commerce between the North and South during the Civil War The version below excludes the documenting footnotes that are available in book which you can buy here.

Chapter One
The World Cotton Economy

Trading with the enemy would have been immaterial during the Civil War but for the significance of cotton.

Although the South was desperate for supplies of all kinds, the North had no reason to provide them if the South had nothing of value to trade. While the South’s ‘King Cotton Diplomacy’ failed to create enough anxiety in Europe about a war-induced cotton shortage to prompt Great Britain and France to intervene on the side of the Confederacy, the resultant intersectional trade between North and South demonstrated that cotton was no puppet monarch. The Northern states, and the industrialized economies of Europe, were more dependent on the staple than is commonly realized today. The profits were so extraordinarily tempting that efforts to block such trade were hopeless. Historian Lauriston Bullard wrote, “Massachusetts depended almost as much on cotton as did South Carolina and Mississippi.” Charles Francis Adams Jr., who was the son of Lincoln’s minister to Great Britain and grandson and great-grandson of two American presidents, said, “Boston . . . became . . . a proslavery community, and it remained so until 1861.”

King Cotton was not the impotent power it is often ridiculed to be by twenty-first century observers. Ward Hill Lamon, who was one of Lincoln’s legal partners for five years before the war and his personal bodyguard during the presidency, explained why Southern secession was such a frightening threat to Northerners:

[Cotton] formed the bulk of our exchanges with Europe; paid our foreign indebtedness; maintained a great marine; built towns, cities, and railways; enriched factors, brokers, and bankers; filled the federal treasury to overflowing, and made the foremost nations of the world commercially our tributaries and politically our dependents. A short crop embarrassed and distressed all Western Europe; a total failure, a war, or non-intercourse, would reduce whole communities to famine, and probably precipitate them into revolution.

Presently it is easy to take the abundance of cotton clothing for granted. However, in the eighteenth century, cotton was more expensive than wool, linen, or silk. Before mechanization of the cotton textile industry, it took up to fourteen man-days to create one pound of thread, compared to six man-days for silk and two-man days for wool. Like modern semiconductors, from 1784 to the start of the Civil War in 1861, the price of cotton dropped 90 percent owing largely to technological advances in the production process. In response, cotton fabrics rapidly gained market share. In Europe during the century from 1783 to 1883, the fabric rose from a 6 percent share to nearly an 80 percent share, while wool dropped from about 80 percent to 20 percent.

memphis cotton

The steadily declining cost created an almost insatiable demand for more cotton. It became known as a cash crop because it was nearly imperishable and could be inventoried indefinitely. It was practically a substitute for gold in international settlements between the United States and Europe. Financiers could extend credit on cotton inventories because it was fungible. In the sixty years from 1801 to 1861, shipping tonnage at Liverpool increased tenfold, from 500,000 to 5 million, translating to a 4 percent growth rate compounded annually. Consequently, cotton textiles became Great Britain’s single largest industry at the start of the American Civil War, with about 20 to 25 percent of its population dependent on the sector. Continue reading

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Trading With the Enemy

Provided below is my speech to the Sarasota, Florida Civil War Roundtable on December 2, 2014 about Trading With the Enemywhich is my book about intersectional trade during the Civil War.

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Trading CoverOn June 7, 1863, the day before Robert E. Lee attended a cavalry review before starting his second northern invasion that would culminate 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. Continue reading

“Trading with The Enemy” – Interview

As you may observe from the “About Me” sidebar, my first Civil War book was released by Westholme Publishing in May 2013. It is an annotated and illustrated version of Confederate Private Sam Watkins’s memoir entitled Co. Aytch, which is rebel vernacular for “Company H”.

One reader became a fan and interviewed me about my next book to be released next spring entitled “Trading with The Enemy“. It is about intersectional trade during the Civil War and will also be released by Westholme who distributes through the University of Chicago Press.  The interview is provided below:

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Q: What prompted you to write a book about intersectional trade during the Civil War?

A: I was reading a book about Confederate high seas commerce raiders that included a chapter on Lieutenant Charles Read who converted one of the vessels captured by the C.S.S. Florida into a disguised miniature raider. Read released one of the first U.S. flagged ships he stopped because it was loaded with a cargo of military supplies bound for Matamoras, Mexico out of New York.  Matamoras is directly across the Rio Grande River from Brownsville, Texas. Despite originating in the United States it was obvious the contraband shipment was destined for Texas Confederates.

That aroused my curiosity.

Q: What key points did you learn by satisfying that curiosity?

A: First, despite its greater prominence in historical memory, blockade running was a smaller business than inter-belligerent trade. It is estimated that almost twice as much Southern cotton was sent to the Northern states as was exported through the blockade to Europe.

Second, it was scandalous.

Third, while the protection of slavery was the chief reason for the first seven of the eleven Confederate states to seceded the continued intersectional commerce during wartime demonstrates that the North’s desire to preserve the union was at least partly an economic motivation.

Q:  Why was inter-belligerent trade greater than blockade running?

A: One reason is that the New-England-centered textile industries of the North were the World’s second largest consumers of raw cotton. On the eve of the War cotton textiles were the single largest manufacturing sector in the United States. The Southern states were the dominant source of feedstock.

Additionally cotton prices spiked as a result of wartime scarcity. From less than $0.15 a pound at the start of the War the staple jumped to a peak of $1.90 during the summer of the third year. Thus, even though shipment tonnage plummeted, dollar volumes remained high. As a result of a combination of the elevated values and the near necessity of hungry Southerners to sell even at bargain prices, the profits available to politically well-connected cotton speculators were irresistible.

Q: What were some of the scandals?

A: Once when President Lincoln refused to grant a trading permit to an old Illinois friend he explained the demoralizing effects of the growing trade by commenting, “The officers of the Army in numerous instances are believed to connive and share in the profits.”

When Union General Benjamin Butler arrived in New Orleans at the head of an occupation army in May 1862 his wealth was estimated at about $0.15 million. Six years later he was worth $3.0 million. He avoided prosecution for graft owing to a combination of luck, political popularity, and the use of intermediaries such as his older brother Andrew who unsuccessfully tried to bribe the general’s New Orleans successor. After New Orleans, Butler moved to Norfolk, Virginia where a similar pattern of trading rapidly emerged.

Finally, for much of the War federal cotton permits were officially issued by the Treasury Department under Secretary Salmon P. Chase. His son-in-law was William Sprague who was a Senator from Rhode Island and one of the nation’s largest textile mill owners. Sprague was also a member of a partnership that exchanged weapons for Confederate cotton.

Q: How did wartime intersectional trade demonstrate an economic motivation for the North to preserve the Union?

A: Much like the chief states right that Confederates wanted to protect was slavery, the prime reason Northerners wanted to preserve the union was to avoid the economic consequences of disunion. Prior to the War both the North and South were economically co-dependent. As Lincoln explained in his first inaugural, “Physically speaking we cannot separate…[The states] must remain face-to-face and intercourse…must continue between them.”

If the Confederacy remained a separate country, its lower tariffs would chop trade away from the North thereby devastating federal tax revenue, Northern industries dependent upon protective tariffs, maritime trade, and the overall commercial activities at export centers such as New York. Goods imported into a low-tariff Confederacy could be smuggled across the Ohio River thereby further attenuating business for the Northeast. Eventually, the United States might have become Balkanized into three or four different countries.

Although the War induced massive federal deficit spending which diluted the previous intersectional dependence, when it started nobody knew that the War would generate such a gigantic fiscal stimulus. Consequently the GNP of the Northern states grew at an estimated annual rate of over 20% during the four years of the War, whereas the economy of the South shrank.

Q: Any final anecdotes?

A: Surprisingly, Northern shippers sometimes transported cargoes directly through the Union blockade instead of delivering them to a blockade running anchorage such as Nassau or Bermuda.

One clever variation was to initially ship Northern goods to Halifax where the merchandise would be unloaded to become “Canadian” and thereafter re-loaded. From Halifax skippers would next run the blockade at a popular Confederate port such as Wilmington, North Carolina with the “Canadian” goods.  Typically, on the return they would first proceed to Halifax and thence re-enter the United States with a load of “Canadian” cotton.