by Philip Leigh
Unfortunately for the Union, fewer than thirty thousand cotton bales were officially exported from New Orleans during the first five months of occupation, compared to the monthly rate of one hundred sixty-five thousand prior to the war, translating to a 95 percent decline. Despite Treasury regulations, General Butler tightly controlled trade authorizations. Brother Andrew sometimes enjoyed monopolies, which could be used to block proposals that failed to profit his interests, which was one reason for the initially slow pace of trade recovery in the city.47
Shortly before being recalled to Washington, Butler made an audacious proposal to the agent of a plantation owner named Stevenson. It was so remarkable that Stevenson described it in a letter to the Confederate secretary of war. Butler offered to let planters haul cotton into New Orleans and transship it to any port in the world. Stevenson explained that when the cotton arrived at its destination, the monetary value of the cargo could be deposited to the credit of the Confederate government at most any reputable banking institution. According to a Confederate War Department clerk, Stevenson went so far as to proclaim, “Butler will let us have anything for a bribe.”48
Soon after the Second Confiscation Act became effective in September 1862, General Butler increasingly relied on it as a means of seizing cotton. Since the act permitted confiscation of property owned by anyone aiding the Confederacy, Butler reversed his earlier method of encouraging trade, which was to refrain from confiscating cotton voluntarily brought into New Orleans for sale. Instead, after the Second Confiscation Act, he started grabbing whatever cotton or other “Rebel” property he could get his hands on.
First he conducted a census in which the four thousand respondents failing to pledge loyalty to the Union were banished and their property seized. Confiscated articles were sold at ridiculously low auction prices where Andrew was often the prime buyer. Next the general sent expeditions into the countryside with no purpose other than to confiscate cotton from residents assumed to be disloyal. Once brought into New Orleans, the cotton was similarly sold in rigged auctions. To maintain correct appearances, auction proceeds were dutifully held for the benefit of “just claimants,” but the Butler consortium still ended up owning the cotton at bargain prices because it was the buyer. (One way a cotton owner might be a “just claimant” would be to prove that the cotton was illegally confiscated because he or she was a Union-loyal citizen.) Later it would sell its accumulated inventories at much higher market prices. Butler “sequestered” (i.e., made vulnerable to confiscation) such “properties” in all of Louisiana beyond parishes surrounding New Orleans.49
Interbelligerent trade in the Mississippi Valley was demoralizing to soldiers of both armies, but especially those of the Union. The profit motive was corrupting. Although army property was ordinarily not used for transporting cotton, army and navy officers could be bribed to make increasingly common exceptions. One investigator claimed that nearly every officer was in partnership with a cotton trader, while every soldier hoped to add a cotton bale to his monthly pay. Such attitudes spread like an infectious disease. A federal officer at occupied Memphis stated bluntly, “The…system of trade has given strength to the Rebel army while it has demoralized and weakened our own.”50
The corruption on the Union side was so widespread that even the Confederates commented on it. One remarked that Major General John McArthur, commanding at Vicksburg (after it was captured by Grant in July 1863), required a bribe in order to permit bales from Rebel plantations to pass through the town to the riverfront docks. He would also delay military expeditions into nearby areas if suppliers of cotton were not yet ready to deliver their bales to Vicksburg. In this manner he prevented such cotton from being confiscated. As cotton traders passed through the lines, they not only provided Confederates with supplies but also military intelligence, including anticipated Union troop movements.51
BANKS REPLACES BUTLER
After the 1862 congressional elections resulted in Republican setbacks in the Northwest the president concluded that opening the Mississippi River to commercial navigation was more important than capturing Texas lands that might be turned over to Northerners to grow cotton.52 Simultaneously, Lincoln decided to replace Butler with General Banks because of the former's lack of military progress and the steady rumors of his fiscal improprieties.
It was a bitter pill for Butler, who hated his replacement partly as a result of narrowly losing an election for Massachusetts governor to him shortly before the war. Within two weeks of arriving in mid-December, Banks received, but did not accept, the following proposal from Andrew Butler and one of his associates:
Dear Sir:
If you will allow our commercial program to be [carried?] out as projected previous to your arrival in this department, giving the same support…as your predecessor, I am authorized to place at your disposal $100,000.53
Upon arriving in New Orleans, Banks immediately suspended all sales of sequestered property. The following month he announced that no further property would be seized except by his order. Two months later he proclaimed that all commercial transactions must use US Treasury notes (greenbacks), thereby forbidding gold payments. He was criticized by the many speculators arriving with his army. They expected him to take the army into Texas to capture cotton lands. Failing in that, they expected that he would at least adopt policies to facilitate between-the-lines commerce in Louisiana. However, his initial steps, like the greenback requirement, actually made such trade more difficult by discouraging sellers. Although Banks proposed a mission into upstate Louisiana to seize cotton under terms granting half the value to the growers as an incentive to refrain from their self-destruction of it, General in Chief Halleck reminded him that his prime objective was to clear the Mississippi River.
Despite the improved morality of Banks's military administration, Louisiana corruption could not be eradicated. As will be discussed in a later chapter, after the last of the Rebel fortifications on the Mississippi River were cleared, Banks made a final major effort to secure cotton for his New England constituency by advancing up the Red River. Although Butler was recalled to Washington, his presence was a problem for Lincoln because the general was popular among radical Republicans who were offended by his removal. They particularly appreciated his novel legal interpretation, which had become an accepted convention, of classifying escaped slaves as “contraband of war” and therefore ineligible to be returned to their owners.
The radicals also admired his iron-fisted control of New Orleans, including the command to treat disrespectful females as “women of the street plying their trade,” thereby earning him the sobriquet “Beast” Butler. Like Butler himself, his supporters seemed to be proud that prominent Southerners had put a price on his head and that Jefferson Davis said Butler's crimes merited capital punishment if he was ever captured. Consequently, when offered a command farther up the Mississippi River, he declined, saying he would consider nothing less than a return to New Orleans. But if he had accepted the upriver job, it may have been Butler instead of Grant who would have been assigned responsibility to capture Vicksburg—a mission for which he had dubious ability.54
FEDERAL PLANTATIONS
As a consequence of meager cotton production and the Confederate practice of burning inventories threatened with capture by an advancing enemy, the Union soon began efforts to grow cotton on seized plantations in the Mississippi Valley, much as was done earlier in Port Royal. The policy was also triggered by a Northern aversion to receiving black refugees. For example, Horace Greely's prominent opposition to slavery did not extend so far as to endorse racial integration in his neighborhood. His New York Tribune advocated that occupied Southern lands be given to ex-slaves in order to avoid mass black migration into the North.55 As explained by Adjutant General Lorenzo Thomas after Lincoln sent him into the Mississippi Valley in spring 1863 to recruit African-American soldiers and develop a system that would industriously employ the remaining former slaves in cotton production:
&nbs
p; It will not do to send [black refugees]…into the free states, for the prejudices of the people of those states are against such a measure and some…have enacted laws against the reception of free negroes…. [Former slaves] are coming in upon us in such numbers that some provision must be made for them. You cannot send them North. You all know the prejudices of the Northern people against receiving large numbers of the colored race. Look upon the river and see the multitude of deserted plantations upon its banks. These are the places for those freedmen.56
The process began earlier near New Orleans after the city became crowded with runaway slaves following its capture in April 1862. Six months later, General Butler started allowing Union-loyal planters in adjacent parishes to use ex-slaves to work their fields in exchange for wages. When Banks took over from Butler in December 1862, he extended the practice throughout occupied Louisiana, insisting that former slaves must avoid vagrancy and idleness.57
For a time, the US Treasury administered the leases of the abandoned plantations while the army was responsible for policing the labor contracts on them, but eventually full control went to the army. Although planters were forbidden to flog their workers, military authorities were allowed to whip those who refused to work. The army also provided patrolling guards to keep laborers from leaving the plantations until their contracts expired. One African-American newspaper in New Orleans protested, “Any white man subjected to such restrictive and humiliating prohibitions would certainly call himself a slave.”58
By May 1863, when Grant had Vicksburg under siege and Banks encircled Port Hudson, numerous abandoned plantations along the lower Mississippi became available for lease, including 136 near Vicksburg. White Northerners, who were sometimes former army officers, leased about 85 percent of them, with the remaining 15 percent taken by former slaves. Additionally, about thirty plantations in the area continued to be operated by Southerners willing to take a loyalty oath to the Union.59
Although terms varied over the next two years because of changing government regulations, they were typically as follows: Lessees paid a two-dollar-per-bale tax. Wage rates for ex-slaves were seven dollars monthly for men over age fifteen and five dollars for women in the same age bracket. Children twelve to fifteen were paid half wages, and those under twelve were exempt from fieldwork. Employment contracts required laborers to work an entire season, putting in ten hours daily in the summer and nine in the winter. Opportunistic white Northerners flooded into the delta. New York journalist Thomas W. Knox wrote, “The majority of the lessees were unprincipled men, who undertook the enterprise solely as speculation. They had as little regard for the rights of the Negro as the most brutal slaveholder…. Some…made an open boast of having swindled their Negroes out of their summers wages.”60
A War Department survey suggests that the apparent promise of quick cotton riches attracted undesirable, inexperienced, and underproductive freebooters from the North. Specifically it concluded that the “old planters [were] dealing fairly with the freedmen…[and] have paid them more promptly, more justly and apparently with more willingness than new lessees.” The Southern planters who remained took a longer-term view. They were primarily concerned with earning a living and holding onto their property until the return of peace and civil government.61
Lorenzo Thomas encouraged family and friends to lease plantations, especially near Natchez, Mississippi, where the general enjoyed cordial relations with leading citizens dating from before the war. He hired publicity agents to entice Northerners into his leasing program. One advertised a return of $15,000 on a $2,000 investment. The general may himself have had an interest in his son Henry's rented plantation in Concordia Parish, Louisiana, directly across the Mississippi River from Natchez. For a time, one of the commissioners in charge of plantation leasing under the Thomas plan was Judge Lewis Dent, who was General Ulysses Grant's father-in-law. When journalist Knox and a partner decided to get into the plantation-leasing business, they discovered “that the best plantations in the Natchez area had been taken by the friends of Adjutant General Thomas.”62
Many newcomers discovered it was difficult to profit by growing cotton. One wrote to the Wisconsin State Journal with a number of complaints, including the necessity to pay bribes. “Who hath much greenbacks and expected more? The official that letteth the plantation.” Bribes of $1,500 were commonly required by Treasury agents to facilitate cotton transportation because of excessive red tape involving affidavits of contract fulfillment, proofs of origin for the cotton, and other procedural obstacles. Provost marshals sometimes required bribes in order to fulfill their duties to police and discipline the freedmen. The Wisconsin writer also complained of ineffective military protection from Rebel guerrillas and the impressment of his own horses and mules by Union soldiers as well as recruiting agents from the North taking his workers when seeking black males as draft substitutes for Northern whites wanting to avoid military service.63
Confederate guerrillas frustrated a consortium of Northerners leasing twenty thousand acres in northeast Louisiana. After a series of raids, the Yankees agreed to evacuate the land in July 1864 if the Southerners would finish cultivating and marketing the crop in exchange for half of the proceeds. It was evidently the best arrangement that could be negotiated because the Union provost guards in nearby Vicksburg, who would normally protect the leased lands, seemed to be on poker-playing terms with some of the raiders.64
In contrast to the poor financial results plaguing many white lessees, Knox discovered that some of the former slaves who operated their own farms earned good profits. Although only able to lease much smaller properties, they benefitted from experience and high wartime cotton prices. Ten near Helena earned $31,000 in a year. Two planted forty acres and each cleared almost $7,000. Another leased twenty-four acres and cleared over $4,000.65
While government-leased plantations productively employed many former slaves, the initiative did little to satisfy the raw-material appetite of the textile industry. As may be observed from Table 1 in chapter 1, cotton production in the Southern states dropped 70 percent in 1863 and 33 percent in 1864. Partly owing to the devastating impact of a pestilence of armyworms, about 90 percent of 1864 lessees returned home without renewing their leases the following year. Although cotton production rebounded sharply to two million bales in 1865 from three hundred thousand in 1864, the gain principally resulted from widespread farming by former Confederate soldiers who returned to peacetime activities.66
Although started during the war, plantation leasing became a standard practice when peace was restored. It enabled former slaveholding planters to avoid breaking up their large land tracts into small parcel sales. It also provided a complementary benefit to most Northern investors who were not interested in living in the South but hoped to make a quick killing in the cotton market. Renting enabled them to pursue such goals without tying up capital in illiquid real estate investments. One prominent example was William Sprague, who leased thirteen plantations along the Mississippi River shortly after General Lee's surrender at Appomattox on April 9, 1865. But after only a year, the senator learned it was harder to earn a profit than he realized, and he closed the venture.67
Six
Abusing the Blockade
FIFTEEN DAYS AFTER THE BOMBARDMENT OF FORT SUMTER, President Lincoln extended the blockade to all of the Confederacy's coastal states, including North Carolina, which had not then seceded. As noted, terms of the 1856 Paris Declaration of Maritime Law permitted signatories, which included most European powers, to officially declare neutrality and grant belligerency rights to both the North and South. Consequently, the Richmond government could buy arms and equipment from neutrals. Belligerency status also permitted the South to raise foreign loans and afforded it rights of search and seizure, thereby paving the way for seagoing commerce raiders such as the CSS Alabama and CSS Shenandoah.1
Initially the United States had few ships with which to enforce the blockade. At the start of the war, the navy had ab
out one hundred vessels, but only thirty-four were steamers, and some of those were merely tenders.2 Furthermore, the navy was not even able to station the available ships off the major Southern ports until July 1861. Even then the blockade was paper thin. Therefore, deep-water ships from Europe could often slip into Rebel ports, but most such vessels were wind-powered because the room required by engines and coal reduced storage space. Since sail-driven ships depended on unpredictable winds, it was almost impossible for them to escape the pursuit of a blockading steamer. Therefore, by the end of the first year of the war, it was necessary to develop another way to get cargoes into the Confederacy.
Deep-water vessels began carrying their cargoes from Europe (or even New York and Boston) to selected neutral ports closer to the Confederacy, such as Nassau in the Bahamas, St. George in Bermuda, and Havana. As will be explained shortly, Halifax was an exceptional and more-distant example. Typically, fast, shallow-draft steamers conveyed cargoes on the final leg from the neutral ports into the major harbors of the Confederacy. Small sailing vessels were also often used, but they normally traveled between the neutral harbors and secondary locations on the Rebel coastline not effectively blockaded.
Eventually, Wilmington, North Carolina, became the chief Rebel port, although Charleston, South Carolina, was the leader until September 1863, when the defenses on Morris Island became untenable and were abandoned. Wilmington, about six hundred miles from Nassau and seven hundred from Bermuda, could be reached from either port in two to three days. The town was guarded by powerful Fort Fisher, twenty-five miles downstream at the mouth of the Cape Fear River. Charleston was defended by Fort Sumter, other fortifications, and a number of innovative nautical weapons, including the CSS Hunley, which made the world's first successful submarine attack by sinking the USS Housatonic in February 1864. Havana principally served the gulf coast ports of New Orleans, Galveston, Mobile, and Matamoros. But the federals captured New Orleans only a year after Fort Sumter, and Mobile fell a little more than two years later. Galveston and Matamoros were far from the Confederacy's main population centers. Although Bermuda was more distant than Nassau from both Wilmington and Charleston, some blockade-runners preferred it because the island was more difficult for the federal blockading fleets to patrol owing to its distance from Union-friendly refueling depots.