Smuggler Nation (29 page)

Confederate officials had little choice but to outsource most blockade running to private shippers. The Confederacy simply lacked the administrative capacity and apparatus to impose centralized control over the business of blockade running even if it had wanted to. Moreover, doing so would reduce the profit incentives that sustained the blockade-running system, as was evident when the Confederacy banned the importation of luxury goods. So even as it attempted to impose greater regulation, the Confederate government remained dependent on the profit motives of foreign merchants.
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Blockade runners fed, armed, and clothed the Confederacy until Union forces sacked the ports of Charleston and Wilmington. In late 1864, General Robert E. Lee’s army in Virginia depended almost entirely on smuggled food from Europe. The supply lines to Europe were severed when the last Confederate port on the Atlantic was shut down in the first months of 1865. With the Wilmington supply line cut, Lee’s army was starving when he surrendered at Appomattox in April.
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Some blockade running continued in the Gulf through Galveston, but this was inconsequential to the war east of the Mississippi.
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In the end, the northern blockade can be seen as both a failure and a success. Its porosity suggests failure, as is evident from the repeated success of blockade runners throughout the war years. Historians tend to agree that the war would have ended much sooner if the North had
been able to seal off southern ports. But as historian James McPherson points out, in evaluating the effectiveness of the blockade we must also ask: what would the supplying of the South have looked like in the absence of the blockade? He notes that the South’s prewar seaborne trade level was significantly higher than the wartime level despite much higher supply needs during the war years. Wartime seaborne trade was less than one-third of its prewar level. Importantly, the blockade forced the Confederacy to rely on ships built to maximize speed and stealth at the expense of cargo capacity. He concludes that the blockade succeeded in significantly reducing southern supplies, even if it did not cut them off entirely.
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The blockade also forced the Confederacy to rely on less-convenient ports, including Matamoros, which was far from the main battlefields.
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The Union blockade also appears relatively more successful compared to blockades during earlier American wars. The British Royal Navy attempted to blockade American ports during the Revolutionary War and the War of 1812. As we saw early on in our story, the British lost the American War of Independence partly because they failed to adequately interdict smuggled European gunpowder and other war supplies to the colonial rebels. The Royal Navy’s blockade of the eastern seaboard had more success in the War of 1812, contributing to a stalemated outcome. Fast-forward to the American Civil War, where for the first time the side imposing the blockade was the victor. On balance, it seems that the Union naval blockade was porous enough to help prolong the war and provide an enormously lucrative opportunity for contraband traders, yet was also sufficiently effective to ultimately constrain Confederate fighting capacity.

The North-South Trade

Blockade running was not the Confederacy’s only supply line to the outside world. To a remarkable extent, the North supplied the South even while fighting and blockading it. Prewar economic interdependence between North and South did not simply end with the dissolution of the Union. Instead, it transformed into more informal interdependence via trading across the front lines. Trading with the enemy was an old story in America. As we saw in earlier chapters, it thrived during
the Seven Years War, the Revolutionary War, and the War of 1812. But during the Civil War it reached an unprecedented level, amid equally unprecedented bloodshed. As Colonel Lafayette C. Baker put it, “It seems incredible that in the midst of the most tragical scenes that war has ever created, the very arena of conflict should be the busy field of mercenary and lawless trade.”
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Federal policy on trade with the South was often confused, conflicted, contradictory, and inconsistent. It was also easily abused, manipulated, and ultimately corrupted in the interests of profiteering.

Cotton was the fiber that tied the Union and Confederacy together even in wartime. It was as sought after by the North as by Britain. Cotton kept the blockade-running system going, and it also generated extensive North-South trading. One estimate suggests that some nine hundred thousand bales of southern cotton reached the North, almost twice the amount exported to Europe through the blockade.
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Of course, this is a rough estimate at best, but even half this amount would still be significant.

High demand and extreme price differentials explain the powerful allure of the wartime cotton trade: cotton could be sold in the North for three to ten times the purchase price in the South. Southern cotton was paid for with gold, supplies, or Union greenbacks. Gold was especially favored by the Confederacy, since it could be used to buy arms in international markets. Salt was also a highly valued currency of exchange, given its great scarcity in the South. A pack of salt selling for $1.25 in Union-occupied New Orleans was worth $100 in nearby Confederate territory.
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When cotton was purchased with greenbacks (the least-preferred payment method for the Confederacy), the greenbacks could be converted to northern supplies.
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Border states and occupied southern territory turned into conduits for trade between the belligerents. In order to maintain their loyalties, Treasury Secretary Salmon T. Chase devised a policy that allowed trade with the border states of Kentucky, Delaware, Maryland, and Missouri—under the condition that the goods would not be shipped on to the Confederacy.
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But it was difficult to enforce this prohibition, and there was considerable leakage. This was soon evident in the cross-border trade between Maryland and Virginia. “Almost daily,” Baltimore customs collector Henry Hoffman acknowledged, “we have
information of goods being shipped from this port to Virginia in our Maryland craft. In some instances we have arrested the parties,” but, he noted, “too many get off.”
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The Confederate sympathies of many Maryland residents added to the border control challenge.

The western borders were equally porous. The treasury secretary was upset by reports in 1861 that the Confederacy routinely received northern goods smuggled down the Ohio River, with Cincinnati customs inspectors apparently showing little concern. “It is reported,” a frustrated Chase wrote to the customs surveyor, “that the agents appointed by you for the purpose of preventing this traffic are in the habit of passing their time playing cards and in other amusements to the entire neglect of their duties.”
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Chase did approve a shipment of Bibles to the Confederacy, but he also instructed Ohio customs agents to carefully inspect the boxes for tampering, noting that “disloyal or unscrupulous persons” would show no reluctance to hide “percussion caps and other contraband articles to the enemies” in the shipment of holy books.
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Illicit trading significantly increased in 1862 as the Union captured and occupied New Orleans, Memphis, and Norfolk. Union policy was to let “commerce follow the flag.” The political rationale was that restoring economic activity would generate loyalty and support in occupied territory. But in practice, illicit commerce also followed the flag, facilitating the supplying of Confederate forces in neighboring areas. As the Union army extended its reach to the cotton belt, so too did smuggling opportunities, despite a ban on trading beyond military lines. For instance, Union occupiers allocated permits to local merchants to open up trade stores and import “family supplies” from the North, so long as they took a loyalty oath. These supplies were supposed to be restricted to “loyal” families and plantations in pacified areas, but much was funneled to nearby Confederate-held territory.
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Union soldiers were often bribed to look the other way at checkpoints, or they became active participants in the trade.
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Women were especially effective smugglers thanks to the reluctance of soldiers to search them.
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This apparently included petty smuggling by the wives of high-ranking Confederate officers, who declared their loyalty to the Union as a cover to sell cotton and buy supplies for the Confederacy.
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One woman trying to cross through the lines had such difficulty stepping down from her carriage that it provoked suspicion.
It turned out that underneath her girdle she had strapped twelve pairs of boots containing whiskey, military lace, and other supplies.
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Memphis, which was captured in June 1862, became a particularly active hub for smuggling supplies into Confederate areas south of the city and bringing cotton out. Charles A. Dana, an observer for the War Department, reported (perhaps with some exaggeration) from Memphis in early 1863 that “The mania for sudden fortunes made in cotton … has to an alarming extent corrupted and demoralized the army. Every colonel, captain, or quartermaster is in secret partnership with some operator in cotton; every soldier dreams of adding a bale of cotton to his monthly pay.”
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Dana himself, meanwhile, was speculating in cotton.
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The financial allure was obvious: cotton purchased for twenty-five cents per pound on the Confederate side of the line could then be sold for sixty cents on the Union side.
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With such profits, there was plenty of money to allocate to paying off those guarding the lines. As Brigadier General Charles S. Hamilton described the situation in January 1863, “pickets are bribed, captains of outposts are bribed, colonels and generals are bribed, and the trade goes on.”
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Senator Zachariah Chandler charged that by the middle of 1864, some $20–30 million worth of supplies had reached the Confederacy via Memphis. This apparently included arms: Grant claimed that Confederate cavalry he captured between Holly Springs and Memphis carried new carbines bought in Memphis.
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Major General Cadwallader C. Washburn complained in May 1864 that “Memphis has been of more value to the Southern Confederacy since it fell into Federal hands, than Nassau [the most important blockade-running port in the Caribbean].”
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Sherman had made similar complaints to Secretary of Treasury Chase in 1862, arguing that Memphis was actually more useful to the enemy after it fell to the Union.
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The North’s occupation of Norfolk in early 1862 similarly facilitated trading with the enemy. “Loyal” local residents were given permits to sell cotton to federal officials in order to feed themselves, but the amount of cotton sold far surpassed the local production level—meaning much of it had to have been clandestinely imported from Confederate-held areas. General George Gordon testified before Congress: “There is now, and has been for many years past, little or no cotton produced in the six counties east of Chowan river for export, and the quantity produced
there the last three years has been extremely small, nor was there any surplus there at the beginning of that period.” He reached the conclusion that “all the cotton that passes across the Blackwater and Chowan rivers is the property of the rebel government, and passes only by their permission.”
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The Confederacy officially denounced and prohibited trading with the enemy but at the same time recognized it as a necessary evil. The Confederate War Department stated that “all trade with the enemy” was “demoralizing and illegal and should, of course, be discountenanced, but situated as the people to a serious extent are … some barter or trading for the supply of their necessities is almost inevitable.”
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In some cases, such trading became a matter of survival. “The alternative,” explained the secretary of war bluntly, “is thus presented of violating our established policy of withholding cotton from the enemy or of risking the starvation of our armies.”
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Generals Sherman and Grant repeatedly complained that the cotton trade was undermining the war effort, and they attempted to impose new controls to curb it. Sherman even had several of his men shot for trading across the lines.
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“War and commerce are inconsistent,” Sherman insisted. “We cannot have commerce until there is peace and security.”
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Sherman summed up his position: “We cannot carry on war and trade with a people at the same time.”
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But that is exactly what was happening. In 1863 Grant complained that the trade “is weakening us of at least thirty-three percent of our force.… I will venture that no honest man has made money in West Tennessee in the last year, whilst many fortunes have been made there during that time.”
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Grant also argued that the cotton trade was eroding troop morale: “Men who had enlisted to fight the battles of their country did not like to be engaged in protecting a traffic which went to the support of the enemy they had to fight, and the profits of which went to men who shared none of their dangers.”
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