Browsing "Lincoln’s Patriots"

The Triumph of Industry Over Idleness

Though Lincoln had been dead for a week, numerous Northern abolition and Republican party personages assembled in Charleston “for Lincoln’s elaborately planned ceremonial of retribution.” General Milton Littlefield spoke in Savannah a few days later, after remarks by his commander, General Quincy Gillmore. Both had been instrumental in conscripting black men from overrun plantations and using them for destructive raids in Georgia and South Carolina – and assisting Salmon P. Chase in his presidential ambitions and conquering Florida for its electoral votes. Littlefield is best known for his role in raising black troops and pocketing most of each recruits bonus money for enlistment, as well as his postwar railroad bond frauds in North Carolina and Florida.    

The Triumph of Industry over Idleness

 “[Judge William D.] Kelley, then and long after a Congressman from Philadelphia, was probably more symbolic of the past and future than the others present. A founder of the Republican party, abolitionist advocate for the use of Negro troops, he was to become famous in history as “Pig Iron” Kelley because of his equally earnest advocacy of high tariffs on iron and steel, which the Republican party had won along with the war.

“For both the whites and blacks it was a highly emotional occasion: “from the hysterical contraband to the dispassionate judge there was no reserve or restraint in the general flow of tears.”

Littlefield spoke and tied his fellow Yankees to New England] where that “Christian band of patriots,” the Pilgrims, had planted their feet and the tree of liberty on the rocky shore. Such Yankees, he said, sought liberty, not gold. “In crossing the old Atlantic,” he told the Southerners who had gathered in subserviency, “they were led by no such allurements as guided DeSoto and his followers.” It had been 350 years since the Spaniard had visited Savannah greedy for any treasure. Little gold was apparent there in 1865.

“This principle [of liberty] is what had given New England her fame, the Yankee a name,” he went on in cool instruction, “and this is what the people of the South contended so strongly against, Free Labor.  We have fought for this, and will fight for it still. We know that the Yankee side of the question is Industry and the opposite is Idleness; the contest is over at last, and the question has been decided on the side of self-government and universal liberty.

The people of South Carolina, Georgia and all the Southern States, can have peace if they wish, by simply complying with the laws and showing themselves unconditionally loyal. The United States Government can afford to be generous; she will be so when those in rebellion repent of the errors of their ways, become good peaceable citizens, and prove it by their actions.

If instead, of standing upon a sentiment, mourning for lost aristocracy, you will go at once, like a good businessman, to restore harmony among your people among your people, industry in all classes, there will be no questions of your rights and wrongs. Should you want help to put yourselves in order, we will send down some of our Yankees in blue, to put you in running shape.  

If you cannot do this, do not be at all disappointed if you should find, one of these fine mornings, some of these Yankees filling your places. You have now but a short time to consider. The world moves, and so does the Yankee nation.”

(The Prince of Carpetbaggers, Jonathan Daniels, J.B. Lippincott Company, 1958, excerpt pp. 117-119)

The Most Costly Price of the Civil War

It is estimated that the Civil War cost $8 billion, which, including destruction of property, derangement of the power of labor, pension system and other economic losses, is increased to $30 billion. To this total is added the human cost of 620,000 battlefield deaths – the war killed one out of every four Southern white males between 20 and 40 — and at least 50,000 civilians dead from indiscriminate Northern bombardment of cities, and starvation.

In the immediate postwar and its two million men in blue mustered out, the Grand Army of the Republic (GAR) became a rich political endorsement as Northern politicians lined up to offer higher pensions in return for votes.  

The Most Costly Price of the Civil War

“War always intrenches privilege in the councils of the nation. The power of the financier is increased. He is called in to rule. Otherwise the state would not go on. Such was our own experience as a result of the Civil War.

Prior to 1861 a democratic spirit prevailed in the nation. Economy was the note in government expenditures. The Civil War ushered on a new era. The need for revenue brought about a merger of the protected interests of Pennsylvania and New England and the banking interests of Wall Street with the Treasury Department, a merger which has continued ever since.

Corruption born of army contracts and war profits penetrated into Congress and the various departments of the government. The public domain of the West was squandered in land grants to the Pacific Railroads with no concern for posterity. The richest resources of the nation were given away. For years after the war, privilege was ascendant and democracy reached to lowest ebb in our history.

Taxes were collected not for the needs of the government, but to maintain a protectionist policy. Revenues were squandered and pork-barrel methods prevailed. Pensions were recklessly granted to prevent a treasury surplus, while appropriations for rivers and harbors, for public buildings, and other purposed became the recognized practice of congressional procedure.

For fifty years the reactionary influences which gained a foothold during the Civil War maintained their control of the government. This was the most costly price of the Civil War, far more costly than the indebtedness incurred or the economic waste involved.”

(Why War? Frederic C. Howe, Charles Scribner’s Sons, 1918, excerpt pp. 313-314)

Capturing Sea Island Volunteers

While it is generally reported that black recruits in the occupied Sea Islands of South Carolina flocked to the Union standard, the truth is that many ran from Northern State agents sent to enlist them for their State quota of troops.  While many enlisted voluntarily, it was due to generous enlistment bounties offered, much of which stuck to the recruiter’s hands, and the possibility of being forced into service or shot for refusal.  During the war the Northern States paid nearly $300,000,000 in bounties for recruits to fill the blue ranks.

The writers below were ardent antislavery New England men at Port Royal, both Harvard men just out of college. Their 1864 observations are telling.

Capturing Sea Island Volunteers

“The next group of letters returns to the subject of Negro recruitment. By this time various Northern States, in despair of finding enough men at home to make out the number of recruits required of them by the general Government, were getting hold of Southern Negroes for the purpose, and their agents had appeared in the Department of the South, competing for freedmen with offers of large bounties.  At the same time, General Foster made up his mind that all able-bodied Negroes who refused to volunteer, even under these [bounties], should be forced into the service. If the conscription methods of the Government up to this time had not been brutal, certainly no one can deny that adjective to the present operations.

From CPW

Aug. 9. Lieutenant-Colonel Rice, agent for Massachusetts, has come. After looking about a little, he does not think the prospect of getting recruits very brilliant, but his agents are at work in Beaufort streets, and may pick up a few men. He intends to send native scouts on to the main to beat up recruits; $35 a man is offered for all they will bring in.

Colonel Rice intended to come down here to-day, but had to go and see General [John G.] Foster and Colonel [Milton] Littlefield, Superintendent of Recruiting. (He, Colonel L., calls it recruiting to conscript all he can lay hands on.) There is to be, not a draft, but a wholesale conscription, enforced here. Lieutenant-Colonel Strong of the First South [Carolina Colored Volunteers] (Thirty-third USCT) enrolled all colored men last month.  

It is possible, if the men can be made to understand this, that a few can be induced to volunteer, but I hardly think than many will be secured, either by enlistment or draft.

From WCG

Sept 23. They are carrying out the draft with excessive severity, not to say horrible cruelty. Last night three [black] men were shot, — one killed, one wounded fatally, it is thought, and the other disappeared over the boat’s side and has not been seen since, — shot as they were trying to escape the guard sent to capture all men who have not been exempted by the military surgeons. The draft here is mere conscription, — every able-bodied man is compelled to serve, — and many not fit for military service are forced to work in the quartermaster’s department.

Oct. 12. You ask more about the draft. The severity of the means employed to enforce it is certainly not to be justified, nor do the authorities attempt to do so, — after the act is done. The draft is carried on by military, not civil, powers. We have no civil laws, courts, officers, etc. The only [lawful] agents to be employed are necessarily soldiers, and the only coercion is necessarily that of guns and arbitrary arrests.

The Massachusetts recruiting agents, of course, have nothing to do with enforcing the draft. But their presence seems to have increased its activity and their bounty money contributes to its success.

(Letters From Port Royal: Written at the Time of the Civil War, Elizabeth Ware Pearson, editor, W.B. Clarke Company, 1906, excerpts pp. 281-284)

The War Power is All Power

A bill to establish a Bureau of Freedmen’s Affairs was introduced in the House of Representatives on February 17, 1864, by Massachusetts Republican Rep. Thomas D. Eliot. Democrat Rep. Samuel S. “Sunset” Cox of Ohio responds to the bill, in part, below.

The War Power is All Power

“Mr. Cox said: “Mr. Speaker . . . the member who introduced it [Mr. Eliot] recalled to our minds the fact that we opposed the confiscation bill for its inhumanity. This bill is founded in part on the confiscation system. If that were inhuman, then this is its aggravation. The former takes the lands which are abandoned by loyal or disloyal whites, under the pressure of war; while the present system turns these abandoned lands over to the blacks.

The effect of former legislation has been, in his opinion, to bring under the control of the Government large multitudes of freedmen who “had ceased to be slaves, but had not learned how to be free.” To care for these multitudes he presents this bill, which, if not crude and undigested, yet is sweeping and revolutionary.

It begins a policy for this Federal Government of limited and express powers, so latitudinarian that the whole system is changed. If the acts of confiscation and the proclamations, on which this measure is founded, be usurpations, how can we who have denounced them favor a measure like this?

This is a new system. It opens a vast opportunity for corruption and abuse. It may be inaugurated in the name of humanity; but I doubt, sir, if any Government, much less our Government of delegated powers, will ever succeed in the philanthropic line of business such as is contemplated by this bill.

The gentleman from Massachusetts appeals to us to forget the past, not to enquire how these poor people have become free, whether by law or by usurpation, but to look the great fact in the face “that three million slaves have become and are becoming free.” Before I come to that great fact, let me first look to the Constitution.

My oath to that is the highest humanity. By preserving the Constitution amidst the rack of war, in any vital part, we are saving for a better time something of those liberties, State and personal, which have given so much happiness for over seventy years to so many millions; and which, under a favorable Administration, might again restore contentment to our afflicted people. Hence the highest humanity is in building strong the ramparts of constitutional restraint against such radical usurpations as is proposed to be inaugurated by measures kindred to this before the House.

If the gentleman can show us warrant in the Constitution to establish this eleemosynary system for the blacks, and for making the Government a plantation speculator and overseer, and the Treasury a fund for the Negro, I will then consider the charitable light in which he has commended his bill to our sympathies.

The gentleman refers us for the constitutionality of this measure to the war power [of Lincoln], the same power by which he justifies the emancipation proclamation and similar measures. We upon this [Democratic] side are thoroughly convinced of the utter sophistry of such reasoning.

If the proclamation be unconstitutional, how can this or any measure based on it be valid?

The gentleman says, “If the President had the power to free the slave, does it not imply the power to take care of him when freed?”

Yes, no doubt. If he had any power under the war power, he has all power.

Under the war power he is a tyrant without a clinch on his revolutions. He can spin in any orbit he likes, as far and as long as he pleases.”

(Eight Years in Congress, 1857-1865: Memoir and Speeches of Samuel S. Cox, Samuel S. Cox, D. Appleton and Company, 1865, excerpts pp. 354-356)

Radical Experiment in the District

On January 4, 1867, President Andrew Johnson was preparing his veto of the District [of Columbia] Suffrage Bill, telling his cabinet of issues with the Bill. He pointed out that “New York Negroes were obliged to comply with property requirements not necessary for white voters”, while other Northern States like Pennsylvania and Indiana excluded them from voting altogether.”

Johnson added that “the representatives of States where suffrage is either denied the colored man or grant [voting rights on qualifications being met] . . . should compel the people of the District of Columbia to try an experiment which their own constituents have thus far shown an unwillingness to test for themselves . . .” It was clear to Johnson that the motivation for Negro suffrage was the voting potential they held, and the potential for Republican Party political hegemony in the future. This led to virtually unbroken Republican national rule until Woodrow Wilson.

It is noteworthy that when the Emancipation Bill of April 1862 provided freedom for colored people in the District, which also compensated their owners, Lincoln insisted that the measure be coupled with a $100,000 appropriation to settle the freedmen in Haiti and Liberia.

Radical Experiment in the District

“The question of voting by Negroes had become by this time a burning national issue and one on which the Republican Party was by no means unanimous. Even in the North only six States permitted Negro suffrage without restrictions. Negroes were not permitted to vote in Pennsylvania, Ohio, Indiana and Illinois, and . . . New York still maintained property qualifications for Negro voters.

The Radical wing of the Party, led by [Charles] Sumner and Thaddeus Stevens, was, however, adamant on this issue. It was essential in their opinion that the colored man should be permitted to vote . . . [and] the control of the Southern States by the Republican Party could be maintained by the Negro vote, since it was quite inconceivable that the vast majority of Negroes would vote for any other Party than the Republicans who had freed them.

Realizing the difficulties of achieving Negro suffrage in the States, the leaders of the Radical Wing of the Republican Party began to turn their attention to the District of Columbia over which Congress had jurisdiction.

If Negro suffrage could be achieved in the District, with its large colored population, that would set the standard which some of the Southern States might be eventually be persuaded or compelled to follow.

Thus the municipal politics of Washington and Georgetown were to become a vital issue in the struggle for power between the Radical Republicans in Congress and Andrew Johnson, the Conservative Democrat in the White House.”

(The Uncivil War: Washington During the Reconstruction, 1865-1878, James H. Whyte, Twayne Publishers, 1958, excerpts pg. 37)

Radicals Versus the South

Radical Republicans of Lincoln’s party barely concealed their contempt for him and certainly favored having him out of the way in order to fully control punishment for the American South’s bid for political independence.

It was these Radicals, who, along with Lincoln, spurned any and all compromise efforts in early 1861 to settle differences peaceably, and drove the country into a war which ended a million lives and laid waste to the South.

Radicals Versus the American South

“While the war from one point of view might be considered tragic, Radicals believed that it furnished an opportunity to make America’s political system just. “If we fail to embrace” the opportunity, warned one Congressman, “the golden moment will have escaped for years, if not forever.”

After winning victory on the battlefield, Radicals were determined not to lose the peace. These two elements – the Radical belief that Reconstruction politics were an extension of wartime issues and the Radical determination not to lose the fruits of military victory – are crucial in understanding Radical motivation.

Lincoln’s assassination confirmed these ideas. “My God Gov.,” wrote a friend to ex-Governor Austin Blair . . . “Poor Lincoln a victim of his own goodness and leniency. Death to all Traitors.”

Another of Blair’s correspondents reacted similarly: “Poor old Abraham has yielded up his life at last . . . Let justice now be meted out to the remorseless villains who led the people into rebellion by a man of their own household [Andrew Johnson] – a man who knows and fully realizes the depth of their depravity & has no mawkish sympathy for them when conquered.”

[Michigan] Senator [Zachariah] Chandler reacted in a more calculating manner. “I believe that the Almighty continued Mr. Lincoln in office as long as he was useful,” Chandler wrote to his wife, “& then substituted a better man to finish the work.” Had Lincoln’s policy [of reconstruction] been carried out, he believed that Jefferson Davis and his followers would be back in the Senate; “but now,” gloated the senator, “their Chance to Stretch hemp are [sic] better than for the Senate . . .”

Needed in Washington, the grim Michigan Senator substituted someone else to accompany Lincoln’s remains to Springfield. “[Andrew] Johnson is right now,” he reported; “thinks just as we do & desires to carry out Radical measures & punish treason & traitors, but much depends on his Surroundings.”

A few days later Chandler described Johnson: “as Radical as I am & fully up to the mark. If he has good men around him there will be no danger in the future.”

(Radical Republican Motivation, George M. Blackburn, Journal of Negro History, Volume LIV, Number 2, April 1969, Carter G. Woodson, editor, excerpts pp. 112-113)

Radical Republican Motivation

Lincoln’s predecessor, James Buchanan, admitted that he had no authority to wage war against States and understood that action as treason.

As “treason” is mentioned often in Radical literature, it is important to understand the constitutional definition of this as defined in Article III, Section 3 of the United States Constitution:

“Treason against the United States shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort.” And “secession” is what is celebrated in the United States every Fourth of July.

Having militarily destroyed the American South’s political and economic strength as well as causing a million deaths in the process, the Republican party was determined to maintain political hegemony and turn the South into an economic colony.

Once the South was defeated and occupied, Republicans created a solid bloc of black voters to politically dominate the South.

Radical Republican Motivation

“Although the South lost the war, the “slave power” did not give up but continued the struggle in a different form. Recognizing the continuing and persistent menace, Michigan’s Governor Henry Crapo, warned in 1866: “It is not slavery, but the spirit which seeks to make slavery the corner stone of the empire, that we now have to guard against – that element of hatred to freedom and equality that instituted the conflict . . . That spirit is neither dead nor sleeping . . . Having failed so utterly in the resort to force, it will but recuperate its energies for a more insidious attack in a different method of warfare. “

However incomplete or inaccurate they might be, such views were to constitute the bases of the Radical Republican program for a decade after the Civil War. The identification of the Republican party with the promotion of freedom and democracy against “slave power” and “aristocracy” gave the Republicans a messianic sense of destiny.

Republican identification of the Democratic party with slavery and treason made Republican control of the national government a patriotic necessity. Further, Republicans viewed the struggle as occurring between ageless, eternal principles – “slave power” and “aristocracy” were resilient, crafty, and powerful.

Far reaching and drastic measures were necessary to extirpate their roots. The Republicans willingly accepted the appellation of “Radical” . . . [and] had developed much of their program long before Lee’s surrender at Appomattox.

The Southerners, stated [Michigan Congressman] John Longyear should be treated as subjugated enemies.

[US] Senator Jacob Howard [of Michigan] . . . wanted a genuine loyalty in the South as the basis for readmission to the Union. “The people of the North,” he prophesied, “are not such fools as to fight through such a war as this, to spend so vast an amount of treasure, as they must necessarily spend in bringing it to a successful termination – that they are not such fools as to sacrifice a hundred and fifty or two hundred thousand lives in putting down this rebellion, and then turn around and say to the traitors, “All you have to do is to come back into the councils of the nation and take an oath that henceforth you will be true to the Government.” Sir, it would be simple imbecility, folly . . .”

Until a majority became loyal [to the North], Howard advocated keeping [the South] out of the Union and in “tutelage” up to twenty years. Howard reasoned that a hostile and belligerent community could not claim the right to elect members of Congress.

“Are public enemies,” he asked, “entitled to be represented in the Legislature of the United States?” “A secession traitor,” Senator [Zachariah] Chandler growled, “is beneath a loyal Negro. I would let a loyal Negro vote. I would let him testify; I would let him fight; I would let him do any other good thing, and I would exclude a secession traitor.”

(Radical Republican Motivation, George M. Blackburn, Journal of Negro History, Volume LIV, Number 2, April 1969, Carter G. Woodson, editor, excerpts pp. 110-112)

Gullible Reporters, Fake News and Servants

Embedded reporters with Northern armies often influenced elections as in the case of the 1863 gubernatorial campaign in Ohio. They fed stories to the Cincinnati Commercial in opposition to the Democratic candidate, writing that soldiers “detested the “nasty little traitorous imposter and gambler of sedition.”

Thus inspired, and with the help of General Rosecrans, the men cast over nine thousand absentee votes for the Republican candidate versus two-hundred fifty votes for the Democrat.

Gullible Reporters, Fake News and Servants

“Making heroes was in some respects a natural preoccupation for the correspondents. The country fidgeted over the morning papers impatiently, looking for the one man with the ready answer or short cut which would bring a quick return out of the national investment in man power, energy and cash.

In an age of open frontier, Americans were used to fast results, to things that got done. They could not accept then – in fact, they never did learn to accept – the notion of a war to be won by long and bloody campaigns of strangulation. The faith in the coming of a “genius” who would carry matters through with one master stroke died hard.

The reporters who became barkers for these “geniuses” were no more gullible than most, but their position made their errors more damaging. Besides, in flattering officers for personal or political motives, they were depressing their newborn profession to the hurdy-gurdy-playing levels of army “public relations.”

Always ready with a sneering word, the Chicago Tribune, in 1862, wrote that much of the laudatory writing of the war was emitted by “army correspondents, with bellies full from the mess tables of Major Generals . . . the dissonant few being swallowed up like Pharaoh’s lean kine by the well-kept bullocks who form the majority.”

Most of the correspondents were apparently as willing to state political opinions as a party guest with a comic monologue to perform. They could not avoid the emancipation question if they tried . . . the Democratic journals acridly pointed out, the Negro was “chin capital” for the Republican press. In that press, the Negroes were painted as a band of brothers, knit by a universal desire for legalized freedom.

[But a] good many conservative orators were frightening laboring audiences with the warning that the Negroes were all too willing to work. If set free, the argument ran, they would drift northward and crowd white men out of jobs. An army correspondent of the Chicago Tribune stepped into the breach with the answer to that.

[He assured readers that] the Negroes did “not wish to remove to the cold and frigid North. This [Southern] climate is more genial, and here is their home. Only give them a fair remuneration for their labor, and strike off their shackles, and the good people of Illinois need not trouble themselves at the prospect of Negro immigration.”

As a matter of fact, many officers and men were genuinely opposed to releasing “contrabands” from camp on practical as well as political or sentimental grounds. Three war correspondents, sweating through the siege of Corinth, Mississippi, in mid-1862, had domestic arrangements typical of many members of the expedition. They shared the services of Bob and Johnny, two Negro youths who blacked their boots, pressed clothes, cooked, ran errands and more or less gentled their employers’ condition for monthly wages totaling six and twelve dollars.”

(Reporters for the Union, Bernard A. Weisberger, Little, Brown and Company, 1953, excerpts pp. 240-243)

“Force of a Most Formidable Character”

In early March 1861, the new Confederate States government adopted a virtual free tariff, which quickly brought Northern merchants to their economic senses. Moses Kelly of the US Department of the Interior overheard many Southerners state that Southern ports planning direct trade with Europe “promised to deprive northern merchants of their position as middlemen and to eject northern manufacturers from the southern market in favor of European competitors.”

Further, the Philadelphia Press asked rhetorically: “If South Carolina is permitted to establish a free port with impunity, and to invite to her harbor all the ships of foreign nations, would not disaster in that event fall upon all our great northern interests?” It accurately predicted “an early reawakening of the Union sentiment in New York.” Thus true reason for total war against the South and destruction of her economic base was clearly revealed.

“Force of a Most Formidable Character”

“[By March 1861] it was evident that northern businessmen had carefully measured the consequences of disunion and the collapse of central authority and decided that they were intolerable. They had called for appeasement, but when that failed they were soon reconciled to the use of force.

Many of them concluded that property had received about as much damage from the crisis as it could, that “no new phase which the [secession] movement may take can have any further effect.”

Stocks had reached their lowest average quotations in December when the government seemed weakest, and even the approach of war failed to depress them that much again. As one commercial writer saw it, business was already suffering “all it could from a state of actual war.” And when war finally came the northern men of property united behind Lincoln to save the Union and restore the prestige of the national government.

When Yankee capitalists finally endorsed the use of military force against secessionists, they accepted the final remedy for a solemn threat to their property and future profits. Inevitably the holders of government securities looked upon disunion as a menace to their investments.

One conservative nervously declared: “So long as the right of secession is acknowledged, United States bonds must still be denounced as entirely unsafe property to hold . . .” To permit States to leave the Union at will, he warned, would mean that the “United States stocks are really worth no more than old Continental money.” With this in mind, when another government loan was offered in January, an observer shrewdly predicted: “Every dollar [New] York takes binds her capitalists to the Union, and the North.”

A basic tenet of the northern middle classes was that the value of property depended upon political stability. In effect, secessionists had made an indirect attack upon the possessions of every property holder. They had invited property-less Northerners, the revolutionary “sans culottes,” “the unwashed and unterrified,” to precipitate the country into “rough and tumble anarchy.” This “social and moral deterioration” might easily infect the lower classes with the radical idea “that a raid upon property can be justified by the plea of necessity.”

Conservatives looked apprehensively at the “immense foreign element” in northern cities and feared that revolution was “nearer our doors than we imagine.” From these recent immigrants could come the mobs to set aside all law and order and, with “revolver and stiletto,” sink the nation “into confusion and riotous chaos.” The only alternative, it was repeatedly argued, was to enforce respect for the Federal government everywhere.

[Northern] businessmen gradually became convinced that Southern independence would be almost fatal to northern commerce. American maritime power in the Caribbean and Gulf . . . would vanish . . . exclude the North from their trade . . . Even trade with the Pacific would be at the mercy of the South.

The northern monopoly in the coasting trade was a further casualty of the disunion movement. Vowing that he had “an interest and proprietorship in the Union of all these States,” [a] New Yorker concluded that secession would have to be checkmated by “force of a most formidable character.”

(And the War Came: The North and the Secession Crisis, 1860-1861 Kenneth M. Stampp, LSU Press, 1950, excerpts pp. 223-230)

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White House Insider Information

William O. Stoddard of upstate New York was one of three personal secretaries utilized by Lincoln, joined by John Hay and John Nicolay. Stoddard had an adventurist personality and became one of the office-seeking multitude looking for appointment in Lincoln’s new Republican administration.

White House Insider Information

“Stoddard was high-spirited . . . “And almost every man who can discover means for doing so is gambling in stocks and gold.” This game is fascinating, he says, because of “the sudden and unaccountable jumps and falls of what are called its prices, meaning the price of greenbacks. They are rather the pulsations of the public hope and fear concerning the national credit.”

To put the case as simply as possible, the new greenbacks the government issued in 1862 were not backed by gold, but they were placed on par value with bonds that were. The Union had not coin enough to pay its bills . . . It was patriotic to hold greenbacks, but even the truest patriot had himself and his family to feed. So rumors of distant battle, another Union defeat or embarrassment, would set many citizens scrambling for gold and speculators selling paper money short – or buying it in the belief a Union victory would send it soaring again.

The speculation that year was running insanely wild in New York and other financial centers, and I formed the idea that it was almost true patriotism to be what is called a “bear” in gold. I therefore went in, a little at first and then deeper . . . I had not the least idea that there was anything wrong in it for a fellow in my position . . .”

Stoddard had noted, as he did every day, the price of gold, selling at $132 per ounce, and it would go even higher if [General Ambrose] Burnside failed in Virginia. He had his eye on the stock exchange, especially the gold and currency markets, where he hoped to make his fortune.

Rumors of Lee’s rapid advance [into Pennsylvania] spread panic in the mid-Atlantic cities from Baltimore to Harrisburg, Pennsylvania. The price of gold had been rising as the result of Union defeats; now the fear of a Confederate invasion spread to the financial markets as well. The price of gold was soaring, and Stoddard – the shrewd gambler – was “shorting” the metal and piling up greenbacks . . . [and] had made a killing in the gold market.  

“Does the President take any interest in Wall Street gambling operations?” Stoddard asked rhetorically in his memoirs. “Of course he does, for the currency is the life of his policies.”

Over dinner one evening, they were discussing precious metals. “What is the price of gold this morning? Is it up or down? Lincoln asked his secretary. “Up Mr. Lincoln. The street is wild.”

“Well now,” the president replied, “they don’t know everything. If I were a bear on Wall Street, and if I were short of gold, I’d keep short. It’s a good time to sell.”

New York financier Clinton Rice testified that he made Stoddard’s acquaintance in 1862, when he told Rice “he enjoyed superior facilities for obtaining in advance all information of a political, official and diplomatic character likely to affect gold, stocks and other commodities. I entered into an arrangement with him [Stoddard] to furnish me telegraphic cipher dispatches.” Rice would use the information to invest in stocks or gold, and divide profits with Stoddard “share and share alike.”

As soon as there was “any important action of the Cabinet, or on receipt by the President or heads of departments of any important military or naval . . . operation” or diplomatic development, the secretary would wire Rice at once in cipher and the financier would place his bets. [Stoddard referred] to the “hollow” Union victory at Bristoe Station three weeks earlier, and how much the press had exaggerated the importance of the event. “I think I could run a gold line here better than anywhere else . . .”

(Lincoln’s Men: The President and His Private Secretaries, Daniel Mark Epstein, HarperCollins, 2009, excerpts pp. 100; 133; 135; 152; 172-173)

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