Browsing "Myth of Saving the Union"

This Sad Life in Vicksburg

The author below was Mary Ann Loughborough, the New York City-born wife of Colonel James Loughborough, assistant adjutant general to Major General Sterling Price. In mid-April 1863, Mary was visiting Vicksburg just as the enemy fleet had run past the defensive batteries on the Mississippi River and began subjecting the city to intense and indiscriminate bombardment.  For protection from this shelling, civilians dug caves in the clay hills which Vicksburg was built upon.

Bernhard Thuersam, www.Circa1865.com

 

How Sad This Life in Vicksburg

“Even the very animals seemed to share the general fear of a sudden and frightful death. The dogs would be seen in the midst of the noise to gallop up the street, and then to return, as if fear had maddened them. On hearing the descent of a shell, they would dart aside – then, as it exploded, sit down and howl in the most pitiful manner.

In the midst of other miserable thoughts, it came to my mind one day that these dogs’ hunger might become as much dreaded as wolves. The horses . . . would frequently strain the halter to its full length, rearing high in the air, with a loud snort of terror as a shell would explode near. I could hear them in the night cry out in the midst of the uproar, ending in a low, plaintive whinny of fear.

Sitting in [my] cave one evening, I heard the most heartrending screams and moans. I was told that a mother had taken a child into a cave about a hundred yards from us; and having laid it on its little bed, as the poor woman believed, in safety, she took her seat near the entrance of the cave.

A mortar shell came rushing through the air and fell with much force, entering the earth above the sleeping child – cutting through into the cave – oh! Most horrible sight to the mother – crushing in the upper part of the little sleeping head, and taking away the young innocent life without a look or word of passing love to be treasured in the mother’s heart.

I sat near the square of moonlight, silent and sorrowful, hearing the sobs and cries – hearing the moans of a mother for her dead child – the child that a few moments since lived to caress and love – speaking the tender words that endear so much the tie of mother and child.

How very sad this life in Vicksburg! – how little security we can feel, with so many around us seeing the morning light that will never more see the night! How blightingly the hand of warfare lay upon the town!

The moans of pain came slowly and more indistinct, until all was silent; and the bereaved mother slept, I hope – slept to find, on waking, a dull pressure of pain at her heart, and in the first collection of faculties will wonder what it is. Then her care for her child will return, and the new sorrow will again come to her – gone, forever gone!”

(My Cave Life in Vicksburg, By a Lady, Broadfoot Publishing Company, 1989 (original D. Appleton & Company, 1864), excerpts, pp. 71-75)

Grant Opens the Northwest to Cheap Water Freight

The bombardment of Vicksburg, Mississippi by Grant in mid-1863 took an enormous toll on the civilians in the city. From the book “My Cave Life in Vicksburg” (D. Appleton & Company, 1864), the author writes: “I was told a Negro woman, in walking through the yard, had been struck by a fragment of a shell, and instantly killed. The screams of the women of Vicksburg were the saddest I have ever heard. I cannot attempt to describe the thrill of pity, mingled with fear that pierced my soul, as suddenly vibrating through the air would come these shrieks – these pitiful moans! – sometimes almost simultaneously with the explosion of a shell.”

Bernhard Thuersam, www.Circa1865.com

 

Grant Opens the Northwest to Cheaper Water Freight

“It was the twenty-fifth of May, three days after the assault on Vicksburg. Federal dead between the lines were “swelling to the stature of giants” and were making the air so unbearable that Confederates had sent out the request [to the enemy] that they be buried.

Under a white flag soldiers threw dirt on late comrades, while in the midst Sherman and a Confederate officer sat on a log. To all appearance, Sherman was callous toward death.

The spectacle of Vicksburg’s bombardment delighted Sherman’s artistic eye. On clear nights he saw pickets sitting on their rifle-pit embankments, staring at the grandest pyrotechnics they had ever beheld – thin red trails of light, sparkling like comets’ tails, soaring into the sky to halt, then curve downward to vanish among the housetops of the dark city. After a pause, a jarring concussion would come on the wind.

From land and river Union siege guns and navy mortars were throwing shells with burning fuses. Privates of the Twelfth Wisconsin said that their Negro cooks lay so flat during a bombardment that soldiers mistook them for rubber blankets and carried them to camp over their shoulders at the day’s end.

Surrender came on July 4 [1863], Grant paroling 31,600 wasted Confederates in the knowledge that the great majority, sick of the war, would go home never to shoulder arms again. Up North, men were declaring that they had always had faith in Grant, the Northwest was happy because the Wall Street railroaders were now due to get their com-uppance – the cheap water freights could soon be resumed.”

(Sherman, Fighting Prophet, Lloyd Lewis, Harcourt, Brace and Company, 1932, excerpts pp. 284-287; 291)

Grant’s New Kind of War

At Vicksburg, Grant initiated a concept of total war and annihilation against Americans in the South which caused Sherman to worship him. The endless streams of paid substitutes and immigrant recruits sent by Lincoln to fill his constantly depleted ranks far surpassed the small citizen armies of the South who fought with their homes behind them.  Grant may have learned this from British Col. Banastre Tarelton, and saw sheer brutality against soldier and civilian alike as an effective manner in which to subjugate the South. Monitoring both Grant, Sherman and Sheridan destructive campaigns was a young Spanish attache, Captain Varleriano Weyler, who in the mid-1890s became known as “Butcher” Weyler for herding Cuban women and children into concentration camps and burning the countryside.

Bernhard Thuersam, www.Circa1865.com

 

Grant’s New Kind of War

“What Sherman could not see was that Grant had, in those silent months before Vicksburg, evolved a new psychology for the Federal armies. At [Fort] Donelson the seed of the new idea had started to grow when he had noted that if two fighters were exhausted the first to revive would be the victor.

Lying at the foot of Vicksburg’s cliffs, Grant had come to the irrevocable belief that, in the end, triumph would come to that army which never counted its dead, never licked its wounds, never gave its adversary breathing space, never remembered the past nor shrank from the future – the army which dismissed old rules and ignored rebuffs – the army which held implicit faith in a simple and eternal offensive.

As he prodded his men . . . , Sherman’s eyes began to open, [and] the old military world of West Point [seemed] to spin around beneath him and disappear. This was a new kind of war – and Grant was making his own rules as he went along. Here was an army caring not a whipstitch for a base of supplies. From field, barn, smokehouse, and cellar they were extracting epicurean meals.

When they squatted on their haunches at noon, they fried ham, bacon, pork chops, beefsteak . . . they rolled blankets around bottles of wine and whiskey lifted from baronial sideboards. What was a base of supplies to them? They were not professional soldiers. They were western pioneers – a new generation of pioneers loose in a new country with rifles and axes.  Had their fathers or grandfathers given a damn about a base of supplies when they had crossed the Ohio long ago to enter the wilderness?

While his men built a new bridge over the Big Black River, he lay down in a Negro’s cabin to snatch a few moments of sleep. It was midnight . . . [and] Grant had just ridden up. Twenty-five years later Sherman recalled the scene in detail:

“I rushed out bareheaded and taking him by the hand said, “General Grant, I want to congratulate you on the success of your plan. And it’s your plan, too, by heaven, and nobody else’s. For nobody else believe in it.”

It was as near to hero-worship as Sherman would come in a lifetime that held no heroes.”

(Sherman, Fighting Prophet, Lloyd Lewis, Harcourt, Brace and Company, 1932, excerpts pp. 273-274)

The Civil War’s Basic Cause: Sectionalism

In this late 1940 address to the Southern Historical Association, historian Frank L. Owsley (1890-1956) spoke of the sectional cause of the Civil War and the North’s reluctance to allow the South to seek political independence.  Prof. Owsley was born in Alabama, taught at Vanderbilt University and was a member of the Southern Agrarians.

Bernhard Thuersam, www.Circa1865.com

 

The Civil War’s Basic Cause: Sectionalism

“Before attempting to say what were the causes of the American Civil War, first let me say what were not the causes of the war.

Perhaps the most beautiful, the most poetic, the most eloquent statement of what the Civil War was not fought for is the Gettysburg Address. That address will live as long as Americans retain their love for free government and personal liberty; and yet in reassessing the causes of the Civil War, the address whose essence is was that the war was being fought so “that government of the people, by the people, and for the people shall not perish from the earth” is irrelevant.

Indeed, this masterpiece of eloquence has little if any value as a statement of the basic principles underlying the war.

The Civil War was not a struggle on the part of the South to destroy free government and personal liberty, nor on the part of the North to preserve them. Looked at from the present perspective of the worldwide attempt of the totalitarians to erase free governments and nations living under such governments from the face of the earth, the timeworn stereotype that the South was attempting the destruction of free government and the North was fighting to preserve it seems unrealistic and downright silly.

If the destruction of democratic government by the South and its preservation by the North were not the causes of the Civil War, what then were the causes? The surface answer to this question is that in 1861, the Southern people desired and attempted to establish their independence and thereby to disrupt the old Union; and that the North took up arms to prevent the South from establishing this independence and to preserve the Union.

This [Southern] state of mind may be summed up thus: by the Spring of 1861, the Southern people felt it both abhorrent and dangerous to continue to live under the same government with the people of the North. So profound was this feeling among the bulk of the Southern population that they were prepared to fight a long and devastating war to accomplish a separation.

On the other hand, the North was willing to fight a war to retain their reluctant fellow citizens under the same government with themselves.

The cause of that state of mind which we may well call war psychosis lay in the sectional character of the United States. In other words, the Civil War had one basic cause: sectionalism.

Our national state was built, not upon the foundations of a homogenous land and people, but upon geographic sections inhabited severally by provincial, self-conscious, self-righteous, aggressive and ambitious populations of varying origins and diverse social and economic systems; and the passage of time and the cumulative effects of history have accentuated these sectional patterns.”

(The Fundamental Cause of the Civil War, Frank L. Owsley, excerpt, Address to Southern Historical Association, November 8, 1940)

 

 

Representing the Powers at Washington in South Carolina

South Carolina’s first reconstruction governor was former Northern General Robert K. Scott, a Pennsylvania native who accomplished a tripling of the State debt through corruption and fraudulent bonds; his legislature voted itself a full-time saloon and restaurant at taxpayer expense. Scott’s successor, former Northern army officer Daniel H. Chamberlain was determined “to make his elected position pay,” though feeble attempts were made toward reform and Republican patronage which enraged black Republicans expecting favors for votes delivered.

Bernhard Thuersam, www.Circa1865.com

 

Representing the Powers at Washington in South Carolina

“There is ample evidence of both black domination and the exercise of controls over black leadership by the white [Republican] leadership. South Carolina was unique among the reconstructed States in that blacks constituted about 60 percent of the population. This population advantage was converted into a substantial numerical advantage in the legislature, where Negroes held a two-to-one majority in the lower house and a clear majority on joint ballot of House and Senate throughout the nine-year period of Reconstruction.

During this same period [black South Carolinians] held the office of secretary of state (from 1868 to 1877), lieutenant-governor and adjutant-general (after 1870), secretary of treasury, Speaker of the House, and president pro tem of the Senate (after 1872).

On the other hand, Negroes never held the governorship, the office of US senator, any of the eight circuit judgeships, the offices of comptroller general, attorney general, superintendent of education, or more than one of the three positions on the State supreme court.

Furthermore, there were recorded instances of black officeholders serving as mere pawns of shrewder white [Republican] colleagues. The northern-born county treasurer of Colleton County boasted to Governor Scott that he “could control every colored man’s vote in St. Paul’s Parish and St. Bartholomew Parish.” The Negro treasurer of Orangeburg County found himself in jail charged with malfeasance in office, while the white mentor who had gotten him the appointment and directed his peculations went free.

On another occasion it was alleged that the white [Republican] political boss of Colleton County engineered the removal from the county auditor’s position of a well-educated Negro political enemy, replacing him with another Negro who was illiterate. The latter was expected to be auditor in name only, while another white crony performed the duties of office.

[The] reactions of historians to [traditional images of racial relationships often betray] more emotion than analysis [and] . . . [WEB] DuBois, for example, accepted the idea of the essential powerlessness of blacks in South Carolina’s Reconstruction government in order to minimize the culpability of blacks for the corruption of that government, even though [this actually] contradicts his thesis of black labor’s control of the government.

However, the key advantage of the white Republicans probably lay in their presumed or real contacts in the North which enabled them to promise and sometimes deliver funds, patronage or protection. White Northerners often passed themselves off as representing the “powers at Washington” in order to secure the political obedience of the Negroes, according to [carpetbagger] ex-Governor [Daniel H.] Chamberlain.

Just after the passage of the Fourteenth Amendment, a committee of South Carolina’s Negro political leaders made a secret trip to Washington to confer with Thaddeus Stevens and Charles Sumner about the formation of a political organization.

But many white Republicans continued to advocate efforts to attract native whites into the Republican party and the appointment of northern whites to sensitive positions. This policy reflected their lack of confidence in black officeholders . . . “There is not enough virtue and intelligence among the Blacks to conduct the government in such a way as will promote peace and prosperity” [wrote one Republican].

In other instances, white Republican officeholders urged the governor to replace with whites those black colleagues whom they considered “un-businesslike” or incompetent.”

(Black Over White, Negro Political Leadership in South Carolina during Reconstruction, Thomas Holt, University of Illinois Press, 1977, excerpts, pp. 96-104)

The Seductive Promises of Demagogues

The late M.E. Bradford understood that the centrality of freedom was the core of Southerners’ insistence on their right to govern their private and local affairs in their own way, and was the same for citizens of all other States. He held that “the only equality Americans can universally approve is accidental, a corollary of liberty or simple equality before the law with limited scope.” Bradford made his readers painfully aware of Lenin’s belief that the only way to make men equal is to treat them unequally.

Bernhard Thuersam, www.Circa1865.com

 

The Seductive Promises of Demagogues

“The wrath [Bradford] directed against Lincoln, like the wrath he directed against Julia Ward Howe, the authors of the Reconstruction amendments, Lyndon Baines Johnson, and all those who had imposed the teleological will of an instrumental government and judiciary upon an unsuspecting nation, had little to do with personal animosity.

It stemmed from his indignation against people he viewed as so intellectually blind as to be incapable of understanding the enormity they had wrought or so morally blind as not to care, provided only that they accomplished their immediate ends. Such attitudes, for Bradford, embodied the reverse – indeed the repudiation – of the obligations of stewardship and amounted to the despoiling of the children as well as the desecration of the fathers.

Bradford refused to apologize for the severity of his message – that the Northern victory had extracted a terrible cost from the country and its culture. Rejecting the cult of equality as the opiate of the intellectuals, Bradford rejected the fashionable identification of the Declaration of Independence with the Constitution, referring to “the Great Divide of the War Between the States.”

He explained: “it has been more and more the habit of our historians, jurists, and political scientists to read the Continental Enlightenment, and the Age of Revolution that was its political consequence, back into the beginnings of our national beginnings by way of an anachronistic gloss upon the Declaration of Independence.”

He constantly reminds his readers that the Constitution, not the Declaration, embodies the country’s law, which it exists to articulate and protect. Thus, he argues in an uncharacteristically optimistic vein, the “Constitution makes it difficult or even impossible for us to alter our political identity on whim or when momentarily carried away by the adjuration of demagogues.”

By the time Bradford died [in 1993], he had reason to know that the American political identity he cherished was under formidable assault, primarily at the hands of the Supreme Court justices – those supposed custodians and interpreters of the Constitution itself.

Experience and history taught Bradford, as he believed they had taught the Framers, that in politics one must conjoin the “caution of David Hume and the pessimism of Saint Paul,” especially with respect to the seductive promises of demagogues. In the time of the Framers, as in our own, he insisted, caution and pessimism should lead to a deep mistrust of the myths of equality with which demagogues love to seduce the more gullible of the citizenry, and he approvingly quoted Rufus King of Massachusetts, “the unnatural Genius of Equality [is] the arch Enemy of the moral world.”

(M.E. Bradford’s Historical Vision, EF & ED Genovese; A Defender of Southern Conservatism, M.E. Bradford and His Achievements, Clyde N. Wilson, editor, University of Missouri Press, 1999, pp. 79-82)

Power and Politics over Country

The months between Lincoln’s election and his inauguration are seen as the most critical in American history as the historical record shows that he revealed little in those four months that might have averted war. Many people journeyed to Springfield, Illinois to better understand his positions though he “wished neither to articulate unrealistic solutions nor hinder ongoing negotiations,” and his Republican allies in Congress convinced him to follow a strategy of silence. His later claims that he wanted to avert war are difficult to explain, and the Founders would not have understood how a mere president could decide whether a State legislature could convene.

Lincoln’s friend Duff Green (1791-1875) was a Kentucky-born politician and businessman who had served under General William H. Harrison in the War of 1812. He later practiced law in Missouri where he also served in the legislature and served as a diplomat under Presidents John Tyler and Zachary Taylor. During the war he manufactured iron for the South and operated the Dalton Arms Factory.

Bernhard Thuersam, www.Circa1865.com

 

Power and Politics over Country

“Green and Lincoln did meet one more time. On April 5, 1865, Lincoln was stationed off the Virginia shore on the USS Malvern trying to decide whether to allow a Virginia legislature to convene since that State had no other government. As it happened, Duff Green was in Richmond at the same time . . . [and] asked for and was granted an audience with the president. The two old friends enjoyed an amiable discussion . . . Green recalled that Lincoln received him “with great kindness.”

The two men discussed the terms of peace and reconstruction. Lincoln said that all the Southern States had to do was “acknowledge the authority of the United States.”

Lincoln remembered their Springfield meeting four years earlier. The president told Green that he went to Washington “resolved to carry out in good faith” those same pledges that he gave when they met in Illinois. Lincoln insisted that he had been willing to sign a constitutional amendment prohibiting Congress from interfering with slavery in the States, a policy similar to what he communicated to Green in Springfield.

Green later contended that if Lincoln “had come to Washington in December, 1860, as I urged him to do, and had then exerted the like influence in favor of Mr. Crittenden’s resolution, extending the Missouri compromise line to the Pacific . . . who can doubt his influence . . . would have prevented the war?

Green believed Lincoln had wanted to avert a war. He alleged, however, that Lincoln’s conciliatory attitude “was carefully kept from the knowledge of the Southern people.” Green stated that if “any pains had been taken” to explain Lincoln’s position to the South, the hostilities may have ended. He blamed the Radical Republicans for deceiving both Lincoln and the Southern public. He believed the president sought peace but was overwhelmed by his party who initiated war in order to control the patronage and powers of the federal government.”

(Lincoln, Green and the Trumbull Letters, David E. Woodard; Civil War History, the Journal of the Middle Period, John T. Hubbell, editor, Kent State University, Vol. XLII, No. 3, September 1996, excerpts pp. -219)

Foreign-Born Tip the 1860 Election

Crucial to the immigrant vote for Lincoln in the 1860 election was Republican Party support for a Homestead bill, the transcontinental railroad, and not allowing black people into western lands — thus reserving those lands for white immigrants. The foreign-born who had already filled up Middle West States were eager for western lands to settle where government property was still available, which also meant clearing those lands of Indians. Future Republican administrations would accomplish that task. With a bare 39% percent of the popular vote, a lower foreign-born vote could have put Stephen Douglas in the White House and avoided war.

Bernhard Thuersam, www.Circa1865.com

 

Foreign-Born Tip the 1860 Election

“Scholars, particularly those interested in the impact of ethnic groups on key national elections, have long been intrigued by Abraham Lincoln’s victory in 1860. Ever since Professor William E. Dodd’s classic article [The Fight for the Northwest, 1860, American Historical Review, XVI, (1910), 786)] it has been axiomatic in the works of historians that the foreign-born of the Old Northwest, voting in solid blocs according to the dictates of their leaders, cast the decisive ballots.

Lincoln could not have won the presidency, Dodd suggested, “but for the loyal support of the Germans and other foreign citizens led by Carl Shurz, Gustav Keorner, and the editors of the Staatzeitung of Chicago.”

A decade later . . . Donnal V. Smith scrutinized the immigrant vote in 1860 and confidently declared that “without the vote of the foreign-born, Lincoln could not have carried the Northwest, and without the Northwest . . . he would have been defeated.”

Smith’s statistics also confirmed the premise that the social solidarity characteristic of ethnic groups invariably translated itself into political solidarity, and that because of the language barrier the immigrants needed leaders to formulate the political issues for them.

“The leaders who were so trusted,” Smith maintained, “were in a splendid to control the political strength of the foreign-born.” And in the election of 1860, he continued, even to the “casual observer” the ethnic leaders of the Middle West were solidly Republican . . . [and] except for isolated, insignificant minorities, the foreign-born of the Old Northwest voted Republican.

Foreign language newspapers generally carried the Lincoln-Hamlin banner of their mastheads; prominent immigrants campaigned actively for Old Abe and played key roles at the Chicago convention.”

(The Ethnic Voter and the First Lincoln Election, Robert P. Swierenga, Civil War History, Volume 11, No. 1, March 1965, excerpts, pp. 27-28)

Two Views on the Destruction of Historic Monuments

 

Noted speaker and author of “Stonewall Jackson at Cedar Mountain, Robert K. Krick:

“We live in an age riven by shrill and intemperate voices, from all perspectives and on most topics. No sane person today would embrace, endorse, or tolerate slavery.

A casual observer, readily able to convince himself that he would have behaved similarly in the 1860s, can vault to the high ground with the greatest of ease. Doing that gratifies the powerful self-righteousness strain that runs through all of us, for better or worse.

In fact, it leaps far ahead of the Federal politicians (Lincoln among them) who said emphatically that slavery was not the issue, and millions of Northern soldiers who fought, bled and died in windrows to save the Union – but were noisily offended by mid-war emancipation.

It is impossible to imagine a United States in the current atmosphere that does not include zealots eager to obliterate any culture not precisely their own, destroying monuments in the fashion of Soviets after a purge, and antiquities in the manner of ISIS.

The trend is redolent of the misery that inundated the planet during the aptly-named Dark Ages, arising from savages who believed, as a matter of religion in that instance, that anyone with opinions different than their own was not just wrong, but craven and evil, and must be brutalized into conformity.

On the other hand, a generous proportion of the country now, and always, eschews extremism, and embraces tolerance of others’ cultures and inheritances and beliefs. Such folk will always be society’s salvation.”

 

Thos. V. Strain, Jr., Commander-in-Chief, Sons of Confederate Veterans:

“. . . It is my opinion, and that of many others, that these [monument] removals are an attempt to erase history. If you take some time to read the comments on social media and on the websites of the news organizations reporting these removals, it is obvious that only a few people support the removals. What it boils down to is that the politicians are telling those that elect them that their wishes mean absolutely nothing to them.

Just this week one of these politicians that voted to remove a statue in Virginia lost in the primary for reelection, and he noted that his stance on the removal more than likely cost him the election.

In the end, what we really have, in my humble opinion, is a group of people who are following their own personal agendas and saying, “to hell with the people” and moving forward with these removals. It isn’t what we want, it is all about them.”

(Civil War Times, October 2017, excerpts, pp. 32; 37)

Financing the War with Inflation

As Lincoln was unable to finance his war with the traditional tax and customs revenue sources, he turned to paper fiat money to be printed as needed, though the Constitution permits only gold and silver as legal tender. The predictable speculation in the value of greenbacks versus gold prices caused murky markets to emerge. In New York’s “Gold Room,” decisions were guided not so much by patriotic motives as the desire for profit. It was said that “Sectional feeling often entered largely into bull and bear contests in the Gold Room, and Union men and rebel sympathizers fought their battles sometimes, as much to gratify this as to make money.”

Bernhard Thuersam, www.Circa1865.com

 

Financing the War with Inflation

“To help finance the Civil War, the federal government began issuing “demand notes” in July 1861. These government obligations were not a legal tender currency and were freely convertible into gold upon presentation to a federal depository. During the course of 1861, the Union’s financial condition deteriorated, and in December the Treasury issues a very bleak report on the budgetary situation.

In the face of such news, bankers concluded that investors would lose confidence in the demand notes and the banks would soon experience a massive outflow of gold. On December 30, the banks suspended specie payments of gold [for greenbacks]. The government followed suit almost immediately.

Soon thereafter, in February 1862, Congress passed the first of the Legal Tender Acts. These acts authorized the government to issue “greenbacks” – a currency that was to be legal tender for both public and private debts. Of course, since demand notes were no longer convertible into gold, neither were greenbacks . . . [though] all available evidence indicates that the public believed that at some future date convertibility would be reinstated and all greenbacks would be redeemed in gold.

[Because Lincoln] was unable to finance the war with the available tax revenues . . . Greenbacks were a way of using inflation to pay for the war. Speculators knew that the degree to which the Union would have to rely on future greenback issues depended on just how much the war would ultimately cost. A long, expensive war would require more greenback issues and make it less likely that greenbacks would ever be exchanged for gold dollars on a one-for-one basis.

Not surprisingly, a formal market for buyers and sellers to trade gold came into existence within two weeks of the suspension of convertibility. The first organized dealings took place at the New York Stock Exchange on January 13, 1862. At about the same time a second market formed . . . in New York City . . . known as the Gold Room.

An important question for our purposes is how the gold market used the [political and war] information coming to it. Did the financial market react quickly to news that was available, or did it take several days to digest it? A closely related question is whether news of battles . . . reached all participants at the same time.

In a report on the burning of Chambersburg, Pennsylvania, on July 31, 1864, the New York Herald explicitly noted that the government frequently withheld information from the public to minimize alarm and protect intelligence and sources.

The daily registry of the Gold Room was a quicker messenger of successes and defeats than the tardier telegrams of the Associated Press. A private secretary of a high official, with no capital at all to save his position, which gave him authentic information of every shaping of the chess game of war a full twenty hours in advance of the public, simply flashed to the words “sell, buy” across the wires, and trusted the honor of his broker for the rest.

If there was a sufficiently large number of “insiders” competing with each other, then the market would quickly transform war news into changes in the price of greenbacks, despite the fact that the news was not coming through published sources.

The observation of [New York Herald writer] Kinahan Cornwallis are consistent with this notion: “Almost every individual speculator in the Gold Room, whose transactions were large enough to make it of consequence, had a correspondent in the national capital, who sent him a telegraphic dispatch as occasion required . . .”

(Greenback Prices as Commentary on the Union Prospects, Guinnane, Rosen and Willard, Civil War History, The Journal of the Middle Period, Kent State University Press, December 1995, Volume XLI, No. 4, excerpts, pp. 315-318)

 

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