Library of Congress
Harper ’ s Weekly illustration of trading behind the lines during the Civil War . Original caption : “ The levee at Memphis , Tenn .— Hauling sugar and cotton from their hiding places for shipment north .” Sketched by Alex Simplot , 1862 .
as President he went to great lengths to appoint Jews to his administration .
The trade across lines was most flagrant in New Orleans . Beginning in May 1862 , the city was placed under the command of a military governor , General Benjamin Butler . A Massachusetts politician with significant textile investments , Butler reaped large profits through the sale of heavy cloth to the army . Chase , who was hoping that Louisiana could be reintegrated into the Union in time to support a presidential bid in 1864 , cultivated Butler as a politically useful ally .
Soon after Butler arrived in New Orleans , Chase revealed his desire for “ Louisianans to make haste back the Union .” The Treasury Secretary was also receiving private reports on the outlook for building a Republican Party in Louisiana loyal to him . In July , he sent Butler his most indiscreet note , in which he urged the general to go beyond Lincoln ’ s policy on slavery . “ If some prudential considerations did not forbid I should at once , if I were in your place , respectfully notify the slaveholders of Louisiana that henceforth they must be content to pay their laborers wages ,” Chase advised . But of course , a “ prudential consideration ” did exist . Chase was advising Butler to interfere with slavery policy — the very step previously taken by General David Hunter and countermanded by Lincoln . In other words , the Treasury Secretary was urging a general to defy his Commander in Chief .
Lest there be any doubt , Chase added , “ It is plain enough now that the annulling of Hunter ’ s order was a mistake .”
Butler improved the civil administration in New Orleans and cleaned the streets . But he failed to grasp that profiteering was undermining his administration . Under his watch , trading with the enemy reached epidemic proportions , as Treasury agents and others fanned out along Mississippi River tributaries in search of cotton . In many cases , cotton was purchased with salt — a forbidden currency for which the South was desperate . A Treasury agent and distant Chase relative , George S . Denison , who effectively served as Chase ’ s spy , sent a stream of letters warning that trade in New Orleans , fully sanctioned by Butler , was aiding the rebels .
By the fall , Denison was reporting that the Union had sent at least 5,000 sacks of salt to the Rebel army and that the trade was demoralizing honest soldiers . “ Many officers and soldiers ,” he reported , “ want to go home , not wishing to risk their lives to make fortunes for others .”
Butler tried to shift the blame to the usual suspects . When traders were apprehended for smuggling , he commented contemptuously , “ They are Jews who betrayed their Savior , & also have betrayed us .” In fact , the worst offender was a gentile — one Colonel Andrew Jackson Butler . As Denison informed Chase with alarm , “ Col . Butler is a brother of Gen ’ l . Butler and came out with the army , and immediately commenced doing business . He is not in government employ . He is here for the sole purpose of making money , and it is stated by secessionists — and by some Union men — that he has made half a million dollars .”
Although Chase had heard disquieting reports about Butler since June , he seemed willfully oblivious to their implications . Denison , though , kept hammering away . In October 1862 , he warned Chase of Butler ’ s extreme tolerance in granting permits and endorsing military passes . Denison noted that eight or nine riverboats under military authority had been carrying on a “ constant ” trade and that “ large quantities of salt crossed Lake Pontchartrain to rebels .” In the blunt words of a Rebel officer , the Yankees “ will do anything for money .”
Roger Lowenstein reported for The Wall Street Journal for more than a decade . His work has appeared in The Wall Street Journal , Bloomberg , The New York Times , the Washington Post , Fortune , The Atlantic and the New York Review of Books . His books include the NYT bestsellers Buffett , When Genius Failed and The End of Wall Street , as well as the critically acclaimed Origins of the Crash , While America Aged and America ’ s Bank . His latest book is Ways and Means : Lincoln and His Cabinet and the Financing of the Civil War ( Penguin Press , 2022 ), from which this article has been adapted .
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