Category Archives: Foreign Relations

The Capture of the C.S.S. Florida

October 7, 1864 – The Federal steam sloop U.S.S. Wachusett captured the famed Confederate commerce raider C.S.S. Florida under dubious circumstances that threatened diplomatic relations with Brazil.

C.S.S. Florida | Image Credit: Wikimedia.org

The Wachusett arrived at Bahia harbor in Brazil on the 2nd to investigate reports that the Florida was nearby. In her career, the Florida had captured 36 Federal prizes totaling over $4 million in shipping, and had once caused panic by threatening New York Harbor. Commander Napoleon Collins led the Wachusett, the sister ship of the U.S.S. Kearsarge, and he had been ordered to do to the Florida what the Kearsarge had done to the C.S.S. Alabama four months before: capture or destroy her.

Two nights later, the Florida anchored in All Saints Bay in Bahia, unaware that the Wachusett had anchored nearby. The Florida’s commander, Lieutenant Charles M. Morris, assumed his ship was safe under international law since Brazil had proclaimed neutrality in the conflict. The U.S. consul, Thomas Wilson, offered peaceful assurances to Brazilian officials, but Collins believed the Florida had previously violated the neutrality by bringing prizes into Brazilian ports. He therefore resolved to confront the Confederate ship.

Through Wilson, Collins sent an invitation to Morris to duel outside the three-mile international limit. Morris declined to even receive the message because it had been addressed to “the sloop Florida,” without acknowledging that she belonged to a nation. Both Collins and Morris pledged not to fight in the neutral area, with Collins removing the shot from his cannon in accordance with international law.

Morris and many of his crew came ashore on the night of the 6th to attend an opera and sleep in a hotel. Around 3 a.m., Collins quietly slipped his cables, backed up, eluded a Brazilian gunboat, then thrust full speed ahead and rammed the Florida in her starboard quarter. The skeleton crew aboard the Florida began firing small arms at the Wachusett, prompting Collins to claim that the Florida had “fired first.”

Though just a glancing blow, the collision crushed the Florida’s bulwarks and snapped the mizzenmast. Collins trained his cannon on the disabled ship and demanded surrender, then he ordered his men to board the Florida and seize the crew. The Wachusett pulled the Florida out of the harbor, bound for Hampton Roads, Virginia. Lieutenant Morris arrived from his hotel to see his ship being towed away.

Florida towed by Wachusett | Image Credit: Harper’s Weekly, Vol. VIII, No. 413, 26 Nov 1864

Brazilian and European officials vehemently protested this violation of international law, as the Florida’s seizure took place in a neutral port, after U.S. assurances that there would be no incident. Diplomatic tensions simmered through this month and into November.

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Sources
Delaney, Norman C., Historical Times Illustrated Encyclopedia of the Civil War (New York: Harper & Row, 1986, Patricia L. Faust ed.), p. 793; Denney, Robert E., The Civil War Years: A Day-by-Day Chronicle (New York: Gramercy Books, 1992 [1998 edition]), p. 469-71; Foote, Shelby, The Civil War: A Narrative: Volume 3: Red River to Appomattox (Vintage Civil War Library, Knopf Doubleday Publishing Group, Kindle Edition, 2011), Locations 12303-353; Fredriksen, John C., Civil War Almanac (New York: Checkmark Books, 2007), p. 505-07; Jones, Virgil Carrington (Pat), Historical Times Illustrated Encyclopedia of the Civil War (New York: Harper & Row, 1986, Patricia L. Faust ed.), p. 264; Linedecker, Clifford L. (ed.), The Civil War A to Z (Ballantine Books, 2002), p. 263; Long, E.B. with Long, Barbara, The Civil War Day by Day (New York: Da Capo Press, Inc., 1971), p. 579-80; McPherson, James M., War on the Waters: The Union and Confederate Navies, 1861-1865 (Littlefield History of the Civil War Era, The University of North Carolina Press, Kindle Edition, 2012), p. 205-06; Time-Life Editors, The Blockade: Runners and Raiders (Alexandria, VA: Time-Life Books, 1983), p. 150-51

The Confederate Congress Assembles

December 7, 1863 – The fourth session of the First Confederate States Congress opened in Richmond.

The 1st Confederate National Flag | Image Credit: RussellHarrison.com

The members of Congress assembled amid very trying times for the Confederacy. The armies had suffered many setbacks (especially in the West), the blockade was strangling the economy, and foreign nations had yet to recognize Confederate independence. President Jefferson Davis submitted his annual message to Congress, which was read to both chambers on the 8th. In his message, Davis declared:

“Grave reverses befell our arms soon after your departure from Richmond. Early in July, our strongholds at Vicksburgh and Port Hudson, together with their entire garrisons, capitulated to the combined land and naval forces of the enemy. The important interior position of Jackson next fell into their temporary possession. Our unsuccessful assault on the post at Helena was followed, at a later period, by the invasion of Arkansas; and the retreat of our army from Little Rock gave to the enemy the control of the important valley in which it is situated.”

Confederate President Jefferson Davis | Image Credit: Wikipedia.org

Despite this, Davis announced that Federal advances had “been checked,” and “the resolute spirit of the people soon overcame the despondency.” In particular, he applauded the ongoing efforts to maintain Charleston:

“The determined and successful defense of Charleston against the joint land and naval operations of the enemy, afforded an inspiring example of our ability to repel the attacks even of the iron-clad fleet, on which they chiefly rely…”

Trying to shine a positive light on the defeat at Gettysburg, Davis explained that General Robert E. Lee had been–

“… determined to meet the threatened advance on Richmond by forcing their armies to cross the Potomac and fight in defense of their own capital and homes. Transferring the battle-field to their own soil, he succeeded in compelling their rapid retreat from Virginia, and, in the hard-fought battle of Gettysburg, inflicted such severity of punishment as disabled them from early renewal of the campaign as originally projected.”

Davis congratulated the Army of Tennessee for its stunning victory at Chickamauga, which he called “one of the most brilliant and decisive victories of the war.” However, he lamented the subsequent defeat at Chattanooga:

“After a long and severe battle, in which great carnage was inflicted on him (the enemy), some of our troops inexplicably abandoned a position of great strength, and by a disorderly retreat compelled the commander to withdraw the forces elsewhere successful, and finally to retreat with his whole army to a position some 20 or 30 miles to the rear.”

Noting that the Confederacy had made no progress in obtaining foreign recognition, Davis accused Great Britain of duplicity because it declared neutrality but continued both trading with the United States and honoring the Federal blockade.

Davis addressed financial issues by proposing a restriction in the amount of Confederate paper money in circulation as a means to stem the widespread inflation and lower the cost of living. He also recommended tax increases to help finance the war effort.

Davis next reviewed the army’s condition:

“Though we have lost many of the best of our soldiers and most patriotic of our citizens–the sad and unavoidable result of the battles and toils of such a campaign as that which will render the year 1863 ever memorable in our annals, the army is believed to be, in all respects, in better condition than at any previous period of the war.”

The troops were “now veterans, familiar with danger, hardened by exposure, and confident in themselves and their officers.” According to Davis, the Confederate army “has not been equaled by any like number in the history of the war.” However, Davis acknowledged the growing problem of manpower shortages by stating that “no effort must be spared to add largely to our effective force as promptly as possible.” This should be done by–

“… putting an end to substitution, modifying the exemption law, restricting details, and placing in the ranks such of the able-bodied men now employed as wagoners, nurses, cooks, and other employees, as are doing service for which the negroes may be found competent.”

By replacing “not only enlisted cooks, but wagoners and other employees in the army, by negroes, it is hoped that the ranks of the army will be so strengthened for the ensuing campaign as to put at defiance the utmost efforts of the enemy.” As for the navy, Davis commended the sailors and seamen who did their best to defend the coast, from the James River to the Rio Grande.

Davis called attention to the Federal government’s “barbarous policy” of refusing to exchange prisoners of war (which was partly due to the Confederacy’s refusal to exchange black Federal troops), and the detention of Confederate troops in prison camps. Davis regretfully announced that the Confederacy would soon have to establish prison camps of their own to deal with the tens of thousands of prisoners that the Federals refused to exchange.

Davis condemned the Lincoln administration’s approval of mass destruction throughout the South:

“The frontier of our country bears witness to the alacrity and efficiency with which the general orders of the (Federals) have been executed in the devastation of farms, the destruction of the agricultural implements, the burning of the houses, and the plunder of everything movable.”

Although his administration had always demanded that Confederate forces refrain from attacking civilians on northern soil, Davis stated, “These considerations have been powerless to allay the unchristian hate of those who, long accustomed to draw large profits from a union with us, cannot control the rage excited by the conviction that they have by their own folly destroyed the richest sources of their prosperity.”

There seemed no hope for a negotiated peace that would end the war with Confederate independence because the Federals “refuse to listen to proposals for the only peace possible between us… We now know that the only reliable hope for peace is in the vigor of our resistance.”

Regretting “the savage ferocity which still marks the conduct of the enemy in the prosecution of the war,” Davis stated that the Federals’ wrath had been particularly severe against “the unfortunate negroes” because they “forced into the ranks of their army every able-bodied (black) man that they could seize, and have either left the aged, the women, and the children to perish by starvation, or have gathered them into camps, where they have been wasted by a frightful mortality.”

Davis argued that the Federals treated blacks in the South “with aversion and neglect,” and “in all localities where the enemy have gained a temporary foothold, the negroes, who under our care increased six fold in number since their importation into the colonies of Great Britain, will have been reduced by mortality during the war to not more than one half their previous number.” This information was supposedly provided by “the negroes who succeeded in escaping from the enemy.”

While acknowledging that “The hope last year entertained of an early termination of the war has not been realized,” Davis stated, “The patriotism of the people has proved equal to every sacrifice demanded by their country’s need.” He concluded: “God has blessed us with success disproportionate to our means and, under his divine favor, our labors must at last be crowned with the reward due to men who have given all they possess to the righteous defense of their inalienable rights, their homes, and their altars.”

In his annual report, Secretary of War James A. Seddon acknowledged having suffered major defeats, particularly in Mississippi, as well as dwindling army manpower due to combat, capture, illness, and desertion. Seddon seconded Davis by urging Congress to repeal the Conscription Act provisions that allowed for exemptions and the purchase of substitutes.

In late December, Congress responded by repealing the provisions allowing draftees to hire substitutes. The practice had been corrupted to the point that substitutes often deserted the army and sold themselves multiple times to the highest bidders; some made as much as $6,000 ($300 in gold), or three years’ wages for a skilled laborer. Substitution had been an American military tradition before the war, but popular furor against the practice compelled Congress to end it after 20 months.

Davis also approved a measure modifying the vastly unpopular tax-in-kind to reduce waste and corruption by allowing cash payments equal to the tax fee at impressment prices. A bill introduced by Senator Robert W. Johnson of Arkansas limiting cabinet members to two-year terms did not pass; this was part of the growing effort in Congress to curtail Davis’s executive power.

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References

Angle, Paul M., A Pictorial History of the Civil War Years (New York: Doubleday, 1967), p. 140; CivilWarDailyGazette.com; Davis, Jefferson, The Rise and Fall of the Confederate Government (Kindle Edition 2008, 1889), Loc 8565-77; Denney, Robert E., The Civil War Years: A Day-by-Day Chronicle (New York: Gramercy Books, 1992 [1998 edition]), p. 351-52; Faust, Patricia L., Historical Times Illustrated Encyclopedia of the Civil War (New York: Harper & Row, 1986, Patricia L. Faust ed.), p. 102-03, 742-43; Fredriksen, John C., Civil War Almanac (New York: Checkmark Books, 2007), p. 381, 386; Long, E.B. with Long, Barbara, The Civil War Day by Day (New York: Da Capo Press, Inc., 1971), p. 443-46, 449; McPherson, James M., Battle Cry of Freedom: The Civil War Era (Oxford History of the United States Book 6, Oxford University Press, Kindle Edition, 1988), p. 431-32, 603; White, Howard Ray, Bloodstains, An Epic History of the Politics that Produced and Sustained the American Civil War and the Political Reconstruction that Followed (Southernbooks, Kindle Edition, 2012), Q463

The Confederacy Looks to France

September 5, 1863 – Confederate Lieutenant General Edmund Kirby Smith urged foreign envoy John Slidell to get France to intervene on the Confederacy’s behalf so that the French puppet regime in Mexico would have a friendly neighbor to the north.

By this month, French forces had invaded Mexico due to non-payment of debts owed to France. French Emperor Napoleon III installed Maximilian I of Austria as the new Mexican emperor under a French protectorate. The Lincoln administration opposed this move because European powers interfering in the affairs of Western Hemisphere nations violated the Monroe Doctrine. But with war raging against the Confederacy, there was little the administration could do about it.

Napoleon had hinted at recognizing Confederate independence in the past, and as such, the Confederacy tried cultivating friendly relations with France. The Confederates also hoped that a French-controlled Mexico would facilitate the passage of much-needed imports into Texas.

Confederate General E.K. Smith | Image Credit: CivilWarDailyGazette.com

Smith, who commanded the Confederate Trans-Mississippi Department that included Texas, hoped to offset the loss of the Mississippi River (and thus his access to goods from the east) by negotiating an arrangement with the French. He wrote Slidell, the former French envoy:

“The action of the French in Mexico and the erection of an empire under their auspices makes the establishment of the Confederacy the policy of the French Government. The condition of the States west of the Mississippi, separated from the General Government, at Richmond; the exhausted state of the country, with its fighting population in the armies east of the Mississippi; the vast preparations making by the enemy to complete the occupation and subjugation of this whole Western Department, are all matters which, if properly brought before the French Emperor, should influence him in hastening the intervention of his good services in our behalf. This succor must come speedily, or it will be too late. Without assistance from abroad or an extraordinary interposition of Providence, less than twelve months will see this fair country irretrievably lost, and the French protectorate in Mexico will find a hostile power established on their frontier, of exhaustless resources and great military strength, impelled by revenge and the traditional policy of its Government to overthrow all foreign influences on the American continent.”

According to Smith, if the French were going to colonize Mexico, it would be in their best interests to have the Confederacy neighboring them to the north because the U.S. would be hostile toward their intentions. Therefore, it only stood to reason that Napoleon should recognize Confederate independence and aid the Davis administration in its war against the U.S.

Smith stressed that France had to act quickly, because his department had only “the aged, the infirm, and the lukewarm” left to stop the growing number of Federal forces. He warned that without France’s help, the Federals would control the Mississippi “with their southern and western frontier open for extension toward Mexico and the Pacific.”

Smith declared that “the forced impressment of our slaves into their army, to wage a ruthless war against their masters, all in the name of humanity call for the interposition of those powers who really hold the destiny of our country in their hands.” He concluded:

“The intervention of the French Government can alone save Mexico from having on its border a grasping, haughty, and imperious neighbor. If the policy of the Emperor looks to an intervention in our affairs, he should take immediate military possession of the east bank of the Rio Grande, and open to us the only channel by which supplies and munitions of war can be introduced into the department. The whole cotton trade west of the Mississippi will thus be secured to the French market, and the enemy will be anticipated in making a lodgment on the Rio Grande, from which he could not be driven without great difficulty.”

Smith then wrote President Jefferson Davis explaining that he had called on Slidell to negotiate with Napoleon on his department’s behalf. Smith conceded that he cast the department “in a gloomy light,” but it “wasn’t a too exaggerated picture of what may occur.” Federals were expanding their control over Louisiana and beginning to threaten the Texas coast. They were also threatening Fort Smith and Little Rock, two of the most important points in Arkansas.

Smith had only 30,000 effectives in his department, but he told Davis that more might be encouraged to enlist if he had weapons to give them. He wrote, “Sixty thousand rifles could, I believe, this moment be well disposed of throughout this department.”

But Davis had no such arms to send Smith, and Napoleon ultimately refused to recognize the Confederacy.

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References

Kerby, Robert L., Kirby Smith’s Confederacy; Official Records of the War of the Rebellion (Series 1, Volume 22, Part 2), p. 993-95

The Laird Rams

September 5, 1863 – Charles Francis Adams, U.S. minister to Great Britain, threatened war unless the British stopped clandestinely building warships for the Confederacy.

Charles Francis Adams | Image Credit: Wikipedia.org

Adams had demanded that the British government investigate allegations that naval warships were being built in British shipyards for Confederate use. This demand specifically referred to ironclads currently under construction in the Laird shipyards at Birkenhead that had become known as the “Laird rams.”

Emperor Napoleon III of France was listed as the rams’ original owner, but U.S. officials claimed the British government secretly knew that Confederate agents owned the ships behind the scenes. The agents arranged for the unarmed rams to be sold to Bravay & Company of Paris, on behalf of “his serene Highness the Pasha of Egypt.” The Pasha would then arm the rams and sell them to the Confederates on the open sea.

Adams and Thomas Dudley, the U.S. consul in Liverpool, had been gathering evidence that the rams truly belonged to the Confederacy since June. They argued that if such activity was taking place, it violated Britain’s avowed neutrality and had to be stopped. Secretary of State William H. Seward had even threatened to declare war on British Canada if evidence surfaced that Britain was aiding the Confederate war effort.

British Foreign Minister Lord John Russell | Image Credit: Wikipedia.org

Adams urged British Foreign Secretary Lord John Russell to stop construction on the rams, but Russell replied on the 1st, “Under these circumstances, Her Majesty’s Government cannot interfere in any way with these vessels.” Without Adams’s knowledge, Russell turned around two days later and issued orders detaining the rams at Birkenhead until British officials could investigate the matter further. Russell decided that such a move was necessary to maintain peaceful relations with the U.S., as well as British neutrality.

Adams wrote Russell on the 5th, unaware that Russell had detained the rams. Adams warned that if the rams left the shipyard, “It would be superfluous in me to point out to your Lordship that this is war…” Adams was then informed that the British government had already taken steps to prevent such a thing from happening.

This was hailed in the U.S. as a great diplomatic victory, and although the British government had decided on its own to detain the rams, Adams became a hero in the U.S. for supposedly forcing Britain to back down. This did much to ease tensions between London and Washington, at the same time dealing another damaging blow to Confederate hopes for independence.

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References

Catton, Bruce, The American Heritage Picture History of the Civil War (New York: American Heritage Publishing Co., 1960), p. 260; Denney, Robert E., The Civil War Years: A Day-by-Day Chronicle (New York: Gramercy Books, 1992 [1998 edition]), p. 322-23; Donald, David Herbert, Lincoln (Simon & Schuster, Kindle Edition, 2011), Loc 9918-28; Fredriksen, John C., Civil War Almanac (New York: Checkmark Books, 2007), p. 346, 348; Long, E.B. with Long, Barbara, The Civil War Day by Day (New York: Da Capo Press, Inc., 1971), p. 404-05; McPherson, James M., Battle Cry of Freedom: The Civil War Era (Oxford History of the United States Book 6, Oxford University Press, Kindle Edition, 1988), p. 682; McPherson, James M., War on the Waters: The Union and Confederate Navies, 1861-1865 (Littlefield History of the Civil War Era, The University of North Carolina Press, Kindle Edition, 2012), p. 202-03; Time-Life Editors, The Blockade: Runners and Raiders (Alexandria, VA: Time-Life Books, 1983), p. 126-27; White, Howard Ray, Bloodstains, An Epic History of the Politics that Produced and Sustained the American Civil War and the Political Reconstruction that Followed (Southernbooks, Kindle Edition, 2012), Q363

Post-Vicksburg: Grant’s Army Reduced

August 3, 1863 – Major General Ulysses S. Grant’s Federal Army of the Tennessee underwent vast reductions following its capture of Vicksburg.

Maj Gen U.S. Grant | Image Credit: Wikimedia.org

By this month, Grant’s Federals were performing occupation duty at Vicksburg and other points in Mississippi and western Tennessee. After borrowing IX Corps to help conquer Vicksburg, Grant returned those troops to Major General Ambrose E. Burnside’s Army of the Ohio, which was poised to invade eastern Tennessee.

Grant proposed joining forces with Major General Nathaniel P. Banks’s Army of the Gulf to capture Mobile, Alabama. This plan was backed by both Banks and Rear Admiral David G. Farragut, whose naval force would be needed to attack the city from the Gulf of Mexico. But General-in-Chief Henry W. Halleck rejected the idea and instead urged Banks to invade eastern Texas while Grant continued managing occupation forces.

Halleck informed Grant on the 6th, “There are important reasons why our flag should be restored to some part of Texas with the least possible delay.” Halleck did not explain those reasons, but President Abraham Lincoln did in a letter to Grant three days later:

“I see by a dispatch of yours that you incline strongly toward an expedition against Mobile. This would appear tempting to me also, were it not that, in view of recent events in Mexico, I am greatly impressed with the importance of re-establishing the national authority in Western Texas as soon as possible.”

Lincoln was referring to Mexico falling under the rule of Maximilian I, a puppet dictator installed by Emperor Napoleon III of France. European interference in the affairs of a Western Hemisphere nation violated the Monroe Doctrine. Even worse, Napoleon had hinted at the possibility of allying with the Confederacy, and the administration feared that the Confederates could start receiving military and financial support from French-occupied Mexico.

Thus, much of Grant’s army was broken up, with Major General E.O.C. Ord’s XIII Corps going to reinforce Banks at New Orleans and Major General William T. Sherman’s XV Corps performing garrison duty in Louisiana. The rest of Grant’s forces held points along the Mississippi River in western Tennessee and Mississippi.

Meanwhile, Lincoln tried convincing Grant of the effectiveness of black troops. Lincoln wrote on the 9th that black troops were “a resource which, if vigorously applied now, will soon close the contest.” However, Sherman wrote his wife Ellen doubting the ability of blacks in the military and stating, “… I cannot trust them yet.” Consequently, Sherman did little to alleviate the problem of freed slaves scouring the region and resorting to robbery for food and shelter.

Major General John A. McClernand, who had caused Grant so much trouble until Grant relieved him of corps command during the Vicksburg campaign, had his military career effectively ended when Lincoln declined assigning him to a new command.

On the 17th, elements of Sherman’s infantry from Vicksburg and Major General Stephen A. Hurlbut’s cavalry from Memphis raided Grenada, Mississippi, south of the Yalobusha River, where Confederates had gathered supplies from the Mississippi Central Railroad. Those supplies were guarded by a token force while the main body of Confederates evacuated Jackson and burned the bridge over the Pearl River in May.

The Federal forces drove the Confederate guards off and seized 57 locomotives, destroyed over 400 railcars, and burned buildings containing vast amounts of commissary and ordnance supplies. This was one of the most destructive raids of the war, with damage estimated at $4 million.

In late August, Grant attended a banquet in his honor at the Gayoso House in Memphis. A pyramid in front of his place at the table listed all his battles, beginning with Belmont. He was toasted as “your Grant and my Grant,” and his feat of opening the Mississippi River was compared to the feats of Hernando de Soto and Robert Fulton. Grant delivered a two-sentence speech to the 200 guests, thanking them and pledging to do what he could to maintain their prosperity.

On the water, Rear Admiral David D. Porter formally took command of all Federal naval forces and operations on the Mississippi River, replacing Farragut. Porter’s main goal was to suppress Confederate raids on Federal shipping while promoting river commerce.

Recalling the terrible problems the navy had in trying to navigate the Yazoo River before the fall of Vicksburg, Porter reported to Navy Secretary Gideon Welles, “There are no more steamers on the Yazoo. The large fleet that sought refuge there, as the safest place in rebeldom, have all been destroyed.”

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References

CivilWarDailyGazette.com; Denney, Robert E., The Civil War Years: A Day-by-Day Chronicle (New York: Gramercy Books, 1992 [1998 edition]), p. 314-16; Foote, Shelby, The Civil War: A Narrative: Volume 2: Fredericksburg to Meridian (Vintage Civil War Library, Knopf Doubleday Publishing Group, Kindle Edition, 2011), p. 770-73; Fredriksen, John C., Civil War Almanac (New York: Checkmark Books, 2007), p. 337, 339, 345; Long, E.B. with Long, Barbara, The Civil War Day by Day (New York: Da Capo Press, Inc., 1971), p. 393-94, 396-97; McPherson, James M., War on the Waters: The Union and Confederate Navies, 1861-1865 (Littlefield History of the Civil War Era, The University of North Carolina Press, Kindle Edition, 2012), p. 167, 170-71; Pritchard, Russ A., Historical Times Illustrated Encyclopedia of the Civil War (New York: Harper & Row, 1986, Patricia L. Faust ed.), p. 178

The Erlanger Loan

March 18, 1863 – Confederate commissioner John Slidell and representatives of Emile Erlanger, head of France’s most influential bank, negotiated a loan to the Confederacy for $15 million to help finance the war.

Confederate envoy John Slidell | Image Credit: Wikimedia.org

The loan was to be secured by the Confederate sale of 20-year war bonds that could be exchanged for cotton, the South’s most lucrative commodity. The cotton was to be sold to bondholders at 12 cents per pound while the market rate was 21 cents per pound, making the potential margin for profit enormous.

Confederate officials complained about Erlanger’s insistence on high interest rates and a five percent commission; some even accused him of extortion. Nevertheless, they approved the loan in the hope that France would recognize Confederate independence.

The Confederates were desperate to raise money, and with depleted specie reserves, the government had turned to bond sales. When these sales further drained the specie out of the South, the government printed paper money that quickly depreciated and caused prices to soar. It was hoped that this loan would not only finance the war but help stabilize the southern economy.

The first bond issue took place on March 19 in London, Amsterdam, Paris, and Frankfurt. By day’s end, the bonds were heavily oversubscribed at 90. The enthusiasm caused by this issue quickly raised the bond price 95.5 percent. This allowed agents to purchase some badly needed supplies for the war effort.

However, Federal agents in Europe began spreading rumors that Confederate securities were a poor risk and bid up the cost of war supplies so high (using gold the Confederacy did not have) that the Confederates could no longer afford to buy them. They also played on investors’ fears by alleging that President Jefferson Davis had supported bond repudiation in his home state of Mississippi before the war.

The bond price soon plummeted due to fears that the Confederacy would repudiate its debts if it won the war; military defeats this summer also worked to drive the prices down. Many investors lost fortunes, but Erlanger cleared $6 million in interest and commissions, leaving the Confederacy with $9 million in European currency to pay for the war. This was about the best deal the credit-starved Confederacy could hope for.

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References

Faust, Patricia L., Historical Times Illustrated Encyclopedia of the Civil War (New York: Harper & Row, 1986, Patricia L. Faust ed.), p. 246; Foote, Shelby, The Civil War: A Narrative: Volume 2: Fredericksburg to Meridian (Vintage Civil War Library, Knopf Doubleday Publishing Group, Kindle Edition, 2011), p. 156; Long, E.B. with Long, Barbara, The Civil War Day by Day (New York: Da Capo Press, Inc., 1971), p. 329-30; Thomas, Emory M., Historical Times Illustrated Encyclopedia of the Civil War (New York: Harper & Row, 1986, Patricia L. Faust ed.), p. 259; Time-Life Editors, The Blockade: Runners and Raiders (Alexandria, VA: Time-Life Books, 1983), p. 122-24

Foreign Affairs: Seward Rejects Mediation

February 6, 1863 – Secretary of State William H. Seward unilaterally declined an offer by French Emperor Napoleon III to mediate the conflict between the U.S. and the Confederacy.

Horace Greeley, the influential editor of the New York Tribune, had been publishing editorials in his newspaper calling for an armistice to negotiate a peace that would restore “the Union as it was.” William C. “Colorado” Jewett, a mining speculator with a questionable reputation, informed Greeley after returning from France that Napoleon had offered to mediate a peace between the warring factions.

Greeley responded by going to Washington to try getting the French minister to the U.S., Henri Mercier, to mediate on Napoleon’s behalf. Mercier offered his services on February 3, proposing that officials of the U.S. and the Confederacy come together in a neutral country to discuss a possible peace, and that Mercier would “chair” the meeting.

President Abraham Lincoln neither accepted nor declined the offer. Senator Charles Sumner, chairman of the Foreign Relations Committee, wanted to continue the war until the Federals achieved total victory. Seward considered arresting Greeley for violating the Logan Act, which barred American citizens from negotiating with a foreign nation on behalf of the U.S. government.

U.S. Secretary of State William H. Seward | Image Credit: Wikimedia.org

Three days later, Seward officially turned down Mercier’s request, explaining that the Lincoln administration would not under any circumstances abandon the effort to preserve the Union, and would also not relinquish any authority to France as the proposal seemed to have implied. Lincoln endorsed Seward’s rejection. Seward took offense to “interference by a foreign power in a family dispute.” Many Republicans in Congress also expressed anger toward the French trying to involve themselves in what they considered to be a domestic insurrection.

Great Britain would not go so far as to offer mediation services. In an address to the British Parliament, Queen Victoria declared that Britain had not tried to “induce a cessation of the conflict between the contending parties in the North American States, because it has not yet seemed to Her Majesty that any such overtures could be attended with a probability of success.”

James Mason, the Confederate envoy in Britain, continued working to gain Confederate recognition. This included delivering a prominent speech at the Lord Mayor’s banquet in London calling for the British to recognize Confederate independence. However, Commander James H. North of the Confederate navy wrote to Navy Secretary Stephen R. Mallory from Glasgow, Scotland:

“I can see no prospect of recognition from this country… If they will let us get our ships out when they are ready, we shall feel ourselves most fortunate. It is now almost impossible to make the slightest move or do the smallest thing, that the Lincoln spies do not know of it.”

Part of the reason the British government was so reluctant to recognize Confederate independence was Lincoln’s Emancipation Proclamation, which proved very popular among the British people. Mass meetings took place on the 19th at Liverpool and Carlisle in support of Lincoln’s decree. Therefore, recognizing the Confederacy would defy the will of many British subjects.

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References

Catton, Bruce, The American Heritage Picture History of the Civil War (New York: American Heritage Publishing Co., 1960), p. 253; Denney, Robert E., The Civil War Years: A Day-by-Day Chronicle (New York: Gramercy Books, 1992 [1998 edition]), p. 259, 261-62; Donald, David Herbert, Lincoln (Simon & Schuster, Kindle Edition, 2011), Loc 8767-78; Foote, Shelby, The Civil War: A Narrative: Volume 2: Fredericksburg to Meridian (Vintage Civil War Library, Knopf Doubleday Publishing Group, Kindle Edition, 2011), p. 157; Fredriksen, John C., Civil War Almanac (New York: Checkmark Books, 2007), p. 261-63; Long, E.B. with Long, Barbara, The Civil War Day by Day (New York: Da Capo Press, Inc., 1971), p. 318-20, 322