George S. Denison to Salmon P. Chase, January 15, 1863

(Private)

New Orleans, January 16th, 1863.

Dear Sir: I have just been informed by Gen. Banks that the expedition to the Teche under Weitzel, was completely successful and accomplished all he intended. The rebels had in the Bayou a large and powerful gunboat called the “Cotton,” which boat got aground below their fortifications. This boat we destroyed. They have no other boats in any of the bayous below Red River.

Gen. Banks can now take the Teche country whenever he pleases. Weitzel's force has returned, but, I judge, Gen. Banks intends occupying the country by flank movement according to suggestions made by me at first.

I hear much complaint of Gen. Banks that he has not accomplished, or prepared to accomplish, anything — that his time is occupied in listening to complaints of secessionists — that four weeks of fine weather have been lost without military operations — that no step has been taken to open the river — and other similar complaints.

Gen. Banks told me this morning, he cannot yet undertake the opening of the river, because he has no cavalry — no transportation — no medicines, &c. He says everything has been done that ought to have been — and that he shall operate up the River at the earliest day possible. I will say one thing strongly in his favor — that he conceals his plans (whatever they may be) perfectly — and I hardly think even the members of his staff know his intentions.

SOURCE: Diary and correspondence of Salmon P. Chase, Annual Report of the American Historical Association for the Year 1902, Vol. 2, p. 350

Diary of Gideon Welles: Tuesday, April 26, 1864

Sent a letter to Naval Committee in favor of an iron navy yard, transmitting former communications. Action is required and should have been taken by Congress long since.

Neither Chase nor Blair were at the Cabinet to-day, nor was Stanton. The course of these men is reprehensible, and yet the President, I am sorry to say, does not reprove but rather encourages it by bringing forward no important measure connected with either. As regards Chase, it is evident he presumes on his position and the condition of the finances to press a point, hoping it may favor his aspirations.

Stanton has a cabinet and is a power in his own Department. He deceives the President and Seward, makes confidants of certain leading men, and is content to have matters move on without being compelled to show his exact position. He is not on good terms with Blair, nor is Chase, which is partly attributable to that want of concert which frequent assemblages and mutual counselling on public measures would secure. At such a time the country should have the combined wisdom of all.

Rear-Admiral Porter has sent me a long, confidential letter in relation to affairs on Red River and the fights that have taken place at Mansfield, Pleasant Hill, etc. The whole affair is unfortunate. Great sacrifice of life and property has been made in consequence of an incompetent general in command. It is plain from Admiral Porter's account that Banks is no general, has no military capacity, is wholly unfit for the position assigned him. He has never exhibited military capacity, and I regret the President should adhere to him. It is to be attributed in a great degree to Seward, who caused Butler to be superseded by Banks, and naturally desires he should not prove a failure, and therefore hopes and strives against facts. Banks has much of the demagogue, is superficially smart, has volubility and a smack of party management, which is often successful. The President thinks he has Presidential pretensions and friends to back him, but it is a great mistake. Banks is not only no general, but he is not much of a statesman. He is something of a politician, and a party man of his own stamp, and for his own advancement, but is not true and reliable.

There is an attempt to convert this reverse into a victory, but the truth will disclose itself. The President should, if Porter's statements are reliable, dismiss Banks, or deprive him of military command.

I asked Halleck, who called on me to-day, what the army opinion was of the recent conflicts on Red River. He said we undoubtedly had the worst of it, and that Banks had no military talent or education. While I do not place a high estimate on Halleck himself, his expressed opinion of Banks corresponds with my own. Whether he will recommend the withdrawal of Banks from the army remains to be seen.

SOURCE: Gideon Welles, Diary of Gideon Welles, Secretary of the Navy Under Lincoln and Johnson, Vol. 2: April 1, 1864 — December 31, 1866, p. 17-8

George S. Denison to Salmon P. Chase, January 15, 1863

(Private)

New Orleans, January 15th, 1863.

Dear Sir: A fight is progressing on Bayou Teche. Gen. Weitzel commands. He crossed Berwick's Bay yesterday morning, and has advanced up the Teche as far as the enemy's fortifications. The enemy have 1,100 infantry and 1,000 cavalry. Weitzel will succeed without doubt, and advance to New Iberia, where fortifications will be erected by us. The rebel salt works near New Iberia, are yielding one million pounds per day. It is carried all over the Southern States. If this movement is successful, these works will be destroyed. The Teche country is full of sugar. This present movement is simply carrying out Gen. Butler's plan of operations. I urged it a week ago, but advised a flank movement. Gen. Banks has thought best to attack in front. I have traveled through that country several times, and know it well.

The U. S. armed Transport, “Hatteras”, was sunk by the “Alabama” on Sunday the 11th inst. The fight lasted about 45 minutes, and occurred sixteen miles from Galveston. The Flag officer there sent the “Hatteras” out to overhaul a strange sail — which proved to be the “Alabama”, and proved too powerful for her antagonist. Six men of the “Hatteras” escaped in a boat — the rest of the crew were killed or captured. The “Hatteras” carried ninety men. The “Brooklyn” and other vessels lying off Galveston, immediately started for the “Alabama”, but could find nothing of her. The rebels have not attempted to come out of Galveston Bay with the “Harriet Lane”. She is still lying in the Harbor, and I do not know why our Gunboats do not go in and destroy her.

Major Gen. Augur has at last been sent to Baton Rouge to take command, and organize the force there. There begins to be exhibited in this department some little energy and activity. All that is now done, ought to have been done four weeks ago.

The business of “Special Agent” under regulations of August 28th, is not now interfered with by military authorities. In consequence of this non-interference I have organized it with great success. I am satisfied that nothing, or very little, reaches the enemy from this port—and the planters within our lines are supplying themselves rapidly with whatever they need for their own use. I supervise everything myself and have an immense amount of labor to perform. I hear that large amounts of merchandise and supplies reach the enemy from Memphis and vicinity. This can be avoided by honestly adopting the right plan. Trade must be centralized and none allowed except at one or few points. I prevent it as far as possible, outside of the city, and can therefore control it. This plan is well adapted to this country, because property real and personal, is in the hands of a few planters. It is easy (and has been customary heretofore) for each planter to come to the City — take the proper oaths and be made individually responsible for whatever he wishes to take out of the City. Every boat going up the river, carries an “Aid to the Revenue” who sees that the supplies are delivered only at the proper plantation. I have to employ many additional “aids”, but make the system pay its own expenses. My personal supervision of all the details is an immense labor, but I know it will be well done if I attend to it myself — otherwise not.

The planters within and without our lines have been afraid to bring their crops of sugar and cotton because it was seized and must pass through the hands of the military commission. Gen. Butler's military commission was a dishonest plundering concern. By the enclosed order of Gen. Banks, you will see that planters are invited to bring their crops to the City and promised protection. It will have a good and marked effect. This order will not interfere with my action as “Special Agent.”

The system of furnishing supplies to planters — adopted by me, gives satisfaction to planters — but dissatisfaction to the great number of Jews, military speculators, and men from the North, who expect to swindle planters out of fortunes.

It is known here that the President has issued his proclamation, but its terms are not fully known. Gen. Banks told me this morning he is going to raise negro troops, but I fear, not in large numbers. I have information that the number of rebel troops in Texas is about 9,000 — of whom one-third are cavalry. They are provided with good arms brought through Mexico. About one-third of them are conscripts.

The number of troops in Louisiana, west of the Mississippi, is about 4,500 — nearly all of whom are in the Teche country.

SOURCE: Diary and correspondence of Salmon P. Chase, Annual Report of the American Historical Association for the Year 1902, Vol. 2, p. 348-50

Diary of Gideon Welles: Saturday, April 23, 1864

We have met with some disaster in North Carolina. Am apprehensive the army has been a little delinquent.

General Butler has telegraphed to Fox, who is an old boyhood associate and acquaintance, to come down to Hampton Roads. Wants help. Asks F. to induce the President to go down, but he declines, — wisely, I think. Troops are getting in at Fortress Monroe, and the indications in this vicinity warn us that the strength is being gathered for a conflict.

Sumner called on me to-day. Had just come from Chase; spoke of the finances and currency. I told him I was a hard-money man and could not unlearn old ideas, and had no time to study new theories. He laughed and said that things in these days must conflict with my old opinions. It is evident that our statesmen do not realize the importance nor condition of the money and currency question.

SOURCE: Gideon Welles, Diary of Gideon Welles, Secretary of the Navy Under Lincoln and Johnson, Vol. 2: April 1, 1864 — December 31, 1866, p. 16-7

George S. Denison to Salmon P. Chase, January 8, 1863

(Private)

New Orleans, January 8th, 1863.

Dear Sir: A disaster has occurred at Galveston, similar to that near Fortress Monroe when the Cumberland and Congress were destroyed.

The rebels under Magruder, came down from Houston with four boats (steam) protected by cotton bales. At the same time, a land force, estimated from 3,000 to 7,000 crossed the bridge to the Island and occupied Galveston. This occurred about one or two o'clock on the morning of Jan. 1st. About 3 o'clock an attack was made by land and water on the Gunboats —which were in the narrow channel within musket shot of the shore. The “Harriet Lane” run into a rebel boat and sunk her, but became entangled in the wreck and could not get off. She was carried by boarding and captured. Less than twenty of her men are supposed to survive (out of 130). The Westfield (Flag Ship) was aground. Commodore Renshaw sent off to the other vessels all the men and officers except eight or ten, and then blew up the vessel and himself with her. He did not intend to destroy himself, but the magazine took fire unexpectedly, just as he was escaping. Two hundred and fifty men of a Massachusetts regiment (infantry only) were posted in the town, and were all captured or killed. The Gunboats had previous notice of the attack, and there must have been negligence on the part of the officers. Our loss is — “Harriet Lane” captured, but believed to be too much injured to be fit for sea for some time. The “Westfield” blown up.

Two sailing vessels loaded with coal for the navy.

About 400 men killed or taken prisoners.

All the other vessels (two were Gunboats) escaped. The fight lasted from three o'clock until 10 A. M.

Admiral Farragut, on receipt of the news, immediately dispatched several vessels to Galveston, which will set things right again, I hope. The 1st. Texas Reg't., Col. Davis, arrived, after the capture, on the S. Ship “Cumbria,” and narrowly escaped capture. The reg't. numbers about 200 men, who have all returned here.

The condition of things here does not seem to me to be very satisfactory — but Gen. Banks has not been here long enough to determine the prospect of improvement.

I think Gen. Banks lacks decision. With one or two exceptions, his staff are not men of ability. He seems to favor the policy of conciliation — which policy is weak and will always be unsuccessful. I can hardly get him to express an opinion — or if he does, it does not seem to be an earnest conviction. Secessionists grow more defiant and Union men despondent. This, I hope, and think, will be changed. I believe he is thoroughly honest, and he already has effected much good by putting down swindlers and army speculators. Gen. Butler's military commission (Gen. Orders No. 91) did an immense amount of mischief and injustice. Gen. Butler is an extraordinary man, but did very wrong in all things connected with internal trade. I have frequently heard Union men say they wished he was President, for though he would make millions for himself during the first three months, he would finish the war in three months more.

Gen. Banks has a very difficult position, for he comes here a stranger and four weeks at least are necessary for him to become informed of the situation.

The Government can finish this war in twelve months — in one way and in only one. Arm the negroes. I am perfectly satisfied it must be done. Why delay it? It can be done here without throwing the border states into a fever. Here and in S. Carolina and not well elsewhere. I called upon Gen. Banks this morning and urged the matter on his attention, as I have often done before. He agreed with me that the war could be finished in that way, but seems afraid of taking the responsibility. I wish I could assume the responsibility for him. I would suggest that you write me a letter to be shown to Gen. Banks, giving your opinion of the expediency of raising negro troops, and stating how such a step will be regarded by the Administration. If he is assured in this manner that the Government will approve, perhaps he will enlist the negroes. There are at least 20,000 black men within our lines who will make good and willing soldiers, 50,000 more can be raised west of the Mississippi as our army advances.

The three colored regiments already organized, have petitioned Gen. Banks to be put in the front rank at Port Hudson, that they may have a chance of removing the stigma of alleged cowardice from their race, and vindicate their rights and abilities as soldiers. I urge him to grant their request, but do not know what he will do about it. The negroes all say they can finish the war if the Gov't. will give them a chance. By no other means is success certain. Why delay it?

If it had not been for speculations in the sugar crops, Gen. Butler would have raised more regiments, but the men were wanted on the plantations to take off the crops.

Our last dates from the North are of the 20th. December. It is rumored that Gen. Butler may go into the Cabinet. I almost wish he would. He is a man of wonderful energy, will, and ability, and will always be admired by the Union men of New Orleans, even though he is believed by some to have acquired great wealth here.

Military affairs remain in the same condition as when I last wrote. Port Hudson has not been attacked and I don't know when it will be. The rebels are said to be receiving re-inforcements there.

P. S. Gen. Hamilton is still here.

SOURCE: Diary and correspondence of Salmon P. Chase, Annual Report of the American Historical Association for the Year 1902, Vol. 2, p. 345-7

John M. Forbes & William H. Aspinwall to Salmon P. Chase, April 25, 1863

London, 25 April, 1863.

. . . We have now to acknowledge receipt of your letter of 30 March, handed to us by the Hon. Robert J. Walker, and to say that this gentleman has also repeated to us the verbal explanations which you made to him before his departure. We have carefully considered both, and we find that the main object of his visit to Europe is to acquaint European capitalists with the actual circumstances and resources of our country.¹ We think it will render great service in helping to stem the current of ignorance and misapprehension so generally prevalent in Europe, and in compliance with your suggestions we shall confer freely with him on all occasions, when we think he can, by his advice or his knowledge of facts, or by his political position, aid us in carrying out the objects of our mission; but we do not consider ourselves called on, either by your letters or by our own judgment of what is expedient, to show him our instructions, although he has exhibited to us his own; nor do we feel justified, under our understanding with Messrs. Baring Bros. & Co., to mention to him, or any one else here, the particulars of our temporary loan.

. . . We have not been negligent on the last suggestion of your letter, and are prepared to resort to it whenever other means fail; but the institution of criminal prosecution against Laird and other builders by us, or any American or official party, would be liable to raise up such an excitement as would frustrate the object in view. The English government must be moved to take these proceedings, or, failing to do this effectually, we can count on a local English association for action; and either of these must command a support we could not rely on, and both must be exhausted before we take the last chance. . . .

_______________

¹ Mr. Walker had been Secretary of the Treasury under President Polk, 1845 to 1849. —  Ed.

SOURCE: Sarah Forbes Hughes, Letters and Recollections of John Murray Forbes, Volume 2, p. 43-4

Diary of Gideon Welles: Friday, April 22, 1864

Neither Seward nor Chase nor Stanton was at the Cabinet-meeting to-day. For some time Chase has been disinclined to be present and evidently for a purpose. When sometimes with him, he takes occasion to allude to the Administration as departmental, — as not having council, not acting in concert. There is much truth in it, and his example and conduct contribute to it. Seward is more responsible than any one, however, although he is generally present. Stanton does not care usually to come, for the President is much of his time at the War Department, and what is said or done is communicated by the President, who is fond of telling as well as of hearing what is new. Three or four times daily the President goes to the War Department and into the telegraph office to look over communications.

Congress is laboring on the tax bill. The Members fear to do their duty because taxation is unpopular. An old infirmity. Chase has not pressed for it heretofore for the same reason.

SOURCE: Gideon Welles, Diary of Gideon Welles, Secretary of the Navy Under Lincoln and Johnson, Vol. 2: April 1, 1864 — December 31, 1866, p. 16

George S. Denison to Salmon P. Chase, January 2, 1863

(Private)

New Orleans, January 2nd, 1863.

Dear Sir: Everything remains nearly as when I last wrote. Troops have been moving up to Baton Rouge, and the whole army and navy here, are occupied in preparations for advancing on Port Hudson. It will certainly be captured when attacked, and according to the best information I can collect, the attack will be made in about twelve days. Gen. Banks seems disposed to occupy himself more with military and less with civil and commercial affairs than Gen. Butler did. He does not yet communicate his intentions to me so freely as Gen. Butler did.

Two regiments of infantry and a battery have gone to Galveston, to occupy that Island. I have laid before Gen. Banks a plan for the capture of Brownsville, opposite Matamoras on the Rio Grande. The occupation of this place is becoming of great consequence, on account of the great trade at that point with the Rebel states. Gen. Hamilton urges the project, and Gen. Banks seems to regard it favorable.

Gen. Hamilton asks for five thousand men. The 1st. Texas regiment (only 200 or 300 in number) accompanied the other two regiments to Galveston. Gen. Hamilton is still here and will probably remain until the expedition goes to Brownsville. I suppose great complaints will be made of Gen. Butler when he gets North. You may be sure that Gen. Butler deserves well of the country and Government — and I believe he did no bad thing, except permitting his brother and other friends to make large sums of money — dishonorably, as I think. All the other accusations against him, which I have seen, are not true.

I do not think Gen. Butler sent to Washington the evidence respecting the schooner which run into Pontchitoula. He said the testimony would be presented to the witnesses for signature, but this has not been done.

Statements are in circulation here that you and Mr. Seward have resigned. In respect to yourself, I can truly say that the report is received by all with regret. When I say by all, I mean the public generally.

I have sent to you to-day a bill of lading for $195,000.00 shipped to John J. Cisco, in accordance with your instructions.

SOURCE: Diary and correspondence of Salmon P. Chase, Annual Report of the American Historical Association for the Year 1902, Vol. 2, p. 344-5

Salmon P. Chase to John M. Forbes & William H. Aspinwall, March 30, 1863

Treasury Department,         

Washington, D. C., March 30, 1863.

. . . This letter will be delivered to you by Mr. Walker, who will also submit to your perusal the letter of instructions under which he will himself act.

He is not informed as to the particulars of any commission with which you are charged, other than that of negotiating a loan of five millions, but you will doubtless find it convenient and useful to confer with him freely as to all the objects you have in view. . . .

I trust your well-known sagacity and practical experience will contribute much to the success of the efforts of our diplomatic and consular functionaries to arrest these practices so dangerous to peace between the two nations. . . .

SOURCE: Sarah Forbes Hughes, Letters and Recollections of John Murray Forbes, Volume 2, p. 42

Diary of Gideon Welles: Tuesday, April 19, 1864

The President did not make his appearance to-day in Cabinet. He was in Baltimore last evening at the opening of the fair, and is reported to have made a speech. He has a fondness for attending these shows only surpassed by Seward. Neither Seward, nor Blair, nor Chase was present with us to-day. Blair was with the President at Baltimore. Being a Marylander, there was propriety in his attendance.

SOURCE: Gideon Welles, Diary of Gideon Welles, Secretary of the Navy Under Lincoln and Johnson, Vol. 2: April 1, 1864 — December 31, 1866, p. 15

George S. Denison to Salmon P. Chase, December 25, 1862

(Private)

New Orleans, December 25th, 1862.

Dear Sir: The mail has just arrived and I see that, among other charges, Gen. Butler is accused of interfering in various ways with the Custom House, to the great injury of commerce.

Gen. Butler has interfered with the Custom House in four instances, but not more.

1st. He ordered me not to permit the shipment of specie and plate, without his written consent to each shipment. His object was to prevent property liable to confiscation, being removed from the country. The Prussian Bark, “Essex,” had received on board several large cases of silver — and by Gen. Butler's orders, I refused a clearance until these cases were delivered up. They were delivered up, and clearance was then granted.

2nd. Gen. B. took possession of about $2,000. worth of printer's paper in the warehouse, for his official newspaper, “The Delta” —on the ground that it was a military necessity.

3rd. He took possession of forty barrels of brandy (imported two or three years ago) for hospital purposes — as a military necessity.

4th. He took possession of ten bales of blankets for hospital purpose, as a military necessity.

In each of the last three instances, I have his written order to deliver up the articles to the officer presenting the order — and in each he settled, I suppose, with the owners of the articles. Except in the above instances, Gen. Butler has not interfered with the Custom House business. I make this statement for your information.

I send you a paper containing Gen. Butler's farewell address, and Gen. Banks' proclamation concerning the Emancipation Proclamation. Each article explains itself. From appearances, I judge that Gen. Butler intends to join the extreme radicals, as the Democratic papers term the only party which (as it seems to me) appreciates the position. The Texas men are bitterly disappointed that they cannot invade Texas at once, and think great injustice has been done them. It seems to me that the thorough opening of the river is of most consequence just now — after which the whole Southwest falls easily. Texas, Louisiana and Arkansas are pretty well drained of men, but full of corn and cattle. The Rebels would like to retreat thither, but if the river is opened at once, they will be forced back toward, or into, Alabama. With the loss of the Three Southwestern states, the rebels lose one-half their material resources. They could not break through the line of defence (Mississippi River) to recover it. In no other way can the Confederate cause be so much injured, with so little expenditure on the part of the Gov't. of men, time and money. The Arkansas, White and Red Rivers and, in Louisiana, various bayous, enable Gunboats to penetrate in all directions to the heart of the country. Fifty thousand men, together with the Union forces now in Arkansas and at El Paso (Texas), would be fully able to accomplish this in two or three months, after the opening of the river — and provided Emancipation attended the march, success would be absolutely certain. Louisiana is virtually subdued already and wishes herself back in the Union. 1 hope Gen. Banks will adopt some such plan as the above and have told him so. Lest he might mistake my political position, I took the first opportunity to tell him also, what my opinions were, particularly in regard to Slavery.

According to the best information I can get — the rebels have at Vicksburg 12,000 men — at Jackson (and Grenada), 40,000 — & at Port Hudson, 20,000. The men are said to be deserting very fast. Port Hudson is twenty miles above Baton Rouge and is said to be much stronger than Vicksburg. Many believe that to be the point (instead of Vicksburg) where the great fight will be.

Our troops are moving up to Baton Rouge, where perhaps 20,000 have already arrived. All the old (Butler's) regiments will probably be sent up. I should judge that the attack on Port Hudson would take place in about ten days. Gen. Banks is expected to command in person.

Mobile is not fortified with such strength as is represented by Southern accounts. The Rebel gunboats there are of very little account. I have just seen a reliable (white) man who escaped from there five weeks ago. Admiral Farragut can take the place whenever he chooses.

Please do not authorize more officers for the Appraiser's Department, to be sent here from New York. One, Mr. Paulson, appointed by your order, has just arrived. He is one too much. I understand still another is to come. I want to keep down expenses, and this expense is entirely unnecessary. Mr. Sarjeant did wrong in making such representations as he did to you, concerning the want of Examiners here.

SOURCE: Diary and correspondence of Salmon P. Chase, Annual Report of the American Historical Association for the Year 1902, Vol. 2, p. 342-4

John M. Forbes & William H. Aspinwall to Salmon P. Chase, April 18, 1863

London, April 18,1863.

SIR, — We beg leave to inform you that we have obtained a loan of £500,000, for the period of six months, from Messrs. Baring Brothers & Co., on the deposit of $4,000,000 of the 5-20 bonds handed us, and with the understanding that, in case of the issuing of letters of marque to cruise against British vessels, they shall have a right to claim a prompt reimbursement of their advance, by sale or otherwise, as you may elect. The existing agitation of the public mind, both in and out of Parliament, rendered this condition a sine quâ non, and we may safely express our doubt if any other house would have undertaken to make the loan; certainly none on terms so liberal. . . .

We wait impatiently the promised official statement of funded and floating debt, amount of currency notes, etc., and also of revenue from imports and from internal sources; they are much needed to remove the almost incredible misapprehensions which have been produced by false or undefined newspaper articles. . . .

Your obedient servants,

W. H. Aspinwall,

J. M. Forbes.

SOURCE: Sarah Forbes Hughes, Letters and Recollections of John Murray Forbes, Volume 2, p. 41-2

Diary of Gideon Welles: Monday, April 18, 1864

The steamer Chenango exploded her boilers in New York Harbor, and I feared there might have been mischief, such as [an] incendiary shell in the coal, but the reports indicate that such was not the case.

I am gratified to find so many sagacious and able naval officers sustaining me and my course in relation to Du Pont. There is no man in the service who is so skillful and successful at intrigue as S. F. Du Pont. He has his cliques and has laid his plans adroitly, and may, for a time, be successful in deceiving the public by artful means, but it cannot last. Truth is mighty and will prevail.

Stocks have had a heavy fall to-day in New York, and there are reported failures. It is a temporary check, I apprehend, a reaction or pause resulting from some action of Mr. Chase in New York. He has doubtless effected a loan with the banks, and they have closed on some of their customers. Money, or investments, are tending to government securities, rather than railroad and other like investments, for the moment.

SOURCE: Gideon Welles, Diary of Gideon Welles, Secretary of the Navy Under Lincoln and Johnson, Vol. 2: April 1, 1864 — December 31, 1866, p. 14-5

Diary of William Howard Russell: July 10, 1861

To-day was spent in a lengthy excursion along the front of the camp in Virginia, round by the chain bridge which crosses the Potomac, about four miles from Washington.

The Government have been coerced, as they say, by the safety of the Republic, to destroy the liberty of the press, which is guaranteed by the Constitution, and this is not the first instance in which the Constitution of the United States will be made nominis umbra. The telegraph, according to General Scott's order, confirmed by the Minister of War, Simon Cameron, is to convey no dispatches respecting military movements not permitted by the General; and to-day the newspaper correspondents have agreed to yield obedience to the order, reserving to themselves a certain freedom of detail in writing their despatches, and relying on the Government to publish the official accounts of all battles very speedily. They will break this agreement if they can, and the Government will not observe their part of the bargain. The freedom of the press, as I take it, does not include the right to publish news hostile to the cause of the country in which it is published; neither can it involve any obligation on the part of Government to publish despatches which may be injurious to the party they represent. There is a wide distinction between the publication of news which is known to the enemy as soon as to the friends of the transmitters, and the utmost freedom of expression concerning the acts of the Government or the conduct of past events; but it will be difficult to establish any rule to limit or extend the boundaries to which discussion can go without mischief, and in effect the only solution of the difficulty in a free country seems to be to grant the press free license, in consideration of the enormous aid it affords in warning the people of their danger, in animating them with the news of their successes, and in sustaining the Government in their efforts to conduct the war.

The most important event to-day is the passage of the Loan Bill, which authorizes Mr. Chase to borrow, in the next year, a sum of £50,000,000, on coupons, with interest at seven per cent., and irredeemable for twenty years — the interest being guaranteed on a pledge of the Customs duties. I just got into the House in time to hear Mr. Vallandigham, who is an ultra Democrat, and very nearly a Secessionist, conclude a well-delivered argumentative address. He is a tall, slight man, of a bilious temperament, with light flashing eyes, dark hair and complexion, and considerable oratorical power. “Deem me ef I wouldn't just ride that Vallaridiggaim on a real,” quoth a citizen to his friend, as the speaker sat down, amid a few feeble expressions of assent. Mr. Chase has also obtained the consent of the Lower House to his bill for closing the Southern ports by the decree of the President, but I hear some more substantial measures are in contemplation for that purpose. Whilst the House is finding the money the Government are preparing to spend it, and they have obtained the approval of the Senate to the enrolment of half a million of men, and the expenditure of one hundred millions of dollars to carry on the war.

I called on Mr. Cameron, the Secretary of War. The small brick house of two stories, with long passages, in which the American Mars prepares his bolts, was, no doubt, large enough for the 20,000 men who constituted the armed force on land of the great Republic, but it is not sufficient to contain a tithe of the contractors who haunt its precincts, fill all the .lobbies, and crowd into every room. With some risk to coattails, I squeezed through iron-masters, gun-makers, clothiers, shoemakers, inventors, bakers, and all that genus which fattens on the desolation caused by an army in the field, and was introduced to Mr. Cameron's room, where he was seated at a desk surrounded by people, who were also grouped round two gentlemen as clerks in the same small room. “I tell you, General Cameron, that the way in which, the loyal men of Missouri have been treated is a disgrace to this Government,” shouted out a big, black, burly man — “I tell you so, sir.” “Well, General,” responded Mr. Cameron, quietly, “so you have several times. Will you, once for all, condescend to particulars?” “Yes, sir; you and the Government have disregarded our appeals. You have left us to fight our own battles. You have not sent us a cent ———” “There, General, I interrupt you. You say we have sent you no money,” said Mr. Cameron, very quietly. “Mr. Jones will be good enough to ask Mr. Smith to step in here.” Before Mr. Smith came in, however, the General, possibly thinking some member of the press was present, rolled his eyes in a Nicotian frenzy, and perorated: “The people of the State of Missouri, sir, will power-out every drop of the blood which only flows to warm patriotic hearts in defence of the great Union, which offers freedom to the enslaved of mankind, and a home to persecuted progress, and a few-ture to civil-zation. We demand, General Cameron, in the neame of the great Western State ———” Here Mr. Smith came in, and Mr. Cameron said, “I want you to tell me what disbursements, if any, have been sent by this department to the State of Missouri.” Mr. Smith was quick at figures, and up in his accounts, for he drew out a little memorandum book, and replied (of course, I can't tell the exact sum), “General, there has been sent, as by vouchers, to Missouri, since the beginning of the levies, six hundred and seventy thousand dollars and twenty-three cents.” “The General looked crestfallen, but he was equal to the occasion, “These sums may have been sent, sir, but they have not been received. I declare in the face of ———” “Mr. Smith will show you the vouchers, General, and you can then take any steps needful against the parties who have misappropriated them.”

“That is only a small specimen of what we have to go through with our people,” said the Minister, as the General went off with a lofty toss of his head, and then gave me a pleasant sketch of the nature of the applications and interviews which take up the time and clog the movements of an American statesman. “These State organizations give us a great deal of trouble.” I could fully understand that they did so. The immediate business that I had with Mr. Cameron — he is rarely called General now that he is Minister of War ——— was to ask him to give me authority to draw rations at cost price, in case the army took the field before I could make arrangements, and he seemed very well disposed to accede; “but I must think about it, for I shall have all our papers down upon me if I grant you any facility which they do not get themselves.” After I left the War Department, I took a walk to Mr. Seward's, who was out. In passing by President's Square, I saw a respectably-dressed man up in one of the trees, cutting off pieces of the bark, which his friends beneath caught up eagerly. I could not help stopping to ask what was the object of the proceeding. “Why, sir, this is the tree Dan Sickles shot Mr. ——— under. I think it's quite a remarkable spot.”

SOURCE: William Howard Russell, My Diary North and South, Vol. 1, p. 399-401

George S. Denison to Salmon P. Chase, December 23, 1862

(Private)

New Orleans, December 23rd, 1862.

Dear Sir: Since the date of my last letter no important changes have occurred. The policy of Gen. Banks is not yet made public. Gen. Butler leaves to-morrow, and probably, immediately after his departure, Gen. Banks will issue new orders and proclamations. At his request I matured and submitted to him a plan for inducing the shipment of produce from the country to this City, and for furnishing abundant supplies to those living within our lines — in such a manner however, that each individual can protect his own interests, and there will be full security against improper disposition of whatever is received by him. The General approved the plan and will adopt it. By it producers and consumers will be protected from the arts of speculators and interference of officials. I will inform you of the details whenever the order appears adopting the plan, which will be very soon.

I do not know your opinions and wishes concerning Gen. Butler, but it is certain that his removal gives great satisfaction to all classes including officers, soldiers and citizens. The hostility to him is almost entirely on account of commercial affairs. About this, I have written to you frequently. It does seem to me that many and serious wrongs have been permitted in this Department.

Gen. Banks desires that trade should be restricted as little as possible — provided nothing goes beyond our lines, and he will effect it, I think. The military commission¹ — a corrupt concern — has ceased its operations — not to recommence them, I hope.

Gen. Banks tells me he intends to organize more negro regiments. Those now in the service are just as efficient for fighting or any other purpose — as any white regiments.

The colored population fear the President will revoke his proclamation. Threats of insurrection are frequent — in case the proclamation should not be made effective on the 1st. January.

After the River is opened, the whole country west of the Mississippi can be conquered in ninety days. Why not do it and make it free soil at once. Slavery is there dead forever, and the Mississippi River will be a convenient western boundary to the institution for the few years that it will continue to exist in the remaining Slave States.

_______________

¹ This commission was appointed November 9, 1862, General Orders, No. 91, to administer upon sequestered property in the La Fourche district of Louisiana. Cf. letter of January 8, 1863.

SOURCE: Diary and correspondence of Salmon P. Chase, Annual Report of the American Historical Association for the Year 1902, Vol. 2, p. 341-2

Diary of Gideon Welles: Saturday, April 16, 1864

Had a long telegram at midnight from Cairo, respecting Rebel movements in western Kentucky, — at Paducah, Columbus, Fort Pillow, etc. Strange that an army of 6000 Rebels should be moving unmolested within our lines. But for the gunboats, they would repossess themselves of the defenses, yet General Halleck wants the magnanimity and justice to acknowledge or even mention the service.

There is still much excitement and uneasy feeling on the gold and currency question. Not a day but that I am spoken to on the subject. It is unpleasant, because my views are wholly dissimilar from the policy of the Treasury Department, and Chase is sensitive and tender — touchy, I may say — if others do not agree with him and adopt his expedients. Mr. Chase is now in New York. He has directed the payment of the May interest, anticipating that throwing out so much gold will affect the market favorably. It will be likely to have that effect for a few days but is no cure for the evil. The volume of irredeemable paper must be reduced before there can be permanent relief. He attributes to speculators the rise in gold! As well charge the manufacturers with affecting the depth of water in the rivers, because they erect dams across the tributaries! Yet one cannot reason with our great financier on the subject. He will consider it a reflection on himself personally and claims he cannot get along successfully if opposed.

I remarked to Senator Trumbull, whom I met when taking my evening walk last Thursday, and was inquired of, that I could hardly answer or discuss his inquiry in regard to the gold excitement, because in a conversation which we had a year or two since, when one of the bills was pending, —  the first, I believe, — I had said to him I was a hard-money man and could indorse no standards but gold and silver as the measure of value and regretted and distrusted the scheme of legal paper tenders. Chase heard of that conversation and claims I was embarrassing the Treasury.

This sensitiveness indicates what I fear and have said, viz. Chase has no system on which he relies, but is seeking expedients which tumble down more rapidly than he can construct them. He cannot stop what he and others call “the rise of gold,” but which is really the depreciation of paper, by the contrivances he is throwing out. The gold dollar, the customs certificates, the interest-bearing Treasury notes, etc., etc., are all failures and harmful and will prove so. The Secretary of the Treasury found a great and rich country filled with enthusiasm in a noble cause and full of wealth, with which they responded to his call, but their recourses and sacrifices were no evidence of financial talent on the part of the Secretary who used them. The Secretary is not always bold, and has not enforced taxation; he is not wise beyond others, and has not maintained the true measure of value; he resorts to expedients instead of abiding by fixed principles. By multiplying irredeemable paper and general inflation, his “ten forty” five-per-cents may be taken, but at what cost to the country! He is in New York and may negotiate a loan; but if he does, it will be with the banks and, I presume, at six per cent. If so, the banks will not be able to help the speculators, and they, being cramped, will suffer, and perhaps fail. The fancy stocks will be likely to fall under this operation, and the surplus money may seek government securities, but under the inflation how expensive to the country!

SOURCE: Gideon Welles, Diary of Gideon Welles, Secretary of the Navy Under Lincoln and Johnson, Vol. 2: April 1, 1864 — December 31, 1866, p. 12-4

George S. Denison to Salmon P. Chase, December 17, 1862

(Private)

New Orleans, December 17th.

Dear Sir: Gen. Banks and staff arrived here on the evening of Sunday the 14th, and he assumed command of the Department of the Gulf yesterday. Enclosed is Gen. Butler's final order — and Gen. Banks' order on assuming command.

I endeavor to ascertain how this change is received here and the result of my inquiries and observations is very satisfactory. Probably those most intimately connected with Gen. Butler, regret the change, and many of the loyal citizens express a fear that the new administration of affairs, will lack the vigor and ability of the former. Some also, think that injustice has been done Gen. Butler in removing him from a command where he has succeeded so admirably. But the general expression is one of satisfaction. The fact is, that the extensive commercial proceedings which were tolerated (to say the least) by the former Commanding General, have created a general disgust. The public opinion was fixed, that these transactions were for Gen. Butler's own benefit, and the dissatisfaction on this account was intense. Gen. Butler has always been very kind to me, and assisted me whenever asked & I feel very grateful to him. But yet I believe the change is a good one. I was intending to write to you by this mail, giving considerable information about speculations here, but it is now unnecessary — & I suppose all such evils will be speedily corrected.

I have seen Gen. Banks but once, but by his invitation am to meet him to-day or to-morrow, for the purpose of giving him all the information in my possession. I shall endeavor to keep you promptly informed of everything transpiring here. Gen. Banks' troops have arrived in large numbers. I do not know whether all have come. It is not certainly known why Gen. Butler was removed. Some say it is on account of demands of France — others that it is on account of speculations — others that it is owing to representations of Admiral Farragut.

I have learned that little more in regard to the Schooner “L. L. Davis” which run into Pontchitoula. Gen. Butler believes that I am satisfied that Col. Butler had nothing to do with it. I am not so satisfied. Gen. Butler says he has ascertained that a prominent officer (I suspect he refers to Col. French — Pro. Marshal) loaded the vessel in good faith for Matamoras and that the captain ran away from him. I do not now know whether the evidence taken down will be sent to Washington. 1 think 1 shall lay-the whole matter before General Banks.

I want some money. Three hundred Dollars in gold, which I brought with me, and a few hundred dollars since received by your order, have been sufficient to pay my expenses but is now consumed. I transmit to-day an official receipt for $25,000 legal tender notes, which have just arrived to pay expenses of the office. About my own pay I wrote to you Oct. 10th. I shall not pay myself out of the $25,000. for the fact is, I never really understood what my compensation is.

SOURCE: Diary and correspondence of Salmon P. Chase, Annual Report of the American Historical Association for the Year 1902, Vol. 2, p. 339-40

Diary of Gideon Welles: Friday, April 15, 1864

Chase and Blair were neither of them at the Cabinet-meeting to-day, nor was Stanton. Seward takes upon himself the French tobacco question. He wishes me to procure some one to investigate and report on the facts of the case of the Sir William Peel. I told him I thought Charles Eames as good a counsellor on prize matters as any lawyer whom I knew, and if referred to me I should give the case to Eames.

The gold panic has subsided, or rather abated. Chase is in New York. It is curious to see the speculator's conjectures and remarks on the expedients and subterfuges that are resorted to. Gold is truth. Its paper substitute is a fiction, sustained by public confidence in part because there is a belief that it will ultimately bring gold, but it has no intrinsic value and the great increase in quantity is undermining confidence.

The House passed a resolution of censure on Long for his weak and reprehensible speech. It is a pity the subject was taken up at all. No good has come of it, but I hope no harm. Lurking treason may feel a little strengthened by the failure to expel.

SOURCE: Gideon Welles, Diary of Gideon Welles, Secretary of the Navy Under Lincoln and Johnson, Vol. 2: April 1, 1864 — December 31, 1866, p. 12

Financial and Commercial

A prominent Boston merchant has transmitted to Mr. Cisco a financial scheme which deserves more attention than most of the plans emanating from amateur financiers. The writer shows clearly that the only reliable source of the government at present is the continued issue of paper money. Starting from this standpoint, he argues that the chief evil to be apprehended from the use of paper money is the export of specie to foreign countries. This danger can be obviated, in his opinion, by the negotiation in London, at regular intervals, of a sufficient amount of United States bonds to keep the balance of trade in our favor. At the present rate of exchange we could afford to sell bonds in London so low as to tempt investors and speculators; and even if, in order to secure a sale, we were compelled to accept prices lower than the market value here, the loss would be unimportant in view of the advantage of keeping our specie at home. A sale of $30,000,000 of bonds in the course of a year would probably keep the balance of trade in our favor. The scheme has been transmitted by Mr. Cisco to Mr. Chase, and will probably receive careful consideration.

_______________

See: John J. Cisco to George L. Stearns, February 9, 1863

SOURCES: The above paragraph abstracted from “Financial and Commercial,” The New York Herald, New York, New York, Monday, February 9, 1863, p. 2 and is quoted in Preston Stearns’ The Life and Public Services of George Luther Stearns, p. 283-4

George S. Denison to Salmon P. Chase, December 10, 1862

(Unofficial)

New Orleans, December 10th, 1862.

Dear Sir: I send this letter by Mr. Flanders who leaves to-day for Washington, and suggest that you talk fully with him concerning affairs here. I mean military and political affairs, with which he is quite familiar. You can rely perfectly on the integrity of Mr. F. An occurrence has just taken place which causes me to feel much indignation and some chagrin.

Col. Butler has three or four men in his employ who manage his business for him. The principal one is a Mr. Wyer. Some days ago Wyer loaded a vessel for Matamoras. She was loaded in the New Basin, and when she got into the Lake, ran into Pontchitoula.

This information reached me two days ago and since then I have been investigating the matter and am satisfied that it was a predetermined plan to take the cargo to Pontchitoula for the rebels, instead of going to Matamoras. I am also satisfied that Col. Butler was the sole owner of the cargo.

The vessel was the Schooner “L. L. Davis”, 95 tons burden, and 500 sacks salt was the greater portion of her cargo. This is worth in Rebeldom the astonishing price of $150. per sack. Cotton could be bought there at not more than 15 cts. per pound and delivered at some point on the Mississippi whence it could be brought hither. Near Matamoras, salt is abundant and cheap. I expressed astonishment to Wyer when he cleared the vessel, that he should send salt to that port, but he pretended to have information that he could get a good price for it.

I have just been to see Gen. Butler and laid the whole matter before him with statement of proof that the “Davis” was loaded with intention to run the blockade. I cannot give this statement in one letter, but it is sufficient to say that Gen. Butler expressed himself perfectly satisfied that such was the intention. I then told him I believed Col. Butler was the owner of the cargo — & gave my reasons.

Gen. Butler assures me he will immediately investigate the matter thoroughly & if Col. Butler or those associated with him, are interested in the operation, he & they shall instantly leave the Department of the Gulf. He manifested great indignation which I cannot believe feigned, judging from his appearance. I am confident I can bring forward sufficient proof to convince any honest Jury that the vessel is Col. Butler's and that he intended to take the cargo to Rebels. This statement I intend to make to Gen. Butler to-morrow morning, so that, if he please, he can permit me to collect and present the evidence.

Yesterday I had a long conversation with Admiral Farragut who holds the same opinion regarding this matter as myself.

The Gunboat at the mouth of New Canal, is the “New London,” commanded by Capt. Read (Lieut. Commanding). I am afraid he will be made to suffer — but it would be very unjust, for he was not deficient in vigilance, and is an honest and faithful officer. I am more in fault than he is, for I allowed myself to be deceived — though any man however vigilant, would have been deceived in the same manner.

I shall report to you promptly this progress and result of the investigation. Please excuse the hasty manner in which I am obliged to write.

P. S. Pontchitoula is in the northern part of Lake Pontchartrain — somewhat inland.

SOURCE: Diary and correspondence of Salmon P. Chase, Annual Report of the American Historical Association for the Year 1902, Vol. 2, p. 338-9