Diary of Gideon Welles: Wednesday, April 25, 1866

Major-General Benjamin F. Butler is exercising a great and dangerous influence at the Treasury Department. He has been employed in some cases and is using his opportunities to press others where he is employed as counsel. As he has talents but no principles, is avaricious and unscrupulous, I have given our friends McCulloch and Chandler at the Treasury an occasional admonition concerning him.

In 1863 the Grey Jacket, a steamer laden with cotton, was captured by the Kennebec on the way from Mobile to Cuba. The cargo and vessel were valued at about half a million of dollars, and were condemned on the showing of the captain and owners. An appeal was taken, but the case was so flagrant that there was no avoiding condemnation. The owners had employed various counsel, — first Nott and others of New Orleans, then Seward and Blatchford of New York, but all have on hearing the facts abandoned the case. About the first of last December it was put in the hands of General Butler, who commenced a series of intrigues and manoeuvres, and from his persistency and unscrupulousness had evidently a large contingent fee. I have heard it stated at $125,000. But he found no favor at the Navy Department. His last appeal with me was a half-threat to go to Congress and make an appeal to their sympathies for a man who had lost his all by this capture and condemnation. I replied that my appeal for sympathy in behalf of the sailors who had nobly done their duty in sunshine and storm, in winter and summer, day and night, would probably be as effective as his. He then changed, proposed that the captors should take one half and the claimant the other, surrendering by this arrangement the moiety which should go to the naval pension fund. I told him that was impossible; the Secretary of the Navy should make no such arrangement; moreover he was the trustee of that fund and held it sacred.

One other futile attempt was made in company with the Attorney-General, whom he persuaded to come with him, but after a brief talk Speed appeared to think he had been imposed upon and abandoned the case.

Failing at these points, Butler commenced intriguing at the Treasury, where he was listened to by Chandler, and finally Caleb Cushing was employed at Chandler's suggestion to give a written opinion, General Butler being the prompter. Cushing was timid, hesitated to present his opinion unsustained, and General Butler drew up a preamble and resolution which he procured Thad Stevens to present and procured to be passed under the previous question, without debate, to the effect that cases of this description should be suspended until the judgment of the Supreme Court should be obtained next winter. There are one or two clauses in certain acts which Chase procured to be inserted when he was striving to absorb the whole government in the Treasury Department, having the Presidency in view. These clauses Butler and Cushing made the foundation of their proceeding. Stevens's resolution was passed on the 9th, and Cushing's opinion is dated on the 11th. The whole thing is disgraceful even to a lobby agent and discreditable to the Treasury Department, which has, so far as the Secretary is concerned, unwittingly lent itself to Butler. How far the Assistant Secretary is involved is uncertain. . . . Great derangement in order to get a great fee has been effected.

SOURCE: Gideon Welles, Diary of Gideon Welles, Secretary of the Navy Under Lincoln and Johnson, Vol. 2: April 1, 1864 — December 31, 1866, p. 492-3

Diary of Gideon Welles: Monday, August 14, 1865

Have written Rev. Mr. Boynton on the subject of an appointment at the Naval Academy while he is preparing a naval history or a history of the Navy during the great Rebellion. I advised that he should take up the latter subject, and after its publication it may be elaborated if thought best.

I find Admiral Porter willing to do, but reckless of money and law in his management of affairs. He has some good qualities for the position of Superintendent, and some which cause me apprehension. Yet I trust all will come out right. His intentions seem good if reckless, and in them there is strength and encouragement.

There is a disposition for mischief, I perceive, among some of the subordinate officers of the Treasury. They have assuming and crude notions in regard to the administration of public affairs, and evidently suppose that they are the custodians of the executive government. Some of these men are well-intentioned but narrow-minded and factious to an extent, others are wholly factious; and there are others who are doubtless corrupt. I perceive that McCulloch and some others yield to these arrogant and improper assumptions of their subordinates, and fancy that the latter can revise and countermand the orders of a Cabinet officer. A little experience and reflection will correct this weak conclusion.

SOURCE: Gideon Welles, Diary of Gideon Welles, Secretary of the Navy Under Lincoln and Johnson, Vol. 2: April 1, 1864 — December 31, 1866, p. 360

Edwin M. Stanton, March 31, 1863

WAR DEPARTMENT,        

Washington, March 31, 1863.

For the purpose of more effectually preventing all commercial intercourse with in-surrectionary States except such as shall be authorized in pursuance of law, and of securing consistent, uniform, and efficient action in conducting such intercourse as shall be so authorized, and for the purpose of carrying out the provisions of an act of Congress entitled "An act to provide for the collection of abandoned property and for the prevention of frauds in insurrectionary States," approved March 12, 1863, it is hereby ordered—

I. That no officer of the Army of the United States nor other person connected therewith shall authorize or have any interest in the transportation of any goods, wares, or merchandise (except supplies belonging to or contracted for by the United States, designed for the military or naval forces thereof, and moving under military or naval orders, and except also sutlers' supplies and other things necessary for the use and comfort of the troops of the United States, and moving under permits of the authorized officers of the Treasury Department) into any State declared by the President to be in insurrection; nor authorize nor have any interest in the purchase or sale therein of any goods or chattels, wares or merchandise, cotton, tobacco, or other product of the soil thereof; nor the transportation of the same, except as aforesaid, therefrom or therein; nor shall any such officer or person authorize, prohibit, or in any manner interfere with any such purchase or sale or transportation which shall be conducted under the regulations of the Secretary of the Treasury, unless under some imperative military necessity, in the place or section where the same shall be conducted, or unless requested by an agent or some other authorized officer of the Treasury Department, in which case all commanders of military departments, districts, and posts will render such aid in carrying out the provisions of the said act, and in enforcing due observance of the said regulations of the Secretary of the Treasury, as can be given without manifest injury to the public service.

II. It is further ordered that every officer or private or person employed in or with the regular or volunteer forces of the United States who may receive or have under his control any property which shall have been abandoned by the owner or owners, or captured in any district declared to be in insurrection against the United States, including all property seized under military orders, excepting only such as shall be required for military use of the United States forces, shall promptly turn over all such property to the agent appointed by the Secretary of the Treasury to receive the same, who shall give duplicate receipts therefor.

And every such officer or private, or person employed in or with the regular or volunteer forces of the United States, shall also promptly turn over to such agent, in like manner, all receipts, bills of lading, and other papers, documents, and vouchers showing title to such property, or the right to the possession, control, or direction thereof; and he shall make such order, indorsement, or writing as he has power to make to enable such agent to take possession of such property or the proceeds thereof. Arms, munitions of war, forage, horses, mules, wagons, beef cattle, and supplies which are necessary in military operations, shall be turned over to the proper officers of the ordnance or of the quartermaster or of the commissary departments, respectively, for the use of the Army. All other property abandoned or captured or seized as aforesaid shall be delivered to the agent appointed by the Secretary of the Treasury.

The officer receiving or turning over such property shall give the usual and necessary invoices, receipts, or vouchers therefor, and shall make regular returns thereof, as prescribed by the Army Regulations. The receipts of the agents of the Treasury Department shall be vouchers for all property delivered to them, and whenever called upon by the agent of the Treasury Department authorized to receive such abandoned or captured or seized property as aforesaid, or the proceeds thereof, all persons employed in the military service will give him full information in regard thereto, and if requested by him so to do they shall give him duplicates or copies of the reports and returns thereof and of the receipts, invoices, and vouchers therefor.

And every officer of the Army of the United States hereafter receiving abandoned or captured or seized property, or the proceeds thereof, or under whose order it may be applied to the use of the military forces as aforesaid, shall, upon request of a duly authorized agent of the Treasury Department, render a written report, with invoices thereof, to said agent, in which he will specify the arms, supplies, or other munitions of war retained for the use of the military forces as aforesaid, and also, separately, the property turned over to said agent, or which may have been sold or otherwise disposed of.

And in case a sale of any such property shall be made under his authority or under the authority of any one subject to his order he will so state, and will describe the property so sold, and will state when and where and by and to whom sold, and the amount received therefor, and what disposition was made of the proceeds.

And all officers of the Army of the United States will at all times render to the agents appointed by the Secretary of the Treasury all such aid as may be necessary to enable them to take possession of and transport all such property, so far as can be done without manifest injury to the public service.

III. All commanders of military departments, districts, and posts will, upon receipt of this order, revoke all existing orders within their respective commands conflicting or inconsistent herewith, or which permit or prohibit or in any manner interfere with any trade or transportation conducted under the regulations of the Secretary of the Treasury; and their attention is particularly directed to said regulations, prescribed March 31, 1863, and they will respectively make such orders as will insure strict observance of this order throughout their respective commands.

All expenses of transporting property herein referred to will be reported by the officers of the Quartermaster's Department who furnish such transportation to the agents of the Treasury Department, and also, through the ordinary channels, to the Quartermaster-General at Washington, in order that the said expenses may be reimbursed from the proceeds of sales of such transported property.

EDWIN M. STANTON,        

Secretary of War.

SOURCE: The War of the Rebellion: A Compilation of the Official Records of the Union and Confederate Armies, Series I, Volume 18 (Serial No. 26), p. 580-2

Diary of Gideon Welles: Monday, August 22, 1864

Mr. Fessenden returned yesterday,— a long absence for such a period as this. The course pursued at the Treasury Department in withholding money from the naval contractors for months after it is due is reprehensible and injurious in the highest degree to the public credit. Mr. F. is not responsible for this wrong. It was the work of Chase, who, in order to retire his interest-bearing notes, seized the money which legitimately belonged to the naval contractors to the amount of $12,000,000. As a consequence we shall lose some of our best contractors, who feel there is bad faith and no dependence on the government.

Some of the contractors for light-draft monitors are writing pressing letters. If disposed to act fairly, they should be promptly met; but if attempting to take advantage of our necessities, we must see that the public suffers no detriment.

Olcott, the detective, sends me a curious letter of E. Delafield Smith, with a not less curious indorsement by Olcott. Smith thinks the transactions of his office have been scrutinized and asks Olcott. O. inquires of me how he shall answer.

SOURCE: Gideon Welles, Diary of Gideon Welles, Secretary of the Navy Under Lincoln and Johnson, Vol. 2: April 1, 1864 — December 31, 1866, p. 114