Civil War Licensed Monopolies

General John Dix (image above) himself was not corrupt in the affair of the “sham blockade” at Norfolk. But special permits were being given to “favorites” and “army corruptionists”. (Background: “General Dix and the Cotton Trade”, Ersjdamoo’s Blog entry of April 4, 2013)

Except maybe even the venerable Dix was corrupt. While in command of Norfolk, Virginia in 1862–63, Gen. John Dix reversed the Union naval blockade’s ban on trade and established a northern monopoly under his sole direction and to his financial benefit. (Virginia Historical Society, “Life on the Virginia Home Front: Federal Military Occupation”)

Thanks to the Civil War, there came into being in the North a system of government-licensed private trade that supplied the Confederate army! The occupation of Norfolk was one case of this. (“Blockade or Trade Monopoly? John A. Dix and the Union Occupation of Norfolk”, by Ludwell H. Johnson III. The Virginia Magazine of History and Biography. Vol. 93, No. 1 (Jan. 1985), pp. 54-78)

On May 10, 1862 Union forces captured and held Norfolk, Virginia. The civilian population of Norfolk, about 40,000 persons, thus were cut off from trade with the Confederacy, and due to the Union’s naval blockade could not trade anywhere else. (Ibid.)

On June 2, 1862, Union General John Dix took charge of Norfolk. Dix was wooed by the New York City business interests. Within two days of taking charge, Dix was seeking the O.K. for some vessels to begin trade with Norfolk. At first only clothing and clothing materials were allowed in through the Union blockade. One of the first permits went to Augustus I. Brown, assistant to Hiram Barney, a protégé of Salmon Chase, Secretary of the Treasury under President Abraham Lincoln. (Ibid.)

Salmon Chase had, during his youth, been friends with Benjamin “Spoons” Butler. (Ibid.) Beginning in November 1863 and through early 1865, Gen. Benjamin Butler commanded Norfolk, orchestrating his own corrupt and oppressive regime by levying tolls on goods and travel, requiring the purchase of business licenses, and denouncing “19/20ths of the citizens [as] disloyal.” (Virginia Historical Society, op. cit.)

Salmon Chase was the man to see if you wanted a special license to trade with Norfolk. Chase, for instance, gave to one William Hodge a license to carry cotton seed from the Norfolk region to Baltimore. (Ludwell H. Johnson III, op. cit.)

Also involved was “military necessity” as a reason to allow specific trade with blockaded ports. A “military necessity” certificate supervened Treasury Department rules on cargo leaving a blockaded port. These “military necessity” certificates were authorized by the military commandant exclusively. (Ibid.)

But so-called “neutral” nations such as Britain and France still could not trade with Norfolk. With the “neutrals” excluded, this gave New York City a monopoly on trade with Norfolk. “What was beginning in Norfolk in the late spring of 1862 was an attempt at such a monopoly by the people associated in one way or another with John A. Dix.” (Ibid.)

The most egregious failing of the Federals was their mishandling of trade in 1863 and 1864, which ultimately prolonged the war. Department commanders failed to eradicate the endemic corruption that flowed from confusing and contradictory federal policies regarding cross-the-lines trading and cotton procurement. (“The Bitter Fruit of Secession: Union Army Occupation and Reconstruction on the Virginia Peninsula”, by Stephen Sledge. http://chss.gmu.edu/defenses/592)

On the night he was assassinated, Abraham Lincoln met former Massachusetts Congressman George Ashmun at the White House shortly before the Lincolns left to go to Ford’s theater. Ashmun had a client who had a claim against the government regarding cotton he owned. Mr. Lincoln was in a good mood that day, but according to artist Francis B. Carpenter, “Mr. Lincoln replied with considerable warmth of manner, “I have done with ‘commissions.’ I believe they are contrivances to cheat the Government out of every pound of cotton they can lay their hands on.”

Authors Leonard F. Guttridge and Ray A. Neff claim in their book, Dark Union, that the plot to assassinate Abraham Lincoln was woven through an even more complex scheme to pay for and profit from the Union war effort by trading in Confederate cotton.

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About ersjdamoo

Editor of Conspiracy Nation, later renamed Melchizedek Communique. Close associate of the late Sherman H. Skolnick. Jack of all trades, master of none. Sagittarius, with Sagittarius rising. I'm not a bum, I'm a philosopher.
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One Response to Civil War Licensed Monopolies

  1. Pingback: CSS Alabama, Terror of the Seas | Ersjdamoo's Blog

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