The ambitious designs of Napoleon were of a very towering and extensive character. He not only expected to recover Louisiana, which his uncle in an hour of necessity had sold to the United States, but he aimed at the restoration of the entire old colonial empire of France on this continent.
The Emperor was thoroughly posted in the affairs of this country. It seems that while he had resided in a small room in Hoboken, and took his meals at a twenty-five cent restaurant, paying for them with money borrowed from French patriots, on the very slim prospect of reaching the throne of France, he made the best use of his time, and he had studied the history and geography of the United States and Canada with great care and accuracy.
In justice to his character for gratitude, however, it must be said, in passing, that, like young “Corneel” Vanderbilt, he paid all the money he borrowed, and placed some of his New York and Hoboken creditors in good positions at the Tuileries, under the Second Empire. He never forgot a favor nor forgave an injury.
The Emperor’s knowledge of American affairs, as well as his ambitious designs, were briefly, but at the same time very fully disclosed, in conversation with Mr. Benjamin, at the Villa Eugenie, at Biarritz. “He turned with peculiar and undisguised eagerness,” said Mr. Benjamin, “to the Mexican question. He knew the very number of guns on the Morro, the sums the United States had spent on the fortifications in Florida, the exports and imports of Galveston and Matamoras, in fact everything which well informed local agents could have reported to an experienced statesman eager for information. He examined me again on Texas and its population, the disposition of the French residents, the tendencies of the German colonists, the feeling on the Mexican frontier. He observed that Louisiana was nothing but French at the bottom. I was fully persuaded that he proposed to seek in Mexico a compensation for the lost colonies in the West Indies, which, he said, could not be recovered, ‘_sans nous brouiller avec nòs allies_,’ (without embroiling us with our allies). He insisted upon it that France must, sooner or later, have a foothold (_pied à terre_) on the Florida coast, for the purpose of protecting her commerce in the Gulf, for, he added, ‘_Nous ne voulons pas d’un autre_ _Gibraltar de ce côté là_,’ (we don’t want another Gibraltar on that side.”)
Mr. Slidell’s predecessor at Paris, Mr. Rost, had received assurance from the Duc de Morny, who was then next to the Emperor in his knowledge of State affairs, that the South would be recognized. It was only a question of time. After consulting with M. Thouvenel, Minister of Foreign Affairs; Persigny, Minister of the Interior; Fould, Minister of Finance; Rouher, Minister of Commerce; Baroche, President of the Council of State; Mocquard, Private Secretary of the Emperor; Count Walewski, De Morny and others, Slidell was satisfied that the Emperor was all right, and he wrote to Jeff. Davis & Co. as follows:
“The Emperor has invited the English Government to join with him in recognizing the South, but the English Government, owing to Earl Russell, has refused to act simultaneously with him.”
This statement of Slidell was true in one sense, but it was not strictly and diplomatically correct. There is no doubt that the English Government would have been anxious enough to join the Emperor in any scheme of conquest and spoliation that had a fair promise of success, and an average chance of avenging the Boston Tea Party and the Battle of Bunker Hill, but both powers were playing at the game of diplomacy, each for the purpose of making the other responsible for taking the initiative in the recognition of the South. They were both very circumspect about committing themselves, and the Palmerston-Russell Cabinet, with that caution which always characterized old “Pam” in foreign affairs, would not recognize any suggestion from the Emperor that did not bear his signature. The Emperor thought to make use of a Mr. Lindsay, a wealthy shipowner and member of Parliament, to draw out the English Government, but the latter was not to be committed to any course of policy that might involve important responsibilities in the future through any second-hand authority.
The Emperor seemed to have opened his mind very freely to Mr. Lindsay. He told him that he would have taken steps to put an end to the blockade of the Southern ports if the English Ministry had intimated a willingness to act with him. He said he had forwarded intimation to this effect through Mr. Thouvenel, but had not received a satisfactory answer. He intimated that if England was ready, he was, and was prepared at once to despatch a formidable fleet to the Mississippi, on condition that England should send an equal force to demand free ingress and egress for their merchantmen, and for the cargoes of goods and supplies of cotton which were necessary to carry on the commerce of the world.
Napoleon was resolved to act, as he had always done, on the high ground of conferring universal favors on humanity.
This was an old trick in his family, but it did not work effectually this time. He said he had regarded the restoration of the Union impossible from the first, and for that reason had deprecated the continuance of the bloody contest, which could not lead to any other result than separation. He authorized Mr. Lindsay to make this statement to Lord Cowley, and to ascertain whether he would recommend the course indicated to his Government.
It is very refreshing to reflect on the sensitive exhibition of feeling displayed, in his ostensible attempt to stop the carnage and fratricidal strife, by the man who planned and directed the wholesale assassinations in connection with the sanguinary _Coup d’Etat_.
Mr. Lindsay reported back to the Emperor the substance of his interview with Lord Cowley, who said that the English Government was not prepared to act until further developments. It was about this time that Mr. Seward was getting _in_ his fine diplomatic work with Earl Russell and Palmerston, which helped materially to upset the calculations of the Emperor.
Napoleon then requested Mr. Lindsay to see Palmerston, Russell, Derby and Mr. Disraeli, and to gather their intentions. He desired Mr. Lindsay to do all this of his own motion, and not as coming from him, and said he did not wish to be embarrassed by the forms and delays of ordinary diplomacy, because he felt the necessity of immediate action.
Lindsay again saw Earl Russell, as the accredited and special ambassador of the Emperor, _viva voce_. The Earl informed him that he could not receive any communications from a foreign power, except through the regular diplomatic channel. He then sought an interview with Mr. Disraeli, who was much more affable and communicative than the little Lord who stood so punctiliously on ministerial ceremony.
Disraeli threw considerable light on the subject. After expressing a deep interest in the affairs of the Confederacy, and saying that he fully concurred in the views of the Emperor, he told Mr. Lindsay that he had good reasons for believing that a secret understanding existed between Earl Russell and Mr. Seward; that England, in the meantime, would respect the Federal blockade and withhold recognition of the South. “But if France should take the initiative,” said Mr. Disraeli in conclusion, “any course she may adopt to put an end to the present state of affairs will undoubtedly be supported by a large majority in Parliament, and knowing this, Lord Russell will give a reluctant assent to this, to avoid a change of ministry, which would otherwise certainly follow.”
This shows that Disraeli saw very clearly through the duplicity of English diplomacy, and that while England was profuse in her promises to Mr. Seward, she was only waiting for the Emperor to act as pioneer in order that she might have a safe opportunity as well as a plausible pretext for armed intervention.
The Emperor complained that Earl Russell had divulged his views on American affairs, as expressed through his ambassador, to Mr. Seward. Lord Russell placed himself squarely on the “fence,” to be prepared for any emergency. Finally, about the middle of April, the Emperor thought it would be best that he himself should make a friendly appeal to the Federal Government alone to open the ports, if England did not join him, without further hesitation. He thought it would be necessary, however, to accompany the appeal with a demonstration of force on the Southern coasts; and if the appeal should be effective, to back it up by a declaration of his purpose not to respect the blockade. He determined, however, to wait a few days longer to see how England would act.
This resolution of the Emperor to make a friendly appeal to raise the blockade was only a thin excuse to find a cause for quarrel with the North, and it is very probable he would have acted on this determination alone, but for an unexpected event which changed his projects, and the apparent course of history.
About a week after this diplomatic conference, Commodores D. G. Farragut, and D. D. Porter, with their able commanders Bailey and Bell, had made the famous passage of forts Jackson and St. Philip, at the mouth of the Mississippi, with the United States squadron, silenced the Chalmette batteries and anchored in the harbor of New Orleans. After two days’ parleying the city surrendered at discretion, or rather, the city authorities passively and sullenly permitted Farragut, and afterwards General Butler, to take possession of the city without shedding any blood.
This great naval victory of Farragut’s squadron and its consequences dampened the ardor of the Emperor. He saw the chances of backing up his “friendly appeal” by a demonstration of force, were cut off, so far as New Orleans and the forts of the Mississippi were concerned.
Yet, Napoleon did not totally relinquish the enterprise, on account of this crushing defeat of the Confederacy. M. Billault, a prominent member of Napoleon’s cabinet, after this event said to Slidell, “The cabinet, with the probable exception of M. Thouvenel, are in favor of the South. If New Orleans had not fallen, our recognition could not have been long delayed, but if the Confederates should obtain successes in Virginia and Tennessee, and hold the enemy at bay a month or two longer, we may see an opportunity for intervention.”
The Emperor’s intentions, however, were fully revealed in an autograph letter to General Forey, which was written in July and in which his grasping ambition stood out in the boldest relief. He wrote: “In the present state of civilization of the world, the prosperity of America is not a subject of indifference to Europe, for she nourishes our manufactures and gives life to our commerce. We are interested in having the Republic of the United States a powerful and prosperous power, but we are not willing to have that Republic take possession of the entire Gulf of Mexico, command from there the Antilles as well as South America, and monopolize the distribution of the products of the New World. To prevent this, a stable Government must be established in Mexico, and we will in that event have restored to the Latin race on the other side of the Atlantic its power and prestige.”
Napoleon completely overdid the thing in this letter to General Forey. The vaulting ambition which overleaps itself and falls on the other side stuck out too plainly. He showed that he wanted the whole earth, and this aroused the resentment of the South. In the following August, M. Theron, a French consul in Texas, inspired by Napoleonic ideas of annexation, coolly contemplated the transformation of Texas to a French republic, and confided his project to Governor Lubbock of that State, who apprised Jefferson Davis of the consul’s aspirations. This was too much even for the Confederate Government, and M. Theron and the French consul at Richmond were both politely requested to leave the Confederate States.
Napoleon persisted in his intrigues for the purpose of getting a foothold in this country, in spite of the rebuff which his officious consuls had received from the Confederacy. He expressed himself desirous of interesting some of the rest of the European powers in the cause of the South, and again entered into confidence with Slidell on the possibility of joint mediation on the part of England, France and Russia. “My own preference,” said the Emperor, “is for a proposition for an armistice for six months, with the Southern ports open to the commerce of the world. This would put a stop to the effusion of blood” (How tender-hearted he was!) “and hostilities would probably never be resumed. We can urge it,” he added, “on the high grounds of humanity, and the interests of the whole civilized world. If it be refused by the North, it will afford good reason for recognition, and perhaps for more active intervention.”
Mr. Slidell then suggested that if the Emperor would give some kind of assurance that the police would not interfere, ships and munitions of war might be sent from France to the Confederacy.
“Why could you not have the ships built as if for the Italian Government?” suggested the Emperor. “I do not think it would be difficult, but I will consult my ministers about it.”
Napoleon then suggested the joint appeal for the six months’ armistice to England and Russia, which was declined by both. He then made a direct offer of mediation to the United States Government, in the most friendly terms, and on the “high grounds of humanity.”
The United States Government did not see it in this light, and rejected Napoleon’s humane offer.
The Confederate agents then obtained power to build ships of war in French ports, and to arm and equip them, and proceed to sea without molestation from the French authorities, the Treaty of Paris forbidding such a hostile act against a friendly power like the North to the contrary notwithstanding. The despot of France imagined himself above all treaties at that time.
The English Alabama was then cruising in a most successful manner. The Emperor had a conference with Mr. Arman, a large shipbuilder, and assured him that there would be no difficulty about building the ships for the Confederates under the disguise of their Italian destination. Accordingly, a contract was made for building five ships of war at Bordeaux and Nantes, and afterwards another contract for three iron-clad rams.
In 1863 the Emperor had a great deal of business on hand, but was still convinced, amid all his diplomatic duties that the South should be recognized by the European powers. He was afraid, however, of putting his Mexican expedition in jeopardy by risking a rupture with the North. Finally, he said: “I will make a direct proposition to England for joint recognition. This will effectually prevent Lord Palmerston from misrepresenting my position and wishes on the American question.” Accordingly, he had an interview with those two worthy members of Parliament, Messrs. Roebuck and Lindsay, at Fontainebleau, which was said to be highly satisfactory. He authorized them to state in the House of Commons that he was both willing and anxious to recognize the Confederate States, with the co-operation of England.
There was a great debate in Parliament on the subject, in the midst of which Earl Russell arose and said that Baron Gros, the French Minister, had received no communication from his Government on American affairs. Mr. Roebuck, who made the motion on the authority of the Emperor, was astonished that he had been so badly fooled. It still remains a mystery, however, why Baron Gros did not receive the advice in question from the Emperor, because M. Mocquard, the Emperor’s Secretary, wrote to Slidell as follows: “On the next day after the interview of Messrs. Roebuck and Lindsay with the Emperor, the Minister of Foreign Affairs telegraphed Baron Gros to ‘officiously’ inform Lord Palmerston that, should Great Britain be willing to recognize the South, the Emperor would be willing to follow her in that way.”
The only explanation that seems plausible under these circumstances is, that the Palmerston-Russell Cabinet interrupted this telegram to Baron Gros for diplomatic purposes, or that the Baron, seeing that the debate in Parliament had taken an unfavorable turn, had prudently resolved to suppress the advice from Napoleon, in order that his master might not commit himself while England was not heart and soul with him in the enterprise. In fact, England had begun to see that she had taken a false position, and Mr. Gladstone’s eloquent spurt, to the effect that “Jefferson Davis had created a nation,” was no longer the diplomatic faith of England. She was more influenced by fear than love, as she always is, and had begun to think, after the capture of New Orleans and the destruction of the Confederate fleet, that the Federal Government was capable of organizing a formidable navy. The London _Times_, which voiced diplomatic sentiment then, said so. During this very debate on Roebuck’s motion, Lee’s army had been beaten at Gettysburg, Vicksburg had surrendered and victory was beginning to perch on the Northern banners everywhere. Napoleon also drew in his horns, complaining bitterly that “perfidious Albion” had gone back on him, and he was afraid to permit the war ships, when finished, to leave the French ports for any destination, and when he permitted the English privateer, the Rappahannock, to depart, it was under the injunction that the American minister should know nothing about it.
What Lord Palmerston called a “concatenation of circumstances” contributed largely to force the Emperor to change his policy towards the United States. Maximilian’s Mexican expedition was exceedingly unpopular, trouble was brewing in several parts of the continent, and Bismarck and Von Moltke were cunningly and deliberately weaving that net in which the Man of Destiny, seven years later, was hopelessly entangled at Sedan. His dream of a French American Empire beyond the Mississippi had vanished long before his last abject act of humiliation in surrendering the sword of France to Bismarck. And ere he died, a miserable wreck of disappointed ambition, again a political exile, he had the opportunity of seeing our own Republic, which he sought to destroy, rehabilitated, and on its way to become the greatest nation in history.
[Illustration:
THE HON. JOHN SHERMAN, Who has taken a prominent part in financial matters since the beginning of the war, first in making treasury notes a legal tender in 1862; in proposing the Redemption Act in 1867, which was passed in 1870, and in the resumption of specie payments in 1879, which was the crowning success of the financial policy which established the Government credit on a solid basis. ]
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CHAPTER IX.
SECRETARY CHASE AND THE TREASURY.
THE DEPLETED CONDITION OF THE TREASURY WHEN MR. CHASE TOOK OFFICE.—PREPARATIONS FOR WAR AND GREAT EXCITEMENT IN WASHINGTON.—CHIVALROUS SOUTHERNERS IN A FERMENT.—OFFICIALS UP IN ARMS IN DEFENCE OF THEIR MENACED POSITIONS.—MISCALCULATION WITH REGARD TO THE PROBABLE DURATION OF THE WAR.—A VISIT TO WASHINGTON AND AN INTERVIEW WITH SECRETARY CHASE.—DISAPPOINTMENT ABOUT THE SALE OF GOVERNMENT BONDS.—A PANIC PRECIPITATED IN WALL STREET.—MILLIONAIRES REDUCED TO INDIGENCE IN A FEW HOURS.—MIRACULOUSLY SAVED FROM THE WRECK.—HOW IT HAPPENED.
Soon after Mr. Chase came into the Treasury he found that money was seriously needed. In fact the Treasury was empty. The expenditure for the fiscal year ending June, 1861, was 62 millions, and there were only 41 millions of revenue to meet them, and even this amount was threatened with a serious reduction on account of the traitorous and rebellious attitude of the South.
After President Lincoln had called upon Congress to provide for the enlistment of 400,000 men, the expenses of the Government were soon advanced to the enormous amount of a million dollars a day. The Secretary of the Treasury made a calculation, which he submitted to the President, showing that the probable expenditures would amount to 318 millions for the ensuing year. He advised that 80 millions be provided for by taxation, 240 millions by loan, and that 50 millions of Treasury notes, redeemable in coin on demand, should be issued.
The Secretary was authorized by Congress to borrow a sum not exceeding 250 millions, on the credit of the United States, and as a part of this loan he was, in the words of the Act, “to issue in exchange for coin, or pay for salaries or other dues from the United States, not over 50 millions of Treasury notes, bearing no interest, but payable on demand at New York, Philadelphia or Boston.”
When Mr. Chase advertised for bids on the bonds known as the 81 issue all bids at 94 and above were accepted, and those under 94 were rejected.
I got up a syndicate immediately to take the entire balance of the loan at 94, and went on to Washington to see the Secretary. This syndicate comprised a number of New York banks and many large capitalists. I called upon Secretary Chase when I arrived, informed him of the object of my visit and made him an offer of 94 for the entire balance of the loan.
He was in favor of the proposition, but requested me to leave the matter open until the following morning for him to consider. It was a question with him whether he ought not to give those whose bids had been rejected an equal opportunity with the parties I represented.
I never can forget the impression I received on my approach to Washington that morning. As I looked through the window of the sleeping-car my eye was met by an entire train load of brass cannon. There were at least a dozen platform cars, each having one of those huge guns, all apparently in order to wheel at once against the enemy. I shall always remember the feelings that came over me at that moment. The question of war or no war was vividly presented to my mind, and this was the uppermost thought during my visit at Washington.
I descended from my traveling quarters as soon as the train was announced as having arrived at the capital, and repaired to Willard’s, then the principal, if not, in fact, the only hotel for a traveler to go to, and it was an old-fashioned, historic hostelry. I hastened to my room, rapidly performed my ablutions, and then found my way into the dingy breakfast room. On inquiry, I found that ten o’clock was the usual hour for heads of departments, including Mr. Chase, to be at the Treasury. At that hour I went to see him. I sent in my card and was ushered into his presence without delay. He was a man of portly frame and distinguished bearing, and impressed me with the feeling of being in the presence of an individual far above the average standard of humanity in every respect.
I informed the Secretary of my mission, with the result above stated.
About seven-eighths of the people of Washington, at that time, were Southerners. The office-holders were largely composed of the latter, and they were expecting to be suddenly turned out of office. This rendered the place a boiling caldron of conspiracy and treason.
As I went around collecting information, the sight of those cannon that at first had made such an indescribable impression upon me, continued to haunt my vision wherever I went. The air was filled with rumors of war, and everybody was wound up to the highest pitch of hostile excitement.
As I mingled among the people, the impression was forced upon me that war was inevitable, and that up to the very hilt of the sword. I felt that the contest would be long and bloody.
I sent a dispatch to my firm in New York, conveying my impressions to that effect, and advised them to clear the decks in preparation therefor. I urged them to lose no time in selling off all the mercantile paper on hand, and requested them to communicate to the members of the syndicate, which I had formed for the purchase of bonds, recommending them to withdraw therefrom, as I was convinced that war to the knife was imminent, and that Government bonds must have a serious fall in price in consequence.
I saw Mr. Chase the next morning, and told him that, as I believed, there was going to be a long and bloody war, I could not conscientiously, in the interest of my clients, renew my bid of the previous day.
With regard to my opinion about the probable length of the war, the Secretary took issue with me very firmly.
Mr. Chase, however, afterwards proved to be a warm and most valued friend of mine, and it was largely due to his aid and recognition that I achieved brilliant success in my early Wall Street career during the war period.
The Secretary was of opinion that the bonds should command par, at least, and they would be worth that and above it very soon, he thought. He made this assertion on the expectation that the impending difficulties would soon be adjusted, and that in less than sixty days all the trouble would be at an end.
It was not so extraordinary as it may seem to some people now, with the light of later events fully before them, that the Secretary was so sanguine of short work being made of the South, because he only shared the opinion of a large number of people, who greatly underestimated Southern durability.
After leaving the Secretary, who treated me with great consideration, as he did every one in his inimitable and dignified manner, which made such a durable and favorable impression on all who came in contact with him, I felt greatly pleased and highly gratified at meeting him. In fact, his fine, magnetic presence was of a character to command the admiration of almost every person who had the honor of an interview. He was a great man for producing good first impressions, and, unlike many impressions of this character they were generally lasting.
Had I not visited Washington at the time I did, and had I not obtained the correct impression concerning the future of the then impending difficulties, my firm, like many others that invested in Government bonds, mercantile paper, stocks and other fluctuating properties, would have been irretrievably ruined. I have reason to congratulate myself, therefore, on my good fortune in narrowly escaping such a disaster, almost at the beginning of my Wall Street career, as I was thus enabled, at a later stage of the national trouble, to be of considerable service to the Government, through the Treasury, in its efforts to sustain such an army in the field as was calculated to ensure success to the Federal arms.
My first experience in dealing in Government bonds was just prior to the Lincoln administration, when Mr. Cobb was Secretary of the Treasury. He advertised for sale to the highest bidders an issue of U. S. bonds bearing five per cent. interest, having twenty years to run, and my firm bid for $200,000 of them, hoping to make a quick turn, and a small profit thereon. A five per cent. deposit was made, as required by custom.
The loan was all awarded to most of the bids, mine included, and a very large part of it was awarded to Lockwood & Co., who were then regarded the largest and most prosperous Stock Exchange firm in the street.
George S. Robbins & Co., John Thompson, Marie & Kans, and a few others, whose names I now forget, made also large bids.
Of those mentioned, however, my firm stood alone in taking up the bonds, as the threatening aspect of political affairs came on so soon afterwards as to depreciate Government securities. The original deposit of five per cent. was lost by these subscribers, and the bonds were permitted to remain in _statu quo_, as the Government never forced the claim against the delinquents.
This, in a large measure, accounted for the impoverished condition of the Treasury when Mr. Chase took charge of it, and for which Mr. Cobb has been made an object, not wholly undeserving, of public reproach.
The $200,000 bonds my firm subscribed for at par were sold mostly at 95 and below, but the fact of taking them, and meeting the subscription, without fail, gave my firm an excellent standing with the Government at the beginning of the war, and enured greatly to my firm’s advantage thereafter.
At the time I visited Washington my firm was more largely engaged in dealing in mercantile paper than any other branch of Wall Street business.
I had inaugurated the system at the time of my advent to the “Street” of buying merchants’ acceptances and receivables out and out, the rate being governed by the prevailing ruling rate for money, with the usual commission added.
It was by this method that my firm soon became the largest dealers in mercantile paper, which business had formerly been controlled by two other firms for at least a quarter of a century, and whose old fogy methods were by my innovations easily eclipsed.
The merchants at that time would go to these discount firms and leave their receivables, bearing their endorsements, on sale there, and only when sold by piecemeal could they obtain the avails thereof.
The more expeditious plan that I adopted, which was to give these negotiators a check at sight, seemed generally to merit their approbation, and enabled me to command the situation in that line of business, very much to the chagrin of my competitors.
In this way my firm had accumulated about five hundred thousand dollars in notes, which were hypothecated with various city and country banks.