With Millions in Hand, 2 Businessmen Set out to Wreck Rebel Ship-buying Plans

 

 

(Library of Congress photos)

 

Former Treasury Secretary Robert Walker, left, was also sent to Europe by his successor, Salmon Chase.  While Forbes and Aspinwall were to wreck Confederate  ship-buying plans, Walker was to undercut their bonds sale.

 

Second of Three Parts

With the basic points settled on what two private businessmen would be doing to disrupt Confederate shipbuilding efforts in Europe, especially the rams being built near Liverpool, Navy Secretary Gideon Welles, Treasury Secretary Salmon Chase, John Murray Forbes and William H. Aspinwall agreed that Forbes should leave first. He would take his young son John Forbes II. Aspinwall, on the other hand, was to wait until  the 12, 500, five- and twenty-year bonds were countersigned, pack them into “five or six trunks,” and then head overseas from New York. He would take a Captain Pearson from his steamship company to scout yards in England and Scotland. 

What was so extraordinary about this mission hatched in a New York hotel room in spring 1963 -- during some of the darkest days facing the Union cause -- was the Lincoln administration’s handing over after the briefest of meetings to two private citizens millions of taxpayers’ dollars “to dispose of pretty much as they liked” in Europe. (1)

After seeing Consul Thomas Haines Dudley in Liverpool to assess the situation at Laird, Forbes hunted down his old friend Joshua Bates, a Massachusetts-born senior official at  Baring Brothers bank in London. The bank was the grand sounding “financial agent” for the Union government in Great Britain. In reality, the “financial agent” disbursed piddling sums to cover immediate bills and pay consuls’ salaries. In the plan hatched in the Fifth Avenue hotel, Barings became vital to securing the credit needed to buy ships or to the raise prices so high that the South couldn’t afford them.

On the more personal level, Bates and Baring Brothers had a long relationship with Forbes and his western railroad investments. In fact, before receiving Chase’s telegram, Forbes took the extraordinary step of sharing with Bates, who for decades ran the commercial side of the bank’s global operations, confidential letters between him and Gustavus Fox, assistant secretary of the Navy,  outlining the Confederate ironclad threat. To this meeting at the bank with Bates and Thomas Baring, Forbes also brought a letter of introduction from Chase. (2)

“From policy I gave them (as they wished) a very limited sketch of my plans,” Forbes wrote. He then left to meet briefly with Charles Francis Adams, the United States minister to Great Britain, who did not press Forbes on exactly what he was doing for the United States. He pledged his aides’ assistance if needed. Forbes left the impression with Adams that he was in Europe to recruit soldiers in Germany for the Union army. By the time Forbes returned to Barings, the United States was awarded a 500,000 pound line of credit “subject to cash draft.”  All that was needed now was for Aspinwall to deposit the securities at the bank. (3) 

The businessmen’s cover was blown almost from the day Aspinwall arrived in the compact financial city that was abuzz with news of the British seizure of Alexanda, a soon-to-be commerce raider, in Liverpool and the capture of Peterhoff on its run from the British Virgin Islands to Matamoros.  As Aspinwall and Forbes dined with Adams, the Times reported on April 7, “Two well known merchants, one from Boston and one from New York have been commissioned by the Washington government … to employ part of the 2 million pounds” they brought with them to buying up “the gunboats now building in England for the rebels.”  (4)

Like Confederate Secret Agent James Bulloch whose presence became news upon his arrival in Liverpool, the two pressed on with their work – buy ironclads, disrupt Confederate shipbuilding activities, and where possible, preach the gospel of the Union emphasizing the Emancipation Proclamation. (5)

The businessmen and the consuls understood that they needed real intelligence to stymie the Confederate agents and that meant paying for depositions and necessary legal fees, retaining detectives and spies of their own, and spreading cash among disaffected shipyard workers and seamen, and when necessary, bribing clerks in shipyards along the Thames, Mersey, and Clyde, for plans;   clerks in banking houses on curious transactions, and chandleries on suspicious purchases. The line of credit at Barings gave the Union a leg up in all these areas. 

While neither the businessmen nor consuls saw any problem with spending the Navy’s money on spying, the funds should have been coming from the State Department, a point that concerned Welles, and he let officials at State know that.

What Forbes and Aspinwall also picked up was the depth of British resentment over the letters of marque resurrecting the anger over Captain Charles Wilkes’ forcibly removing James Mason and John Slidell from the British mail packet Trent in 1861.  “Every Englishman thinks that his appointment [as flotilla commander in the West Indies] was a taint to the international mails.” On these two points, the men finally got their way. The letters of marque were never issued, and Wilkes was reassigned. 

As April moved along, Forbes was receiving advice from Adams, who by then knew what their real mission was, to be very wary of the shipyards toying with them.  “This is merely playing the game of the Englishmen” in driving war materiel prices skyward.  The Confederates’ successful sale of bonds based on the delivery of cotton had changed the financial game, the minister noted. On the rams, they were not going to be out-bid. Adams stepped up his diplomatic pressure on the British.  Dudley’s reports from Liverpool, paid for out of the Barings account, were particularly useful in building the Union’s case on who really was buying these warships. (6)

The defeat at Chancellorsville added to financial pressures on the Union overseas. The Union bonds were bringing between 60 and 75 percent of par value, further reducing the businessmen’s ability to knock the South out of the European arms and shipbuilding markets.

Adams then reminded Forbes it was better to work as a private businessman with a limited amount of hard currency in these matters than appear to be an agent of the United States with its deep pockets.

Complicating matters for the Union in London was the arrival of Robert Walker, a former secretary of the Treasury and a one-time senator from Mississippi, on a special mission from Chase.  Walker’s mission was to undermine Confederate bond sales and to bolster the Union’s standing in European financial markets. It was just another addition to the posse of roving diplomats, like Thurlow Weed; poaching diplomats, like William Evarts to handle American claims against the British government;  volunteer diplomats, like Moncure Conway who began corresponding with Mason, the Confederate commissioner in London, that soon appeared in the Times, and special mission diplomats, like Forbes, Aspinwall, and Walker.  Adams noted in his diary that like Forbes’ and Aspinwall’s mission, “I had nothing to do” with Walker’s. 

As for the two businessmen, they were pleasant enough with Walker but remained tight-lipped about what they were about. This was in contrast to their letter to Chase about conferring freely with him. The letter was proof that Forbes, especially, had an  uncanny ability at “working through indirections.” The historian Adams marveled, “That, under such an ingeniously bad system, a catastrophe did not result, speaks volumes for the discretion of those concerned.”  By contrast, Confederate agents even representing the same department bickered among themselves over who was entitled to what share of the Erlanger Loan. The Confederate agents “are soon found out and drawn into confessions and statements by gossiping acquaintances.”  (7)

End notes:

1.Charles Francis Adams, Laird Rams (hereafter Adams, Laird), Proceedings of the Massachusetts Historical Society, Vol. 33, Google e-Book, p. 196, John Murray Forbes, Drawing on Letters and Recollections of John Murray Forbes edited by his daughter Sarah Forbes Hughes (hereafter Hughes, Recollections), Vol. 1, Cambridge, Google e-Book, Vol. 1, p. 340. John Launtz Larson, Bonds of Enterprise: John Murray Forbes and Western Development in America’s Railway Age (hereafter Larson, Bonds of Enterprise), Google e-Book, p. 211.

2.Hughes, Recollection, Vol. 1, p. 340.  Larson, Bonds of Enterprise, p. 211.  Stanley Chapman, The Rise of Merchant Banking, Taylor and Francis, Oxon, U.K., 2006, p. 28.

3.Hughes, Recollections, Vol. 2, pp. 8-9. Adams, Studies, p. 358.

4.Adams, Studies, p. 359. Maynard, Forbes, pp. 67-89.

5.Hughes, recollections, Vol. 2, p. 9.  Maynard, Forbes, pp. 67-89.

6.Maynard, Forbes, pp. 67-89.

7.Adams, Studies, pp. 360-364. Adams, Laird, pp. 165-207.  John Niven (ed.), Salmon P. Chase Papers, Correspondence, 1863-1864, Vol. 4, Kent State University Press, Kent, pp. 16-18.

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