Trading with the Enemy Page 6

  Four

  Matamoros

  THE MEXICAN BORDER WITH TEXAS WAS THE ONLY Confederate boundary immune to the federal blockade. Situated across the Rio Grande from Brownsville, Texas, the port of Matamoros was the single most important legal loophole. Article 7 of the 1848 Treaty of Guadalupe Hidalgo that ended the Mexican-American War specified that the river “should be free and common to the vessels of both countries.”1 Blockading vessels were banned within one mile to the north or south of the river's mouth. Since Matamoros and Brownsville were thirty twisted miles up the shallow river, cargoes were commonly lightered at the beachfront Mexican village of Bagdad.2

  Despite the advantage provided by a legal circumvention of the blockade, Matamoros trade presented two problems. First, it was distant from the most important parts of the Confederacy. Second, government policies south of the Rio Grande were sometimes conflicting and often corruptly implemented.

  It was difficult to ship cargoes to and from Matamoros from most of the Confederacy. The town was hundreds of miles from the nearest important cotton fields in east Texas. The closest rail depot with a line connecting to the Mississippi River was over five hundred miles away. After the first year of the war, Rebel shipments to and from Matamoros were primarily by wagon routes over desertlike terrain that were often short of potable water and nearly devoid of improved roadways. They were never satisfactory for transporting heavy ordnance such as large-caliber artillery.

  Early in the war, the most popular course to Brownsville and Matamoros was a waterway along the Texas coast. A long string of sandy islands stretching several hundred miles from Matagorda almost all the way to Mexico provided a shallow passageway between the islands and the mainland. It was navigable to small boats but not the larger vessels of the federal blockading fleet. By early 1862, a steady flow of small vessels glided along the route taking cotton and sugar south and bringing back supplies and contraband, including weapons and munitions. Since the mouth of the Rio Grande was treacherous, most of the boats used Corpus Christi or Baffin Bay as their southernmost port whence cargoes were hauled overland to and from Mexico.3

  In February 1862, the blockaders retaliated by sending a detachment of marines to Aransas Pass just north of Corpus Christi. Simultaneously, the blockader Portsmouth was stationed off the Rio Grande. However, the Portsmouth was only temporarily effective in disrupting activities near the mouth of the river because the lighters used to load cargoes onto the deep-water vessels merely shifted their registries to neutral Mexico. Nonetheless, during the ensuing months, a series of unexpected attacks along the Texas coast sufficiently interrupted the trade to drive most of it onshore by July 1862.4 San Antonio was the concentration point for the overland path. From there it would take six to eight weeks for wagon convoys to reach the Mexican border.5

  Ultimately, the need for essential goods in the Trans-Mississippi Confederacy combined with the profit incentive motivated traders to tackle the challenging transportation obstacles. At one point, Lieutenant General Edmund Kirby Smith, who commanded the vast region after 1862, said he was getting fifty cents a pound in gold in Mexico for cotton he could buy for four cents a pound in the Rebel interior. Wagon trains of cotton arrived in Matamoros from as far away as Arkansas and Louisiana. One economic historian estimated that about 20 percent of Confederate exports over the span of the war crossed the Mexican border.6

  The inconsistent governmental policies south of the border reflected a combination of fluctuations in the Mexican central government as well as conflicting power with local authorities along the Rio Grande. Until President Benito Juarez was forced into temporary exile in June 1863, the Mexico City government tended to side with the United States. If Washington could reach an agreement with Mexico to prevent trade across the Rio Grande, the federal blockade could extend along the entire perimeter of the Confederacy. Yet reaching such an agreement was hard for two reasons. One was that states' rights was a respected concept in Mexico just as it was in the Confederacy. The governors of Mexican states along the Texas border favored the trade owing to the tax revenues and economic prosperity it created. Another reason it was hard to reach an agreement was the traditional instability of Mexican governments, temporarily amplified by prospects for European intervention during the Civil War.

  MEXICAN POLITICS

  Since gaining independence in 1821, Mexico was regularly in political turmoil. There were seventy-five changes in government by the time the American Civil War started in 1861. In January of that year, liberal Benito Juarez assumed the presidency after defeating the armies of the incumbent conservative government. From Mexico City, he held power over the central and southern sections of the country. However, in the states bordering the Rio Grande, local officials assumed more authority. Partly because they could foresee prosperity resulting from trade with the Confederacy, they were wary of interference from Mexico City.7

  In contrast, Juarez was more concerned with his own political status, which was linked to the welfare of the entire country. He inherited an unmanageable debt totaling $62 million owed to European creditors. By summer 1861, he was compelled to suspend interest payments, which led to a forceful response. In December, Britain, France, and Spain blockaded the port of Veracruz and seized the customs houses, where they collected tariffs and applied the funds toward reducing Mexico's debt. By March 1862, a French army arrived, which prompted a withdrawal by the British and Spanish, who concluded that France was attempting to establish a vassal government instead of merely solving an international monetary disagreement. On May 5, 1862 (Cinco de Mayo), when the French army attempted to advance toward Mexico City, it was defeated by Mexicans. Nonetheless, the French returned a year later to win a victory and capture Mexico City in June 1863. Juarez was forced to exile his government to the northern state of Chihuahua, which borders El Paso.

  By October 1863, a member of Austria's royal family, Ferdinand Maximilian, tentatively accepted an invitation from Mexican conservatives to become emperor of Mexico.8 Partially influenced by his Spanish-born wife, Empress Eugenie de Montijo, Napoleon III was the mastermind behind the maneuver. He intended that the Hapsburg family member become a puppet monarch. Maximilian assumed the throne in April 1864, but would not be secure until armed resistance from Juarez was subdued. But defeating Juarez was unlikely without the presence of an occupying French army.9

  Prior to being ousted from Mexico City, Juarez attempted to negotiate an alliance with the United States that would temporarily satisfy European creditors. He hoped it would delay French intervention long enough for him to stabilize the government and craft a more lasting debt solution. He and Lincoln's representative, Thomas Corwin, hammered out a proposal for the United States to lend $11 million to Mexico, secured by a mortgage on public lands in northern Mexican states such as Baja California. Since the Confederates employed an inept diplomat in Mexico City and could not hope to offer comparable financial terms, Juarez pinned his hopes for placating the Europeans on the United States. But the Juarez-Corwin agreement never became effective due to disinterest in Congress together with procrastinating and insincere advocacy in Lincoln's administration.10

  Meanwhile, diplomatic arrangements in the states bordering the Rio Grande proceeded independently. The head negotiators were a Mexican governor named Santiago Vidaurri and a Confederate commissioner named Jose Quintero. Initially, Vidaurri controlled the two states immediately upstream from Tamaulipas, which is the state where Matamoros and the mouth of the Rio Grande are located. However, he was not without influence in Tamaulipas, and by spring 1862 he had control of it.11 Vidaurri worried that Juarez would challenge his authority and went so far as to propose annexation of his territory by the Confederacy as a means of securing protection against Juarez. President Davis declined the annexation offer but welcomed an eagerness to trade.12

  Partly because of historical political turmoil, Vidaurri had difficulty maintaining control of his region to the end of the war. Various bandits who raided on both
sides of the border sporadically challenged his authority. Most notable was a polished and likable scoundrel named Carvajal, who befriended the Confederates. For a time, Carvajal set up a recruiting station in Brownsville under the protection of Rebel Colonel John S. “Rip” Ford. Vidaurri responded by raising the tax on cotton imported into Mexico, which prompted Ford's superior to order the arrest of Carvajal.

  Finally, when Juarez relocated to nearby Chihuahua in summer 1863, Vidaurri felt compelled to seek safety with the French army, thereby leaving Juarez in charge of the Rio Grande trade by default. Although his earlier favoritism toward the United States suggested he might shut down the trade, it was simply too profitable and remained wide open until the end of the war. Two years after it ended, Juarez defeated Maximilian's forces, executed the Hapsburg monarch, and regained control of the government in Mexico City. After leaving the border, Vidaurri joined Maximilian; he was likewise executed in 1867. Juarez remained president of Mexico until his death by heart attack in 1871.13

  TRADE CHARACTERISTICS

  Despite difficult routes to the Confederate hinterland, trade through Matamoros began before the end of 1861, for two reasons. First was the reduced risk of cargo loss that resulted from the Mexican port's legal immunity to the Union blockade. Second, despite an unofficial cotton embargo during the first year of the war, the Confederate Congress specifically exempted exports across the Rio Grande. The exemption enabled Trans-Mississippi growers to profit from crops they were otherwise expected to destroy. Given a choice between burning their inventory and selling it, many planters were sufficiently motivated to accept the arduous journey to the Mexican market.

  An estimated five thousand wagons were used to haul cotton from Texas, Louisiana, Arkansas, and the Indian Territory (present-day Oklahoma). San Antonio and Alleyton, near Houston, were collection points, which remained hundreds of arid miles distant from depots on the Texas side of the Rio Grande. Even in good weather it would take four to six weeks to finish the trip. Wagon trains typically consisted of ten to fifteen vehicles, each carrying about twenty cotton bales. The trains were in constant danger of attack by bushwhackers, Native Americans, bandits, and outlaws. As noted, a smaller amount moved to the Rio Grande on coastal vessels. The ships were nearly all sail driven, carried forty to eighty bales each, and drew only about three feet of water. Despite such restrictive conveyances, it is estimated that over three hundred thousand bales were moved through Matamoros during the war.14

  Over the next three-and-a-half years, twenty thousand speculators flocked to Matamoros. English became so commonly spoken that the Matamoros Morning Call newspaper was published in the language. A regularly scheduled packet line was set up to Havana, Cuba, carrying a great deal of arms and ammunition for the Confederacy. By 1863, regular steamship service to London was established. The following year, federally occupied New Orleans offered two regularly scheduled steamships. Matamoros effectively became a blockade-free Confederate port. At one point in summer 1864, twenty-four ships in the New Orleans harbor were destined for Matamoros. Furthermore, one of the city's newspapers advertised more departures for the Mexican port than any other destination.15

  While most Matamoros trade was presumably with Europe, merchants from Northern states also participated. Prior to the war, scarcely one ship annually left New York for Matamoros, but from summer 1861 to summer 1864, the average was about one per week—a fiftyfold increase. Confederate Brigadier General Hamilton Bee said that arms could be bought in New York and shipped to Matamoros and thence imported into Texas. The New York Herald wrote about a Gotham shipper principally engaged in contraband trade via the Mexican town. By the last year of the war, trade between New York and Matamoros averaged a million dollars a week.16

  In their book Napoleon III and Mexico, authors Alfred Hanna and Kathryn Hanna wrote, “Officers of blockading vessels were incensed by the purchase of Confederate cotton by Northerners; they were outraged particularly by the number of ships from New York and other Eastern ports engaged illicitly in this traffic.”17

  According to historian Robert Kerby, Matamoros trade from Northern and Union-occupied Southern ports was a significant source of war supplies for Rebel armies west of the Mississippi River. “Profits earned from the sale of cotton were either collected in gold or reinvested in manufactures, provisions, or munitions-of-war carried to Bagdad by inbound ships. Most of the vessels…and imports…were…European, but it was not uncommon for ships flying the flag of the United States to bring down cargoes of contraband from Boston, New York, or Philadelphia.”18

  Cargoes from Northern states included large quantities of munitions and war supplies for the Confederate army. There were also a sizable number of wagons and harnesses, as well as thousands of pistols, carbines, uniforms, shoes, blankets, and other materials manufactured in Northern states. Civilian goods also arrived from the North. One San Antonio newspaper reported that the very paper it was printed on came from New York and that cotton traders returning from Matamoros sometimes carried gold marked by the Philadelphia mint.

  Shippers between New York and Matamoros used direct and broken-voyage methods to transport goods. The direct method utilized bogus front men in Mexico and ordinary brokers in New York. However, if direct clearance between the two ports could not be secured, the broken-voyage system was used to circumvent interdiction. Shipments destined for either Matamoros or New York would first stop at such neutral ports as Havana, Nassau, or even Halifax with legitimate papers for the first leg of the journey. Once at the intermediate point, authorization for the second half of the journey would be obtained.

  Ironically, the British became particularly annoyed at trade between Matamoros and ports in the Northern states or Union-occupied ones in the South. The British Foreign Office received a steady stream of complaints from shippers in their country about the advantages of US shippers in the Matamoros market. Specifically, they complained that federal blockaders would stop British-flagged vessels for inspection and confiscation of contraband items while ships trading between New York and the Rio Grande passed unmolested. Consequently, British foreign secretary Lord Russell warned Secretary of State Seward that “hostilities” against British vessels bound for Matamoros could lead to a “calamity” between the two nations.19

  Charles Stillman is a prominent example of a Matamoros trader with family ties to the Northern states. Born in Connecticut, he was fifty when the war broke out and had been in Texas and Mexico for over thirty years. He had disputed ownership of large land tracks north of the Rio Grande near Brownsville. He also founded Brownsville in 1849, naming it after nearby Fort Brown. Although he married a New England lady, she could not abide the region's climate and relocated to New York with their children in 1853. Charles visited the family during the summers but otherwise stayed in Texas and Mexico. He claimed that he grew to dislike “Yankees,” whom he regarded as “haughty and domineering.” By 1861, he declared, “My sympathy is for the South. In fact I never wish to see the North again.”20

  However, Stillman camouflaged his Southern sympathies by using three Mexicans in Matamoros and Monterrey to handle his mail and contracts. Much of his cotton was obtained from a Confederate Texan who switched sides in November 1863 when Brownsville was temporarily occupied by Union troops. The converted Union-loyal man set up a new partnership that included Stillman, which ran a constantly moving chain of at least three ships between Matamoros and New York. The partnership benefitted from blockade policies designed to supply cotton to Northern providers of military uniforms. Consequently, Stillman sold Texas cotton to the federal government for use in making uniforms for federal soldiers.21

  Stillman's Matamoros-bound cargoes normally originated at New York. To minimize customs interference, his partnership registered its three ships under the British flag. When preparing to leave New York, the ships would generally seek clearance directly to Matamoros, but if necessary they would settle for authorization to travel to a neutral port such as Havana before co
ntinuing on to Matamoros. Stillman's ships typically carried cotton to New York and returned munitions and other contraband evidently obtained from suppliers in the Northern states. By 1864, a congressional committee began investigating Stillman's business, but it discovered that his New York agent, James Donahue, had disappeared and could not testify, while Stillman remained beyond reach in Mexico.22

  Early in 1865, Stillman suffered a stroke. Because the war was winding down and trade volumes along with it, he decided to rejoin his family in a more comfortable New York setting. But the congressional investigation left him with a desire to avoid attracting attention, and he sought to reenter the United States quietly. He first traveled to Great Britain before boarding a New York-bound steamer as a supercargo in order to avoid having his name appear on the passenger list. (A supercargo is an individual who travels with a shipper's cargo and assumes responsibility for managing and delivering it. He is essentially a caretaker, much like an apartment superintendent.) A few months after arriving in New York, Stillman received a pardon from President Andrew Johnson.23

  After the war, Stillman was one of the richest men in the United States. Among other investments, he became a prominent shareholder of New York's National City Bank, which was the predecessor to today's Citicorp. His son, grandson, and great-grandson each became the bank's board chairman, with the great-grandson holding the position as late as 1967. Two granddaughters married into the Rockefeller family. Stillman died in 1875, about ten years after moving to New York.24

  William Sprague is an even more prominent example of a distinguished Union leader ensnared in dubious Matamoros commerce. In the first days of the war in April 1861, the thirty-one-year-old Sprague, then governor of Rhode Island, organized a state regiment that was one of the first to reach Washington as President Lincoln waited anxiously for protectors to arrive in the event of a Rebel attempt to capture the city. He also participated at the First Battle of Bull Run. Only five years earlier, he had inherited his father's prosperous business that was founded on cotton textiles but included locomotive manufacturing, among other interests. By the end of 1862, he was anxiously seeking raw cotton for his mills.