Trading with the Enemy

While Battles Raged Across the Country, Merchants on Both Sides of the Conflict Continued to Carry on Illicit Trade

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While Confederate blockade runners famously carried the seaborne trade for the South during the American Civil War, the amount of Southern cotton exported to Europe was only half of that shipped illicitly to the North. Most went to New England textile mills where business "was better than ever," according to textile mogul Amos Lawrence. Rhode Island senator William Sprague, a mill owner and son-in-law to Treasury Secretary Salmon P. Chase, was a member of a partnership supplying weapons to the Confederacy in exchange for cotton. The trade in contraband was not confined to New England. Union General William T. Sherman claimed Confederates were supplied with weapons from Cincinnati, while General Ulysses S. Grant captured Rebel cavalry armed with carbines purchased in Union-occupied Memphis. During the last months of the war, supplies entering the Union-controlled port of Norfolk, Virginia, were one of the principal factors enabling Robert E. Lee's Confederate army to avoid starvation. Indeed, many of the supplies that passed through the Union blockade into the Confederacy originated in Northern states, instead of Europe as is commonly supposed.
Merchants were not the only ones who profited; Union officers General Benjamin Butler and Admiral David Dixon Porter benefited from this black market. President Lincoln admitted that numerous military leaders and public officials were involved, but refused to stop the trade. In Trading with the Enemy: The Covert Economy During the American Civil War, New York Times Disunion contributor Philip Leigh recounts the little-known story of clandestine commerce between the North and South. Cotton was so important to the Northern economy that Yankees began growing it on the captured Sea Islands of South Carolina. Soon the neutral port of Matamoras, Mexico, became a major trading center, where nearly all the munitions shipped to the port-much of it from Northern armories-went to the Confederacy. After the fall of New Orleans and Vicksburg, a frenzy of contraband-for-cotton swept across Military History/American Civil War the vast trans-Mississippi Confederacy, with Northerners sometimes buy- ing the cotton directly from the Confederate government. A fascinating May 2014 study, Trading with the Enemy adds another layer to our understanding of the Civil War.