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(Private and unofficial)

NEW ORLEANS, Oct. 10th, 1862.

DEAR SIR: I have received your official letter of Sept. 22nd. enclosing letters of Mr. Barney and Mr. Norton—and asking information whether any portion of shipments to this port reach the enemy. My official reply dated yester-day, is correct so far as it goes, but additional facts exist, proper to be stated only in a private letter.
Ever since the capture of this city, a brisk trade has been carried on with the rebels, by a few persons, under military permits, frequently with military assistance and as I believe, much to the pecuniary benefit of some of the principal mili-tary officers of this Department. I have suspected it for a long time, and spoke of it in my private letters to you, of Aug. 26th. and Sept. 9th. On the 5th. October, your regu-lations of Aug. 28th. reached me. I immediately stopped all trade with the enemy, and as this brought me in contact with the persons who have been conducting the trade, I acquired much information. Almost all the information to be given in this letter, has been collected this week.
A brother of Gen. Butler is here, who is called Col. Butler, though he occupies no position in the army. Government officers, citizens, and rebels, generally believe him to be the partner or agent of Gen'l. Butler. He does a heavy business and by various practices has made between one and two million dollars since the capture of the City. Gov. Shepley and especially Col. French (Provost Marshal) are supposed to be interested, but these officers, I believe to be entirely under control of Gen'l. Butler, who knows everything, controls everything, and should be held responsible for everything.
There are two channels of trade with the rebels - the River and Lake Pontchatrain.
River trade must be conducted by steamboats. There are eight or nine. River boats here, all seized and now in the hands of the military authorities. Col. Butler has used these boats as he pleased, for carrying up and bringing down freight. I had no control over them and could not know what was transpiring, for the military authorities controlled them, with whom I had no authority to interfere. Troops were at Baton Rouge and below Vicksburg, and it was to be supposed the boats were used for public, not private purposes. Of late, frequently, one or two infantry companies would accompany a boat taking up cargo and bringing back produce. This service was unpopular with officers and men, who enlisted for the benefit of the country and not of speculators. I say no more concerning the River trade, except that it has been constant and sometimes active.
Of the trade across the Lake I have more accurate and more information, because there are no government vessels there, and it was conducted with schooners. Shortly after arriving here I learned that large quantities of salt had crossed the lake to the rebels, and supposing it to be smug-gled, took measures to stop it thenceforth. Two weeks later a schooner loaded with 1,000 sacks salt to cross the Lake. I directed the inspector to seize the vessel, and immediately called upon Gen. Butler, and requested a guard to be put on board. This was about 9 o'clock at night. He appeared indignant at the attempt to take salt to the enemy - ordered a guard on board the vessel - and orderedthe immediate arrest of the Captain and shippers. The next day I had an interview with Provost Marshal French, who told me it was all a misunderstanding. The shipper had a permit for 500, but not for 1,000. That the shipper and captain were released - the vessel unladen and released also. I told him, he had no authority to release my seizures, but it was now too late to help it.
After this but little trade was done until six or eight weeks ago, when Gen. Butler gave a permit to a rebel, to ship four large cargoes, much of which was contraband, across the lake. I immediately called upon the General, who said that it was the policy of the Gov't. to get cotton shipped from this port, and for that purpose, to trade with the enemy. In the conversation he left upon my mind the impression that this course was approved at Washington. I then had entire confidence in Gen'l. Butler, and my letter of instructions had directed me to consult with him frequently. For the last two months trade has been active across the lake, nor had I any authority to stop it, until the arrival of your regulations on the 5th. Oct., as above mentioned.
The following statements are made to me by various persons.
One man says - that he took over 600 sacks salt just before I arrived, and was gone six weeks. Gen'l Butler gave permit. Two dollars per sack was paid for permission to take from New Orleans. He sold 400 sacks to Confederate army at $25. per sack, and was permitted to sell the other 200 to citizens, at $86. per sack. He did not own the cargo, but received one fourth of net profits. He cleared $2,000. The owners cleared $6,000 - good money.
Dr. Avery, Surgeon 9th. Reg't. Conn. Vol., states that he accompanied an expedition to Pontchitoula, just North of Lake Pontchartrain, about three weeks ago. A skirmish ensued - he was taken prisoner and taken to Camp Moore. He saw a large quantity of salt in sacks there, lying by the railroad. A rebel officer said to him. "We bought that salt from Col. Butler. We paid $5. per sack for the privilege of shipment from New Orleans." To-day that salt goes to Richmond for the army. To-morrow or next day another cargo will arrive. The army get their salt from New Orleans. The Yankees "will do anything for money." Dr. A. was subsequently released and is now in this city.
Capt. Cornwell, Co. A. 13th. Conn. Reg't. was stationed with his company at mouth of New Canal, for about three weeks, ending last Saturday. He states that the first schooner going out, was laden with large am't. of contraband articles - some medicines, including 80 gals. castor oil - It had Shepley's permit. He sent his 2nd. Lieut. (Kinney) to Gen. Butler - who said "Go to Gov. Shepley and ask him if he does not know) that these articles will go right into the hands of the enemy." Gov. Shepley said, "Return to Gen. Butler and say that I consulted him before giving this permit." Whereupon Gen. B. said, " Well, let it go, since Gov. S. has granted a permit." The same thing happened two or three days afterward, when Gen. B. received the messenger, and at once wrote on the back of the permit - "Gov. Shepley's passes must be respected." Capt. Cornwell now wants to go home.
The inspector of Customs at the New Canal is very sick, and therefore I cannot get his statement at present.
Mr. Clark applies for permission to trade with the enemy on a large scale and states that he made the arrangement by Gen. Butler's consent. I let his vessel leave in ballast, taking bond in double the value of the vessel, that she would be returned into my custody within 20 days. He had a letter from Gen. B. which I caused to be privately copied, and also a letter from Col. Butler. Both are enclosed here-with, marked A.
Don D. Goicouria (of the firm of D. D. Goicouria and Co., New St., N. Y.) has been here four months and has made about $200,000. Ile asks to continue trade with the enemy authorized by Gen'l. Butler. He has taken two thousand sacks salt to the confederate army. He made an arrangement with Gen. Butler and Benjamin (Rebel Secre-tary of War) to take salt to the enemy, bringing back cot-ton—in exchange, at the rate of ten sacks in one bale of cotton. He goes North next steamer, and will apply to Secretary of Treasury for permit to continue the trade. He has rec'd. here 200 bales cotton. His salt goes to the Confederate Army. He says, Col. Butler told him that he (Col. B.) had sent North 8,000 hogs. sugar of his own, worth in N. Y. $800,000 or $900,000. Besides salt, he has taken to the enemy large amount of other goods. In his interview with you be will be able to tell you everything about trade with the Rebels if disposed so to do.
A Roman Catholic Priest, from Bay St. Louis, told me yesterday that in his vicinity, Salt was selling for $3.50 per gallon - or $25. per bushel - and Flour at $55. per barrel.
(A Sack of salt contains about 4 bushels).
Mr. Lloyd applies for permit to trade. He states that Gen. B. granted him permit, to take effect whenever be pleased and offered him Gunboats and soldiers. He declined such aid, preferring to make arrangements with Confederate authorities, which are now completed. That he promised to bring hither 5,000 bales cotton and sell them to Gen. Butler, at the market price. He insinuates that there is a further understanding between himself and Gen. Butler, but declines stating what it is. His agent's name is Burden and his application (with list of cargo) is enclosed herewith, marked B.
Another application comes from Wm. Perkins and is enclosed herewith marked C.
R. H. Montgomery's vessels was stopped by me in New Canal on the 5th. October. His permit from Gov. Shepley and list of Cargo is enclosed herewith marked D.
All the vessels crossing the Lake since Sept. 23rd. have had Gen. Shepley's pass. The inspector has furnished a list of them with their cargoes—which list is enclosed herewith, marked E.
After receiving copy of your regulations, 1. told Gen. Butler that this trade gave aid and comfort to the enemy without benefit to the Gov't. - that it demoralized the army - disgusted loyal citizens - and degraded the character of the Gov't. He smilingly assented—said it ought, to be stopped - that he didn't see why Shepley granted such permits - and that he was going to visit Ship Island, and when he returned would see me about it again!
The stringent blockade enhances prices in the Rebel States, and is a great thing for the military speculators of this Department--and their friends.
I know of 5,000 sacks being sent to the enemy, and I think more than 10,000 have been sent.
I suppose your regulations (28th. Aug.) apply equally to the portion of the State within our lines - as well as to that under insurrectionary control. That supplies can be sent anywhere to a loyal citizen for his own use, but not to sell to rebels, and that I am to control the whole matter. If I mistake please inform me.
Most of this trade can be stopped, but I believe the present military authorities are so corrupt that they will take all means to make money. The amount of goods smuggled from this point to the enemy, has been trifling. Gen. Butler has always been kind to me, and our personal relations are upon the most pleasant footing. He has great ability, great energy, shrewdness and activity, and industry, but he can never acquire a character here for disinterestedness. Many officers and soldiers want to go home, not wishing to risk their lives to make fortunes for others.


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Annual Report of the American Historical Association; Volume II; Washington, Government Printing Office; 1903

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