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New York City’s Secession Crisis

By Chuck Leddy
9/5/2018 • Civil War Times Magazine

Strong economic ties to the South tempted Gotham to consider a break from the Union in 1861.

On December 20, 1860, in the wake of the election of Abraham Lincoln, the words that would ignite a war rang out at a state convention in South Carolina: “the union now subsisting between South Carolina and other States…is hereby dissolved.” Soon six other Southern states would also leave the Union. And if a colorful but corrupt mayor had had his way, they would have had some unlikely company.

New York City, the North’s largest and wealthiest metropolis, seriously considered exiting the Union only two weeks after South Carolina had done so. Several of the city’s most influential political and business leaders proposed to separate it from the United States in the months prior to the Civil War, and worked tirelessly—though unsuccessfully—to achieve a negotiated accommodation with secessionists from the Southern states.

On January 6, 1861, New York City’s Democratic Mayor Fernando Wood addressed the Common Council in his annual State of the City speech. Wood described how the city’s “great trading and producing interests” were presently “prostrated by a monetary crisis.” Southern secession threatened commercial relationships upon which New York City’s wealth had historically depended. Wood’s solution to the crisis was simple. “[W]hy should not New York City… become also equally independent? As a free city…she would have the whole and united support of the Southern States….” Wood intended to call the independent city-state, comprising Manhattan, Staten Island and Long Island, “Tri-Insula,” meaning “three islands” in Latin. Once separated, it would be free to continue its extraordinarily lucrative cotton trade with the seceded South.

Business relationships between New York City and the South had grown strong in the four decades prior to the Civil War. Mayor Wood, during his campaign for a third term as mayor in 1859, put it simply: “The South is our best customer. She pays the best prices, and pays promptly.” Cotton had become the nation’s top export, accounting for more than half of all American exports, and New York City was America’s undisputed center of the trade. New York City merchants directly benefited from slave labor, and in the antebellum years worked constantly to keep the growing slavery crisis from boiling over into a civil war that would devastate their bottom lines.

Historian Philip S. Foner, in his book Business and Slavery: New York Merchants and the Irrepressible Conflict, explains that “New York dominated every single phase of the cotton trade from plantation to market.” Southern planters financed their operations through New York City banks, negotiated contracts with New York City business agents, transported their crops on New York City ships, insured them through New York City brokers and purchased equipment and household goods from New York City merchants. According to Foner, the South pumped approximately $200 million annually into Gotham’s economy. James De Bow, an economist, statistician and editor of the widely circulated Southern magazine De Bow’s Review, estimated at the time that New York City businessmen received 40 cents for every dollar spent on Southern cotton.

Southern planters regularly traveled to New York to purchase luxury items, married into New York’s leading merchant families, vacationed at Saratoga and socialized with their Northern business partners. One of New York’s top financiers of the cotton trade, August Belmont, was related by marriage to Louisiana Congressman James Slidell, later a Confederate diplomat. Through Slidell, Belmont was connected to the South’s leading politicians and planters. During the secession crisis of 1860-61, Belmont would become a vocal leader in New York City’s continuous efforts to negotiate a solution.

Mayor Wood, himself a former merchant, clearly understood that New York City’s prosperity depended on the enslavement of 4 million African Americans, admitting in 1859 that “the profits… depend upon the products only to be obtained by continuance of slave labor….” The connections between New York City’s merchants and Southern cotton growers were everywhere. Three Lehman brothers were cotton brokers in Alabama before moving north to help establish the New York Cotton Exchange. Today, Lehman Brothers is a major Wall Street investment firm. Shipping magnate John Jacob Astor’s ships hauled Southern cotton. J.P. Morgan studied the cotton trade as a young man.

These strong economic ties had obvious political ramifications. New York merchants were overwhelmingly Democratic, in sympathy with the South and the institution of slavery. When the American Anti-Slavery Society held its annual convention in New York City in 1859, for example, the Democratic New York Herald described the visiting abolitionists as “a little set of crazy demagogues and fanatics.”

One New York City merchant bluntly explained the merchant community’s attitude toward slavery to Syracuse abolitionist Samuel May: “Mr. May, we are not such fools as not to know that slavery is a great evil, a great wrong. But a great portion of the prosperity of the Southerners is invested under its sanction; and the business of the North, as well as the South, has become adjusted to it. There are millions upon millions of dollars due from Southerners to the merchants and mechanics alone, the payment of which would be jeopardized by any rupture between the North and the South. We cannot afford, sir, to let you and your associates endeavor to overthrow slavery. It is not a matter of principles with us. It is a matter of business….” Abolitionists, in short, were rocking a boat that was making New York City’s merchants rich.

During the 1860 presidential campaign, Mayor Wood and New York’s merchant community fanned fears of “Black Republican” control in Washington. The New York Daily News, edited by the mayor’s brother, Benjamin Wood, shamelessly appealed to working class racism by warning workers that “if Lincoln is elected you will have to compete with the labor of four million emancipated negroes.” Many businessmen also warned their employees that if Lincoln won in November, the South would soon bolt the Union, taking away its lucrative business and leaving New York City workers without jobs. The anti-Lincoln vote in New York City was 62 percent. But Republican strength upstate outweighed Democratic gains in the metropolis. Lincoln won the state and the election, triggering a nightmare scenario for the South and the New York City merchants who depended upon its trade.

In early December 1860, New York merchants planned to assemble and discuss rumors of South Carolina’s secession and the possible loss of Southern trade. Two hundred invitations were sent out for the December 15 meeting at 33 Pine Street, the offices of a cotton merchant near Wall Street. Over 2,000 worried merchants showed up, a veritable “Who’s Who” of the city’s commercial establishment, determined to show their solidarity with the South and seek an alternative to Southern secession.

Hiram Ketchum, a prominent lawyer, spoke for many New York City merchants at the Pine Street meeting when he begged the South to “give us time to organize and combine, and we will put down any party that attempts to do what the South fears the Republican Party will do . . . .We can right the wrong in the Union, only give us time.” But after decades of cobbled-together, last-second compromises, the South was sick and tired of waiting. Five days after the massive Pine Street meeting, South Carolina seceded from the Union. With about $200 million in outstanding Southern debt still owed New York City, its merchants trembled at the possibility that this massive deficit might be ignored, and the lucrative Southern trade cut off.

In late December, a delegation of 30 New York City merchants journeyed to Washington to sound out lame-duck President James Buchanan about how he planned to respond to South Carolina’s secession. The merchants stood in stunned silence as Buchanan answered their anxious questions by shaking his head and uttering: “I have no power in the matter. I have no power in the matter.” President-elect Lincoln remained silent on the issue, biding his time until he took power in March. The worried merchants next turned to Congress, lobbying in support of the recently introduced Crittenden Compromise, which included constitutional amendments intended to protect slavery in the South forever. (Ultimately, the compromise was narrowly defeated in the Senate, a few days before Lincoln’s March 4 inauguration.)

The secession crisis was proving to be the expected body blow for New York City’s cotton-dependent economy. Many Southerners, long resentful of what they regarded as Gotham’s exploitation of cotton growers, cared little about the city’s dilemma. When the London Times asked editor James De Bow what would happen to New York City without the South, he gleefully replied: “The ships would rot at her docks; grass would grow in Wall Street and Broadway, and the glory of New York…would be numbered with the things of the past.”

The city would not wait idly for that disaster to happen. Wood’s proposal that New York City leave the Union in order to continue trading with the South—taking with it the hefty 67 percent of the federal revenue that was the city’s contribution— came shortly after. Wood blamed the secessionist crisis on Republican abolitionists in Albany and New England, and also castigated Albany for its interference with his city’s government.

Wood had a history of bad blood with the state government. The mayor “set the pattern for the institutionalized corruption that plagued nineteenth-century New York politics,” according to Melvin Holli, author of The American Mayor. In the 1856-57 session of the state Legislature, the Albany Republicans had voted to slash Wood’s term as mayor in half. Moreover, Albany had created a new law enforcement entity, the Metropolitan Police, to replace the Wood-controlled Municipal Police. Legislators believed that Wood’s men had become so corrupt and disorganized that they had to intervene. The two police forces clashed in front of City Hall in 1857, and the Metropolitan Police arrested a rebellious Wood for inciting a riot for refusing to disband “his” police force.

Republican reaction to Wood’s secession proposal was predictably hostile. Pro-Lincoln editor Horace Greeley concluded in the New York Tribune that “Fernando Wood evidently wants to be a traitor.” Still, Wood’s proposal would remain a subject of debate until the first shots were fired at Fort Sumter.

Although Wood’s proposal received support among some merchants as one possible option to forestall the commercial crisis, city merchants continued to lobby Congress for a legislative resolution, such as that embodied by the Crittenden Compromise. In late January 1861, a second delegation of New York City businessmen traveled to Washington seeking a compromise to the secession crisis, this time carrying a petition signed by over 40,000 city merchants. The delegation strongly hinted that Wall Street would withhold financial support from the Union unless an agreement with the South was reached. These veiled threats infuriated the Republican press, which viewed them as tantamount to blackmail. Greeley condemned the “mercantile howl” and claimed that the public possessed “a wider range of vision than the shelves of dry goods and warehouses of cotton” and didn’t need these unscrupulous, pro-slavery “money men” to finance the Union cause.

This second New York merchant delegation also left Washington empty-handed, reporting that the escalating crisis was “apparently insurmountable.” The New York Herald expressed disappointment, complaining that “the Southern trade is reduced to nothing, and everything seems to be going to the dogs.” To make matters worse, the Republican Congress soon passed a tariff favoring Northern manufacturers, and the Confederacy followed suit in March by erecting tariff walls to protect Southern trade. Wood’s dream of an independent New York City able to trade freely and peaceably with everyone suffered a severe setback.

President-Elect Lincoln soon arrived into this atmosphere of doom and gloom within New York City’s commercial circles. Hoping to quell secessionist sentiment in the city, he had breakfast on February 20 with 100 of the city’s leading businessmen, nearly all of whom either favored compromising with the South or supported Gotham’s right to secede. In his comments, Lincoln did his best to be noncommittal on secession while stating his support for the law and the Union. When someone pointed out to Lincoln all the millionaires gathered in the room, underscoring their financial muscle, he wryly snapped back: “I’m a millionaire myself. I got a minority of a million in the votes last November.”

Lincoln met with Mayor Wood at City Hall later the same day and in his public remarks seemed to criticize Wood’s secessionist proposal without directly mentioning it. “There is nothing,” said Lincoln, “that can ever bring me to willingly consent to the destruction of this Union, under which not only the commercial city of New York, but the whole country has acquired its greatness.” What went on behind closed doors, and whether or not Lincoln promised to give special treatment to New York City’s commercial interests, is unknown.

When Lincoln gave his long-anticipated Inaugural Address on March 4, he attempted to set a conciliatory tone while holding firm to the principal that “the Union of these states is perpetual.” Tellingly, Lincoln asserted that “the central idea of secession is the essence of anarchy.” Lincoln also promised to protect federal property, an indirect reference to the stalemate at Fort Sumter in South Carolina, a political headache he had inherited from the outgoing Buchanan.

In March 1861, faced with high tariffs, a new president seemingly set against recognizing the right of secession and the real possibility of the Confederacy’s repudiation of its debts to New York City, Mayor Wood’s dream of an independent, free-trading “Tri-Insula” was tottering on the ropes. The knockout blow came a few weeks later. Early on the morning of April 12, 1861, Confederate shells burst out over Fort Sumter. The following day Major Robert Anderson surrendered the garrison to Confederate forces. The Civil War had begun, ending any realistic possibility of a negotiated settlement—or an independent New York City.

Patriotic fervor spread quickly throughout the North, and a bipartisan rallying ensued around President Lincoln. On April 20, a crowd of between 100,000 to 250,000 people thronged New York’s Union Square to hear patriotic speeches. Wood, caught up in the flag-waving, had even issued a vague proclamation supporting the Union in the days after Fort Sumter. Republicans and other New Yorkers remained skeptical of his supposed change of heart. Prominent attorney George Templeton Strong, who would later work for Lincoln as treasurer of the U.S. Sanitary Commission, wrote about Wood’s apparent transformation in his diary on April 15: “The cunning scoundrel [Wood] sees which way the cat is jumping.”

On April 21, Lincoln disbursed $2 million into the hands of a New York City business organization to purchase arms and supplies, and New York City businessmen would continue to grow rich financing the Union war effort over the next four years. In a moment of supreme irony, Wood sat down to write a letter to Lincoln on April 29, 1861, and made a proposal utterly unlike his one of January 6: “I beg to tender my services in any military capacity consistent with my position as Mayor of New York.” Lincoln, not needing another inexperienced political general, particularly one of questionable loyalty, ignored the offer.

On April 30, the Richmond Dispatch spoke for much of the South in denouncing the sudden transformation of the once-friendly Wood and his metropolis: “We could not have believed, nothing could have persuaded us, that the city of New York, which has been enriched by Southern trade, and had ever professed to be true to…the South, would in one day be converted into our bitterest enemy, panting for our blood, fitting out fleets and armies, and raising millions for our destruction.”

The mayor was far from finished in his duplicity. He ran for reelection later in 1861, roundly criticizing Lincoln and his use of war powers. After one anti-Republican speech, the local U.S. marshal was so outraged that he asked Secretary of State William Seward for permission to arrest Wood. Wood lost his reelection bid, but soon won a seat in Congress, where he became a leading Copperhead and a constant thorn in Lincoln’s side. Whenever the war went badly Wood could always be counted on to criticize the Republican administration, and he was particularly outspoken when Lincoln shifted the focus of the conflict from preserving the Union to emancipating the slaves. He also voted against the 13th Amendment, which guaranteed freedom to former slaves.

When Congressman Wood tried to visit Lincoln at the White House in mid-December of 1863, the exasperated president sent him away, commenting to an aide: “I am sorry he is here. I would rather he should not come about here so much. Tell Mr. Wood I have nothing yet to tell him….”

New York City would remain a center of Copperhead sentiment. Rioting broke out at a draft office on July 13, 1863, after Lincoln instituted a conscription act and soon boiled over into the worst episode of public unrest in American history. The mob’s focus eventually expand-ed from targeting draft officials and wealthy Republicans to targeting African Americans. An officer in charge of mustering new recruits blamed the rioting on Democratic politicians, though he did not name Wood specifically: “The authorities in Washington do not seem able or willing to comprehend the magnitude [of] the opposition to the government which exists in New York. There’s no doubt that most, if not all, of the Democratic politicians are at the bottom of this riot.”

Although New York City and its opportunistic mayor never officially left the Union, keeping the city fighting for the Union cause would be a constant source of anxiety for President Lincoln. The frustrations expressed by Wood on January 6, 1861, would not disappear, but would be transformed into the type of political sniping that Lincoln famously termed “the fire in the rear.”

 

Chuck Leddy, who writes from Quincy, Mass., is the author of several articles on the Civil War and American history. For additional reading, see Business & Slavery: The New York Merchants and the Irrepressible Conflict, by Philip S. Foner.

Originally published in the January 2007 issue of Civil War Times. To subscribe, click here.  

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