by Charles Lane
Observing the trial, General Meade soon sensed that “every conceivable obstacle is being resorted to to produce delay, with the intention of taking the prisoners out of my hands...so soon as the state is supposed to be admitted,” as he wrote to his superiors in Washington.56 The general asked the War Department whether Congress could help him thwart this tactic by authorizing the Ashburn military commission to continue even after Georgia ratified the Fourteenth Amendment. General Grant consulted with Republican members of both the House and Senate—and informed Meade in early July that no such change in the law would be possible.57
Back-channel negotiations followed between one of Alexander H. Stephens’s colleagues on the defense team and Democratic members of the Georgia House of Representatives: the purpose was to secure the Democratic votes needed to create a majority for ratification. Undoubtedly aware of the talks, the Atlanta Constitution admonished the party’s politicians to “stand firm” against the hated amendment. “This is no time for policy or expediency,” the paper declared.58 Yet expediency, on behalf of the “Columbus Prisoners,” carried the day. On July 21 the Georgia state legislature ratified the Fourteenth Amendment; the vote was 27–14 in the Senate, and 89–70 in the House of Representatives.59
On the same day, Meade ordered the dissolution of the military commission. Its last act was to grant the nine defendants bail on July 24. The day after that, William D. Chipley, Elisha Kirkscey, and the seven other men who had been on trial for conspiring to murder George W. Ashburn arrived at the Muscogee Depot in Columbus. Hundreds of people turned out to welcome them as heroes.60 The prosecution’s witnesses, meanwhile, fled with the Army’s assistance to new homes far away.
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The United States government had achieved a kind of stalemate in its first contest with the Ku Klux Klan. The new terrorist threat had not been defeated, but it had been exposed and condemned. Its members had escaped individual accountability for their crimes, but they had been unable to stop the political reforms called for under the Reconstruction Acts: a new state constitution, equal suffrage for black and white men, and ratification of the Fourteenth Amendment. These accomplishments were tentative, to be sure, given the Klan’s impunity for the Ashburn assassination, the recalcitrance of white supremacist Democrats, and the prospect of future violence. Yet as the commission disbanded, there was still hope Republicans could overcome opposition to the “new birth of freedom” of which President Lincoln had spoken so eloquently.
As a participant in the Ashburn investigation later wrote:
To the unobserving mind the murder of George W. Ashburn would seem totally unavenged; but to him who sees in every great event the hand of an overruling Providence, evolving good from evil, a different conclusion must be arrived at. In his life, he fought manfully for the establishment of civil rights, and the political equality of the oppressed race of which he was the chosen champion. In his death that result was consummated, in the State of Georgia, sooner perhaps by years than it would otherwise have been without this sacrifice.61
By the time the case reached its denouement, the author of this assessment—Hiram C. Whitley—was long gone from Georgia.
The defense had made a motion to subpoena Whitley as a witness, and the prosecution had consented. But the detective was not eager to testify under oath about his investigatory methods, despite his defiant claim, in his letter to General Meade, that he would “stand all the bitter curses that have been heaped upon me.” On July 16, he left for Washington, reporting to the commissioner of Internal Revenue and rejoining his wife, Catherine, who was waiting for him there.62 He was still outside Georgia when the military commission disbanded.
Mixed as the results of the Ashburn case might have been for the federal government, it was a triumph for Hiram C. Whitley. His arrival in Columbus had been the turning point. Until he made his recommendation to create a separate interrogation center under military control, the investigation was stymied. After Meade adopted Whitley’s stratagem, and gave him latitude to execute it, the truth, at last, came out.
The Republican newspaper that followed the trial most closely, the Cincinnati Daily Gazette, attributed whatever success the prosecution had to Whitley: “With rare tact, discrimination, and courage, he has worked his way through the labyrinth of lies,” its correspondent concluded.63
Whitley had employed hardball methods; in two cases, he had gone beyond hardball to cruelty. The fact that the victims were African Americans, and that his mistreatment of them became public and revealed his own racial biases, was certainly appalling, and, given the nature of the case, ironic. Whitley’s conduct had handed the Klan’s defenders a propaganda coup.
Yet his excesses had not fundamentally undermined the evidence; the Democratic press’s contention that the case had been built on tortured or suborned testimony was false, egregiously so. On the day he dissolved his military commission, General Meade mounted a vehement defense of his decisions, and of Whitley’s methods, in a letter to General Grant. The detective “did operate on the fears of the negroes, Wells and Stapler,” General Meade wrote, but “had the people of Columbus evinced or felt any horror of the crime, and cooperated in any way in detecting its perpetrators, much that was seemingly harsh and arbitrary might have and would have been avoided.”64
With those pragmatic words, the hero of Gettysburg endorsed his detective to the man who was not only the highest-ranking officer of the United States Army, but also the new standard-bearer of the Republican Party for the November 3, 1868, general election—and very likely the next president of the United States.
4
“A powerful instrument for good or evil.”
Ulysses S. Grant was indeed elected—in a landslide—to succeed Andrew Johnson as president. Hiram C. Whitley, with his record in the Ashburn case and in the battle against Virginia’s moonshiners, made a logical pick for Secret Service chief when the new Grant administration chose him two months after the president’s March 4, 1869, swearing-in. As much as the political leaders of the United States might have wanted Whitley to lead their anti-counterfeiting force, and as much as Whitley himself coveted the job—even more, he said, than the presidency—the nation’s founders probably would have been surprised that such a position even existed.
The Constitution did authorize Congress to “provide for the Punishment of counterfeiting the Securities and current Coin” issued by the United States government. In that sense, the Secret Service resembled existing forces of postal, customs, and revenue agents—even the slave-catching commissions of the 1850s. Those bodies, too, had been established pursuant to one of the federal government’s enumerated powers.
What would have astonished the founders was the fact that the United States had instituted a national paper currency at all. Many of them took a dim view of paper money, due to the disastrous hyperinflation during the Revolutionary War. George Washington said paper money would “ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.”1 James Madison called it a “wicked project.”2 The Constitution prohibited the states from creating “bills of credit,” a kind of government IOU that the colonies had employed as currency. Therefore, when the Constitution referred to “securities” and “coin,” it meant federal bonds and actual gold or silver pieces, the latter being the primary means of payment for federal taxes and tariffs.
Inevitably, though, the expanding nation needed more liquidity than limited supplies of precious metal could provide. States therefore evaded the ban on bills of credit by chartering private banks, hundreds of which then issued banknotes—commercially tradeable promises to pay, ostensibly backed by the state banks’ own reserves.
Counterfeiters exploited the monetary anarchy. Fake state banknotes, many made in Canada and smuggled south, flooded the market. Printers on Cogniac Street in the tiny hamlet of Dunham, Quebec—just over the Vermont border—produced so much high-quality cou
nterfeit that Americans began referring to all counterfeiters as “coniackers,” or “coney men,” and all fake money as “coney.”3
Congress left suppression of these counterfeits up to the states. They had little success against a crime that was inherently difficult to detect, and even harder to prove in court, since anyone who passed a counterfeit bill could plausibly deny doing so knowingly. As it happened, Americans were not necessarily eager to crack down on counterfeiting. The robust demand for fake bills showed that coney men were meeting a public need for financial liquidity.
Financial decentralization, states’ rights, and a strictly limited federal government, except to the extent it protected slavery—this policy mix reflected the influence in Washington of the Southern-based Democratic Party. When Southern states seceded in 1861, taking their senators and representatives with them, they plunged the Republican-dominated Congress and President Abraham Lincoln into a crisis, but also gave the Republicans an opportunity to deal with it according to the party’s much more robust notion of federal power.
By late 1861, when it became clear that the Treasury did not hold nearly enough gold and silver to finance the military effort ahead, Congress and President Lincoln asserted the authority to expand money and credit, by selling hundreds of millions of dollars’ worth of bonds, backed by tariff proceeds and taxes, including the new excise and income taxes, and, in February 1862, by establishing a national currency that had to be accepted in nearly all transactions. The National Banking Act of 1863 created federally chartered banks empowered to issue banknotes. That measure, coupled with a federal tax on state-chartered banks, effectively ended state banknote issuance.4
In essence, the Republicans had replaced the prewar system with a more centralized federal equivalent. It was a political exercise as much as a financial one. Republicans were asking the American people to place their confidence not just in their home states, but in the nation and its government—just as Republicans would, over time, replace narrow, state-based notions of citizenship with a nationalized concept, inclusive of emancipated African Americans in the South. “The policy of this country,” Senator John Sherman of Ohio, an author of the new financial laws (and brother of United States Army General William Tecumseh Sherman), declared, “ought to be to make everything national as far as possible; to nationalize our country so that we shall love our country.”5
Republican creators of the new monetary policy did not think counterfeiting would be a problem. Since there would be only a handful of standardized national bills, as opposed to hundreds of antebellum state-bank bills, citizens could learn to identify the genuine ones and reject the fakes. Printed on special “fiber paper” with unusual green ink, the money would also be technologically resistant to counterfeiting.
Such hopes quickly proved unfounded in practice. Ingenious but greedy engravers and printers found clever ways to copy both “greenbacks” and the new banknotes, as well as government bonds. The federal government had to exercise its constitutional power to fight counterfeiting more vigorously than ever before. Between 1862 and 1864, it used detectives affiliated with the War Department, headed by the flamboyant Lafayette Baker, to pursue coney men on an ad hoc basis. Then Congress appropriated $100,000 for the Treasury Department to spend on fighting counterfeiters. It was a significant sum of money, equal to ten times all previous appropriations for the purpose since the nation’s founding; the department used it mainly to finance rewards for individuals or private detectives who fingered suspects to the United States Marshals.
Not until July 5, 1865—after the Confederate surrender at Appomattox—did the Treasury Department organize its own in-house anti-counterfeiting detective force, employed and supervised by the department’s legal officer, Solicitor of the Treasury Edward Jordan. No new law enacted by Congress authorized this. Solicitor Jordan simply claimed the power to create the “division,” as he called it, based on his own expansive interpretation of the anti-counterfeiting appropriations. It was a chaotic time, less than three months after Lincoln’s assassination and his replacement by Vice President Andrew Johnson. Congress was not in session; if it had been, lawmakers might have balked at Jordan’s idea.6
Jordan swore in the new force’s first chief, William Patrick Wood, with no outside vetting or Senate confirmation. Wood was a Mexican War veteran, Union Civil War intelligence agent, and ex-superintendent of the Old Capitol Prison in Washington, which had housed both common criminals and Confederate prisoners of war. Wood’s contacts with counterfeiters there made him an expert on the crime; he parlayed that into a job investigating wartime counterfeiting cases for the Treasury Department, prior to his 1865 appointment.7
Without an explicit congressional grant of authority, his detectives lacked the independent power to make arrests. If they wanted to detain a suspect, they had to call in the federal marshals; ask local police or sheriffs to deputize them; or, when they actually witnessed a crime in progress, attempt “citizens’ arrests,” based in common law. Still, Wood’s Secret Service Division made aggressive use of these alternatives, arresting some two hundred counterfeiting suspects during the four years of the Johnson administration, and confiscating numerous engraving plates and stashes of coney.
The pursuit of more arrests, however, proved corrupting. In 1866, Wood offered twenty-five dollars for each counterfeiter taken into custody, which incentivized his men to frame innocent people—“put-up jobs” in the argot of the day. They sometimes extorted protection money from real crooks, or sold the counterfeit bills they confiscated. None of this was surprising, given that Wood recruited about half of his operatives from the underworld itself.8
In 1867, President Johnson pardoned dozens of convicted counterfeiters, partly to rebuke Wood for his tactics.9 That same year, Wood appeared as an adviser to the defense at the trial of a notorious counterfeiter in New York’s federal court. The defendant had been a paid Secret Service informant; Wood felt he owed him help. The judge denounced the “unseemly spectacle.”10 Agreeing, the New York Times called for a congressional investigation.11
Even if William P. Wood’s tenure at the Secret Service had been less controversial, a new Republican president would have been unlikely to retain him, simply because he was associated with the hated Johnson. Republican leaders viewed the Secret Service’s crime-fighting mission in the broader context of partisanship and policy. For them, debauchers of the national money threatened Republican plans for postwar nation-building just as surely as the Klansmen who had killed George W. Ashburn in Georgia did. The Klan challenged the national expansion of civil and voting rights to all citizens. The coney men undermined the federal government’s control of the legitimate issuance of money.
President Grant’s secretary of the Treasury, George S. Boutwell, was a Massachusetts man who, as a member of Congress, had helped establish the tax-collection bureaucracy that financed the Union war effort. He was a “radical” on Reconstruction and a close collaborator of Representative Benjamin Butler, the former Civil War general who had first put Whitley’s talents to use for the federal government. Butler and Boutwell spearheaded the House of Representatives’ impeachment effort against Andrew Johnson, for which Whitley and William H. Reed had provided undercover assistance.
Such men valued Whitley not only for his general prowess as a detective or his specific experience investigating counterfeiting gangs for Butler’s Civil War occupation force in New Orleans. Equally if not more important was his long record of service to them and their causes. True, Whitley had a dark side; his inability to suppress it had marred an otherwise laudable performance in the Ashburn case. But that was not disqualifying in Secretary Boutwell’s eyes. Though the secretary had made his career on the high principles of the antislavery movement, he also believed, as he once put it, that “there is a rough side to government, and there must be a quality of harshness in those who administer governments successfully.”12
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; For public consumption, the Republican press presented the new Secret Service chief neither as a reliable Republican nor as an avatar of necessary governmental “harshness,” but as a reformer. Under Whitley, a newspaper noted, the Secret Service would end such abuses as his predecessor Wood’s “pernicious system of manufacturing criminals.” The Secret Service was “a powerful instrument for good or evil, according to the hands that guide it,” the paper suggested, and, led by Whitley, who was “cool and collected and looks you straight in the eye when talking to you,” it could be a force for good.13
Whitley’s direct supervisor would be Solicitor of the Treasury Everett C. Banfield, who had replaced Edward Jordan. A Boston Brahmin and small-time Massachusetts politician, Solicitor Banfield came to Washington intending mainly to serve his patron in the Bay State Republican Party, Secretary Boutwell. He had little aptitude for, or interest in, keeping tabs on detectives. The very idea of undercover work struck him as unseemly—“a branch of business that I have no particular fondness for,” as he put it. Banfield gave Whitley wide operational latitude.14
