The War of 1812

by Donald R Hickey

  Congress also authorized the president to reenlist the army’s short-term men for longer periods and to raise additional riflemen. This legislation, coupled with a reorganization in the artillery and cavalry corps, raised the authorized level of the army to 62,500.41 In accordance with a recommendation from the administration, Congress also adopted a law to secure the obedience of recalcitrant militia. The new law gave military courts broad authority to try delinquent militia in absentia and to compel the attendance and testimony of witnesses.42

  Robert Wright wanted to give military courts authority to try civilian spies as well. He argued that it was impossible to secure a conviction for treason in civilian courts because the constitutional requirements were so strict.43 Federalist Richard Stockton of New Jersey called Wright’s proposal “monstrous,” claiming that it would “subvert every principle of civil liberty.”44 Most Republicans evidently agreed. Although Wright’s resolution was adopted, no bill on the subject was ever reported.45

  Congress also passed a pair of laws to bolster American operations at sea. One measure appropriated $500,000 for the construction of a floating battery, which was actually a steam-powered frigate designed by Robert Fulton.46 Federalists objected to so large an expenditure for an experimental project, but Republicans countered that the expense was justified because of the danger posed by British warships in American waters.47

  Congress also quadrupled the $25 bounty that was paid for prisoners of war brought in by privateers.48 Federalists considered the additional premium excessive, but once again Republicans argued that circumstances justified the expense.49 The British had accumulated 2,000 more prisoners than the United States, and, according to an American official, they had “discontinued the system of releases on account.”50 The object of the bill, said Congressman Alexander McKim, “was to get as many prisoners of war as we could, to balance accounts with the enemy, and enable us to redeem our fellow-citizens from captivity.”51

  Financing the War

  Congress had to make further provision not only for fighting the war but also for financing it. In January 1814, before surrendering the Treasury Department to Campbell, William Jones presented his budget for the coming year. He estimated that the government’s income would be only $16 million while its expenses would be $45.4 million. This meant that $29.4 million would have to be raised by loans and treasury notes. Since the cost of servicing the national debt was growing faster than tax revenue, the government was actually using money from new loans to pay the interest on old ones. This violated Gallatin’s original plan of war finance, and hence Jones recommended a new round of taxes.52

  Having adopted a comprehensive system of internal duties only a few months earlier, congressional Republicans were in no mood for additional taxes. Instead, they authorized a $25 million loan and the issue of $10 million in treasury notes.53 Federalists attacked these measures as unsound. Alexander Contee Hanson, who was still suffering from injuries sustained in the Baltimore riots but was now a member of Congress, called the Republican system of war finance “deceptive and disingenuous.” To float new loans to pay the interest on old ones, he said, was “to adopt a most desperate system of fiscal gambling.”54

  Calhoun responded that the government had no choice but to borrow the money it needed. If the money were withheld, he said, “it must communicate a fatal shock to public credit.” The result, said the National Intelligencer, would be “the bankruptcy of the Treasury; confusion and anarchy at home; and . . . an ignominious submission to whatever terms the arrogance of the enemy might dictate!”55

  A National Bank Debated

  Although irked by Federalist opposition, most Republicans recognized that the government’s financial position was precarious. To shore up this position, many Republicans favored a national bank. Pro-bank Republicans had been unable to save the first national bank when its charter had expired in 1811 even though they had the unanimous support of the Federalists.56 But now, as a measure of war finance, a national bank had greater appeal. In December 1813 a group of businessmen in New York City urged Congress to establish a bank. “Among the most obvious and important advantages which the Government would acquire,” they said, “would be the means of borrowing . . . money for the public service.”57

  The House Ways and Means Committee agreed. On February 19, 1814, John W. Taylor of New York reported a bill from committee for creating a national bank in Washington, D.C. The bank would have no branches and thus would not compete with or exert any influence over state banks. The bill set the bank’s capital stock at $30 million and required the bank to lend the government $6 million to buy bank stock plus an additional $15 million to finance the war. The whole scheme was little more than an attempt to float paper money in the guise of bank notes. Many Republicans doubted the wisdom of the plan. Some preferred to rely on treasury notes, while others insisted that additional revenue was unnecessary. The proposal was finally killed by a rash of armistice rumors that swept through the country in April.58

  On the Brink of Bankruptcy

  The fears voiced for the nation’s financial health were nonetheless well founded. Although some Federalists had quietly subscribed to the war loans in 1812 and 1813, most Federalist bankers, who controlled the bulk of the nation’s liquid capital, had remained aloof.59 The British offer to open peace talks, however, had generated considerable optimism in 1814, and some bankers wanted to take part in the new loan, especially since it was likely to be offered on favorable terms.60

  Federalist bankers from Boston and Philadelphia met in April to work out a common policy. They agreed to subscribe to the loan but only if the administration dropped its demand for an end to impressment. When the administration refused to budge, the bankers withheld their support.61 Some New England Federalists did not approve of subscribing to the loan under any circumstances. “As to Federalists who loan their money,” said Timothy Pickering, “I know not any punishment they do not deserve.”62

  Although representatives of the government ran newspaper ads in Boston offering to keep the names of subscribers secret, the loan of 1814 failed.63 When the Treasury put up $10 million in May, it received subscriptions for $9.8 million, but the principal subscriber was Jacob Barker of New York, who took $5 million. Federalists scoffed at Barker’s ability to raise so much capital, and even Republicans were skeptical.64 Eventually he defaulted on $1.5 million of his contract. Since other subscribers defaulted on $400,000, the government realized only $7.9 million from the loan. Moreover, it had to accept $88 in cash for every $100 in bonds issued and guarantee to increase the discount if future subscribers received a better deal.65

  Two months later, the administration put up another $6 million of the loan, but subscribers would take only $2.9 million even at $80 a share, which was a 20 percent discount. Since the loan was offered at 6 percent for thirteen years, this means the effective rate was just over 8.6 percent. The administration had to accept this offer out of sheer necessity, but because of defaults, the total amount realized was only $2.5 million. Moreover, the Treasury had to issue additional bonds to the subscribers of the May loan so that they would receive the same discount. In all, the government issued $4 million in bonds to raise $2.5 million in cash.66 All of this suggested that public credit was sinking and that the government teetered on the brink of bankruptcy.

  Trade with the Enemy

  With the nation’s military prospects dimming and public credit in decline, the administration looked for other ways to pressure the enemy. The president had lost none of his faith in commercial sanctions, and this was the only major weapon still left in the nation’s arsenal. Madison was also determined to stamp out trade with the enemy, which flourished all along the common border in the north and on the maritime frontier in the east and south, “We have been feeding and supplying the enemy,” complained a Republican newspaper, “both on our coast and in Canada, ever since the war began.”67

  Most of this traffic was carried on with Canada. Extensive trade
along the Canadian-American border was well established before 1812 despite the non-importation law, and the war did little to halt it.68 Indeed, one of the reasons the British left New England unblockaded was to facilitate this trade. At the beginning of the war, British officials in Canada explicitly authorized the export of all goods to the United States (war material and specie excepted) and ordered British subjects in the Maritime provinces not to molest the goods or vessels of American citizens “so long as they shall abstain, on their parts, from any Acts of Hostility.”69 Americans living near the frontier were happy to accept this modus vivendi. Anxious to acquire British textiles, plaster of paris, pottery, salt, and sugar products, they freely offered provisions and naval stores in return.70

  Much of the trade with Canada was carried on by sea, and as long as it was conducted in neutral vessels, it did not violate American law. Neutral ships ferried particularly large quantities of American food from Massachusetts (which then included Maine) to the Maritime provinces. “Since I have been here (about 15 days),” wrote an American from Halifax in late 1812, “upwards of 20,000 barrels of flour have been brought in by vessels under Swedish and Spanish colors—most of the shipments are from Boston.”71

  The bulk of the seaborne trade, however, was conducted in American vessels—a clear violation of the enemy trade act. Coasting vessels, which did not have to enter or clear from a customshouse, traded directly with Nova Scotia and New Brunswick or rendezvoused with neutral vessels at sea. Islands were often used as “drops” for the exchange of goods, and collusive captures were common.72 In one notorious case, the tiny privateer Washington “captured” two heavily laden ships from Halifax worth more than $100,000. Although customs officials seized the prizes, the Supreme Court later restored them to their captors. Justice William Johnson conceded “that the voyage of these vessels was loaded with infamy,” but “the evidence is not sufficient to fasten on the captors a participation in the fraud.”73

  American merchants commonly ransomed captured vessels for 5 or 10 percent of their value. “A brisk business is now carrying on all along our coast,” said the Boston Centinel in 1813, “between the British cruizers and our coasting vessels, in ready money.”74 Although this practice was sanctioned by the American government, it was sometimes a cover for illegal trade. Moreover, British merchants who wished to ship their merchandise directly to the United States could usually secure neutral papers from obliging Swedish officials at St. Barthelemy in the Caribbean. Although the United States denounced this practice, the Swedish government was slow to curtail it.75 In the meantime, some customs officials hired experts to distinguish between British and non-British goods. In practice, however, it was almost impossible to determine the source of any product unless those perpetrating the fraud slipped up. In one case, customs officials in Boston confiscated a $130,000 shipment because thread pulled out of the woolens had left a visible impression of the word London.76

  There was also a great deal of overland trade between Canada and the United States. Merchants in the interior often used inland waterways, such as Lake Ontario and the St. Lawrence River, or Lake Champlain and the Richelieu River. Some merchants outfitted privateers on these waters and made dummy captures of goods purchased by their agents in Montreal. Others informed on themselves (which entitled them to a third of the proceeds) and then used various legal maneuvers to secure additional relief.77

  Nor was the illicit trade confined to the northern frontier. Amelia Island, a Spanish possession at the mouth of St. Marys River in Florida, was the principal outlet for southern produce and the main source of British goods for people living in the South. Shortly before the war, Gallatin received reports “that British goods to an immense amount have been imported into Amelia Island, with the view of smuggling the same into the United States.”78 There were also reports of illegal slave imports from the Spanish island.79

  Lake Barataria, with its ready access to the sea, was the funnel through which illegal goods flowed into Louisiana. The Baratarian pirates had established a settlement on Grand Terre Island in Barataria Bay in southern Louisiana. Although technically privateersmen sailing under commissions issued by France or Cartagena (a city state in present-day Colombia), the pirates preyed indiscriminately on commerce in the Gulf of Mexico and smuggled their booty into New Orleans.80 “Our whole coast Westwardly of the Balize,” reported a naval officer in 1812, “is at this moment, infested with pirates and smugglers.”81

  Most merchants in New Orleans had no qualms about buying smuggled goods because the profits were so high. “Smuggling is carried on to a great degree,” reported an observer; “fortunes have been made in a few Months.”82 The smugglers operated openly, and according to one official, they “even dared to rescue property which had been Seized by the Officers of the Customs.”83 In one case, a customs official was killed and two others were wounded in an armed clash with smugglers.84

  The collector at New Orleans repeatedly asked for military assistance, but Brigadier General James Wilkinson (who may have profited from the trade) was unwilling to cooperate.85 Nor could the navy help. “The force heretofore under my command,” said the ranking officer on the station, “had been rendered by decay, altogether inadequate to the protection of the coast, and the support of the revenue laws, even in a time of peace.”86 The administration promised assistance but insisted that the real problem was local complicity. “I will not dissemble,” William Jones told the New Orleans collector in 1813, “that whilst the inhabitants of Louisiana continue to countenance this illegal commerce and the Courts of justice forbear to enforce the laws against the offenders, little or no benefit can be expected to result from the best concerted measures.”87

  Growing Enforcement Problems

  The experience of customs agents in New Orleans typified that of most border officials during the war. Even before the war, collectors on the northern frontier had complained of the difficulty of enforcing the non-importation law. “Large combinations,” wrote the Sackets Harbor collector in early 1812, “appear to be forming to render the Non-importation law, unpopular and intimidate those who will assist in inforcing the law. The public houses in this quarter are kept by violent partisans in their interest. Every friend to the law is misused at them; by a gang of villains kept for that purpose.”88 The wartime expansion of the restrictive system did not make enforcement any easier. After Vermont repealed a law against trading with Canada, the customs collector there claimed that illegal trade was conducted “in a public and open manner.”89

  Widespread complicity rendered government officials helpless. Before meeting his death in the Battle of York, Colonel Zebulon M. Pike sought to prosecute smugglers near Plattsburgh, but no court would take cognizance because even the judges had a hand in the trade.90 In Eastport, Maine, a volunteer army officer reported that some 200 merchants were engaged in trade with the enemy and that eighty-six British subjects were present to facilitate the trade. When the officer tried to suppress the traffic, he was threatened with tar and feathers and eventually jailed for fictitious debts.91 Other army officers later assigned to the station profited from his example by looking the other way. According to an anonymous correspondent of the War Department, they showed a “blind indifference and almost total disregard . . . to the prosecution of an illicit trade.”92 Government officials were also stymied in Provincetown, Massachusetts, on the tip of Cape Cod. Local merchants, said a customs official, were so deeply involved in illegal trade that “his Inspecters dare not now attempt to search Stores or Houses there, for smuggled Goods, as the mass of the population are interested in their concealment, and so far from giving assistance, threaten such opposition as renders the attempt . . . futile.”93

  Nor were government officials able to keep provisions from British fleets in American waters. “The fact is notorious,” declared the Lexington Reporter, “that the very squadrons of the enemy now annoying our coast . . . derive their supplies from the very country which is the theatre of their atroc
ities.”94 Although royal officials sometimes threatened coastal towns with destruction if their needs were not met, the use of force was rarely necessary. Admiralty procurers paid for provisions in cash, and there was no shortage of volunteers to supply their needs. Chesapeake Bay, Long Island Sound, and Vineyard Sound teemed with tiny coasters ferrying supplies to the British ships stationed there. Some sixty vessels were reportedly engaged in this traffic in Long Island Sound alone.95 Although most trade with the Royal Navy was clandestine, the harbor at Provincetown, Massachusetts, was openly used by British warships seeking provisions or refuge from winter storms. According to one report, small coasters and fishing vessels regularly carried “Fresh Beef, vegitables, and in fact all Kind of supplies” to these ships.96

  The trade with the enemy knew no political or social barriers. Although Republicans blamed the traffic on Federalists, members of both parties were implicated. Republican John Jacob Astor used various ruses to import furs from Canada, and while cruising in the Rossie Joshua Barney stopped a ship owned by Maine Republican William King that was carrying a fraudulent manifest and British goods.97 Barney let the ship go, fearing that “such a seizure at this time would be made a handle by the enemies of the administration.”98 Another Republican, Jacob Gibson of Maryland, was described as a “flaming democrat and war-man,” but because of his friendship with Royal Navy officials, he was allowed to export produce to the mainland from his island in the Chesapeake.99 Local Republicans freely admitted that if Gibson had been a Federalist “he would have been tarred and feathered and his house pulled down.”100