Economic Problems Preoccupy Lincoln Cabinet

April 12, 1864

Navy Secretary Gideon Welles writes in his diary about regular Cabinet meeting at the White House: “To-day have a letter from Admiral Lee respecting the exportation of French tobacco from Richmond. This is an arrangement of Mr. Seward to which I have always objected, but to which the President was persuaded to yield his assent some months ago. The subject has lingered until now. Admiral Lee says the French naval vessels and transports are at the Roads and about to proceed up the James River, and inquires if he shall keep an account of their export.

I took the dispatch to the Cabinet-meeting to ascertain from Mr. Seward what his arrangements were, but he was not present. When the little business on hand was disposed of, I introduced the subject to the President, who told me he had seen the dispatch to me and also one to Mr. Stanton from General Butler. He saw them both at the telegraph office, and after he got home he had sent for Fred Seward and Mr. Stanton. They appear neither of them to think the subject of much consequence, but after Stanton had returned to the War Department and read Butler’s dispatch, he sent the President word that Mr. Seward ought to give the subject attention. The President had therefore told Fred Seward to telegraph his father, who is in New York, to return.

It is curious that the President, who saw Admiral Lee’s dispatch to me, should have consulted the Secretary of War and Assistant Secretary of State without advising me, or consulting me on the subject. He was annoyed, I saw, when I introduced the topic. The reason for all this I well understood. He knew full well my opposition to this whole proceeding, which I had fought off two or three times, until he finally gave in to Seward. When, therefore, some of the difficulties which I had suggested began to arise, the President preferred not to see me. It will not surprise me if this is but the beginning of the trouble we shall experience.

Treasury Secretary Salmon P. Chase writes Senator William P. Fessenden, the Senate’s leading financial expert about gold speculation: “Notwithstanding the diminished amount of United States notes in circulation, and the gradual withdrawal from use as currency of interest bearing United States Notes made a legal tender for their face, the price of gold continues to advance. This effect can only be attributed to one of two causes, and is probably due in part to each: First, to the increase of notes of local banks; and Secondly, to the efforts of Speculators. I have already submitted through you to the consideration of the Committee of Ways and Means a bill intended as a remedy for the first evil. I now beg leave to submit to its consideration a bill intended as a remedy for the second.”

The first bill, if it becomes a law, will have, I doubt not the most salutary consequences. The effects of the second will probably be more immediate, though perhaps not of such permanent importance.

I ask for both a candid consideration, and if approved, the favorable action of Congress.

It must not be thought, however, that I regard either or both of these measures as adequate remedies for financial disorders. Nothing short of taxation to one-half of the amount of our current expenditures and a reduction of those expenditures to the lowest point compatible with efficiency will ensure financial success to the government. And without military successes, all measures must fail.

Black Union soldiers at Fort Pillow are massacred by Confederate troops led by General Nathan B. Forrest.

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