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Mississippi Historical Society

Mississippi Department of Archives and History

Military Intelligence, Civilian Operatives, and the Needs of the New

United States at the End of the Civil War

I have been unable to find a definitive history of intelligence assets in the western theater during the war. We have the works of Lafayette Baker and Allan Pinkerton, who worked primarily in the eastern theatre and in the North, but I’ve found nothing inclusive consolidating operations in the west. I’m speaking of covert operations, spies, double agents and black market activities. I have no doubt they occurred—there was a major war on, after all, and both sides participated. I can understand the lack of material from the Southern side. Any man who might have liked to put his memoirs out there for literary consumption could end up incriminating himself, which would not be good in the wake of defeat, but there weren’t any swaggering secret agents in Treasury or the Army that appear to have jotted down their recollections of glory, and their activities would have more likely inspired awe rather than trial by a military tribunal, though in the interest of true justice, the opposite would have been the case.

All that being said, I recently became aware of this article, the subject being Confederate guerrilla operations against the Union navy—to include actions on the Mississippi. The use of mines and submarines is, of course, the poor man’s way of putting limited assets to good use. The article indicates the Confederacy was quite adept at it. But back to my point, the placement of mines in the cottonmouth-infested swamps and inlets to main water routes had to have been discreetly performed—and on-going—by the spring of 1863 in Mississippi and Louisiana with Vicksburg under seige and Yankees everywhere. But of special interest to me as relates to this article was the reference to the compromise of the names of Confederate operatives along the Mississippi during one particular operation. Of course, as you will note when you continue reading my article, my focus is Union intelligence activity/assets rather than Confederate, but you see what I’m getting at—guerrilla ops meret counterguerrilla operations.

The subject of covert activities in the west proved the catalyst driving the plot of my 2016 historical, Honor’s Banner. My speculation that the usurpation of military intelligence assets into Treasury’s Secret Service aroused suspicion (and not a little heartburn) within the Army (at least for those in the Army whose bailiwick would have been intelligence gathering and analysis) is just that—speculation. My sources for what little definitive information I have are the first chapter of The Secret Service by Philip H. Melanson, Ph.D., and a series of blog posts by the American Numismatic Society’s Bank Note Reporter, Fred L. Reed III. Reed’s work on government operatives’ forays against counterfeiters during and after the war provides a good view of the character of the men making up Treasury’s Secret Service at that time.

Contrary to popular belief, Abraham Lincoln did not, on the day he was killed, authorize the official establishment of a secret service under the Department of the Treasury. A more likely scenario would be that Treasury Secretary Hugh McCulloch caught Lincoln’s arm following that last afternoon cabinet meeting and said, “I wanted to talk to you about this secret service thing,” and Lincoln responding, “hmm—sounds like a good idea. Handle it.” That night, of course, Lincoln was shot by John Wilkes Booth, and Treasury took Lincoln’s alleged words for action.

While still Secretary of the Treasury, Salmon P. Chase convinced War Secretary Edwin Stanton to assign Colonel Lafayette Baker, head of the War Department’s Army intelligence assets that composed the National Detective Police, to help Treasury. Though his assets were employed in support of Treasury, Baker remained directly subordinate to Stanton. By the summer of 1865, Baker, due to his “extracurricular” activities, had fallen out of favor with Stanton. So it was that on 5 July 1865, after an exuberant Fourth of July celebration, Secretary of the Treasury Hugh McCulloch appointed William P. Wood chief of Treasury’s Secret Service Bureau. Wood’s new position fell directly under the Solicitor of the Treasury, Treasury’s head lawyer, Edward Jordan, an old Ohio Whig turned Republican who had been given the position by Chase back in 1861. Note that though Hugh McCulloch made Wood’s assignment to Treasury, it was Edwin Stanton in War who handpicked Wood for the job.

Back in 1862, Stanton had tapped this same old friend for Commandant of the Old Capitol Prison in Washington, D.C. It seems Wood had served Stanton well in a patent dispute between equipment giants Massey and McCormick. I won’t go into the details of the case here, but I will say that the suspicion of fraud perpetrated by the Stanton and Wood contingent in favor of McCormick haunts the case to this day. I mention this to give the reader an idea of the relationship between these two men. Before the war ended, Wood had become Superintendent of Prisons in the District of Columbia, and he was reported to have been very effective in gleaning information from prisoners ranging from Confederate soldiers, vocal northern Democrats known as Copperheads, spies, blockade runners, draft opponents…anyone and everyone who might possibly be opposed to the Union cause (translate that as “opposed to the Federal government”).

Wood, as it turns out, was another swashbuckling, legend-in-his-own-mind Baker-type individual who participated in guerrilla warfare during the Mexican War and reputedly accompanied William Walker on his ill-fated attempt to establish the Republic of Nicaragua as an English-speaking colony, 1855-1860. While chief interrogator for the Union and commandant of prisons, Wood expanded his law-enforcement repertoire to include anticounterfeiting. When Wood assumed his position in Treasury on 5 July 1865, his primary mission was, in the words of either McCulloch or possibly Jordan, “…to restore faith in the nation’s money.” Jordan, as Treasury’s head lawyer, then told him, and we are sure he spoke these words, “Our policies and rules can take shape as your work progresses.” Yeah, faith in Monopoly money was paramount. Faith in the laws of the Republic, however, didn’t matter—just make up legislation as required.

Imagine how happy the South must have been to be back in the warm, safe fold with men such as these.

I will cease with the sarcasm and characterization of Wood and the men he would subsequently hire to support his “anticounterfeiting” efforts. Counterfeiting has no relevancy to Honor’s Banner, and the reputed heyday of Treasury’s success against terrorism in the unreconstructed South resides in the future, and will make its way into another historical note down the road. What I want to point out is the shifting of Army intelligence assets under Baker to Treasury under McCulloch/Jordan/Wood, all with the obvious blessing of Edwin Stanton, Secretary of War. As far as Army’s high command was concerned, U. S. Grant, very much aware that his future was tied to the Republican Party, would have gone along. The regular Army’s thoughts on the matter, as heard through the mouth of Malcolm Byrnes in the text of my novel, are my thoughts on what I believe his take would have been. As a retired intelligence officer, albeit Navy, I believe the regulars would have resented it, fought it as best as they could, but in the end, yielded to political expediency.

Regardless, covert operations during the war and the dark days of Reconstruction that followed are great stuff for fiction, and I intend to put my imagination to work in future novels.

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