Smuggler Nation (15 page)

Yet these moves did more to inflame local passions than tame smuggling. For example, Providence customs collector Jeremiah Olney wrote to Gallatin that in response to a seizure under the Enforcement Act “a large body of men had in a riotous manner assembled at and about the wharf” where the vessel was detained, with plans to “run off with said vessel … to a foreign port.” When confronted, the mob “refused to obey the orders” to disperse. “A large body of rioters, from two to three hundred assembled … and forcibly took possession” of the vessel. Governor James Fenner informed Olney “he would not turn out his [militia] company in support of the embargo laws.” In the aftermath of this incident, Olney received a credible warning that “the life of a Collector … would not be safe if he attempted to enforce the last Fatal Embargo Act.” Olney resigned in frustration and wrote to Gallatin that the longer Congress “continue[d] to enforce with military aid, the fatal System” of the embargo, “in my candid opinion … it will shake the Empire to its centre, and deluge this once happy land in Blood.”
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Further north, Naval Captain William Bainbridge, stationed in Portland, Maine, similarly reported that “an armed and riotous mob” threatened the lives of the customs officers. Collector Isaac Ilsey described the scene: “The wharves were taken possession of by a large number of disguised and armed men, supposed to be one or two hundred and they loaded and carried out of the harbor two vessels.”
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The situation had deteriorated so badly by early 1809 that in Alburg, Vermont (the port of entry on Lake Champlain), some of the troops originally deployed to help enforce the embargo instead became hired help in loading goods on Canada-bound smuggling rafts.
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Wary of further rebellion, an anxious Congress finally moved to repeal the embargo. It was officially lifted the same day Jefferson stepped down from office in March 1809. Yet the trade war was not over, and the precarious international conditions that had prompted the embargo in the first place only worsened. The new Madison administration replaced the embargo with a weaker, face-saving measure, the
Non-Intercourse Act of 1809, which restored trade with all countries except France and England. American shippers, in turn, could evade this restriction with relative ease by trading with the French and British via neutral ports, or even clandestinely ship directly to England and France.

The Non-Importation Act of 1811 followed the Non-Intercourse Act and had equally dismal results. The magnitude of the illicit trade was clearly evident by the American ships routinely returning to port loaded with British merchandise. This included a large influx of British rum from the West Indies, where accommodating Rhode Island customs inspectors happily served as taste testers to confirm its non-British origins.
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Thus, the smuggling boom sparked by the embargo continued under conditions of Madison’s high restrictions and low enforcement capacity.

THE 1807–1809 EMBARGO AND
the trade prohibitions that replaced it had important implications for early American state building. Jefferson’s administration was guided by principles of small government and states’ rights. But ironically, Jefferson’s stubborn commitment to enforcing the embargo ultimately led him to push for the very centralization of authority and power he so strenuously opposed—opening him up to charges of hypocrisy on the part of his Federalist opponents. For instance, in an effort to crack down on embargo busting, he reversed his long-standing policy of downsizing the navy and also pushed for and was given sweeping federal enforcement powers. Prior to the embargo, Jefferson had similarly pushed to scale back the number of revenue cutters, but he then reversed himself in order to enforce the embargo.
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The series of embargo laws, each progressively more invasive and coercive, and Jefferson’s willingness to resort to extreme measures to enforce them altered the legacy of what was otherwise a rather minimalist presidential administration.

The embargo also further entrenched the smuggling economy in already difficult-to-control borderlands—nowhere more evident than along the U.S.-Canada border, such as Maine’s Passamaquoddy Bay, where smuggling would continue to thrive in the War of 1812 and beyond.
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At the same time, the embargo propelled a buildup of federal policing presence in the region that persisted well beyond the embargo.
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Smuggling, in the context of the embargo and subsequent trade restrictions, also shaped American foreign policy by undermining economic coercion as a viable policy instrument. Illicit trade forced the Jefferson administration to go much farther than it would have wanted to enforce the embargo. The embargo had made supplies less plentiful and more expensive, yet England and other foreign powers continued to access American goods through clandestine channels and viewed large-scale smuggling as evidence that America’s resolve and ability to maintain the embargo was limited. Illicit trade therefore challenged not only federal authority at home but also the government’s legitimacy and credibility abroad.
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Perhaps the greatest irony is that whereas Jefferson’s embargo and Madison’s subsequent trade prohibitions were meant to punish England and France for treating neutral American trade as illicit trade, these self-imposed restrictions had a far greater criminalizing effect on American trade. And in the process, this only reinforced the already deep-seated merchant hostility toward the interventions of a distant federal government. Such hostility, as we will see in the next chapter, would turn to outright treason during the War of 1812.

5
Traitorous Traders and Patriotic Pirates

JEFFERSON AND MADISON HELD
out hope that “peaceful coercion” through embargoes and other trade prohibitions would substitute for war. But as we saw earlier, these efforts were repeatedly sabotaged from within through rampant smuggling. And the main targets of economic coercion, France and especially Britain, never proved to be as economically vulnerable as expected. For Secretary of State James Monroe, America’s credibility was at stake: “We have been so long dealing in the small way of embargoes, non-intercourse, and non-importation, with menaces of war, &c., that the British government has not believed us. We must actually get to war before the intention to make it will be credited either here or abroad.”
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So in the end, Madison resorted to the very war that Jefferson had for so long been trying to avoid. In retaliation for Britain’s continued predations on American trade and impressments of sailors on American ships, the United States declared war against its former colonial rulers in June 1812. It was a war the adolescent country was ill prepared to fight, yet Madison remained confident it would be relatively short and painless, and some even dreamed that it would lead to vast territorial expansion through a quick and easy conquest of Canada.
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It didn’t work out that way. The War of 1812 instead turned into a stalemate that dragged on for two and a half years, with British forces
kept well fed and supplied with the help of American smugglers pursuing illicit profits over patriotism. But even as the profit motive undermined the American war effort by reviving the old and familiar practice of trading with the enemy, the lure of quick fortunes also aided the military cause in the form of privateering. The success of American privateers at sea contrasted sharply with the less impressive U.S. military performance on land. Prominent American merchants who had earlier profited from violating U.S. trade prohibitions now invested heavily in privateers.
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Pirates and smugglers would also go on to play a celebrated role in defeating the British in the battle of New Orleans, and they were granted presidential pardons as a reward for their contributions to the war effort. In what was otherwise a deeply divisive and unpopular war, the stunning victory at New Orleans provided a desperately needed psychological boost that helped unify the young republic and create the false impression that the United States had actually won the war.

A Traitorous Trade

The smuggling patterns that emerged during the War of 1812 were in many ways simply a continuation of the embargo-busting trade of earlier years, except this time American merchants were not just violating U.S. trade laws; they were aiding the British war effort against their own country. Similarly, U.S. wartime trade prohibitions were essentially an extension of the prewar restrictions, but the stakes were now much higher and domestic opponents of the measures were more muted in voicing their displeasure. Just as the Madison administration had earlier attempted to use economic coercion as an alternative to war, it now tried to use economic coercion as an instrument of war.
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The Enemy Trade Act of 1812 outlawed trade with America’s enemies, banned the sale of American war stores to Canada, and permitted only American vessels in U.S. ports. This was followed by the sweeping but short-lived embargo of 1813 (outlawing all exports and giving officials more invasive powers), and the Enemy Trade Act of 1815, passed shortly before the conclusion of the war. These restrictions included a further militarization of customs enforcement, as naval and other military forces were increasingly tasked with fighting not only British troops but also smugglers.

Despite these efforts, trade with the enemy flourished, and it mushroomed with the heightened demand generated by the influx of British forces in 1814.
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“We have been feeding and supplying the enemy,” bemoaned a Republican newspaper, “both on our coast and in Canada, ever since the war began.”
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Indeed, much to Madison’s dismay, America’s trading spirit often seemed stronger than its fighting spirit. “Self, the great ruling principle, [is] more powerful with Yankees than any people I ever saw,” one British officer commented disparagingly.
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Nowhere was this more apparent than in the U.S.-Canada borderlands, where Americans proved more enthused about illicitly trading with their northern neighbors than conquering them. This diverted scarce supplies to the enemy, increased the costs of feeding U.S. soldiers, and undermined popular support for the war.
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Even as some state militia units simply refused orders to march into Canada,
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American smugglers were far less inhibited in their border crossings and engagements with the enemy. And indeed, some militia members deployed to secure the border instead colluded in border smuggling. Military intelligence also covertly flowed across the border. “The turpitude of many of our citizens in this part of the country,” commented Navy Lieutenant Thomas Macdonough in dismay, “furnishes the Enemy with every information he wants.”
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Colonel Zebulon Montgomery Pike, commander of the 15th Infantry based in Burlington, described soldiers and civilians on the border as “void of all sense of honor or love of country” because of their cross-border dealings.
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The U.S.-Canada border became the most important back door for wartime trading, building on the illicit trade routes and networks that flourished during the embargo era. Smuggling was not only good business for border communities but good for relieving cross-border tensions in a time of war. Vermonters in the Lake Champlain Valley, for instance, remained largely unprotected from a British invasion and had good reason to maintain peaceful relations with their immediate neighbors in Lower Canada. Smuggling fostered an informal local cross-border interdependence that had a pacifying effect. Smuggling thus became a peculiar mode of peacemaking.
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Indeed, the importance of illicit imports from northern Vermont apparently even influenced British military strategy. In preparing for the failed invasion of 1814, the Canadian governor noted that thanks to Vermont’s “decided
opposition to the war, and very large supplies of the Specie daily coming in from thense, as well as the whole of the cattle required for the use of the Troops, I mean for the present to confine myself in any offensive Operations which may take place to the west side of Lake Champlain.”
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Despite some 170 seizures in northern Vermont alone, the potential for high profits outweighed the risks.
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According to the Salem
Gazette
, smuggling had turned into “the most lucrative business which is now carried on.” Smugglers could “afford to lose one half by customs house spies, and yet make money faster than those who follow the ‘dull pursuits’ of regular business.”
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And even when goods were seized, authorities had great difficulty making convictions. Judges in border areas were often sympathetic to the smugglers, and some even invested in the illicit trade.
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Adding to the challenge of securing convictions, the attorney general ruled that simply visiting the enemy by itself was not a crime; the burden of proof was therefore on the prosecution to demonstrate that the accused had actually provided the enemy with “improper information” or “supplies.”
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Smugglers could even avoid any incriminating evidence of direct and improper exchange with the enemy by simply leaving goods at prearranged remote drop-off points.