"A Crisis Unprecedented" > Southern Debts
A month after Fort Sumter, Union armies tiptoed their first tentative steps into Confederate territory, recapturing the city of Alexandria, Virginia, seven miles south of Washington, D.C. Northern visitors found there “a melancholy illustration of the evils of secession and rebellion … Not a ship is to be seen at its wharves, not a bale of goods is piled on them, not a sailor is to be seen lounging about them. All, all are swept away…”
The federal government established a military tribunal and provost court in the occupied city. In October, the new judge ruled on a minor case concerning a few thousand dollars owed by local merchants to creditors in New York and Philadelphia. Despite the seeming obscurity of the proceedings, businessmen all over the nation followed the decision. Alexandria was the first reoccupied rebel city; this case, therefore, was to set an important pattern. At issue was two hundred million dollars of debt outstanding between Southern traders and their Northern creditors, three-quarters of which was owed to merchants in New York City. The judge, aware of the stakes, ruled with gusto, hoping “to fix irrevocably the precedent which this Court deems just and equitable – namely, that the rebels should be made to pay all debts due loyal citizens – peaceably if possible, forcibly if necessary.”
Determined to take advantage of this opportunity, the Chamber of Commerce wrote a long missive to President Abraham Lincoln, asking that he ratify the Alexandria provost judge’s ruling, and explaining why the government had to protect the interests of the merchant class.