The Business of Blockade Running

The large iron-hulled screw steamer Bermuda, weighted down by a full cargo, eased into the English port of Falmouth on the morning of 22 August 1861. In short time, rumors about the vessel were floating around the Cornish port—what exactly was her cargo and what was her destination? After the ship’s coal bunkers were topped off, she steamed off westward. 

Crossing the Atlantic, the Bermuda reached the Georgia coast amid a storm that forced a nearby Union frigate off her station and out to sea. Nevertheless, the Bermuda safely proceeded to the port of Savannah, Georgia, becoming the first steamer to test the Union naval blockade. Leased by Fraser, Trenholm and Company, the ship was loaded with shoes, blankets, drugs, and military goods—including 18 rifled field guns, 4 large seacoast guns, 6,500 Enfield rifles, and 20,000 cartridges—that were quickly purchased. A month later, the Bermuda, carrying 2,000 bales of cotton, set out for England, where the cargo was sold at a large profit.

Later, ships would face greater challenges running the blockade, but the Bermuda’s round-trip proved that steam ships carrying sizable cargoes could reach and leave Confederate ports, and, for shipping companies, the business was highly lucrative.

The Blockade and Blockade Running

With the outbreak of the Civil War, the United States looked for ways to disrupt the Confederacy’s foreign trade. With that in mind, President Abraham Lincoln declared a blockade of Southern ports. A plan was devised to establish a 3,550-mile cordon, focusing on main ports, that would stretch along the southeastern Atlantic seaboard and Gulf of Mexico coast, from the Chesapeake Bay all the way to the Rio Grande. 

Implementation of the plan gave rise to a type of wartime commerce: blockade running. With the promise of easy riches for shipping goods through the initially porous blockade, investors lined up to sink their money into blockade-running companies that sprang up and shipping firms that branched out into blockade running. The business would prove to be highly successful, not just for Southern enterprises, but for English ones as well. 

Early in the war, blockade runners seemingly had carte blanche to steam to and from Southern ports. The North lacked enough ships to enforce its blockade; blocking all 189 estuaries along the serpentine cordon was a herculean task. But as the conflict continued, the Federal nautical girdle gradually tightened.

Blockade running involved both importing and exporting goods. Larger ships loaded with weapons, ammunition, clothing, sundry other military items, raw materials, machinery, meat, medicine, and luxury items from England would steam across the Atlantic to the neutral ports of Nassau, Bahamas; Havana, Cuba; and St. George, Bermuda. The ships ran the risk of being stopped at sea by Union warships and their cargoes confiscated, but Confederate goods could be disguised by being repackaged and papers altered to show neutral ports as their goods’ ultimate destination. 

In port, the cargoes would be transferred to smaller blockade runners. The swift steamers departing from Nassau or St. George would head for the southeastern Atlantic coast, outrunning ships they might spot en route. Under cover of darkness they then would make the dangerous run past blockading Union ships into port, mainly Charleston, South Carolina; Wilmington, North Carolina; and Savannah. Meanwhile, vessels leaving Havana would head for Gulf Coast ports, including Galveston, Texas; Mobile, Alabama; and New Orleans. After the ships’ arrival, Confederate officials would take possession of the military cargo, while the runners’ parent company would auction off the luxury goods. 

The steamers’ holds then were filled with bales of cotton and perhaps other goods such as tobacco and turpentine—with a cargo load sometimes worth up to hundreds of thousands of dollars in England. They again would attempt to slip through the blockade and reach Bermuda, Havana, or Nassau. Once there, the cargo eventually would be transferred to ships for the voyage to England. 

Nassau, closest to the southeastern ports, became the leading transloading location. Vast warehouses there were packed with matériel that would sustain Confederate armies in the field. 

The Union capture of Fort Pulaski in April 1862 virtually shut down the port of Savannah. Charleston, a major railroad terminus, was a financial and commercial hub from where goods could be transported rapidly to vital areas. But determined Union Navy and Army efforts to capture the port in 1863 reduced the number of smugglers using it, and Wilmington, on the Cape Fear River, became the most active blockade-running port. Downriver, the Cape Fear’s two key Atlantic inlets were protected by Forts Fisher and Caswell, just 50 miles apart. From January to October 1863, 90 blockade runners slipped through the blockade into the port. 

Gulf Coast blockade running never came close to equaling the activity along the Atlantic coast, in large part because of the lack of local shipping and the early Union capture of New Orleans. Later, much of the cotton grown in Mississippi and Alabama would be transported by rail to Charleston or Wilmington for export.

Ships of the Trade

Captains of blockade runners, most of whom were Southern steamboat skippers or former naval captains, were a special breed and described as having the “cunning of a fox, the patience of Job and the bravery of a Spartan warrior.” They initially used various types of ships to slip through the porous blockade before settling on relatively small, low-profile, shallow-draft steamers, many purchased in England and Scotland. Shipyards in those countries eventually turned out ships built especially for the trade—iron- or steel-hulled side-wheelers or double-screw vessels. They were outfitted with double boilers that made them capable of speeds of 15 to 18 knots when called for. 

While most runners were owned by companies involved in the wartime trade, the Confederate government eventually became more involved in blockade running, with the Departments of War and Navy operating their own runners. Similarly, some Southern states, led by North Carolina, developed their own blockade-running operations. 

The ships carried large cargoes for their size. The Navigation Company’s 399-ton Scottish-built steamer Minho, which ran aground off Charleston Harbor’s Fort Moultrie on 20 October 1862, was carrying 7,340 Enfields, 2,100 swords, 87 cases of ammunition, and 80 cases of percussion caps. The remainder of her cargo included shoes and clothing. 

With stealth being blockade runners’ best defense against detection, smokeless anthracite coal, when available, would fuel their engines when nearing a blockaded inlet to a port. As a testament to the importance of absolute quiet, dogs and roosters generally were not allowed on board lest their barking or crowing give the ships away. Blockade runners took advantage of darker nights near the new moon phase. When making their approach, lights were extinguished, the fire room hatch was covered with a tarp, and the binnacle was covered with a hood that had a small opening that allowed the helmsman to see the compass. Painted dull gray, the runners often slipped through the Union web unnoticed.

The blockaders were at somewhat of a disadvantage. Their movements were mostly reactive, while blockade runners could decide when circumstances were most favorable for them to make their runs. Also, most blockaders drew more water and, generally not having pilots to navigate channels, had no choice but to keep farther to sea. 

Money to Be Made, and Lost

The lifespan of a blockade runner was measured in successful trips, and four was the average number before capture. Considering that the steamers reached profitability after just two trips, four trips turned a good profit. Two round trips per month could incur $80,000 in expenses and generate $250,000 in revenue. Cotton valued at $15,000 in Georgia could sell for $150,000 in England. The Syren, owned by the Charleston Importing and Exporting Company, held the record for successful trips—33. The Alice, owned by the Importing and Exporting Company of South Carolina, also was very successful, completing 24 runs. 

The attraction to the new venture was reminiscent of that for the California gold rush. Just as would-be prospectors pulled up roots and scrambled to the gold fields, speculators flocked to the blockade-running business. But it was not for the financially faint of heart. As with the miners, some hit pay dirt, others didn’t. 

German-born Henry Sutler closed his restaurant in Savannah, quit his militia unit, and purchased two vessels—the Mary Baker and Lida—to run the blockade. But they fell into the hands of the U.S. Navy, and, as a result, he faced bankruptcy. James Stump of Baltimore, a Confederate supporter, put several of his ships into service smuggling goods from New York through the blockade to Virginia but eventually lost all the vessels. 

Among English firms in the blockade-running business, Liverpool-based Fraser, Trenholm and Company served as financial agents for the Confederate government and owned more than 25 blockade runners at one time or another during the war. Other English firms in the running business included the Navigation Company of Liverpool, Manchester’s Alexander Collie and Company, and the Anglo-Confederate Trading Company. Meanwhile, Charleston was home to most Southern-based blockade-running companies. In addition to the Charleston Importing and Exporting Company, they included John Fraser and Company, the Exporting Company of South Carolina, and the Chicora Importing and Exporting Company. 

Large stockholders and company officers of such firms were not the only ones to profit from blockade running. An imprisoned Confederate officer shared with his Northern captors that he had purchased a few thousand dollars’ worth of shares in a blockade-running company and in 18 months realized a 500 percent profit. And ship captains and pilots could earn thousands of dollars for each successful run. Two of the latter, Charles Weston and Grover A. Baldwin of Atlanta, ran the blockade for 18 months to the tune of $50,000 each. 

In true trickle-down economics, crewmen garnered generous pieces of the pie: While salaries varied among companies, a sailor could earn $250 per trip—very good money at that time—as well as bonuses of $50 or $100 if a voyage was successful. And they were paid in gold, not Confederate shinplasters. But their earnings could slip through their fingers just as easily as they had crossed their palms. Prices in the Confederacy were exorbitant, and nighttime reveling in Nassau easily emptied sailors’ purses. Street crime became rampant in Nassau, and Charleston and Wilmington were not exempt from the same problem. 

Even while the war was raging, an article in the Nassau Herald described an illicit operation in which Southern commodities including cotton and turpentine were shipped to New York by way of Nassau. Leaving New York for the Bahamas, smugglers’ ships would carry matériel such as Colt revolvers, shoes, and blankets ultimately bound for the Confederate Army. The involvement of New York merchants and bribes paid to custom-house officers made the practice possible. The schooner Wild Pigeon navigated the Nassau to New York leg, and the sloop yacht Rosalie ran the gauntlet between Nassau and Charleston.

As with any commercial venture, greed played a major role in blockade running. Some of the more independent Southern blockade-running companies and captains had little interest in the Confederacy’s plight and ran the blockade to fill their pockets. They wanted no part in carrying the Confederate government’s cotton on account, and transporting military goods left less room for their high-profit luxury goods that could be auctioned in Charleston or Wilmington. But for the Confederate government, maximizing imports to sustain its armies was imperative. In 1864, it passed bills giving President Jefferson Davis the power to regulate foreign commerce, allowing him to restrict the importation of many luxury items, and reserving space in many blockade runners for Confederate produce and goods. 

A Hard Landing

The end of the war and the lifting of the blockade left many in the running business in dire straits. In Nassau, British-owned ships were loaded with $15 million of goods and warehouses were packed with military goods that were no longer in demand. The commercial importance of Nassau and Bermuda quickly waned. Companies were left with flotillas of blockade runners, the values of which plunged. Meanwhile, many of the firms had been paid in part with Confederate bonds that were worthless.

Meanwhile, the U.S. government was ready to settle accounts with Southern blockade-running companies, especially after some Charleston firms announced dividends for stockholders more than six months after Robert E. Lee’s surrender at Appomattox. Treasury Department officials seized their records and assets. The latter included several steamers then in British waters that the government deemed to be the property of the United States. Company executives who  did not comply were arrested, including Theodore Jervey, an officer of William C. Bee & Co.; the Charleston Importing and Exporting Company’s president, Henry Corbia; and the Chicora Importing and Exporting Company’s president, Archibald Johnson.