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In the spring of 1864, the [[Army of the James]] was directed to land at Bermuda Hundred on the James River, south of Richmond, and from there attack [[Petersburg, Virginia|Petersburg]]. This would sever the rail links supplying [[Richmond, Virginia|Richmond]], and force the Confederates to abandon the city. In spite of [[Ulysses S. Grant|Grant]]'s low opinion of Butler's military skills, he was given command of the operation.
 
Butler's force landed on May 5, when Petersburg was almost undefended, but Butler hesitatedbecame unnerved by the presence of a handful of Confederate militia and home guards. While he dithered, the Confederates assembled a substantial force under General [[P. G. T. Beauregard]]. On 13 May, Butler's advance toward Richmond was repulsed. On May 16, the Confederates drove Butler's force back to Bermuda Hundred, bottling up the Union troops in a loop of the James River. Both sides entrenched; the Union troops were safe but impotent, and Beauregard sent most of his troops as reinforcements to Lee's [[Army of Northern Virginia]]. Had Butler been more aggressive in early May, he might have taken Petersburg or even Richmond itself and ended the war a year early, although his two West Pointer corps commanders Maj. Gen [["Baldly" Smith]] and [[Quincy Gilmore]] also did not perform well or make up for Butler's limitations as a general.
 
Despite this fiasco, Butler remained in command of the Army of the James.
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Although Grant had largely been successful in removing incompetent political generals from service, Butler could not be easily gotten rid of.<ref name=Foote73940/> As a prominent Radical Republican, Butler was a potential replacement of Lincoln as presidential nominee.<ref>Trefousse (1969), pp. 294–295</ref> Lincoln had even asked Butler to be the 1864 nominee for vice president,<ref name=Foote73940/> as did Treasury Secretary [[Salmon P. Chase]], who sought to replace Lincoln as president.<ref>West, Jr., Richard S., ''Lincoln's Scapegoat General'', pp. 230-231.</ref> In reply to Lincoln's offer, Butler said, "Tell him ... I would not quit the field [resign as major general] to be Vice-President, even with himself as President, unless he will give me bond with sureties ... that he will die or resign within three months after his inauguration. Ask him what he thinks I have done to deserve the punishment ... of being made to sit as presiding officer over the Senate, to listen for four years to debates more or less stupid, in which I can take no part or say a word...."<ref>West, Jr., Richard S., ''Lincoln's Scapegoat General'', p. 231.</ref>
 
There was no good place to put Butler; sending him to Missouri or Kentucky would likely end in disaster, so it was considered safer to leave him where he was in Virginia. More worrying was the fact that Butler was one of the highest ranking volunteer major generals in the Union army; next to Grant himself, he was the ranking field officer in the Eastern theater, and command of the Army of the Potomac would default to him in Grant's absence. For that reason, Grant remained with the army as much as possible and only made trips away from the front when it was absolutely necessary.
In December 1864, troops from the Army of the James [[First Battle of Fort Fisher|were sent to attack Fort Fisher in North Carolina]] with Butler in command. Butler devised a scheme to breach the defenses with a boat loaded with gunpowder, which failed completely. He then declared that Fort Fisher was impregnable. However, Admiral [[David Dixon Porter]] (commander of the naval element of the expedition) informed Grant that it could be taken easily if anyone competent were put in charge.
 
In December 1864, troops from the Army of the James [[First Battle of Fort Fisher|were sent to attack Fort Fisher in North Carolina]] with Butler in command. Butler devised a scheme to breach the defenses with a boat loaded with gunpowder, which failed completely. He then declared that Fort Fisher was impregnable and withdrew his troops without authorization. However, Admiral [[David Dixon Porter]] (commander of the naval element of the expedition) informed Grant that it could be taken easily if anyone competent were put in charge.
This mismanagement finally led to his recall by General Grant in early 1865. As Secretary of War [[Edwin M. Stanton]] was not in Washington at the time,<ref name=Foote73940/> Grant appealed directly to Lincoln for permission to terminate Butler, noting "there is a lack of confidence felt in [Butler's] military ability".<ref>West (1965), p. 291</ref> In General Order Number 1, Lincoln relieved Butler from command of the Department of North Carolina and Virginia and ordered him to report to Lowell, Massachusetts.<ref name=Foote73940>Foote, pp. 739–740</ref> Grant informed Butler of his recall on January 8, 1865, and named Major General [[Edward Ord|Edward O. C. Ord]] to replace him as commander of the Army of the James.<ref name=Foote73940/> "Embarrassed and outraged, Butler broke off all relations with Grant and set out to destroy him."<ref name="Simpson">[[Brooks D. Simpson|Simpson, Brooks D.]], ''Let Us Have Peace: Ulysses S. Grant and the Politics of War and Reconstruction, 1861-1868'', Chapel Hill and London: The University of North Carolina Press, 1991, p. 210.</ref> In 1867, when it seemed that Grant might run for president, Butler "employed detectives in an effort to prove that Grant was 'a drunkard, after fast horses, women and whores.' Grant, he announced, was 'a man without a head or a heart, indifferent to human suffering and impotent to govern.'"<ref name="Simpson"/>
 
This mismanagement finally led to his recall by General Grant in early 1865. As Secretary of War [[Edwin M. Stanton]] was not in Washington at the time,<ref name=Foote73940/> Grant appealed directly to Lincoln for permission to terminate Butler, noting "there is a lack of confidence felt in [Butler's] military ability". Grant also voiced his suspicions about corruption going on in Butler's department, including smuggling of supplies to Lee's army, and that Butler arbitrarily arrested anyone who noticed what was going on, although nothing came of Grant's complaints there due to Butler's formidible political connections.<ref>West (1965), p. 291</ref> InBy this point, the presidential election was over so the administration no longer had to be concerned about Butler running for president and in General Order Number 1, Lincoln relieved Butlerhim from command of the Department of North Carolina and Virginia and ordered him to report to Lowell, Massachusetts.<ref name=Foote73940>Foote, pp. 739–740</ref> Grant informed Butler of his recall on January 8, 1865, and named Major General [[Edward Ord|Edward O. C. Ord]] to replace him as commander of the Army of the James.<ref name=Foote73940/> "Embarrassed and outraged, Butler broke off all relations with Grant and set out to destroy him."<ref name="Simpson">[[Brooks D. Simpson|Simpson, Brooks D.]], ''Let Us Have Peace: Ulysses S. Grant and the Politics of War and Reconstruction, 1861-1868'', Chapel Hill and London: The University of North Carolina Press, 1991, p. 210.</ref> In 1867, when it seemed that Grant might run for president, Butler "employed detectives in an effort to prove that Grant was 'a drunkard, after fast horses, women and whores.' Grant, he announced, was 'a man without a head or a heart, indifferent to human suffering and impotent to govern.'"<ref name="Simpson"/>
 
Rather than report to Lowell, Butler went to Washington, where he used his considerable political connections to get a hearing before the [[United States Congress Joint Committee on the Conduct of the War|Joint Congressional Committee on the Conduct of the War]] in mid-January. At his hearing Butler focused his defense on his actions at Fort Fisher. He produced charts and duplicates of reports by subordinates to prove he had been right to call off his attack of Fort Fisher, despite orders from General Grant to the contrary. Butler claimed the fort was impregnable. To his embarrassment, a follow-up expedition led by Maj. Gen. [[Alfred H. Terry]] and Brig. Gen. [[Adelbert Ames]] (Butler's future son-in-law) [[Second Battle of Fort Fisher|captured the fort]] on January 15, and news of this victory arrived during the committee hearing; Butler's military career was over.<ref name=Foote73940/> He was formally retained until November 1865 with the idea that he might act as military prosecutor of Confederate President Jefferson Davis.<ref>West (1965), pp. 312–313</ref>