From the History website, "Dec 17, 1862: Grant expels Jews from Tennessee, Kentucky and Mississippi -- On December 17, 1862, during the Civil War, U.S. Army General Ulysses S. Grant, the future 18th president of the United States, issues General Order No. 11, expelling Jews suspected of engaging in war profiteering from a region occupied by the Union Army.
Grant was commander of the military's administrative "department" of Tennessee (consisting of Tennessee, Kentucky and Mississippi) and was in charge of issuing trade licenses. Although President Abraham Lincoln permitted limited trade in southern cotton, Grant was tasked with shutting down the black-market trade in the cotton industry. Swayed by the commonly held prejudice that Jews were largely responsible for war profiteering, Grant blamed the district's Jewish community for organizing the illegal trade in black-market cotton.
Grant's order prohibited the issuing of trade licenses to Jews within the Tennessee district. Furthermore, it required them to leave the district within 24 hours of the order or risk imprisonment. Grant's zealous underlings immediately began to enforce the order: Entire families were marched out of town with only what they could carry.
According to the American Jewish Historical Society's research, Lincoln did not know about Grant's order and expressed surprise when a group of Jewish leaders met with him to protest Grant's decree. President Lincoln disapproved of the order and expressed his disbelief to Grant in a letter: "a paper purporting to be [issued by you] has been presented here. It expels all Jews from your department. If such an order has been issued, it will be immediately revoked." Three days later, Grant obeyed the commander in chief's orders and revoked General Order No. 11. Lincoln later told Jewish representatives that "to condemn a class is, to say the least, to wrong the good with the bad" and promised to not only rid the country of slavery, but to protect Americans from religious discrimination.
Grant's reputation was not tarnished by the General Order No. 11 episode. In fact, after the war, most Americans regarded Grant as a hero and he went on to win the majority of the Jewish vote in the presidential election of 1868. As president, he appointed Jews to top federal positions. (source: History)