The Profiteers. (Article 43)

Speaking about corruption during the Revolutionary War, General George Washington noted: “There is such a thirst for gain among them (military suppliers) that it is enough to make one curse our own species, for possessing so little virtue and patriotism.”

While the government was certainly gouged by some merchants during our War for Independence, which Washington was addressing in those comments in 1778, he would have been even more appalled at the excesses during the Civil War.

Some of these “merchants of opportunity” were names still known today; Rockefeller, Armour, Colt, Morgan, and Brooks (of Brooks Brothers Clothiers). These men, among many others, spent their time during the Civil War, not in devoted service to either the Union or the Confederacy, but to building their personal fortunes. At the start of the Civil War in early 1861, there were less than thirty millionaires in New York City, but by 1864 there were nearly five hundred. The same exponential growth in wealthy Americans was found in Washington DC, Boston, and Philadelphia (not to ignore Richmond, Charleston, and New Orleans) and almost any community which manufactured, raised, assembled, or mined any commodity needed by the armies. Some businessmen, both in the North and the South, made their money honestly, providing quality goods and services at a fair price; but simply sold so much more that they became wealthy.

Others, however, had a decidedly selfish agenda.

Since the beginning of time, all-out war brings tragedy, suffering, and loss to almost all involved. There are those, however, who sense an opportunity for personal gain, and seize it. War is a huge enterprise, and the wider the conflict, and the longer it continues, the more the business of war grows. The Civil War resulted in massive production of weapons, manufacture of clothing and other military supplies, contracts to transport men and equipment, and even arrangements for financing the war expenditures. These enterprises were often managed by patriotic and honorable individuals; for example, Cornelius Vanderbilt loaned ships to the Union Navy to assist with the blockade of southern ports and supplied rail cars at no charge to move Union troops. On the other hand, the opportunity for quick and massive profits brought other people to the process who focused only on building wealth during the national crisis.

These were the Profiteers, and they generally fell into one of three categories.

The first group were the industrialists who built their empires by creating national networks of railroads, telegraph lines, ship building facilities, and food processors; and the financiers of these large enterprises. These profiteers generally created business dynasties that lasted for generations. The Rockefeller fortune began when John D. quickly became wealthy during the Civil War by cornering the overland shipping businesses that moved produce to larger Eastern cities; and then he used his profits to invest in oil fields and refining equipment to form the basis of Standard Oil. Phillip Armour realized the Army would require large shipments of pork and signed purchase contracts with hundreds of farmers, in essence controlling the price to be paid by the Army. Samuel Colt continued to sell firearms to both the Union Army and Confederate state militias even after the Civil War began in April 1861. He ordered his factory to “produce around the clock” seven days a week to meet the demand of the opposing sides, and only stopped shipments to the South in July when he was thought he might lose his Union military contracts.

The second type of profiteer speculated in commodities for financial gain including cotton, produce and meat, and especially gold. At the time, gold was the bell-weather currency in the northern United States, rising upon the de-stabilizing news of a Confederate victory, while the good news of a Union victory would result in falling prices. Gold traders could make a fortune by learning battlefield news before it became public and a few even paid reporters to give the trader a few minutes lead time in a coded telegraph before news was telegraphed to their newspapers. In the South, there was always some Cotton speculation, but gold speculation was not as widespread simply because that poorer region had little gold to trade.

The third type of profiteer built smaller enterprises (by comparison only) to turn a quick buck by selling a wide array of commodities at exorbitant prices to a disjointed military apparatus with little controls over cost or quality. Food sold to feed soldiers was poorly handled and sometimes spoiled, horses provided were often found to be sick and lame, and clothing was so poorly assembled that a new word entered the American lexicon; Shoddy!

And this last group of profiteers, these unscrupulous self-made millionaires, became known as “The Shoddy Aristocracy.”

The New York Herald ran this editorial: “The world has seen its silver age, its golden age. This is the age of shoddy. The new brownstone palaces on Fifth Avenue, the new diamonds which dazzle unaccustomed eyes, and the new people who live in the palaces and ride in the carriages, are all shoddy. Six days a week they are shoddy businessmen. On the seventh day, they are shoddy Christians.”

In the first few months of the War, Abraham Lincoln became aware that his Secretary of War, Simon Cameron might be steering lucrative contracts to certain suppliers. At first he held some hope that Cameron was being falsely maligned, but one congressman who looked into the matter told Lincoln. “It appears the only thing Cameron would not steal from your house is the red hot stove.” Lincoln, aware that an open scandal in the War Department would hurt the support for the war effort, requested more information before he would confront Cameron. After a few days, the Congressman returned and told Lincoln, “Mr. President, I was wrong about Cameron,….. he would even steal the hot stove!”

One contractor supplied 2,000 boots to the Union Army and made the soles out of pressed paper and wood chips, which fell apart after only a few miles of marching. When the quartermaster questioned him about the defective boots the man replied; “I thought they were for the Cavalry.”

Profiteers also plagued the South. An arms supplier, who required payment in advance from the new Confederate government, eventually delivered 2,000 old rifles with mismatched bayonets that would not attach and included the wrong type of ammunition. The quarter-master who took delivery said, “Fire? They will not fire, and they do not even make a good truncheon (club).”

One of the most versatile Civil War profiteers was John Pierpont Morgan, who built J.P. Morgan & Co into a financial powerhouse later in the century. Morgan made money financing industrialists (the first category) and speculating in gold (the second category). He then entered the third category of profiteer when found himself entangled in the “Hall Carbine Affair.” Morgan purchased 5,000 rifles (for $3.50 apiece) made by the Hall manufacturing Company but which had proven defective and had been returned by the Army. Morgan had new packing crates made which indicated the contents were new rifles and sold them at $22.00 each to a different quartermaster unit. When confronted by an inspector, Morgan testified that his rifles were fine but the Army mixed his shipment with other older rifles. The evidence was shaky so there was no resolution, and Morgan was able to keep the notoriety to a tolerable level.

Not so with the two most publicized profiteers whose shoddy merchandise earned them the moniker “The Gruesome Twosome!”

George Opdyke, one of the pair who earned the infamous title, made his money in New York City where he gained control of much of the garment trade, and operated large sweat shops throughout the city. His companies consistently delivered tents, blankets, and coats that were of such poor quality, they became known as “New York Rags” among the soldiers. When one military inspector complained that the seams in some shirts had openings, a foreman for Opdyke said it was for “ventilation.” Soldiers were not Opdyke’s only victims as his sweatshops were notorious for the poor treatment of the seamstresses who were paid only for piece work, which often came to less than twenty cents for a 12-14 hour shift. The New York Herald, in an editorial published near the end of the War, wrote, “Opdyke is a scoundrel, accomplished at bribery, political back-dealing, degradation of women, and manipulation of government contracts; a blight on our city.”

But Opdyke had company!

Elisha Brooks, joined Opdyke as the second member of the Gruesome Twosome. Brooks Brothers Tailors became an early major supplier of uniforms to the Union, and promised to deliver far more than their small tailoring company could manufacture by the deadline.  They hastily assembled several of their own sweat shops, gave little or no training to the workers, and began turning out uniforms. However, they quickly ran out of the type of wool and cotton commonly used for men’s suits and began to manufacture an odd cloth made from cotton residue and scraps, pressed together with glue. As a result, most of the 12,000 uniforms provided to the New York Volunteers did not meet contract specifications, many lacked buttons and those made from the poorer cloth fell apart at the first rain. When Elisha Brooks was asked to explain the deficiencies to an inspector for the quartermaster, he replied; “I think that I cannot ascertain the difference without spending more time than I can now devote to that purpose.” (Huh?) Despite these known deficiencies, not only was Brooks Brothers paid in full for the first contract, but awarded additional contracts for over 48,000 uniforms. Elisha Brooks became rich during the War providing shoddy merchandise for the soldiers, but simultaneously created “Brooks Bros, A Purveyor of Fine Apparel for Men” which also became (and still is) a successful business selling to the well-to-do. The store was popular among the elite in Boston, New York, and Washington DC, and ironically, Abraham Lincoln wore a Brooks Brothers suit that sad evening at Ford’s Theater.

There have been profiteers in the business of War for as long as governments have fallen into conflict as a way to solve disputes. They learned how to make their way through the maze of government bureaucracy to obtain lucrative contracts using bribes, favors, misrepresentation, and political influence. The military, after all, is a massive consumer.

But the Civil War was the first time government purchases (both Union and Confederate) reached such a massive scale. Coincidently, it seems that some Americans developed a special affinity for doing their business with the military to assure maximum profits without regard for any harm caused to those fighting the war or to the government which was paying for it.

The New York Herald, in an editorial during the Civil War, wrote; “There must be a Divine punishment awaiting the man who will get rich by giving our poor soldiers miserable goods.”

We can only hope that the editor was right!

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