War Profiteers

War profiteering is the act of an individual or company making an unreasonable financial gain from selling goods or services during wartime. Certainly, suppliers who feed and transport soldiers, dispose of the dead, and produce weapons and clothing for the military are all necessary for the waging of war. Sometimes the paranoia and common mistrust of others that comes with war leads people to confuse the economic realities of war with war profiteering. For example, wartime food shortages result in significantly higher food prices in urban areas, leading city-dwellers to accuse farmers of gauging produce prices (Norton 1919, pp. 546–547). Basic foreign trade with enemy or neutral countries, and protecting intellectual property can be interpreted as profiteering or even treason (Hammond 1931, p. 3). Strong feelings about the moral reprehensibility of war profiteering sometimes provoke general, public accusations that take the form of racial or religious discrimination against certain groups (Korn 1951, pp. 294–295). All of these things did happen during the U.S. Civil War, but war profiteering of the period went beyond these.

Almost as soon as the Civil War began, rumors of war profiteering began to circulate. The New York Herald, for example, claimed that a quarter of the first $200 million spent on the war had been "dishonestly pocketed" (Brandes 1997, p. 67). These accusations were probably exaggerated, but were not completely without merit. In 1861 it was Secretary of War Simon Cameron (1799-1889), whose family owned the rail lines from Washington, DC, to Harrisburg, Pennsylvania, who set the price and policies for soldiers to be transported during the war, despite his clear conflict of interest. To be sure, Cameron's decisions were made under the assumption that the war would not last long—and there were no other rail options for transporting soldiers into Pennsylvania—but it set a precedent for many rail lines to profit heavily from the war (Brandes 1997, p. 73-74).

The technological advances of the nineteenth century contributed to the potential for war profiteering during the Civil War. The need for transportation and weapons is an economic reality of war, and the complexities of the use of war-related technology during the Industrial Revolution led to stock-market speculation, jumps in executives' incomes, and significant corporate profits reaped from intellectual property and patents (Brandes 1997, p. 69). Samuel Colt (1814-1862), the founder of Colt's Patent Fire-Arms Manufacturing Company, had a long history of marking up the price on military-issue weapons during wartime; before the Civil War began he had sold similar weapons to both American civilians and the British government for lower prices. At the beginning of the war Colt expanded his man-ufacturing plant, and had 1,000 employees with a $50,000 monthly payroll. In 1864 the plant was destroyed by a fire, and the estimated loss was $1.5 to 2 million (Brandes 1997, p. 88).

War profiteering by suppliers with government contracts was widespread; even military uniforms were so badly made that they may have contributed to the low morale of soldiers early in the war. The uniforms of New York's volunteer soldiers—supplied by the Brooks Brothers of New York City—were so cheaply made that the soldiers were mocked (Brandes 1997, p. 71). The term shoddies became the euphemism, coined by Harper's Weekly, for clothing manufacturers such as the Brooks Brothers, who maximized their profits by supplying poorly constructed garments made of cheap fabrics (Brandes 1997, p. 73). So widespread was the use of this term that a contemporary novel by Henry Morford, The Days of Shoddy (1863), dubbed the war profiteers the "shoddy aristocracy" or the "shoddocracy," which became "a metaphor for Civil War business itself" (Brandes 1997, p. 69).

BIBLIOGRAPHY

Brandes, Stuart. Warhogs:A History of War Profits in America. Lexington: University Press of Kentucky, 1997.

Hammond, Matthew. "Economic Conflict as a Regulatory Force in International Affairs." American Economic Review 21, no. 1 (1931): 1-9.

Korn, Bertram. American Jewry and the Civil War. Philadelphia: Jewish Publishing Society of America, 1951.

Norton, J. P. "Industry and Food Prices after the War." Scientific Monthly 8, no. 6 (1919): 546-551.

Christopher D. Rodkey