Corruption Disruption: How Profiteers Harmed the Union’s War Machine

Corruption Disruption: How Profiteers Harmed the Union’s War Machine

The illegal theft and resale of goods made it more difficult to wage total war.

Key point: All militaries have had to contend with supply issues and war profiteering. Here is how the Union dealt with these issues.

“For sugar the government often got sand; for coffee, rye; for leather, something no better than brown paper; for sound horses and mules, spavined beasts and dying donkeys; and for serviceable muskets and pistols, the experimental failures of sanguine inventors, or the refuse of shops and foreign armories.” So wrote Harper’s Monthly journalist Robert Tomes in July 1864. What Tomes was describing was far from uncommon during the American Civil War, a war that many have put on high moral ground beneath the umbrella of righteousness. But in that war, as with most wars throughout history, thievery and corruption ran rampant. This corruption, involving not only suppliers and manufacturers in the North but also high government officials, resulted in the unnecessary loss of life for many Union soldiers and was so costly as to prolong the war many months after it might have come to an end.

This first appeared earlier and is being reposted due to reader interest.

Corruption in all forms was familiar to Americans long before the Civil War. The struggle with corruption can be seen in one of the earliest debates surrounding Alexander Hamilton’s economic policies, particularly his views on the need for increased manufacturing. Many common people feared that new economic policies would be the basis for systematic corruption. Southerners, especially, were wary of an industrialized manufacturing society and centralized government itself.

Andrew Jackson, who had been cheated out of the White House in 1824 by political chicanery between his main rivals, John Quincy Adams and Henry Clay, built much of his political platform on the struggle against corruption. He greatly feared systemic corruption, which he viewed as inevitable if the national bank was rechartered, owing to the large amount of power a small percentage of financiers would hold over the government. Ironically, Jackson himself was accused of corruption by Clay, the key partner in the “Corrupt Bargain of 1824” that swung the presidency to Adams, despite the fact that Jackson had received a clear majority of popular votes. Clay, who was more or less immune to shame, said of Jackson’s free exercise of executive powers: “The question is no longer what laws will Congress pass, but what will the Executive veto?”

Although the idea of popular sovereignty was favored by many Americans, the susceptibility of the people to be controlled by a demagogue made Clay and other politicians uneasy. By the mid-1850s, corruption had spread even into the lowest political levels. “Congress is a humbug and Washington is no place for an honest man,” Benjamin French wrote in 1853 of his fellow United States representatives. Bribery and self-interest were commonplace in Washington, and French was one of the few officials who cared about the issues that were forming the nation rather than the personal rewards of his actions.

Corruption and Government Contracts

Corruption would have a large and deleterious impact on the Union war effort. At the beginning of the war, thousands of new soldiers had to be supplied, leaders had to be appointed, and some form of military organization had to be established. In many wars, an economic boom can follow the sudden need for material and labor. The Civil War was no exception. The railroad system was already on the rise due to its advantages over existing canals, but the Civil War would take railroad usage to another level. A more humble industry that prospered during the war was the lamp oil industry.

The institutions that were most vulnerable to corruption during the war were those with the responsibility of supplying Union armies in the field. As ordnance and munitions contracts poured out of Washington, production of iron, brass, and bronze weapons proceeded at record levels. Many of the metal foundries were also put to use making rails for the emerging railways. Uniforms, blankets, tents, oil cloth, wagons, chemicals, and ships were all in high demand, and there were plenty of willing men in the North to fill the orders. What Northern manufacturers lost from their Southern markets they more than made up for through government contracts. The loss of Southern markets did have an impact on the textile industry of the North, since other means of acquiring cotton were necessary. These contracts not only provided commerce for small Northern companies, but also opened up the national market.

At the beginning of the war, unscrupulous wheelers and dealers swooped into Washington, drawn by unbridled profits from government contracts. The initial rush of raw recruits to answer President Abraham Lincoln’s call for 75,000 volunteers to put down the rebellion was accompanied by a similar rush of businessmen eager to nab government contracts. An army of lobbyists, contractors, and speculators, in the words of one historian, “hurried to the assault on the treasury, like a cloud of locusts. They were everywhere; in the streets, in the hotels, in the offices, at the Capitol, and in the White House. They continually besieged the bureaus of administration, the doors of the Senate and House of Representatives, wherever there was a chance to gain something.”

Keeping the Growing Union Army Supplied

The start of the war was marked by official confusion as well as corruption. With more than 700,000 men in uniform by early 1862, the efforts to adequately supply them were woefully slipshod. Indiana Governor Oliver Morton voiced the frustrations of many Northern governors at the government’s faulty administration of supplies. “Twenty-four hundred men in camp and less than half of them armed,” he fumed. “Why has there been such delay in sending arms? No officer here has yet to muster troops into service. Not a pound of powder or a single ball sent us, or any sort of equipment. Allow me to ask what is the cause of all this?”

Brigadier General Ulysses S. Grant, then commanding the Union camp at Cairo, Illinois, echoed the criticism. “There is a great deficiency in transportation,” said Grant. “I have no ambulances. The clothing received has been almost universally of an inferior quality, and deficient in quantity. The arms in the hands of the men are mostly the old flint-lock repaired. The Quartermaster’s Department has been carried on with so little funds that Government credit has become exhausted.” Lincoln ruefully conceded as much in his annual July 4 message to Congress. “One of the greatest perplexities of the government,” said the president, “is to avoid receiving troops faster than it can provide for them.”

In the sprint to supply the first volunteer soldiers, many less than acceptable products were sold to the government. Although many of the poorer quality items were passed because of sheer haste or carelessness, many more were okayed due to the bribery of government officials at every level. Large contractors would take the high-priced orders they received from the federal government and subcontract them to smaller companies for lesser prices, still making a large profit without actually producing any goods themselves. For example, the Sibley, Tyler, Laugham and Dyer Company was offered a contract of eight cents per pound of cattle, which it then subcontracted to Williams and Alerton for six and a half cents per pound, making a profit of more then $32,000 without moving a single head of cattle.

Corruption at the Highest Levels

Many high government officials, including Maj. Gen. John C. Fremont, head inspector George Updyke, and Secretary of War Simon Cameron, were later exposed for allowing or encouraging this sort of behavior, but dozens of lesser officials partook in the thievery unmolested. The New York-based company Brooks Brothers produced pocketless, buttonless, and overall inferior-quality pants but somehow still received a government contact to do so. Even rejection did not sway contractors from their dealings. An arms manufacturer once bribed a government official with $10,000 to approve a pistol that shortly beforehand had been deemed unfit for service by the chief of ordnance.

The federal government was cheated on many types of items. In September 1861, Fremont commissioned a fort to be built in St. Louis. The majority of the fort had already been built, but a separate builder received $150,000 for the seven days of work that it took to complete the fort. Quartermaster General Robert Allen was able to catch the closing stages of this deceit and stop another $60,000 from being paid. Animals were also the subject of corruption. The government once bought 411 horses from contractors in St. Louis—76 were in working condition, but all but five were too sick, worn out, or old to be used. The other five were already dead. Another $40,000 was lost on the transaction.

Secretary of War Cameron played a large part in crippling the Union war effort. He commissioned his good friend Alexander Cummings, whom he described as “a capital man,” to buy supplies for the War Department. Cummings did purchase some military-related items, including completely unserviceable carbines for $15 apiece, but he also spent more than $21,000 on such debatable items as herring, porter, ale, straw hats, linen pantaloons, and 23 barrels of pickles for the soldiers. Union supply trains were often needlessly rerouted through Cameron’s home state of Pennsylvania on the flimsiest of excuses, further lining the pockets of his political allies.