The real effects of war on the life of nations is one of those old and
complicated debates which lie outside the scope of a volume such as
this. Yet in the particular case of the Northern people it is imperative
to answer two questions both of which have provoked interminable
discussion: Was the moral life of the North good or bad in the war
years? Was its commercial life sound?
As to the moral question, contemporary evidence seems at first sight
contradictory. The very able Englishman who represented the "Times",
William H. Russell, gives this ugly picture of an American city in 1863:
"Every fresh bulletin from the battlefield of Chickamauga, during my
three weeks' stay in Cincinnati, brought a long list of the dead and
wounded of the Western army, many of whom, of the officers, belonged to
the best families of the place. Yet the signs of mourning were hardly
anywhere perceptible; the noisy gaiety of the town was not abated one
jot."
On the other hand, a private manuscript of a Cincinnati family describes
the "intense gloom hanging over the city like a pall" during the period
of that dreadful battle. The memories of old people at Cincinnati in
after days--if they had belonged to the "loyal" party--contained only
sad impressions of a city that was one great hospital where "all
our best people" worked passionately as volunteer assistants of the
government medical corps.
A third fact to be borne in mind in connection with this apparent
contradiction in evidence is the source of the greater fortunes of
Cincinnati, a large proportion of which are to be traced, directly or
indirectly to government contracts during the war. In some cases the
merciless indifference of the Cincinnati speculators to the troubles
of their country are a local scandal to this day, and it is still told,
sometimes with scorn, sometimes with amusement, how perhaps the greatest
of these fortunes was made by forcing up the price of iron at a time
when the Government had to have iron, cost what it might.
Thus we no sooner take up the moral problem of the times than we find
ourselves involved in the commercial question, for here, as always,
morals and business are intertwined. Was the commercial management of
the North creditable to the Government and an honor to the people? The
surest way to answer such questions is to trace out with some fullness
the commercial and industrial conditions of the North during the four
years of war.
The general reader who looks for the first time into the matter is
likely to be staggered by what statistics seem to say. Apparently they
contradict what he is accustomed to hear from popular economists about
the waste of war. He has been told in the newspapers that business is
undermined by the withdrawal of great numbers of men from "productive"
consumption of the fruits of labor and their engagement as soldiers in
"unproductive" consumption. But, to his astonishment, he finds that the
statistics of 1861-1865 show much increase in Northern business--as,
for example, in 1865, the production of 142 million pounds of wool
against 60 million in 1860. The government reports show that 13 million
tons of coal were mined in 1860 and 21 million in 1864; in 1860, the
output of pig iron was 821,000 tons, and 1,014,282 tons in 1864; the
petroleum production rose from 21 million gallons in 1860 to 128
million in 1862; the export of corn, measured in money, shows for 1860
a business of $2,399,808 compared with $10,592,704 for 1863; wheat
exporting showed, also, an enormous increase, rising from 14 millions
in 1860 to 46 millions in 1863. There are, to be sure, many statistics
which seem to contradict these. Some of them will be mentioned
presently. And yet, on the whole, it seems safe to conclude that the
North, at the close of the third year of war was producing more and was
receiving larger profits than in 1860.
To deal with this subject in its entirety would lead us into the
labyrinths of complex economic theory, yet two or three simple facts
appear so plain that even the mere historian may venture to set them
forth. When we look into the statistics which seem to show a general
increase of business during the war, we find that in point of fact this
increase was highly specialized. All those industries that dealt with
the physical necessities of life and all those that dealt peculiarly
with armies flourished amazingly. And yet there is another side to the
story, for there were other industries that were set back and some that
almost, if not entirely, disappeared. A good instance is the manufacture
of cotton cloth. When the war opened, 200,000 hands were employed in
this manufacture in New England. With the sealing up of the South and
the failure of the cotton supply, their work temporarily ceased. What
became of the workmen? Briefly, one of three things happened: some went
into other trades, such as munitions, in which the war had created an
abnormal demand for labor; a great number of them became soldiers; and
many of them went West and became farmers or miners. Furthermore,
many whose trades were not injured by the war left their jobs and fled
westward to escape conscription. Their places were left open to be
filled by operatives from the injured trades. In one or another of
these ways the laborer who was thrown out of work was generally able to
recover employment. But it is important to remember that the key to the
labor situation at that time was the vast area of unoccupied land which
could be had for nothing or next to nothing. This fact is brought
home by a comparison of the situation of the American with that of the
English workman during the cotton famine. According to its own ideas
England was then fully cultivated. There was no body of land waiting
to be thrown open, as an emergency device, to a host of new-made
agriculturists. When the cotton-mills stopped at Manchester, their
operatives had practically no openings but in other industrial
occupations. As such opportunities were lacking, they became objects of
charity until they could resume their work. As a country with a great
reserve of unoccupied land, the United States was singularly fortunate
at this economic crisis.
One of the noteworthy features of Northern life during the war is that
there was no abnormal increase in pauperism. A great deal has been
written upon the extensive charities of the time, but the term is
wrongly applied, for what is really referred to is the volunteer aid
given to the Government in supporting the armies. This was done on
a vast scale, by all classes of the population--that is, by all who
supported the Union party, for the separation between the two parties
was bitter and unforgiving. But of charity in the ordinary sense of the
care of the destitute there was no significant increase because there
was no peculiar need. Here again the fact that the free land could
be easily reached is the final explanation. There was no need for the
unemployed workman to become a pauper. He could take advantage of the
Homestead Act*, which was passed in 1862, and acquire a farm of 160
acres free; or he could secure at almost nominal cost farm-land
which had been given to railways as an inducement to build. Under the
Homestead Act, the Government gave away land amounting to 2,400,000
acres before the close of the war. The Illinois Central alone sold to
actual settlers 221,000 acres in 1863 and 264,000 in 1864. It was during
the war, too, that the great undertaking of the transcontinental railway
was begun, partly for military and partly for commercial reasons. In
this project, both as a field of labor and as a stimulus to Western
settlement, there is also to be found one more device for the relief of
the labor situation in the East.
*This Act, which may be regarded as the culmination of the
long battle of the Northern dreamers to win "land for the
landless," provided that every settler who was, or intended
to be, a citizen might secure 180 acres of government land
by living on it and cultivating it for five years.
There is no more important phenomenon of the time than the shifting of
large masses of population from the East to the West, while the war was
in progress. This fact begins to indicate why there was no shortage in
the agricultural output. The North suffered acutely from inflation of
prices and from a speculative wildness that accompanied the inflation,
but it did not suffer from a lack of those things that are produced by
the soil--food, timber, metals, and coal. In addition to the reason just
mentioned--the search for new occupation by Eastern labor which had
been thrown out of employment--three other causes helped to maintain the
efficiency of work in the mines, in the forests, and on the farms. These
three factors were immigration, the labor of women, and labor-saving
machines.
Immigration, naturally, fell off to a certain degree but it did not
become altogether negligible. It is probable that 110,000 able-bodied
men came into the country while war was in progress--a poor offset
to the many hundred thousand who became soldiers, but nevertheless a
contribution that counted for something.
Vastly more important, in the work of the North, was the part taken by
women. A pathetic detail with which in our own experience the world has
again become familiar was the absence of young men throughout most
of the North, and the presence of women new to the work in many
occupations, especially farming. A single quotation from a home
missionary in Iowa tells the whole story:
"I will mention that I met more women driving teams on the road and saw
more at work in the fields than men. They seem to have said to their
husbands in the language of a favorite song,
'Just take your gun and go;
For Ruth can drive the oxen, John,
And I can use the hoe!'
"I went first to Clarinda, and the town seemed deserted. Upon inquiry
for former friends, the frequent answer was, 'In the army.' From
Hawleyville almost all the thoroughly loyal male inhabitants had gone;
and in one township beyond, where I formerly preached, there are but
seven men left, and at Quincy, the county seat of Adams County, but
five."
Even more important than the change in the personnel of labor were the
new machines of the day. During the fifteen years previous to the war
American ingenuity had reached a high point. Such inventions as the
sewing machine and the horse-reaper date in their practical forms from
that period, and both of these helped the North to fight the war. Their
further improvement, and the extension of the principles involved to
many new forms of machinery, sprang from the pressing need to make up
for the loss of men who were drained by the army from the farms and the
workshops. It was the horse-reaper, the horse-rake, the horse-thresher
that enabled women and boys to work the farms while husbands, fathers,
and elder brothers were at the front.
All these causes maintained Northern farming at a high pitch of
productivity. This efficiency is implied in some of the figures already
quoted, but many others could be cited. For example, in 1859, the total
production of wheat for the whole country was 173 million bushels; in
1862, the North alone produced 177 millions; even in 1864, with over a
million men under arms, it still produced 160 million bushels.
It must be remembered that the great Northern army produced nothing
while it consumed the products of agriculture and manufacture--food,
clothing, arms, ammunition, cannon, wagons, horses, medical stores--at
a rate that might have led a poetical person to imagine the army as
a devouring dragon. Who, in the last analysis, provided all these
supplies? Who paid the soldiers? Who supplemented their meager pay and
supported their families? The people, of course; and they did so both
directly and indirectly. In taxes and loans they paid to the Government
about three thousand millions of dollars. Their indirect assistance was
perhaps as great, though it is impossible today to estimate with any
approach to accuracy the amount either in money or service. Among
obvious items are the collections made by the Sanitary Commission for
the benefit of the hospital service, amounting to twenty-five million
dollars, and about six millions raised by the Christian Commission. In
a hundred other ways both individuals and localities strained their
resources to supplement those of the Government. Immense subscription
lists were circulated to raise funds for the families of soldiers. The
city of Philadelphia alone spent in this way in a single year $600,000.
There is also evidence of a vast amount of unrecorded relief of
needy families by the neighbors, and in the farming districts, such
assistance, particularly in the form of fuel during winter, was very
generally given.
What made possible this enormous total of contributions was, in a word,
the general willingness of those supporting the war to forego luxuries.
They ceased buying a great multitude of unnecessary things. But
what became of the labor that had previously supplied the demand for
luxuries? A part of it went the way of all other Northern labor--into
new trades, into the army, or to the West--and a part continued to
manufacture luxuries: for their market, though curtailed, was not
destroyed. There were, indeed, two populations in the North, and they
were separated by an emotional chasm. Had all the North been a unit in
feeling, the production of articles of luxury might have ceased.
Because of this emotional division of the North, however, this business
survived; for the sacrifice of luxurious expenditure was made by only a
part of the population, even though it was the majority.
Furthermore, the whole matter was adjusted voluntarily without
systematic government direction, since there was nothing in the
financial policy of the Government to correspond to conscription.
Consequently, both in the way of loans and in the way of contributions,
as well as in the matter of unpaid service, the entire burden fell
upon the war party alone. In the absence of anything like economic
conscription, if such a phrase may be used, those Northerners who did
not wish to lend money, or to make financial sacrifice, or to give
unpaid service, were free to pursue their own bent. The election of 1864
showed that they formed a market which amounted to something between six
and nine millions. There is no reason to suppose that these millions in
1864 spent less on luxuries than they did in 1860. Two or three items
are enough. In 1860, the importation of silk amounted to 32 million
dollars; in 1862, in spite of inflated prices, it had shrunk to 7
millions; the consumption of malt liquors shrank from 101 million
gallons in 1860 to 62 million gallons in 1863; of coffee, hardly to be
classed as a luxury, there were consumed in 1861, 184 million pounds and
in 1863, 80 millions.
The clue to the story of capital is to be found in this fact, too often
forgotten, that there was an economic-political division cutting deep
through every stratum of the Northern people. Their economic life
as well as their political life was controlled on the one hand by a
devotion to the cause of the war, and on the other hand by a hatred
of that cause or by cynical indifference. And we cannot insist too
positively that the Government failed very largely to take this fact
into account. The American spirit of invention, so conspicuous at that
time in mechanics, did not apply itself to the science of government.
Lincoln confessedly was not a financier; his instinct was at home only
in problems that could be stated in terms of men. Witness his acceptance
of conscription and his firmness in carrying it through, as a result
of which he saved the patriotic party from bearing the whole burden of
military service. But there was no parallel conservation of power in the
field of industry. The financial policy, left in the hands of Chase, may
truly be described as barren of ideas. Incidentally, it may be mentioned
that the "loyal" North was left at the mercy of its domestic enemies and
a prey to parasites by Chase's policy of loans instead of taxes and of
voluntary support instead of enforced support.
The consequence of this financial policy was an immense opportunity for
the "disloyally" and the parasites to make huge war profits out of the
"loyals" and the Government. Of course, it must not be supposed that
everyone who seized the chance to feather his nest was so careless or so
impolitic as to let himself be classed as a "disloyal." An incident of
the autumn of 1861 shows the temper of those professed "loyals" who were
really parasites. The background of the incident is supplied by a report
of the Quartermaster-General:
"Governors daily complain that recruiting will stop unless clothing is
sent in abundance and immediately to the various recruiting camps and
regiments. With every exertion, this department has not been able to
obtain clothing to supply these demands, and they have been so urgent
that troops before the enemy have been compelled to do picket duty in
the late cold nights without overcoats, or even coats, wearing only thin
summer flannel blouses.... Could 150,000 suits of clothing, overcoats,
coats, and pantaloons be placed today, in depot, it would scarce supply
the calls now before us. They would certainly leave no surplus."
The Government attempted to meet this difficulty in the shortest
possible time by purchasing clothing abroad. But such disregard of home
industry, the "patriotism" of the New England manufacturers could not
endure. Along with the report just quoted, the Quartermaster-General
forwarded to the Secretary of War a long argumentative protest from
a committee of the Boston Board of Trade against the purchase of army
clothing in Europe. Any American of the present day can guess how
the protest was worded and what arguments were used. Stripped of its
insincerity, it signified this: the cotton mills were inoperative for
lack of material; their owners saw no chance to save their dividends
except by re-equipment as woolen mills; the existing woolen mills also saw
a great chance to force wool upon the market as a substitute for cotton.
In Ohio, California, Pennsylvania, and Illinois, the growers of wool saw
the opportunity with equal clearness. But, one and all, these various
groups of parasites saw that their game hinged on one condition: the
munitions market must be kept open until they were ready to monopolize
government contracts. If soldiers contracted pneumonia doing picket duty
on cold nights, in their summer blouses, that was but an unfortunate
incident of war.
Very different in spirit from the protest of the Boston manufacturers
is a dispatch from the American minister at Brussels which shows what
American public servants, in contrast with American manufacturers, were
about. Abroad the agents of North and South were fighting a commercial
duel in which each strove to monopolize the munitions market. The United
States Navy, seeing things from an angle entirely different from that of
the Boston Board of Trade, ably seconded the ministers by blockading the
Southern ports and by thus preventing the movement of specie and cotton
to Europe. As a consequence, fourmonth notes which had been given by
Southern agents with their orders fell due, had to be renewed, and
began to be held in disfavor. Agents of the North, getting wind of
these hitches in negotiations, eagerly sought to take over the unpaid
Confederate orders. All these details of the situation help to explain
the jubilant tone of this dispatch from Brussels late in November, 1861:
"I have now in my hands complete control of the principal rebel
contracts on the continent, viz.: 206,000 yards of cloth ready for
delivery, already commencing to move forward to Havre; gray but can
be dyed blue in twenty days; 100,000 yards deliverable from 15th of
December to 26th of January, light blue army cloth, same as ours;
100,000 blankets; 40,000 guns to be shipped in ten days; 20,000 saber
bayonets to be delivered in six weeks.... The winter clothing for
100,000 men taken out of their hands, when they cannot replace it, would
almost compensate for Bull Run. There is no considerable amount of cloth
to be had in Europe; the stocks are very short."
The Secretary of War was as devoid of ideas as the Secretary of the
Treasury was and even less equipped with resisting power. Though he
could not undo the work already done by the agents of the Government
abroad, he gave way as rapidly as possible to the allied parasites whose
headquarters, at the moment, were in Boston. The story grows uglier
as we proceed. Two powerful commercial combinations took charge of the
policy of the woolen interests--the National Woolgrowers' Association
and the National Association of Wool Manufacturers, which were soon in
control of this immense industry. Woolen mills sprang up so fast that
a report of the New York Chamber of Commerce pronounced their increase
"scarcely credible." So great was the new market created by the
Government demand, and so ruthless were the parasites in forcing up
prices, that dividends on mill stock rose to 10, 15, 25, and even 40 per
cent. And all the while the wool growers and the wool manufacturers were
clamoring to Congress for protection of the home industry, exclusion
of the wicked foreign competition, and all in the name of their devoted
"patriotism"--patriotism with a dividend of 40 per cent!
Of course, it is not meant that every wool grower and every woolen
manufacturer was either a "disloyal" or a parasite. By no means. Numbers
of them were to be found in that great host of "loyals" who put their
dividends into government bonds and gave their services unpaid as
auxiliaries of the Commissary Department or the Hospital Service of
the Army. What is meant is that the abnormal conditions of industry,
uncorrected by the Government, afforded a glaring opportunity for
unscrupulous men of business who, whatever their professions, cared a
hundred times more for themselves than for their country. To these
was due the pitiless hampering of the army in the interest of the
wool-trade. For example, many uniforms paid for at outrageous prices,
turned out to be made of a miserable cheap fabric, called "shoddy,"
which resisted weather scarcely better than paper. This fraud gave
the word "shoddy" its present significance in our American speech and
produced the phrase--applied to manufacturers newly become rich--"shoddy
aristocracy." An even more shameful result of the selfishness of the
manufacturers and of the weakness of the Government was the use of cloth
for uniforms not of the regulation colors, with the result that soldiers
sometimes fired upon their comrades by mistake.
The prosperity of the capitalists who financed the woolen business did
not extend to the labor employed in it. One of the ugliest details of
the time was the resolute attempt of the parasites to seize the whole
amount of the abnormal profits they wrung from the Government and from
the people. For it must not be forgotten that the whole nation had to
pay their prices. It is estimated that prices in the main advanced about
100 per cent while wages were not advanced more than sixty per cent.
It is not strange that these years of war form a period of bitter
antagonism between labor and capital.
What went on in the woolen business is to be found more or less in every
business. Immense fortunes sprang up over night. They had but two
roots: government contracts and excessive profits due to war prices. The
gigantic fortunes which characterized the North at the end of the war
are thus accounted for. The so-called prosperity of the time was a
class prosperity and was absorbed by parasites who fattened upon the
necessities of the Government and the sacrifices of the people.