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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 requipment 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.
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Abraham Lincoln and the Union -by- Nathaniel W. Stephenson