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chapter฀4 TheTroublewithContracting A lthough public enterprises were important in many areas of the North’s military economy, in the end most procurement dollars went to contractors . From 1861 to 1865, the Quartermaster’s Department and other military supply bureaus signed thousands of agreements with hundreds of prime contractors all over the country. But contracting, while routine and essential to the Union’s war e¤ort, never ceased to be troublesome—in more ways than one. The laws and regulations governing contracting created significant administrative costs for military procurement o‹cers and their suppliers. For both the army and its contractors, the financial aspects of the war supply business proved especially di‹cult. For all concerned, the bureaucratic institutions that ballooned after 1861 to handle the business of war made that business complicated. But the trouble with contracting went beyond the costs associated with large-scale government regulation and finance. In the eyes of many Northerners , contracting seemed to create undesirable economic outcomes. It was not only that the act of buying instead of making limited the wartime state’s influence over wages paid to war workers on the home front, as seamstresses and others constantly argued. Beyond this, there was the problem of individual contractors receiving huge payments—and, potentially, huge profits—even as hundreds of thousands of their countrymen risked life and limb, often with little compensation. This stark inequality bothered not only common soldiers and war workers but also many of the Union’s top procurement o‹cers. To these o‹cers, it seemed that, in addition to the sheer scale of the war supply business, its unique administrative and financial complexities worked to push the bulk of the business of war and the potential wealth it represented into the hands of a 1฀ the฀business฀of฀civil฀war small group of unusually large dealers. Having grown up in a political culture that was generally hostile to the concentration of economic power, supply o‹cers—no less than many other Northerners—were disturbed by this evident trend. In response, some of them waged a campaign to discard the formal contracting procedures that seemed to be preventing small producers from selling directly to the giant wartime state. In at least one large part of the North’s military economy, the one that provided the army with horses and mules and their feed, this campaign resulted in a partial victory for the critics of contracting . On the whole, however, the North continued to supply its armies by negotiating formal contracts, often with merchants and manufacturers whose business operations were on a scale that put them well outside the circle of small producers long idealized by many Americans. In the end, the war carried an economic logic of its own, which could overwhelm the intentions of even the most influential managers of the North’s procurement project. The Life of a Civil War Contract In 1862, after the various Northern states had given up independent procurement authority to the U.S. bureaus and the chaos of the initial war emergency had been tamed, the Quartermaster’s Department settled into a contracting routine. In the bureau’s national depot system, there were three main procurement depots: Philadelphia, New York City, and Cincinnati. By the summer of 1862, the chief quartermasters at each of these three depots were following the standing orders of Quartermaster General Meigs to accumulate and maintain enough goods to outfit 100,000 new troops and maintain another 200,000 already in the field. In October of the following year, after President Lincoln called for 300,000 more troops, Meigs raised the depots’ target for supplying new troops to 150,000 soldiers each. This decentralized system served as the foundation of supply for the North’s million-man army.¹ Meanwhile, Saint Louis, Washington, and Louisville emerged as three more leading procurement depots, where quartermasters bought and warehoused huge numbers of horses and mules, tons of grain and hay, and other goods. Together, the six largest depots handled the bulk of Northern contracting (see fig. 3.1).² Civil War contracting was governed by federal law and military regulations , which had developed over several decades and had been revised as late as 1861. Under normal circumstances, U.S. procurement o‹cers were required to circulate advertisements for proposals. The laws and regulations did allow that, in times of “public exigency,” when goods were required immediately, the advertising requirement could be dropped and the o‹cer could...

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