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 cla.s.ses 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 dest.i.tute 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 pa.s.sed 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 ma.s.ses 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 a.n.a.lysis, 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 a.s.sistance 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 a.s.sistance, 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 mult.i.tude 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 cla.s.sed 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 cla.s.sed 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 subst.i.tute 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 princ.i.p.al 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' a.s.sociation and the National a.s.sociation 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 p.r.o.nounced 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 compet.i.tion, 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 cla.s.s prosperity and was absorbed by parasites who fattened upon the necessities of the Government and the sacrifices of the people.

CHAPTER XII. THE MEXICAN EPISODE

That French demagogue whom Victor Hugo aptly called Napoleon the Little was a prime factor in the history of the Union and the Confederacy. The Confederate side of his intrigue will be told in its proper place. Here, let us observe him from the point of view of Washington.

It is too much to attempt to pack into a sentence or two the complicated drama of deceit, lies, and graft, through which he created at last a pretext for intervention in the affairs of Mexico; it is enough that in the autumn of 1862 a French army of invasion marched from Vera Cruz upon Mexico City. We have already seen that about this same time Napoleon proposed to England and Russia a joint intervention with France between North and South--a proposal which, however, was rejected. This Mexican venture explains why the plan was suggested at that particular time.

Disappointed in England and Russia, Napoleon unexpectedly received encouragement, as he thought, from within the United States through the medium of the eccentric editor of the "New York Tribune". We shall have occasion to return later to the adventures of Horace Greeley--that erratic individual who has many good and generous acts to his credit, as well as many foolish ones. For the present we have to note that toward the close of 1862 he approached the French Amba.s.sador at Washington with a request for imperial mediation between the North and the South.

Greeley was a type of American that no European can understand: he believed in talk, and more talk, and still more talk, as the cure for earthly ills. He never could understand that anybody besides himself could have strong convictions. When he told the Amba.s.sador that the Emperor's mediation would lead to a reconciliation of the sections, he was doubtless sincere in his belief. The astute European diplomat, who could not believe such simplicity, thought it a mask. When he asked for, and received, permission to pa.s.s the Federal lines and visit Richmond, he interpreted the permit in the light of his a.s.sumption about Greeley.

At Richmond, he found no desire for reunion. Putting this and that together, he concluded that the North wanted to give up the fight and would welcome mediation to save its face. The dreadful defeat at Fredericksburg fell in with this reasoning. His reports on American conditions led Napoleon, in January, 1863, to attempt alone what he had once hoped to do supported by England and Russia. He proposed his good offices to the Government at Washington as a mediator between North and South.

Hitherto, Washington had been very discreet about Mexico. Adroit hints not to go too far had been given Napoleon in full measure, but there was no real protest. The State Department now continued this caution and in the most polite terms declined Napoleon's offer. Congress, however, took the matter more grimly, for throughout the dealings with Napoleon, it had been at odds with Lincoln. It now pa.s.sed the first of a series of resolutions which expressed the will of the country, if not quite the will of the President, by resolving that any further proposal of mediation would be regarded by it as "an unfriendly act."

Napoleon then resumed his scheming for joint intervention, while in the meantime his armies continued to fight their way until they entered Mexico City in June, 1863. The time had now come when Napoleon thought it opportune to show his hand. Those were the days when Lee appeared invincible, and when Chancellorsville crowned a splendid series of triumphs. In England, the Southern party made a fresh start; and societies were organized to aid the Confederacy. At Liverpool, Laird Brothers were building, ostensibly for France, really for the Confederacy, two ironclads supposed to outcla.s.s every ship in the Northern navy. In France, 100,000 unemployed cotton hands were rioting for food. To raise funds for the Confederacy the great Erlanger banking-house of Paris negotiated a loan based on cotton which was to be delivered after the breaking of the blockade. Napoleon dreamed of a shattered American union, two enfeebled republics, and a broad way for his own scheme in Mexico.

In June an English politician of Southern sympathies, Edward Roebuck, went over to France, was received by the Emperor, and came to an understanding with him. Roebuck went home to report to the Southern party that Napoleon was ready to intervene, and that all he waited for was England's cooperation. A motion "to enter into negotiations with the Great Powers of Europe for the purpose of obtaining their cooperation in the recognition" of the Confederacy was introduced by Roebuck in the House of Commons.

The debate which followed was the last chance of the Southern party and, as events proved, the last chance of Napoleon. How completely the British ministry was now committed to the North appears in the fact that Gladstone, for the Government, opposed Roebuck's motion. John Bright attacked it in what Lord Morley calls "perhaps the most powerful and the n.o.blest speech of his life." The Southern party was hardly resolute in their support of Roebuck and presently he withdrew his motion.

But there were still the ironclads at Liverpool. We have seen that earlier in the war, the carelessness of the British authorities had permitted the escape of ship 290, subsequently known as the Confederate commerce-destroyer, Alabama. The authorities did not wish to allow a repet.i.tion of the incident. But could it be shown that the Laird ships were not really for a French purchaser? It was in the course of diplomatic conversations that Mr. Adams, speaking of the possible sailing of the ships, made a remark destined to become famous: "It would be superfluous in me to point out to your lordship that this is war." At jest, the authorities were satisfied. The ships were seized and in the end bought for the British Navy.

Again Napoleon stood alone. Not only had he failed to obtain aid from abroad, but in France itself his Mexican schemes were widely and bitterly condemned. Yet he had gone too far to recede, and what he had been aiming at all along was now revealed. An a.s.sembly of Mexican notables, convened by the general of the invaders, voted to set up an imperial government and offered the crown to Napoleon's nominee, the Archduke Maximilian of Austria.

And now the Government at Washington was faced with a complicated problem. What about the Monroe Doctrine? Did the Union dare risk war with France? Did it dare pa.s.s over without protest the establishment of monarchy on American soil by foreign arms? Between these horns of a dilemma, the Government maintained its precarious position during another year. Seward's correspondence with Paris was a masterpiece of evasion. He neither protested against the intervention of Napoleon nor acknowledged the authority of Maximilian. Apparently, both he and Lincoln were divided between fear of a French alliance with the Confederacy and fear of premature action in the North that would render Napoleon desperate. Just how far they comprehended Napoleon and his problems is an open question.

Whether really comprehending or merely trusting to its instinct, Congress took a bolder course. Two men prove the antagonists of a parliamentary duel--Charles Sumner, chairman of the Senate Committee on Foreign Relations, and Henry Winter Davis, chairman of the corresponding committee of the House. Sumner played the hand of the Administration.

Fiery resolutions demanding the evacuation of Mexico or an American declaration of war were skillfully buried in the silence of Sumner's committee. But there was nevertheless one resolution that affected history: it was a ringing condemnation of the attempt to establish a monarchy in Mexico. In the House, a joint resolution which Davis submitted was pa.s.sed without one dissenting vote. When it came to the Senate, Sumner buried it as he had buried earlier resolutions. None the less it went out to the world attended by the news of the unanimous vote in the House.

Shortly afterwards, the American Amba.s.sador at Paris called upon the imperial Foreign Secretary, M. Drouyn de L'huys. News of this resolution had preceded him. He was met by the curt question, "Do you bring peace or war?" Again, the Washington Government was skillfully evasive. The Amba.s.sador was instructed to explain that the resolution had not been inspired by the President and "the French Government would be seasonably apprized of any change of policy...which the President might at any future time think it proper to adopt."

There seems little doubt that Lincoln's course was very widely condemned as timid. When we come to the political campaign of 1864, we shall meet Henry Winter Davis among his most relentless personal enemies.

Dissatisfaction with Lincoln's Mexican policy has not been sufficiently considered in accounting for the opposition to him, inside the war party, in 1864. To it may be traced an article in the platform of the war party, adopted in June, 1864, protesting against the establishment of monarchy "in near proximity to the United States." In the same month Maximilian entered Mexico City.

The subsequent moves of Napoleon are explained elsewhere.* The central fact in the story is his virtual change of att.i.tude, in the summer of 1864. The Confederate agent at Paris complained of a growing coolness.

Before the end of the summer, the Confederate Secretary of State was bitter in his denunciation of Napoleon for having deserted the South.

Napoleon's puppet Maximilian refused to receive an envoy from the Confederacy. Though Washington did not formally protest against the presence of Maximilian in Mexico, it declined to recognize his Government, and that Government continued unrecognized at Washington throughout the war.