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By Root 7503 0

subcontracted the work to jobbers who, to extract their own profit, jammed wages down, demanded blistering rates of production from artisans and female outworkers, and scrimped on materials. This became apparent when shoddy uniforms fell to pieces in the rain, leaving soldiers almost naked. The army also marched on shoddy shoes. Even the New York Chamber of Commerce later admitted that local contractors had sold the government great numbers of boots whose soles, made of pine chips pasted over with thin leather, dropped off after a half-hour’s hike. Contractors also supplied rotten blankets, tainted pork, glued knapsacks that came apart in rain, and even shoddy horses: stables on 24th Street—in collusion with inspectors—fobbed off partially blind nags on the cavalry at premium prices.

War boosted the communications industry. New technology allowed newspapers to bring the fighting vividly before the literate public, and as Sabbatarian reservations crumpled, special Sunday editions offered detailed recounting of battles. The press reached the illiterate as well: the dailies, and especially Harper’s Weekly, Frank Leslie’s Illustrated Newspaper, and the New York Illustrated News, carried Currier and Ives etchings or sketches by artists that graphically portrayed battlefields, soldiers, and hospitals. The soldiers themselves were mass consumers, and it was rumored that during the battie of Antietam newsboys hawked the latest extras to the troops.

The war did deal a severe blow to one sector of the city’s economy. New York’s merchant marine—badly buffeted in 1857 and 1858—was finished off by Confederate cruisers. After 284 captures by southern privateers (sixty-four by the dreaded Alabama alone) and the inevitable hike in insurance rates, most American and overseas traders had transferred to foreign flags. The total value of goods carried in U.S. vessels sank from $507 million in 1860 to $185 million in 1864. By war’s end three-fourths of the commerce in New York’s harbor was carried by foreign lines, and most of the steamship lines that serviced the city were heavily subsidized British and German firms.

Overall, however, the war forged powerful new bonds between metropolitan manufacturing and the national state—neatly symbolized by the Bronx-built Capitol dome set in place in 1863—which wrought a revolution in productivity. The industrial output of New York City almost outpaced that of the entire Confederacy.

GREENBACKS AND GOLDBUGS

By July 1861 the Union was nearly broke. Secretary of the Treasury Salmon P. Chase had two million dollars on hand to meet federal needs he estimated at $320 million. He turned to the banks. In August, after a week-long conference in Manhattan, a consortium of financiers from New York, Boston, and Philadelphia—headed by Moses Taylor of City Bank and James Gallatin of National Bank—agreed to lend the government $150 million. Charging a 7.3 percent rate of interest, compared to the 5 to 6 percent they got from railroad companies, the consortium began with a first installment of $50 million, of which New York’s share was $29.5 million, apportioned among thirty-nine of the city’s fifty banks. Secretary Chase took the loan in gold (the government was, by law, not allowed to accept bank deposits). This quickly depleted the banks’ reserves, especially given the hoarding of gold that had commenced with the war. By December 30, 1861, the New York banks had ceased making specie payments, and bankruptcy was at hand.

So Congress authorized the treasury to print money. In February 1862 the government began issuing legal tender “greenbacks,” and by March 1863 it had authorized $450 million worth. The arrival of the nation’s first uniform currency did not stop state banks from continuing to print a bewildering array of notes, which also served as money, so to regularize the currency, Congress reorganized the entire banking system in February 1863. The law created the new status of “national bank”—chartered directly by the federal government and required to obey certain rules and regulations. Many state-chartered