Economic Development and Labor in Civil War Illinois
by Drew E. VandeCreek
The Civil War initially disrupted the Illinois economy. Farmers found no market for agricultural products normally floated downriver to New Orleans for sale. Many Illinois banks holding southern state bonds as backing for their note issues failed in the war's first months. But the federal government's seemingly insatiable demand for military supplies fired Illinois' industrial economy, and bad weather in Europe opened new agricultural markets as well. As the Illinois economy recovered, businesses increasingly turned away from antebellum markets linked by rivers and toward the Chicago and its contacts, via the Great Lakes and Erie Canal, with the northeast.
While southern anxieties and generations of popular literature have portrayed the Civil War as a contest between an industrial North and an agrarian South, the northern states remained overwhelmingly agricultural in 1860. Illinois was no exception. But Illinois did serve as a hotbed of the technological innovation that began to transform American agriculture in this period. In 1837 John Deere (pictured below) of Grand Detour, Illinois unveiled the nation's first steel plow. In 1847 Cyrus McCormick came to Chicago to produce his mechanical reaper.
The federal war effort's demand for foodstuffs, compounded by crop failures in Europe, pulled many former subsistence farmers into the web of commerce during the Civil War. Illinois Governor Richard Yates complained that the closure of the Mississippi River saddled farmers with unfairly high railroad rates. The growth in farm products coming to market demanded an increased number of middlemen, and made Chicago a major center for grain shipment, storage, and trading. The Chicago Board of Trade reported dramatic increases in the number of grain ships plying the Great Lakes, and the city doubled its shipments of grain during the war years.
Although the disruption of river traffic originally undermined the economic position of Cairo, Illinois, located at the confluence of the Ohio and Mississippi Rivers at the southern tip of Illinois, the war soon brought the city its finest hour. Cairo became the home of a huge Union military camp and supply depot, gathering up troops and war materiel from across the Northwest and sending them downriver to support General Grant's troops as far south as Vicksburg. The growth spilled over into other nearby communities. Because no more land was available at Cairo, the United States Navy constructed a new home for its Mississippi fleet at Mound City, Illinois, just a few miles away.
While the disruption of water transportation temporarily unhinged farm markets, crop prices consistently rose during the conflict, as did land prices. As farming increasingly became a business rather than a self-sufficient way of life, many individuals taking up the work found that they could no longer afford the land for farming. By 1860, an eighty-acre farm in Illinois required nearly $1700 in initial outlays. Increasingly prospective farmers began their careers as tenants, hoping to save enough money to purchase their own farm. These farm laborers formed the core of the Illinois volunteers. Many saw a soldier's enlistment bounties as a gift-wrapped down payment for acreage.
John Griffiths of Appanoose, Illinois epitomized farmers' high times during the Civil War. His son had gone to the army, receiving a bounty of $450 and wages of $25 a month. Much of this money went to expanding the farm. In the absence of laborers, John Griffiths completed most of the tasks himself. He built a new two-story house with a separate kitchen and cellar, and concluded that "It has been a good time for making money in the north since the war began. Everything was so high."1
The war also gave rise to a number of new millionaires who extracted high payments from federal and state governments desperate for war materiel. Chicago's merchants, manufacturers and railroads soon the War Department to be an ideal customer, willing to pay large sums for even the most basic goods and services. Wartime investigations also found that suppliers often devised means by which they defrauded the federal government of large sums of money.
For their part, many workers were still reeling from the depression of 1857, and feared that secession would bring another economic catastrophe. But the attack on Fort Sumter led many laborers and factory workers to enlist.
The exodus of farm and factory laborers to military service drove up wages for those workers that remained. Sharp increases in wartime prices often outpaced wage gains, and left workers with less real income. The rise of the new millionaires only accentuated a growing inequality of wealth in America. Larger aggregations of capital, represented by factories, mills and other large enterprises, provided investors with returns that regularly increased far more quickly than workers' wages, even in good times.
Immigrants surged into the United States to fill many of the new jobs. Many workers protested angrily, fearing that competition with new workers would undermine their wage gains. The performance of foreign-born regiments in combat and the presence of immigrants in labor organizations often helped to defuse the tension, however. Black workers were not so fortunate. Most white workers simply refused to accept African-Americans in the workplace, and some employers exacerbated difficult race relations by using blacks as strikebreakers. 2
These conditions led many workers to found new labor organizations. As in the case of farmers who began to organize in response to railroads' high transportation costs, the Civil War laid the basis for a generation of postwar unions and workingman's groups. But government officials usually supported employers in labor disagreements, fearing disrupted production's impact upon the war effort. Government policies, and even troops, acted to put down workers' strikes, leaving them unable to claim a larger share of the war prosperity.
Some organized workers led resistance to the draft. Chicago's Third Ward, called "The Patch" by Republicans, saw a mob of several thousand men, women and children obstruct draft procedures, then attack police arresting protestors. Most workers resented the fact that men with $300 could buy a substitute for the draft. Poorer men faced only conscription. 3
Business proprietors and corporations found the Civil War to be quite congenial in ways beyond their triumphs over striking workers. While many southern manufacturing centers, including Richmond and Chattanooga, lay in ruins, northern manufacturers used war profits to invest in new facilities and equipment, paving the way for their dominance of the late nineteenth century economy.
The Republican Congress, free at last of southern Democrats, took time from their war responsibilities to enact a vastly influential set of economic policies as well. In 1861 and 1862 they passed high tariffs protecting many American manufacturers from foreign competition. Lawmakers also authorized the construction of a federally assisted Transcontinental Railroad and other internal improvements. Republicans argued that such measures, and especially the tariff, promised high wages for workers as well as profits for proprietors.
The Congress also enacted the Morrill College Land Grant Act, contributing to the founding of a new generation of land-grant universities charged with providing instruction in agricultural and mechanical pursuits. Initially dubbed a concession to rural interests in the midst of so many acts benefiting manufacturing, this measure eventually contributed to the acceleration of technological change and market relationships in American agriculture.4
Thus the Civil War provided Illinois with a mixed economic blessing. Chicago accelerated its climb to supremacy among the nation's northwestern centers of commerce, serving as the Union's great grain port and rail hub. But low-lying Cairo proved subject to regular floods, and never became the commercial center its boosters had envisioned. Illinois farmers benefited from the Civil War's influence upon prices, and many became businessmen in their own right. But industrial workers suffered double setbacks in slipping standards of living and a de facto ban on wartime strikes. These developments set the stage for the great conflicts of the Gilded Age.