The Ordnance Department
And The Contract System
Despite the system's above-mentioned problems from the private contractors’ point of view, contractors did make some profit off of their products.16 That partially may have been due to certain inspectors’ relaxing some of the arms requirements, making the gun pass inspection, because they were biased towards a contractor or the contractor fooled the inspector.17 Yet, this unethical bias could be overcome when one or more companies undertook the inspection.18 By hiring inspectors, the government further stimulated the economy.
Although both the Ordnance and Quartermaster Departments attempted to keep contracts away from political leanings, there were some cases where connections may have been used to gain a contract.19 Such may have been the case with the Burnside Carbine, in which the carbine's inventor was involved in the U.S. Cavalry. Likewise, Fisher and the Cheney brothers had connections and influence to help inventor Christopher Spencer get a contract with the government for his patented repeating carbine.
Before 1862, the government used private proposals, buying off of middlemen (such as banks), instead of utilizing competitive bidding. The middlemen took away from the manufacturer’s profit.20 Competitive bidding was fairer to the business contractors and could lower prices for the government due to competition. Although contracts were not reliable and often created scandals in the beginning year of the war, the Ordnance Department discovered reliable firms and became more selective in its contracts.21 The Ordnance Department, in 1862, underwent a change in process after the review by the Holt-Owen Commission of its early arms suppliers who found that there was no system for its small arms orders.
A more ethical solution came for the contractors (besides producing every gun at the highest quality for the government). The need for guns to arm soldiers caused the government to become even more lax on their regulations. Two grades of quality were created, and the lower grade could still be bought by the government after meeting minimum requirements and demonstrating that they work.22
a The inspection of each piece of a gun, instead of testing the gun as a whole, was driven by the need for interchangeable parts.
1 James Ripley. James Ripley, Chief of Ordnance, to Simon Cameron, Secretary of War, June 8, 1861. Quoted in Robert N. Scott, “Correspondence, Orders, Reports, and Returns of the Union Authorities from November 1, 1860 to March 31, 1862,” Series III, Vol I, The War of the Rebellion: A Compilation of the Official Records of the Union andConfederate Armies (Washington D.C.: Government Publishing Office, 1880-1901), page 669, accessed through http://www.simmonsgames.com/research/authors/USWarDept/ORA/OR-S3-V1.html.
2 Mark Wilson, The Business of Civil War: Military Mobilization and the State, 1861 – 1865 (Baltimore: Johns Hopkins University Press, 2006), 57.
3 Matthew J. Gallman, The North Fights the Civil War: The Home Front (Chicago: Ivan R. Dee, Inc., 1994), 206.
4 Gallman, The North Fights the Civil War, 214-215
5 Wilson, Business of the Civil War, 115
6 Wilson, Business of the Civil War, 126-127.
7 Wilson, Business of the Civil War, 126.
8 Wilson, Business of the Civil War, 76.
9 Felicia Johnson Deyrup, Arms Makers of the Connecticut Valley: A Regional Study of the Economic Development of the Small Arms Industry, 1798-1870 (George Banta Publishing Company: Menasha, Wisconsin, 1948), 184.
10 Wilson, Business of the Civil War, 127.
11 Deyrup, Arms Makers of the Connecticut Valley, 187.
12Wilson, Business of the Civil War, 122.
13 Wilson, Business of the Civil War, 120.
14 Deyrup, Arms Makers of the Connecticut Valley, 57.
15 Wilson, Business of the Civil War, 128.
16Wilson, Business of the Civil War, 132.
17 Deyrup, Arms Makers of the Connecticut Valley,59.
18 Deyrup, Arms Makers of the Connecticut Valley 60.
20 Wilson, Business of the Civil War, 175.
21Wilson, Business of the Civil War, 158-159.
22 Carl L. Davis, Arming the Union: Small Arms in the Civil War (Port Washington, New York: Kennikat Press, Inc., 1973), 75.
23 Deyrup, Arms Makers of the Connecticut Valley,185.
With exception of the start of the Civil War, in which the Ordnance Department was forced to seek out foreign aid, the government depended on domestic suppliers for their rifles and carbines throughout the war. A letter from Chief of Ordnance James Ripley to Secretary of War Simon Cameron on June 8, 1861 reads, “All these deficiencies [in artillery, arms and ammunition] must be supplied by manufacture at the U. S. Armory and arsenals and by purchases from private establishments. These two sources will keep up our supply to meet immediate wants, and in one year, it is estimated, will afford a good stock in store.”1 That goal was hard to attain, and foreign arms flooded the field in the beginning of the war. Ultimately, the Ordnance Department and the Subsistence Bureau combined spent over $500 million during the war.2
Some contractors were large, established companies capable of fulfilling the government’s needs through slightly changing their manufacturing, and others were smaller firms made specifically to fill government contracts.3 Neither large firms or small companies dedicated to the war effort were safe from bankruptcy due to the trickiness of the contract system. Yet, profit was not solely found in the companies’ products that fulfilled a contract; it was produced from inventors' patents.4 Inventors could rent out or sell machinery or use their inventions, such as an advancement in arms, to get an edge over their contracting competitors.
Because of the contract system, many smaller companies became subcontractors in order to gain a profit and assume less responsibility pertaining to a huge order.5 The government mainly dealt with large firms able to take on the financial risk and weather the time gap between delivery and payment.6 Those companies were able to gain some profit if they were successful.7 Springfield Armory, manufacturer of the Springfield rifle, as well as primary contractors used subcontractors for parts of a product or creation of ready material to make a product, helping to fulfill growing demands for arms and parts.8 The Springfield Armory, which did not reach its peak production until 1864,9 was the only federal armory that manufactured guns during the Civil War, requiring the Armory to look to private contractors to meet the growing demand for arms. Many small and medium-sized companies subcontracted so they did not make their company as liable. Subcontractors were paid in a more timely fashion than contractors.10
Small companies were also discouraged from direct contracts with the government through their limited capacity to produce large orders of goods. The contracting system seemed biased against small manufacturers as the government tried desperately to fulfill arm orders for the great influx of soldiers in the service. The larger the order, the more money the contractor received from the government.11 With a larger the firm, the chance of a successfully filled contract and possible a larger contract improved. The leading contractors for small arms was, first, Colt’s Patent Fire Arms Co. at $4.7 million; second, E. Remington & Sons at $2.9 million; and third, Sharps Rifle Manufacturing Co. at $2.4 million.12 Other top small arms contractors were the Burnside Rifle Company, the Providence Tool Company, and the Alfred, Jenks & Son Company. Each of these companies were large operations with 500 to 2,000 workers during the Civil War.13
Even large manufacturers had to learn to adapt their processes and products to meet the Ordnance Department’s regulations to obtain or maintain their contract. The learning and adaptation process needed to be quick in order to win their desired contracts. The Ordnance Department’s inspection process, paid for by the government, was rigorous. Inspections looked for defects in both the materials used, such as iron, and in the workmanship of each gun from its lock parts to the barrel's interior straightness. The arms also underwent waterproofing tests where the barrel was filled with water, and the barrels were also weighed separately from the gun. The gun was fired with varying charges and then with lead bullets and wads of paper. Mountings and the stock were also tested.15
The guns that were not stamped by an inspector, thus not meeting the standards, were unable to be used in fulfilling the contract, because the federal government viewed them as not fit for service.14 That inspired the proofmaster to fully evaluate each gun, and the process needed to be thorough. The inspector was held accountable for every gun he stamped.15 Entire deliveries of the companies’ products could have been rejected, even for the more successful contractors, causing a large financial risk for those private companies.16
Click chart to enlarge.