Hall Carbine Affair facts for kids
During the American Civil War, a famous banker named John Pierpont Morgan was involved in a deal that caused a big scandal. He helped finance the purchase of 5,000 old rifles for $3.50 each. These rifles were then sold back to the government for $22 each. This event became known as a shocking example of making too much profit during wartime. People remembered this incident in 1910 when Morgan was criticized again.
The Hall Carbines Deal
The rifles involved in this deal were called "Hall's Carbines." An arms dealer named Arthur M. Eastman bought them in June 1861. He made the deal with Brigadier General James Wolfe Ripley, who was in charge of the US Ordinance Bureau.
Eastman then agreed to sell these rifles to Simon Stevens for $12.50 each. Stevens needed to provide $20,000 to help Eastman buy the rifles from the government first. Stevens quickly found a buyer for the rifles: General John C. Frémont, who agreed to pay $22 for each. Stevens also promised to make the rifles' barrels wider.
After the deal was set, Stevens got a $20,000 loan from J. P. Morgan. The rifles were given to Eastman in August 1861. They were fixed up for about 75 cents each. By the end of August, 2,500 rifles were sent to General Frémont.
Meanwhile, Stevens got another loan from a different banker, Morris Ketchum. He used some of this money to pay Eastman. Morgan was still owed $20,000 and held the remaining 2,500 rifles as security. On September 14, 1861, the US government paid for the first shipment. Morgan then released the rest of the rifles for Frémont.
Why It Became a Scandal
By September 1861, when the second payment was due, the deal was causing a scandal. General Ripley found out that Frémont had bought the rifles without his permission. Ripley also felt that Frémont had paid too much for them.
Ripley complained to the Secretary of War. News about the issue appeared in major newspapers on September 26, 1861. The very next day, a committee from the House of Representatives started investigating the matter.
In 1863, a special Congressional Committee on Government Contracts strongly criticized the people who sold the weapons. They said that those who pretended to be loyal but made huge profits from the nation's troubles were worse than traitors.
Interest in this event came back in 1910. This was when a book called History of the Great American Fortunes by Gustavus Myers was published. It had a chapter about J. P. Morgan. The rifle deal then became a very famous case, discussed by many people.
Myers claimed that the rifles were so old and faulty that they were more likely to hurt the person firing them than the enemy. An older version of the rifle was known to have this problem.
Some people, like Gordon Wasson, argued that there was no proof Morgan knew he was part of a plan to profit unfairly from the war. However, Matthew Josephson had said earlier that Morgan must have known. This was because Morgan had sent the government a bill for a large amount of money before he even delivered all the rifles he was holding.
After looking at the evidence, Charles Morris concluded that it was "unlikely" that Morgan didn't know how profitable the deal was. Jan Irvin pointed out that Gordon Wasson later became a vice president for J. P. Morgan's company after writing his book, which tried to clear Morgan's name.
