American Revolution

IN APRIL 1775, the first shots were fired at Lexington and Concord, Massachusetts, plunging the American colonies into the Revolutionary War. Just more than a year later, in July 1776, the Continental Congress endorsed the Declaration of Independence, providing legitimacy for the fight for independence from England, then the world's greatest power. When the young nation entered the war, it had only a weak central government; there were no efficient governmental organizations to take charge of procurement for the American troops. The overall result of the lack of organization was chaos, waste, inefficiency, and corruption.

Profiteers were quick to take advantage of the government's shortcomings and to use the emergency situation to their own advantage. It was not uncommon for American troops to go without food, clothing, or blankets while local merchants, profiteers, and speculators grew rich and powerful. Scholars who study the Revolutionary period have estimated that the number of profiteers might have been as high as 90,000 compared to the 100,000 or so who composed the military might of the various armies. Profiteering methods included price-gouging, speculation, plunder, theft, fraud, privateering, ransom, hoarding, and trading with the enemy.

The Continental Congress understood from the beginning that Americans would expect to make money from the Revolutionary War. In 1776, Congress established the Secret Committee of Trade, which stated that the government would be “willing to allow what might be a reasonable compensation without being willing to submit to extortion.” Congressional inexperience led to several serious mistakes, such as duplication of services. Duplication meant that different governmental agencies often competed for the same goods, raising prices even [Page 34]higher. The government often found itself in a nowin situation because it was forced to pay inflated prices to obtain necessities for the troops. Once the inflated price was established, merchants were unwilling to accept a lower price for the item, and the cycle continued. Profiteering was not limited to the private sector but also occurred within the American and British militaries and was common in government.

An American supply train at Valley Forge, Pennsylvania, was a typical opportunity for war profiteers.