The Economics of US Civil War Conscription

1. The Economics of US Civil War Conscription Tim Perri Department of Economics ASU September 15, 2006

2.  5 times the United States used conscription during wars: in the CW, WWI, WWII, the Korean War, & in the Vietnam War.  In the 20th century wars with conscription, the % of those who served who were draftees: 59, 61, 27, and 21.  The same % for the CW is 2.

3.  Civil War conscription (CWC) was not designed to directly attract volunteers.  The federal govt. was weak & had little ability to tax. CWC was used to shift some of the payroll cost of the army to state & local govt.  Historians have criticized bounties, substitution, & commutation.

4.  Others (including economists) have argued sub. & commutation were only for the relatively affluent. Draft riots suggest it was not easy to avoid service.  However, only 2% of those who served were drafted.

5.  Among the arguments herein are: 1) Riots did not reflect draft risk. 2) There were many ways to avoid svc. 3) Commutation & substitution were used to reduce the # of those who were conscripted. 4) The bounty system worked reasonably well given constraints. 5) Commutation could have lowered social cost but was used as a price ceiling.

6. History of conscription in the US  All but Pa. of the colonies allowed sub. in the militia; some allowed payment of a fee to avoid svc.  Militia drafts were used in Indian Wars, War of 1812, & in the Revolution.  1812: Troup/Monroe plans: classes of 25 men, each class of  wealth. No volunteer from a class? Pay a tax.

7.  Lindsay (1968) & Rafuse (1970): Troup/Monroe similar to vol. army.  I argue CWC was similar: shift some of the tax burden to the local level without taxing only draftees or compelling anyone to enter military service.

8.  CW: early attempts to raise troops were left to the states (militias were used). Recruiting  in summer 1862.  Demand for men .  In the army: 1/62: 575,917 1/63: 918,121 1/64: 860,737 1/65: 959,460

9. Militia law of 1862: transition to federal authority to raise troops.  Before this, federal troop calls were voluntary; states appropriated $$ to pay for militia.  With militia law, draft from militias if troop calls were not met.

10.  Exemptions and substitutions were allowed. Riots occurred & the draft was rescinded.  The Enrollment Act of 1863 completed the transition to federal control of recruitment and to national conscription.

11.  Enlistment quotas were assigned to each Congressional district by its pro rata share of the # called minus the # of previous enlistees from the district.  After 50 days, a lottery would be held to obtain the remainder of a district's quota.  Not all districts had drafts.  The draft calls were 10/63, 3/64, 7/64, & 12/64.

12. Substitution & commutation  All 4 drafts: hire & avoid svc. for 3 years.  Pay $300: 1st draft, avoid svc. for 3 yrs.; 2nd draft, avoid svc. for that draft; & 3rd & 4th drafts, only COs could avoid svc.

13. Table One. Draft Statistics from the US Civil War.* * Source: Murdock (1971), p.13. ** These are the numbers called in a draft after volunteers were obtained. The government calls for men were, as best as can be determined, 500,000, 200,000, 500,000, and 300,000, respectively (Geary, 1991, p.81). *** These individuals apparently were discharged because their districts had met their quotas.

14. Table Two. Various Draft Percentages.* * Source: Table One

15.  # who served: estimates 1.5 m to over 2.5 m. I use 2.1m.  92% of those who served were volunteers.  Volunteers non-regular army.  Regular army: authorized to have 42,000 men---never did.

16. Enrollment Act  50 days to meet quotas  then a draft occurred  Bounties at state & local level to hire subs. & vols.  $285m.  Federal bounties  $300m.

17.  Fall ’63. A vol. in NYC, $300 (county), $75 (state), & $200-$400 (fed.): $775.  Rafuse (1970): a union private earned $6.40 per month in 1864.  Lonn (1928): pay was initially $13 per mo. rising to $16 by 5/64.

18. Bounty system  Jumping was a big prob.  12/64: bounties held until men reached the front.  Incentive to pay up front; one “counted” even if he did not serve.  Why? Limited fed. power.

19.  Long (1975): ave. annual earnings in manufacturing of $297 (1860) & $384 (1870).  Could those not wealthy afford to hire or commute? YES!!

20. 1) Communities raise $$ for subs. & commutation. 2) Draft insurance (formal & informal) existed.  Pay for commut. or subs.  Fees: $10-$50.

21. Draft opposition  Why riots & oppo. to commutation? 1) Non-affluent wanted a tax on the wealthy to pay for sub. & commut. 2) Commut. was a focal point. 3) Riots occurred before people realized community funds would be forthcoming. 4) Anti-fed. govt. sentiments.

22. Why the draft? 1) Assertion of fed. power to prevent disunion. 2) Feds. could not pay for troops.  Induce communities to pay.

23. A model a) Market for subs.  inds. U on [0,N] with density of 1.  Random draft of m inds., m < N.  Feds. pay WM.  Each enlistee gets B from the community.  Seller reservation wage = W.

24.  P = price of a substitute.  Hire if called & W-P > WM + B.  Go as a sub. if not called & W < WM + B + P.

25. Mkt. clearing: P = m – WM – B.  A sub. gets P + WM + B = m.  Those with W < m serve.  D = # of reluctant draftees.

26.  Reluctant if drafted & WM + B < W < m. D = (m - WM - B)m/N.  No resource misallocation (“wrong” people in svc.).

27. Figure One. Conscription with substitution. Hire if called Reluctant draftees if called Go as a substitute if not called W 0 WM+B WM+B+P=m N

28. b) The community  T = total funds raised.  F = fixed cost of fundraising.  T = Bm + F.  Opposition to the community = .   = (D,T).

29. all > 0.

30.  Min.  w.r.t. B & totally differentiate f.o.c.: -1 < dB/dWM < 0, dB/dF < 0.  If dkD > 0  an increase in /D: dB/dkD > 0.

31. c) The federal govt.  Feds. min. C w.r.t. WM, C = C(, mWM).  S.o.c. requires |dB/dWM| < 1. dWM/dkD > 0.

32. d) Costly substitution  Let cost = sW.  Now hire if W > W”, & go as a sub (if not called) if W < W’: W” = W’ = WM + B + P.

33.  As s, demand for sub., P, & quantity of subs..  If s = 0, W’ = W” = m.  D/s > 0: more reluctant draftees.  Some of the “wrong” people are now in the army.

34.  With costly substitution, P = Ps>0: Ps>0 = -WM - B.  With costless substitution, P = Ps=0: Ps=0 = m – WM – B. Ps>0 < Ps=0 < Ps>0 + sW”.

35. Figure Two. Costly substitution. Animation Hire if called Reluctant draftees if called Go as a substitute if not called W m 0 WM+B W’ W” N Potential for the wrong people to be enlisted

36. Commutation could... ...lower social cost. Instead of subs., have commutation, with the fee = z.  Set z = Ps = 0 = m – WM – B  z*. 1) Cost of finding subs. is avoided; 2) D; & 3) eliminates resource misallocation.

37.  Ps > 0 < z* < Ps > 0 + sW”.  More commute with z* than substitute with Ps > 0.

38. Commutation actually... ...worked as a price ceiling.  z was set < PS > 0.  In 1862 (Militia Act), P = $1000 in some areas.  3/63, Enrollment Act set z = $300.

39.  Economists knew the effects of a price ceiling (Mill, 1848).  Did Lincoln & his advisors know?  Apparently not.

40. Conclusions 1) CW draft not to raise men directly. 2) Designed to attract “m” soldiers with states & localities bearing some of the payroll cost. 3) Many options to avoid svc.

41. 4) Commutation could have lowered social & private cost, but was used as a price ceiling,  fewer than “m” were enrolled.