REQUERIMIENTOS PARA EL PROYECTO DE INGENIERÍA DEFINITIVO

The single best historical barometer for the drug market of the Civil War era is the Market Report, issued annually by the American Pharmaceutical Association. Unfortunately, the Committee on the Drug Market was not formed until the association’s tenth annual meeting in Philadelphia in 1862, after widespread dissatisfaction with its predecessor, the Committee on Adulterations.89_{The first re-}

port on the drug market would not be issued until 1863, with Edward R. Squibb as chair. Thus, we have no good source of information on market factors early in the war. But Squibb’s report was predictably thorough and intriguing with regard to the quinine market:

This appears above all others to be the “fancy” article of the market to which it belongs. The speculations and “corners” into which it has entered, and the amount of capital employed in its market management during the past two years would doubtless make a most curious history. Beyond all other articles, this has tempted outside persons to invest in it for speculation, and as such are generally easily frightened, they get “weak kneed,” as it is called, and by selling out in a falling market, aid to depress it often to extremes upon which opposite extremes find surest basis. It is a curious circumstance alleged to be true, particularly with out- side speculators, that they commonly overstand [sic] a rising market and miss the highest point, but will rarely pass through a depression without selling near the lowest point.90

Squibb’s comments give an interesting glimpse into the volatile mar- ket conditions of a highly viable product, which quinine had become.

With a high-demand product such as quinine, Squibb’s indications of speculation should not be surprising. But in 1906 John W. Church- man, a young clinical assistant at Johns Hopkins Hospital studying under Dr. Hugh Hampton Young, wrote an interesting—albeit scath- ing—analysis of the quinine market during the Civil War. The article is unfortunately not referenced, but the fact that the essay was issued at a time when many of the participants in those events were still alive

also gives his essay added force. Churchman’s accusations are so pointed and potentially damning that they require some in-depth in- vestigation.

Churchman begins his review of quinine use by tracing the story of its development and rise in popularity as a virtual cure-all drug, top- ics that have been previously discussed and need not be recounted here. Churchman’s record adds interesting detail to the story, but nothing new. His treatment of quinine’s wartime market conditions, however, is another matter. He points out that during the war there were only two manufacturers of quinine: Powers and Weightman and Rosengarten and Sons. As we have seen, the process of making qui- nine sulfate came to both firms independently. John Farr (1791-1847) was the first to manufacture quinine sulfate in America, which he did under the firm name Farr and Kunzie in 1823. Thomas H. Powers and William Weightman became heirs to Farr’s quinine sulfate process when they formed a partnership with him in 1837. The firm Farr, Powers, and Weightman lasted until the death of the senior partner ten years later. Quinine came to George D. Rosengarten through a Frenchman, N. F. H. Denis, who had studied under Robiquet, a chem- ist who, in turn, had undoubtedly learned of the process discovered by his colleagues Caventou and Pelletier in 1820. Rosengarten, with Denis heading his manufacturing department, was making quinine sulfate one year after Farr. Careful to guard the precise processes by which they made the product, Powers and Weightman and Rosen- garten and Sons were the only two domestic firms to manufacture quinine sulfate commercially throughout the war.91

Armed with this fact, Churchman smells a conspiracy. He implies (without any hard evidence) that the two firms worked in collusion, “[a]nd before long the price of the drug ($2.10 per ounce at the out- break of the war) was, by reason of this monopoly aided by certain economic conditions, soaring heavenward.”92_{For Churchman, the 40}

percent duty went beyond reasonable domestic protection. Only when the quinine tariff was lifted with the Dingley Bill in 1897 was this alleged “oppression” removed. Chief among villains was Weight- man. William Weightman died on August 29, 1904, “the richest man in Pennsylvania.”93_{In true Progessivist style, Churchman paints the}

portrait of a robber baron, finding little to praise in the industrial gi- ant:

He was a singularly reserved man, a captain of industry, a prac- tical scientist of rank; a man of sagacity, energy, and thrift, who amassed a fortune of at least $50,000,000 and died in the harness. Eminently fitted to serve the community he had little in com- mon with it, finding his chief interests in the making of a fortune and the raising of chrysanthemums to a variety of which his name became attached. He owned more property in Philadelphia than the Pennsylvania or the Reading Railroads. The Garrick Theatre and the Hale Building—assessed at $2,000,000—were two of his holdings. He made it a point never to sell any of his proper- ties—the only exception to this rule being the sale of the Bing- ham House, which brought him $1,000,000. The store of Dar- lington and Co. belonged to him; whole blocks in Philadelphia were his; and his personal property tax return for 1903-04 was over $5,000,000. Here we find, then, the resting place of the dol- lars that went for those 19 odd tons of quinine and of the many thousands of dollars that followed them when the monopoly es- tablished during the war lived on and grew fat . . .

But in estimating the price [of the Civil War], do not think only or chiefly of the life lost in the four unfortunate years. Re- member as well the disability and debility they left behind them: and in considering the vast financial perplexities which came when reconstruction days began, do not overlook the quinine monopoly which the war had made possible but which a suffer- ing people overthrew.94

Looking at the matter as a whole, some circumstantial evidence supports Churchman’s allegations. First, two firms holding all do- mestic production of one high-demand drug during a time of war set the stage for all kinds of potential business chicanery. Second, it is known that Powers and Weightman, along with Millinckrodt and oth- ers, engaged in a bromine cartel in the late nineteenth century.95

Third, it is suspicious that with all the demand for quinine sulfate, the U.S. Army Laboratory never produced a drop. Even historian George Winston Smith wondered about this “singular fact.”96 _{Yet Smith}

could find no “clandestine arrangements” between the two firms and the Army Medical Department. Hammond seriously considered hav- ing the Philadelphia plant try its hand at producing the precious arti- cle; as soon as word got out that the government might start produc- tion, the price plummeted 33 percent.97

Yet allegations of corruption—even in the historical bar of jus- tice—need more than circumstance for proof. Maisch examined the problem of quinine sulfate manufacture in a report submitted on April 17, 1863, and decided against the proposal because of unreli- able cinchona bark supplies and the fact that it would not be economi- cally advantageous for the government to pay the existing manufac- turers higher prices for bark already in their hands. In addition, Maisch noted the start-up costs of machinery and equipment in order to begin production, which might even include the necessity of con- structing or at least procuring another building.98

Maisch’s analysis seems reasonable on the face of it, and there is no reason to assume any undue outside pressures (financial or other- wise) for him to have rendered it. But there are other reasons to argue against a conspiratorial oligopoly such as the one described by Church- man. Although it is true that Powers and Weightman made huge sums of money in the manufacture of wartime quinine, being uniquely well positioned during a particularly advantageous time and making a profit is not a crime. If Powers and Weightman and Rosengarten and Sons engaged in business practices that would be considered illegal by today’s standards (and there is no evidence of that), the historian is still hard-pressed to indict them on rules and regulations unknown and unpracticed in their day. Yet Churchman’s assertions suggest a certain degree of price-gouging unacceptable by even nineteenth- century standards. It should be noted in this regard that Squibb, him- self a manufacturer and one who had little financial interest in quinine, did not chide his colleagues for gouging. In fact, Squibb states in his Market Report of 1863 that “manufacturers cannot sell it [quinine sulfate] at fair profit below $2.87” and that the item’s high- and low- end prices were due to speculators.99

Furthermore, it will be recalled that Squibb attributed this specula- tion to “outside persons,” meaning no doubt persons not associated with drug manufacturing. Price alone does not determine conclu- sively that there was no collusion on the part of the principal manu- facturers, but it surely is one indicator. Figure 7.3 shows the highest annual quinine sulfate prices per ounce for the period. It can readily be seen that although there is a modest rise during the war years, this can easily be attributed to normal wartime demands. Whatever else may be said about prices, they certainly were not “soaring heaven- ward.”

One final piece to this puzzle is worth mentioning. In 1907 Rene Leon de Milhau presented a paper for the American Pharmaceutical Association in which he provided a biography of his pharmacist grand- father, John Milhau. Described by his grandson as a “public-spirited man of the highest type,” Milhau rose to become director of a large New York bank and was therefore in a position to thwart “a band of speculators who were demanding, with good prospects of getting, 33 percent. During the entire war, he kept close watch over the quinine market, defeating every attempt to corner the drug.”100

The final word may not have been written on the quinine story dur- ing the Civil War. Evidence yet to be discovered may bring new light to the subject. But the present conclusion must be against any machi- nations on the part of Powers and Weightman or Rosengarten and Sons in manipulating the prices of quinine sulfate during or even after the war. In order for them to have effectively controlled (much less

manipulated) prices as suggested by Churchman, they would have

had to been able to dominate the supplies of South American cin- chona bark. With plenty of international competition from Britain, France, and Germany, this assumes power neither firm possessed. Both companies were probably content to supply burgeoning domes-

FIGURE 7.3. Quinine Market by Highest Annual Prices, 1823-1880 (Source:

“Table of Prices of Quinine Since 1823,”Pharmaceutical Era [October 15, 1891]:

238, and Joseph W. England, “The American Manufacture of Quinine Sulphate,”

tic needs with the protective duty in place and prices relatively stable; their greatest enemies were the outside speculators who, left un- checked, could make the crude drug prices highly unpredictable. Conditions do not always equal crime, and the imputation of impro- priety does not make it so.

SUMMARY

Calomel and quinine are representative of medicinal agents at two extremes. On the one hand, calomel, an age-old remedy, came to epit- omize the regular profession so much that to remove it from the stan- dard supply table was viewed as an attack on the profession itself. The fact that it cost the career of so enterprising a surgeon general as William A. Hammond shows how ossified and tradition-bound the medical profession and military had become. On the other hand, qui- nine sulfate was the very opposite of calomel. Although cinchona had been around for quite a while, its sulfate cousin was comparatively new and really seemed to work in reducing fevers. As a result, qui- nine helped create industry giants and encouraged production on an unprecedented scale.

Yet quinine, perhaps more than any other medicinal substance, showed the power of Northern industry over the South. Without any assistance from government laboratories or foreign imports, two firms supplied the most prescribed drug for a huge standing army. The South could not have hoped to duplicate this feat of mass manu- facturing. When it received quinine it was largely through smuggling or the capture of Northern supplies.

The Confederacy had its own standing army to provide for, and it had its own administrative structure and system in place to answer those medicinal needs. But it had its own special problems too. Lack- ing the industrial infrastructure of the North, and saddled with a sti- fling blockade of its coast and port cities, the drug story in the South is one of ingenuity and even daring.

PART III: