War of 1812 Declared, Enabling Widespread Profiteering and Contractor Fraud

The United States Congress declares war on Great Britain, initiating the War of 1812 ostensibly over British impressment of American sailors, trade restrictions, and western expansion conflicts. The declaration creates immediate opportunities for systematic profiteering, contractor fraud, and illicit trade that characterize American military conflicts. The war enables what Stuart D. Brandes documents as a long pattern of war profiteering including “price gouging, quality degradation, trading with the enemy, plunder, and fraud”—practices that previous conflicts had already established but which the War of 1812 intensifies and normalizes.

The conflict triggers the last significant era of privateering, with enterprising entrepreneurs and adventure seekers hoping to make fortunes on the open ocean at the expense of enemy shipping. The National Archives documents over 200 cases of libel for salvage, smuggling, and prize of war during the War of 1812, revealing the extent of maritime profiteering. American privateers do not limit their predation to British merchants—they also capture Swedish, Spanish, Portuguese, and Russian ships, demonstrating how war creates cover for indiscriminate commercial raiding under the pretense of patriotic service. Illicit trade flourishes through collusive captures arranged between American traders and British officers, with American ships fraudulently transferred to neutral flags to evade restrictions. The government eventually issues orders to stop illicit trading, but enforcement proves weak and sporadic.

The War of 1812 establishes enduring patterns of war profiteering that recur throughout American history despite repeated condemnation. The Puritans had condemned war profiteering as a “Provoking Evil,” George Washington feared it would ruin the Revolution, and Franklin D. Roosevelt later promises never to permit another crop of “war millionaires”—yet on every occasion that American soldiers serve and sacrifice, other Americans cheerfully enhance their personal wealth by exploiting wartime circumstances. The war demonstrates how military conflicts create systematic opportunities for elite enrichment while soldiers bear the costs and risks, establishing precedents for contractor fraud and profiteering that persist from the Civil War through Iraq and Afghanistan, revealing war as an instrument not merely of policy but of wealth transfer from public treasuries to private fortunes.