S. Isaac, Campbell & Company

• 1. Introduction

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  S. Isaac, Campbell & Company moved its main London offices to 71 Jermyn Street in mid-1861, right after the American Civil War broke out. The timing was not coincidence. Within months, the firm had identified its most consequential customer in the Confederate States of America. How a London military supply firm ended up channeling arms to the Confederate South is a story of lost contracts and desperate opportunity. The debt the Confederacy accumulated with the firm would ultimately destroy it.

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• 2. From Chatham to London

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  In 1838, Samuel Isaac set himself up in Chatham, Kent as a merchant selling military uniforms, belts, and knapsacks to soldiers and sailors. He opened a large and prestigious store in the town. By 1845, the business had taken formal shape: 'Samuel Isaac, Military Contractor & Tailor,' located at 71 High Street in Chatham. Leather and clothing goods formed the core of the business, though boots were its earliest claim to success.

  By 1848, a second office had opened at 21 St. James Street in London, operating under the name 'Isaac Samuel, Army Contractor.' The firm's name changed to 'Samuel Isaac & Company' in 1851 and then to 'S. Isaac, Campbell & Company' the following year.

  A contract to supply uniforms to the entire British Army in the East established the firm among the largest military suppliers in the country. In May 1858, another major contract followed: boots for the British Army as a whole. The firm's trajectory from a small Chatham tailor to a national military contractor had taken just two decades. One month after that boots contract was signed, a charge of bribery would reshape the company entirely.

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• 3. Barred from the Crown

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  Crimean War supply contracts were at the center of the corruption charges that caught up with S. Isaac, Campbell & Company in June 1858. The firm stood accused of selling inferior goods to the military while overcharging the government for them. The punishment was an absolute bar from all further business with the British military.

  British Volunteer Corps units did not face the rigid government standards or the strict inspections applied to regular forces. For a firm barred from Crown contracts, those units became the primary remaining market. Three years later, when the Confederate states went looking for arms in Britain, S. Isaac, Campbell & Company was ready to deal.

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• 4. The Confederate Agent

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  Jefferson Davis was inaugurated president of the Confederacy on the 18th of February 1861. Three days later, Davis directed Josiah Gorgas, chief of the newly established Confederate States Ordnance Bureau, to address the South's dire shortage of arms. Gorgas dispatched Major Caleb Huse to Europe as the Confederacy's head purchasing agent. Huse's orders called for the procurement and shipment of rifles, munitions, and other military supplies for the Confederate war effort.

  Confederate Treasury Secretary Christopher Memminger had already reached out to George Trenholm of John Fraser and Company in Liverpool. Trenholm had arranged a £5,000 letter of credit to cover Huse's initial purchases. Additional funding came through Fraser, Trenholm and Company, giving Huse the means to begin searching the English market immediately. His specific initial target was 12,000 Pattern 1853 Enfield rifles, a weapon whose battlefield performance matched that of the Union's Springfield.

  Huse arrived in Liverpool on the 10th of May 1861 and traveled directly to London. He took a room at Morley's hotel, at 58 Jermyn Street in Trafalgar Square, a spot favored by visiting Americans. S. Isaac, Campbell & Company had recently opened offices directly across the street. Huse contacted the firm along with the London Armoury Company, searching for Enfield rifles and comparable weapons. He was not yet aware that his new supplier had been expelled from British government contracting just three years earlier.

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• 5. A Million Pounds

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  By February 1863, Huse had arranged Confederate purchases exceeding one million pounds, almost all handled through S. Isaac, Campbell & Company. Small arms alone accounted for £417,262 of that total. Uniforms and clothing contributed £110,525, while military accouterments added another £54,973.

  S. Isaac, Campbell & Company operated as commission merchants throughout this period. The firm connected Huse with arms suppliers, arranged financing through Trenholm, and charged a commission from both sides of each transaction. Union agents had also rushed to Britain to purchase arms, driving up prices and creating fierce competition for the same Enfield rifles. Huse arrived with comparatively little money to compete against them.

  Goods sent from Britain traveled to neutral ports off the American coast. From there they were loaded onto specially built blockade runners attempting to slip through the Union naval blockade into southern harbors.

  By the end of 1862, Huse had spent more than $5,000,000 on Confederate supplies. Between the 20th of January and the 7th of March 1862, $1,261,600 was transferred to Huse for purchasing. A U.S. naval officer, William M. Walker, was monitoring the firm's operations as a Union secret agent in Britain. His reports went directly to Secretary of State William H. Seward. S. Isaac, Campbell & Company and Huse had often funded these purchases from their own capital. They shipped goods immediately, expecting the Confederacy to repay them at a later date. By November 1862, $2,000,000 was still owed to the firm.

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• 6. The Double Ledger

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  Confederate investigators eventually discovered that S. Isaac, Campbell & Company was maintaining two separate account books. One recorded the actual prices paid for goods; the other listed inflated figures charged to the Confederacy. When confronted, the firm argued this practice was the only way to protect itself from financial loss.

  Colin J. McRae, the Confederate States Financial Agent in Britain, led the investigation that followed. His inquiry cleared Major Huse of any wrongdoing. Huse still severed all ties with the firm, suspecting it had deliberately substituted inferior arms while over-charging the Confederacy. By mid-1863, the Confederacy had officially ended its business relationship with S. Isaac, Campbell & Company.

  The Isaac brothers continued to sell goods to the South through 1864, using front men to offer products from their factories. This kept a trickle of business flowing even after the official break.

  In April and May 1863, the Confederacy had sold £220,000 of cotton bonds at approximately 91%, raising £199,340. In late May, the Confederacy used £150,000 in Erlanger bonds to settle part of its debt with Huse and S. Isaac, Campbell & Company. The firm received those bonds at the issue price of 90% and agreed to cancel £135,000 of the outstanding debt.

  General Grant's capture of Vicksburg in July 1863 proved decisive for the firm's fate. With the Confederacy cut off from the Mississippi River, access to the cotton plantations backing the value of those bonds was severed. Cotton securities lost most of their value almost immediately. The damage to S. Isaac, Campbell & Company's holdings and credit was severe enough that no viable future business remained for the firm.

  By the war's end, 60% of the cotton produced in the South during those years had reached British shores. S. Isaac, Campbell & Company had accepted bonds tied to that cotton as partial payment. When the Confederacy fell, those bonds became worthless, and the firm's bankruptcy filing in 1869 followed within a few years.

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