Washington's tyranny is yours now, too. You are with us now. We are not brighter than you, but do have the life experience in our heritage of impoverishment by perishable paper money. Our ancestors foolishly believed the pro-war propaganda as you did from your northern demagogues, media, and churches. Learn from Southern history which is your American history also.
The main international bankers in Europe were reluctant to finance the Confederacy, so it turned to smaller houses and speculators who bought $15,000,000 in Confederate bonds with gold.[34] The gold was used to buy warships and supplies to be brought in by blockade runners. By highlighting Britain's economic links to the Northern states and pointing to the potential dangers of meddling in the conflict, financiers in the City of London provided Parliament with a powerful economic justification for the policy of neutrality.[35]
$15 bond coupon circulated as cash, but depreciated rapidly in value
This policy of issuing irredeemable paper money was copied by the
individual states and other political bodies. Alabama began by issuing
$1,000,000 in notes in February 1861, and added to this amount during
each subsequent session of the state legislature. The other states
followed suit. Cities also sought to replenish their treasuries in the
same way.
Corporations and other business concerns tried to meet the rising tide of prices with the issue of their individual promissory notes intended to circulate from hand to hand.
As a result of this redundancy of the currency, its value collapsed. Gold was quoted at a premium in Confederate notes in April 1861. By the end of that year, a paper dollar was quoted at 90 cents in gold; during 1862 that figure fell to 40 cents; during 1863, to 6 cents; and still lower during the last two years of the war. The downward course of this figure, with occasional recoveries, reflects the popular estimate of the Confederacy's chance of winning independence.
The oversupply of currency drove the price of commodities to exorbitant heights, and disarranged all business. Savings in nominal dollars lost 90 percent or more of their value. It affected different classes of commodities differently. Imports like coffee became very expensive, and ersatz substitutes were found. (Massey 1952) Confederate asset price stabilization policies appear to have increased the velocity of circulation, and counterproductively channeled inflationary pressures into other areas of the economy.
Between January 1861 and April 1865, the Lerner Commodity Price Index of leading cities in the Eastern Confederacy increased from 100 to over 9000. Price inflation in the South during the Civil War ranks second only to the American Revolution in U.S. history.
Three successive monetary reforms
encouraged holders of treasury notes to exchange these notes for bonds
by imposing deadlines on their convertibility. Confederate legislative
efforts aimed at precipitating the conversion of currency into bonds did
temporarily suppress currency depreciation. These acts also triggered
upsurges in commodity prices, however, because note holders rushed to
spend the currency before their exchange rights were reduced.[37]
More>> Economy of the Confederate States of America
External links:
Confederate War Finance
Money and Finance in the Confederate States of America
Economy of the Confederate States of America - Wikipedia, the free encyclopedia
[excerpt] The main international bankers in Europe were reluctant to finance the Confederacy, so it turned to smaller houses and speculators who bought $15,000,000 in Confederate bonds with gold.[34] The gold was used to buy warships and supplies to be brought in by blockade runners. By highlighting Britain's economic links to the Northern states and pointing to the potential dangers of meddling in the conflict, financiers in the City of London provided Parliament with a powerful economic justification for the policy of neutrality.[35]
Money
Main article: Confederate States of America currency
Bad money drives out good, and supplies of gold and silver were
hoarded, driven out of circulation by the rising flood of paper money.
The first notes were issued in March 1861, and bore interest. They were
soon followed by others, bearing no interest and payable in two years,
others payable six months after peace. New issues were continually
provided, so that from an initial $1,000,000 in circulation in July
1861, the amount rose to $30 million before December 1861; to $100
million by March 1862; to $200 million by August 1862; to perhaps $450
million by December 1862; to $700 million by the autumn of 1863; and to a
much larger figure before the end of the war.[36]
"January 1, 1864. … The prices of everything are very high.
Corn seven dollars a bushel, calico ten dollars a yard, salt sixty
dollars a hundred, cotton from sixty to eighty cents a pound, everything
in like ratio."
"November 16, 1864. Paid seven dollars [Confederate money] a pound for coffee, six dollars an ounce for indigo, twenty dollars for a quire of paper, five dollars for ten cents' worth of flax thread, six dollars for pins, and forty dollars for a bunch of factory thread."
"November 16, 1864. Paid seven dollars [Confederate money] a pound for coffee, six dollars an ounce for indigo, twenty dollars for a quire of paper, five dollars for ten cents' worth of flax thread, six dollars for pins, and forty dollars for a bunch of factory thread."
Journal of Dolly Sumner Lunt Burge. Mrs. Burge, a Maine native, widow of Thomas Burge, lived near Covington, Georgia, about 40 miles east of Atlanta. The Battle of Atlanta,
July 22 to September 2, 1864, ended with the city's surrender. The U.S.
Army under General William T. Sherman then began in earnest the
subsequent scorched-earth campaign Sherman's March to the Sea, which ended with the negotiated surrender of the city of Savannah on December 21, 1864.[38]
Corporations and other business concerns tried to meet the rising tide of prices with the issue of their individual promissory notes intended to circulate from hand to hand.
As a result of this redundancy of the currency, its value collapsed. Gold was quoted at a premium in Confederate notes in April 1861. By the end of that year, a paper dollar was quoted at 90 cents in gold; during 1862 that figure fell to 40 cents; during 1863, to 6 cents; and still lower during the last two years of the war. The downward course of this figure, with occasional recoveries, reflects the popular estimate of the Confederacy's chance of winning independence.
The oversupply of currency drove the price of commodities to exorbitant heights, and disarranged all business. Savings in nominal dollars lost 90 percent or more of their value. It affected different classes of commodities differently. Imports like coffee became very expensive, and ersatz substitutes were found. (Massey 1952) Confederate asset price stabilization policies appear to have increased the velocity of circulation, and counterproductively channeled inflationary pressures into other areas of the economy.
Between January 1861 and April 1865, the Lerner Commodity Price Index of leading cities in the Eastern Confederacy increased from 100 to over 9000. Price inflation in the South during the Civil War ranks second only to the American Revolution in U.S. history.
 |
Lerner Price Index (Jan-Mar 1861 = 100)
Monthly Intervals
|
More>> Economy of the Confederate States of America
External links:
Confederate War Finance
Money and Finance in the Confederate States of America
