Confederate currency

“ Capital and Credit Destroyed.—The fluid capital of the South, money and credit, was in the same prostrate condition as the material capital. The Confederate currency, inflated to the bursting point, had utterly collapsed and was as worthless as waste paper. The bonds of the Confederate government were equally valueless. Specie had nearly disappeared from circulation. The fourteenth amendment to the federal Constitution had made all "debts, obligations, and claims" incurred in aid of the Confederate cause "illegal and void." ”

“ Confederate currency was a commodity in trade, and the parties risked their judgment upon the future value of it, as they might have done upon any other commodity for sale in the community. But if it be treated in this case as a loan of money, Crump agreed to repay it by a certain time after the termination of the war, in the currency which that termination should bring with it, and onerous as the condition is, he must abide by it. ”

“ The Confederacy owed, at the end of the year [Pg 310] 1863, $1,221,000,000; the State Governments, the counties and cities, probably owed as much more. Paper money, the only medium of exchange, was fast giving way to barter. One dollar in gold was worth twenty dollars in Confederate currency. The monthly wage of a common soldier was not sufficient to buy a bushel of wheat. People who lived in the cities converted their tiny yards into vegetable gardens; the planters no longer produced cotton and tobacco, but supplies for “their people” and for the armies. ”

“ For the redemption of the currency (now worth about five cents in specie to the dollar) , every citizen, and every description of property, has been pledged; and as the same citizens and the same property must be pledged for the redemption of any newly created currency, there is no reason to suppose it would not likewise run the same career of depreciation. Nor can bonds be worth more than notes. Success in the field, only, can appreciate either; for none will or can be paid, if we fail to achieve independence. ”

“ The condition upon which their payment was promised-'after the ratification of a treaty of peace between the Confederate States and the United States of America'-had become impossible. It is evidence, therefore, that, if their value in lawful money is to be estimated at the maturit of the bond, a nominal sum, not more than one-twentieth of its amount in Confederate currency, can be recovered. In the case of contracts maturing after the overthrow of the Confederacy, no value whatever can be given to that currency. ”

“ The people had no faith in paper money of any kind, and thought that greenbacks would become worthless in the same way as Confederate currency. All sense of values had been lost, which may account for the fabulous and fictitious prices in the South for several years after the war, and the liberality of appropriations of the first legislature after the surrender, which in small matters was severely economical. ”

“ It was by this government, said the court, exercising its power through an immense territory, that the Confederate notes were issued early in the war; that they became in a short time almost exclusively the currency of the insurgent States; that while the war lasted they were used as money in nearly all the business transactions of many millions of people; and that they must, therefore, be regarded as a currency imposed on the community by irresistible force. ”

“ With our vast resources the circulation, if restricted to its present volume, would be easily manageable, and by gradual absorption in payment of public dues would give place to the precious metals, the only basis of a currency adapted to commerce with foreign countries. In our present circumstances I know of no mode of providing for the public wants which would entail sacrifices so great as a fresh issue of Treasury notes, and I trust that you will concur in the propriety of absolutely forbidding any increase of those now in circulation. ”

“ The disordered condition of the currency, to which I have already alluded, has imposed on the Government a system of supplying the wants of the Army which is so unequal in its operation, vexatious to the producer, injurious to the industrial interest, and productive of such discontent among the people as only to be justified by the existence of an absolute necessity. ”

“ The Confederates sent their gold to Europe by millions to buy arms and munitions of war, relying upon the patriotism of the people to keep up the credit of the national currency; and lest brokers should undertake to depreciate it, they passed a law imposing a heavy penalty upon any one who should discount Confederate notes. ”

“ In addition to the difficulty presented to the necessary operations of the Government and the efficient conduct of the war, the most deplorable of all its results is undoubtedly its corrupting influence on the morals of the people. The possession of large amounts of Treasury notes has naturally led to a desire for investment, and with a constantly increasing volume of currency there has been an equally constant increase of price in all objects of investment. ”

“ The addition of this large sum to the volume of the currency would be attended by disastrous effects and would produce the speedy recurrence of the evils from which the funding law has rescued the country. If our arms are crowned with the success which we have so much reason to hope, we may well expect that this war cannot be prolonged beyond the current year, and nothing would so much retard the beneficent influence of peace on all the interests of our country as the existence of a great mass of currency not redeemable in coin. ”

“ The Texas cavalry in Virginia—originally 5000—now number 180!
Congress adjourned without adopting any plan to reduce the currency, deeming it hopeless, since the discovery of a deficiency, in Mr. Memminger’s accounts, of $400,000,000! So the depreciation will go on, since the collection of taxes is rendered quite [Pg 457] impracticable by the operations of the enemy. Yet buying and selling, for what they call “dollars,” are still extensively indulged; and although the insecurity of slave property is so manifest, yet a negro man will bring $10,000 at auction. ”

“ Our currency was, yesterday, selling $25 for $1 in gold; and all of us who live on salaries live very badly: for food and everything else is governed by the specie value. Our $8000 per annum really is no more than $320 in gold. The rent of our house is the only item of expense not proportionably enlarged. It is $500, or $20 in gold. Gas is put up to $30 per 1000 feet.
Four p.m. We hear the deep booming of cannon again down the river. I hope the enemy will not get back the beeves we captured, and that my barrel of flour from North Carolina will not be intercepted! ”

“ It is the result of the depreciation of a redundant currency, and not of an ascertained scarcity. Timber and coal are as abundant as ever they were; and the one sells at $32 per cord, and the other at $30 per load of 25 bushels. And cotton is abundant, while brown domestic is bringing $3.00 per yard. Many are becoming very shabby in appearance; and I can get no clothes for myself or my family, unless the government shall very materially increase our salaries.
October 21st.—Gen. Lee telegraphed last night that our cavalry had routed the enemy’s horse on Monday, capturing some 200, etc. ”

“ The ordinance and act require the courts, in the construction of contracts made in the insurgent States between certain dates, to assume as a fact that the parties intended by the term 'dollars' Confederate notes, and understood that the contracts were solvable in that currency; and they thus throw upon the party contesting the truth of the assumed fact the burden of establishing a different understanding. ”

“ The large majority of those engaged in the trade were foreigners who, by the aid of the fortifications and defenses established and maintained in our harbors at the Confederate expense, were thus enabled to accumulate rapid fortunes, while depreciating our currency and exhausting our country of the productions which form its most valuable resources for needful supplies during the war. In the beginning these vessels were by consent of the owners made partially available for public purposes, and a portion of their tonnage was reserved for public use, but always at very extravagant rates. ”

“ The holders of the currency now outstanding can be protected in the recovery of their just claims only by substituting for their notes some other security. If the currency is not greatly and promptly reduced, the present scale of inflated prices will not only continue to exist, but by the very fact of the large amounts thus made requisite in the conduct of the war those prices will reach rates still more extravagant, and the whole system will fall under its own weight, thus rendering the redemption of the debt impossible, and destroying its whole value in the hands of the holder. ”

“ Orders to-day were given that no more supplies from the United States should be received by the Federal prisoners here. It seems that our men in their hands are not even allowed the visits of their friends.
December 13th.—Rained last night—and this morning we have warm April weather and bright sunshine.
It is getting to be the general belief among men capable of reflection, that no jugglery can save the Confederate States currency. As well might one lift himself from the earth by seizing his feet, as to legislate a remedy. ”

“ The increasing public debt, the great augmentation in the volume of the currency, with its necessary concomitant of extravagant prices for all articles of consumption, the want of revenue from a taxation adequate to support the public credit, all unite in admonishing us that energetic and wise legislation alone can prevent serious embarrassment in our monetary affairs. ”

“ There can be no doubt that those who framed and adopted the Constitution, having in immediate view the depreciated paper of the Confederacy—of which $500 in paper were at times only equal to $1 in coin—intended to prevent the recurrence of similar evils, so far at least as related to the transactions of the new Government. They gave to Congress express powers to coin money and to regulate the value thereof and of foreign coin; they refused to give it power to establish corporations—the agents then as now chiefly employed to create a paper currency ”

“ The value of the paper currency of a nation is a symptom of the nation’s stability, and men had it thus brought home to them in the common operations of life, that the financial system of the Confederacy had broken down while the enemy’s money was eagerly sought for within its borders. ”

“ Congress should provide that the compulsory coinage of silver, now required by law, may not disturb our monetary system by driving either metal out of circulation. If possible, such an adjustment should be made that the purchasing power of every coined dollar will be exactly equal to its debt-paying power in all the markets of the world. The chief duty of the national government, in connection with the currency of the country, is to coin and declare its value. Grave doubts have been entertained whether Congress is authorized by the Constitution to make any form of paper money legal tender. ”

“ On the one side is devotion to the country, and a firm, secure currency, which at any moment will bring its full value in gold; on the other, secession, with the inevitable attendant of a circulation, not depreciated, but utterly worthless, and that, too, with no other to fill its place, since the operation of the law must soon drive out of existence every dollar of the present local bank circulation: patriotism and prosperity arrayed against rebellion and ruin. ”

“ The states cannot coin money. Can they, then, coin that, which becomes the actual and almost universal substitute for money? Is not the right of issuing paper, intended for circulation in the place, and as the representative of metallic currency, derived merely from the power of coining and regulating the metallic currency? Could congress, if it did not possess the power of coining money and regulating the value of foreign coins, create a bank with the power to circulate bills? ”

“ The fortunes of many individuals were destroyed; and those of all persons were greatly impaired by the rapid and unparalleled depreciation of the paper currency during this period. In truth, the history of the paper currency, which during the revolution was issued by congress alone, is full of melancholy instruction. It is at once humiliating to our pride, and disreputable to our national justice. Congress at an early period (November, 1775,) directed an emission of bills of credit to the amount of three millions of dollars ”

“ As a necessary consequence, labor lacks employment and suffering and distress are visited upon a portion of our fellow-citizens especially entitled to the careful consideration of those charged with the duties of legislation. No interest appeals to us so strongly for a safe and stable currency as the vast army of the unemployed.
I recommend the suspension of the compulsory coinage of silver dollars, directed by the law passed in February, 1878. ”

“ We find at this time that the General Assembly petitioned the King for permission to enhance the value of all the coins imported into the Colony to an extent represented by one-fourth of their face value; in other words, that body desired to obtain authority to rate a coin equal, let us say, to one dollar in our modern currency, at one dollar and a quarter, and having by the mere stroke of the pen given this arbitrary value, to compel all persons to whom it was offered, to receive it under threat of severe punishment. ”