A Second Try at a Topic

[kevikens]

Several months ago I posted a request that went nowhere but let me try again.

Does anybody know how Union soldiers were paid early in the Civil War before the US Government started to issue a paper currency, that is in what form of money were they paid? At the start of the war the US Government issued money only in the form of hard money, coins, specie, so were US soldiers paid in that medium? Were the Regulars paid differently from the early volunteer units? If they were paid with some kind of paper what was it? Did the US obtain in some way the state bank issued currency then in circulation to pay the troops? If so how would they obtain those state bank notes? Thanks for any help.

 

[Copperhead-mi]

According to this Department of Defense site the Federal troops were paid during the Civil War in "hard currency" --gold and silver coinage, due to the wild fluctuations in the value of paper money.

 

[TinCan]

kevikens,

In 1862 the US government started issueing "greenbacks" or paper currency than wasn't backed by any amount of gold or silver to help finance the war. Many thought the government didn't have the power to do this but since the Confederates had printed money for the same reason from almost day one of their existence we did it anyway. Also in 1862 the first income tax was established which, as we all know, gives the government an excellent way of taking your money almost as fast as you can earn it.

 

[kevikens]

Thanks for the reply. However when I read the site it appears to be talking about paying the troops with hard currency, specie coinage, before the Civil War broke out. Although the value of the money being paid did fluctuate I know that troops were paid in Greenbacks throughout most of the war, but this kind of currency was not available until well into 1862. Troops frequently complained about the mails being robbed of their money sent back home so it was not likely to be silver dollars they were putting into the mail as they would have been obviously cash and likely to be pilfered. Also, after the war the troops continued to be paid in Greenbacks and those troops stationed out West constantly griped at western merchants accepting the Greenbacks only at a discount. I think there is a gap here between the paying of the troops in specie into the spring of 1861 and the availability of the Greenbacks in the spring of 1862. What I am looking for is what the government would have issued the troops in that gap. Thanks again for the response.

 

[Barrycdog]

"Money, Money, Money!"
—19
th
Century Currency—
Soldier Pay in the American Civil War Activity
Union privates were paid $13 per month until after the final raise on June 20, 1864, when they got $16. In
the infantry and artillery, officers were as follows at the start of the war: colonels, $212; lieutenant colonels,
$181; majors, $169; captains, $115.50; first lieutenants, $105.50; and second lieutenants, $105.50. Other line
and staff officers drew an average of about $15 per month more. Pay for one, two, and three star generals were
$315, $457, and $758, respectively.

The Confederate pay structure was modeled after that of the US Army. Privates continued to be paid at
the prewar rate of $11 per month until June 1864, when the pay of all enlisted men was raised $7 per month.
Confederate officer's pay was a few dollars lower than that of their Union counterparts. A Southern Brigadier
General for example, drew $301 instead of $315 per month; Confederate colonels of the infantry received $195,
and those of artillery, engineers, and cavalry got $210. While the inflation of Confederate money reduced the
actual value of a Southerner's military pay, this was somewhat counterbalanced by the fact that promotion
policies in the South were more liberal.

As for the pay of noncommissioned officers, when Southern privates
were making $11 per month, corporals were making $13, "buck" sergeants $17,
first sergeants $20, and engineer sergeants were drawing $34. About the same
ratio existed in the Northern army between the pay of privates and
noncommissioned officers.

Soldiers were supposed to be paid every two months in the field, but they were fortunate if they got
their pay at four-month intervals (in the Union Army) and authentic instances are recorded where they went six
and eight months. Payment in the Confederate Army was even slower and less regular.
Source: "The Civil War Dictionary" by Mark M. Boatner

http://www.nps.gov/fosu/forteachers/upload/Money-Civil-War-Activity.pdf

 

[Barrycdog]

https://chnm.gmu.edu/courses/omalley/389money/greenbacks.html

 

[kevikens]

kevikens,

In 1862 the US government started issueing "greenbacks" or paper currency than wasn't backed by any amount of gold or silver to help finance the war. Many thought the government didn't have the power to do this but since the Confederates had printed money for the same reason from almost day one of their existence we did it anyway. Also in 1862 the first income tax was established which, as we all know, gives the government an excellent way of taking your money almost as fast as you can earn it.

Thanks, but you may have missed the point of what I am seeking, which is what did the US Government issue to the troops as pay BEFORE the Greenbacks in 1862 were available to be used. The demand notes of late 1861 could in theory be used but they were apparently given to contractors to pay for supplies and besides were not issued in a large enough quantity to cover the payroll of more than 100,000 soldiers. The US Gov't had to have some medium of exchange to hand out to troops before the spring of 1862. What was that medium? Specie, bank notes issued by state chartered banks (and how would the feds have obtained such notes) or were they paid in some other way. That is what I am trying to determine. What kind of money the did US give its troops prior to the Greenbacks?

 

[Barrycdog]

https://archive.org/stream/recollectionspr00chitgoog#page/n8/mode/2up

 

[Barrycdog]

I am referencing a Wikipedia quote but searching for a more appropriate answer

 

[Barrycdog]

 

[kevikens]

https://chnm.gmu.edu/courses/omalley/389money/greenbacks.html

Again thanks for the reply but that site deals only with the period after April of 1862 when the Greenbacks were available. These Greenbacks were not in existence for payment to troops until the war was about a year old. What kind of money would the US have handed out to the troops prior to that time?

 

[Barrycdog]

 

[Barrycdog]

Again thanks for the reply but that site deals only with the period after April of 1862 when the Greenbacks were available. These Greenbacks were not in existence for payment to troops until the war was about a year old. What kind of money would the US have handed out to the troops prior to that time?

It looks like they issued Treasury Notes redeemable for Coin but the policy was cancelled.

 

[kevikens]

It looks like they issued Treasury Notes redeemable for Coin but the policy was cancelled.

Yes, this appears to be a possibility, the use of the demand notes before the Legal tender notes, the Greenbacks were issued, but even if they were used for payroll purposes they could not have been available until several months after the first troops were raised, apparently in November of 1861. Before then were they paid in specie or could they have been paid by the states who raised the volunteer regiments that spring using their own state issued banknotes? It appears that any troops in uniform from April of 1861 to October of 1861, including the 90 day units who had been demobilized, had to be paid in something other than any kind of US paper currency. What was that medium of payment?

 

[kevikens]

Encouraged by some of the helpful responses on this topic I was able to do some research which helps me answer the question raised about paying the troops before the Greenbacks of 1862.

Before the greenbacks of 1862 there was an issue of notes called "demand notes" because they were redeemable in specie on demand. They were the first general issue paper currency of the US Government since Revolutionary War times. They were authorized in August of 1861 and were to be used to pay the troops. According to several sources, Wesley Clair Mitchell's " A History of Greenbacks with Special Reference to the Economic Consequences of Their Issue. 1862-1865" Chicago. 1903 or the magazine entitled Sound Currency, issued 10/15/1898. p. 334 or the YouTube video, Funding the American Civil War-1861-A Revolution in Government Finance by Historical Insight (www.youtube.com/watchPV=Rp6YkLDOQew) each source says pretty much the same thing.

This is the quote from one of the sources and the others are in agreement. General of the Army, Winfield Scot, on 9/3/1861 sent a circular to the troops telling them that "the treasury department... to meet future payments to the troops, is about to supply, besides coin, treasury notes"... "as good as gold... and most convenient for transmission by mail".

From this it appears that for the first few months of the war the troops were paid in specie, "coin", and that state bank notes were not issued to the troops at all. Their first paper currency payments were made using the 1861 US Federal demand notes which were replaced in April 1862 with the legal tender notes.

Thanks to all of you responders for offering the info that lead to this finding.

 

[mikekj]

13 of these for a private.

 

[John Davison]

"Money, Money, Money!"
—19
th
Century Currency—
Soldier Pay in the American Civil War Activity
Union privates were paid $13 per month until after the final raise on June 20, 1864, when they got $16. In
the infantry and artillery, officers were as follows at the start of the war: colonels, $212; lieutenant colonels,
$181; majors, $169; captains, $115.50; first lieutenants, $105.50; and second lieutenants, $105.50. Other line
and staff officers drew an average of about $15 per month more. Pay for one, two, and three star generals were
$315, $457, and $758, respectively.

The Confederate pay structure was modeled after that of the US Army. Privates continued to be paid at
the prewar rate of $11 per month until June 1864, when the pay of all enlisted men was raised $7 per month.
Confederate officer's pay was a few dollars lower than that of their Union counterparts. A Southern Brigadier
General for example, drew $301 instead of $315 per month; Confederate colonels of the infantry received $195,
and those of artillery, engineers, and cavalry got $210. While the inflation of Confederate money reduced the
actual value of a Southerner's military pay, this was somewhat counterbalanced by the fact that promotion
policies in the South were more liberal.

As for the pay of noncommissioned officers, when Southern privates
were making $11 per month, corporals were making $13, "buck" sergeants $17,
first sergeants $20, and engineer sergeants were drawing $34. About the same
ratio existed in the Northern army between the pay of privates and
noncommissioned officers.

Soldiers were supposed to be paid every two months in the field, but they were fortunate if they got
their pay at four-month intervals (in the Union Army) and authentic instances are recorded where they went six
and eight months. Payment in the Confederate Army was even slower and less regular.
Source: "The Civil War Dictionary" by Mark M. Boatner

http://www.nps.gov/fosu/forteachers/upload/Money-Civil-War-Activity.pdf

hmmmm. 100 years later my pay as a private in boot camp (1961) $78 bucks a month. Gee, I was really cutting the fat hog!

 

[kevikens]

Yes, but in 1961 gold was $35 an ounce so you were getting more than two ounces a month. In 1861 gold was $20 an ounce and Billy Yank was getting only 2/3 of an ounce so you had twice his buying power and the GI bill to boot.

 

[Barrycdog]

Southern Watchman, Apr. 30, 1862 -- page 3

 

[kevikens]

As far as I know the CSA never got around to any actual coinage except at new Orleans where they used up the available bullion early in 1861, but I think the design was that of the US coinage so they cannot be distinguished from those minted before secession. A few half dollars had the reverse planed down and restruck with a Confederate design but these may have been struck later and never intended for circulation.There were a few one cent pieces struck in Philadelphia, of all places, for the CSA but the private die maker ceased production before delivery and hid the coins struck and defaced the dies and then hid everything fearful of the US authorities. After the war they resurfaced and became collectors objects and some were restruck from the damaged dies. About 50 years ago newer repros turned up. The older ones are considered valuable and quite collectible as whimsy pieces of what might have been. Google Confederate cent for the image.