Discussion Confederate Money

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MikeyB

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How did the government get its money into circulation? At the start of the war, did people go to their local bank and trade in greenbacks for Confederate dollars? Was the major method of circulation through paydays to the soldiers, who then sent it home and trickled it down into the local economies?

Did USA dollars continue to be accepted and circulated in the Confederacy throughout the war? Was it confiscated by the CSA government? Did people just hide it under their mattresses and use it to trade with foreign merchants and/or use it again after the war was over?

Mike
 

Polloco

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Good question, it didn't just happen. There had to be some sort of "method" for circulation. Now it's time to go do a little research and I'll get back to you.
 
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James N.

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who are some of the people on the money besides Davis and George Washington?
They're not shown here, but politician R. M. T. Hunter is on the 1864-issue ten and Stonewall Jackson is on the 1864 five hundred; V.P. Alexander Stephens is on the twenty (marked XX) in the third row from the bottom at left; Secretary of the Treasury Christopher Meminger is on the two fives in the first two rows; Secretary of State and War Judah P. Benjamin is on the two at bottom right; and I believe it's Lucy Holcombe Pickens on that one at right in the second row from the bottom.

In @Larryh86GT post the personalities are, top-to-bottom Secretary of War George W. Randolph (grandson of Thomas Jefferson), R. M. T. Hunter; Alex Stephens; and Davis.
 
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leftyhunter

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How did the government get its money into circulation? At the start of the war, did people go to their local bank and trade in greenbacks for Confederate dollars? Was the major method of circulation through paydays to the soldiers, who then sent it home and trickled it down into the local economies?

Did USA dollars continue to be accepted and circulated in the Confederacy throughout the war? Was it confiscated by the CSA government? Did people just hide it under their mattresses and use it to trade with foreign merchants and/or use it again after the war was over?

Mike
I can't see US dollars not being accepted especially if Union Sulters were nearby also smugglers could accept them.
Leftyhunter
 

DaveBrt

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How did the government get its money into circulation? At the start of the war, did people go to their local bank and trade in greenbacks for Confederate dollars? Was the major method of circulation through paydays to the soldiers, who then sent it home and trickled it down into the local economies?

Did USA dollars continue to be accepted and circulated in the Confederacy throughout the war? Was it confiscated by the CSA government? Did people just hide it under their mattresses and use it to trade with foreign merchants and/or use it again after the war was over?

Mike
At the start of the new nation, people patriotically accepted CS paper notes in payment. They were already used to local bank notes and were soon joined by state notes. Eventually, some businesses (especially railroads) printed their own notes (useful only on the RR itself and convertible to CS or state notes in quantities of $1 or more face value). Coins quickly vanished because of their value even if the CS notes were hit by inflation (as had been experienced during the Revolution).

The big purchasers, the CS Government (Army, etc), railroads and factories, all received CS notes in payment. They used them in the local economy, introducing the notes that way. Unfortunately, the supply of notes could not keep up with the demand, so bonds and promissory notes were also used to pay the big suppliers AND keep the amount of money in circulation down, as an attempt to suppress inflation. The real need was for small notes and fractional notes (coin replacements), which created the demand that the non-CS notes tried to fill.

Yes, US money was used in the South throughout the war, but not for common transactions. US currency was purchased from the public and from Union POWs by the CS Government for use in cross-line purchases and overseas purchases. In 1862, there was a campaign in the newspapers to shame the businesses that refused to accept CS notes for payment.
 

Polloco

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who are some of the people on the money besides Davis and George Washington?
Here are some of them.Lucy Pickens$1, Judah Benjaman $2, Christopher Memminger$5, Alexander Stephens $10.. Clement Clay appeared on a later $1. That older $10 with 3 guys on the front has Francis Marion . I was hoping to see the $500.00 with Stonewall Jackson and the Confederate Flag.That one has to be "the Holy Grail" of collectibles.
 
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mobile_96

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I was hoping to see the $500.00 with Stonewall Jackson and the Confederate Flag.That one has to be "the Holy Grail" of collectibles.
In my 2014 copy of Confederate States Paper Money is listed at $150 (good) to $800 (uncirculated). In the notes I find that it is not rare but its popularity with collectors has caused it to rise in price. I would expect it to have risen even higher since 2014.
To give some perspective, some issues have values ranging from a few dollars to 45,000 (the highest one in my book).
 

leftyhunter

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How did the government get its money into circulation? At the start of the war, did people go to their local bank and trade in greenbacks for Confederate dollars? Was the major method of circulation through paydays to the soldiers, who then sent it home and trickled it down into the local economies?

Did USA dollars continue to be accepted and circulated in the Confederacy throughout the war? Was it confiscated by the CSA government? Did people just hide it under their mattresses and use it to trade with foreign merchants and/or use it again after the war was over?

Mike
Alexsn
How did the government get its money into circulation? At the start of the war, did people go to their local bank and trade in greenbacks for Confederate dollars? Was the major method of circulation through paydays to the soldiers, who then sent it home and trickled it down into the local economies?

Did USA dollars continue to be accepted and circulated in the Confederacy throughout the war? Was it confiscated by the CSA government? Did people just hide it under their mattresses and use it to trade with foreign merchants and/or use it again after the war was over?

Mike
Porter Alexander mentioned in his biography mentioned how the value of Confederate money went down as the war progressed and gave figures.
Confederate money wasn't backed by specie so it's entirely based on it's perceived worth. Not sure if blockade runners accepted CS notes or if they did for how long.
Leftyhunter
 

lurid

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The Confederate currency was pretty much worthless by 1863, because they printed so much paper money. By 1865 hyperinflation set in and its currency was utterly worthless.

1578714756164.png


By 1863 a pair shoes cost $25, so the money circulating was not worth much.

priceofshoes.jpg
 
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damYankee

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The Civil War drastically changed the US banking system. The Legal Tender Act of 1862 authorized the use of paper money to be used by the government to pay the governments bills. Prior to this the government paid it's bills in gold or silver. Following the Legal Tender Act the National Banking Acts of 1863 and 64 ended the chaotic practice of state authorized bank charters that had resulted in a patch work of bank issued notes that were easy to counterfeit and also created the problem of notes from defunct banks being circulated.
Prior to these acts anyone with 25,000 dollars could start a bank if they received a charter from each state which was loosely regulated.
The Free Banking Acts of Michigan and New York State allowed easier process to chartering by allowing anyone to open a bank without applying to the stat legislatures, private local flyby night banks proliferated and other states followed. Bank failures were common, as many scoundrels made fortunes opening and closing banks....
These acts created the national banking system, putting to end to the confusing banking system that it replaced.


The Confederacy likewise attempted to control counterfeiting by establishing a national currency but didn't have the gold or silver to back up the value of the paper money it printed.
 

DaveBrt

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Alexsn

Porter Alexander mentioned in his biography mentioned how the value of Confederate money went down as the war progressed and gave figures.
Confederate money wasn't backed by specie so it's entirely based on it's perceived worth. Not sure if blockade runners accepted CS notes or if they did for how long.
Leftyhunter
Blockade running ships only accepted cotton. Land blockade runners used cotton for large operations and US currency for smaller ones. Tobacco was also traded in Virginia.
 
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DaveBrt

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The Confederate currency was pretty much worthless by 1863, because they printed so much paper money. By 1865 hyperinflation set in and its currency was utterly worthless.

View attachment 341800
Notice that the inflation rate took of in July 1863 -- loss of confidence in achieving independence. The fall in the rate in early 1864 was caused by an anti-inflation measure -- replacing old issue notes with new ones, at a reduced rate. Inflation took off again in December of 1864 with the loss of Savannah. It really took off in March as Columbia fell and Sherman moved toward Richmond unhindered.

The amount of currency in circulation was less a factor than the los of confidence. Much of the currency was in large notes and was held by the banks and major industries, not circulated much in the market.

Our money today is not backed by anything but confidence, and even though we have issued vast amounts of digital and paper currency, our inflation rate is very low -- because of the confidence of the holders of the money.
 

Virginia Dave

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How did the government get its money into circulation? At the start of the war, did people go to their local bank and trade in greenbacks for Confederate dollars? Was the major method of circulation through paydays to the soldiers, who then sent it home and trickled it down into the local economies?

Did USA dollars continue to be accepted and circulated in the Confederacy throughout the war? Was it confiscated by the CSA government? Did people just hide it under their mattresses and use it to trade with foreign merchants and/or use it again after the war was over?

Mike
20/20 hindsight makes me sick at times. I remember playing with a small stack of confederate bills at my grandparents when I was about 5 years old. The stack was about 3/4 high I guess in my small hands at the time that seemed like a lot. I wish I had remembered this as I grew older. I have no idea what happened to it, and I have ask my aunts and uncles etc. Two of them remember the bills also, but like me have no idea where they went. Like I said this makes me ill.
 

James N.

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dixie.jpg

20/20 hindsight makes me sick at times. I remember playing with a small stack of confederate bills at my grandparents when I was about 5 years old. The stack was about 3/4 high I guess in my small hands at the time that seemed like a lot. I wish I had remembered this as I grew older. I have no idea what happened to it, and I have ask my aunts and uncles etc. Two of them remember the bills also, but like me have no idea where they went. Like I said this makes me ill.
I've mentioned another horror story here before - when I was a kid my uncle gave me one of those 1864 tens featuring Hunter and a cannon and limber drawn by a team of horses. It was in fairly poor circulated condition, so no big deal, but to "preserve" this priceless historic relic I did what any rational person around 1960 would do and LAMINATED it! Now it and two better-condition 1864 notes (I forget the denomination, but they're common bills) are the only examples of Confederate money I own.

dixie 001.jpg
 
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Robin Lesjovitch

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How did the government get its money into circulation? At the start of the war, did people go to their local bank and trade in greenbacks for Confederate dollars? Was the major method of circulation through paydays to the soldiers, who then sent it home and trickled it down into the local economies?

Did USA dollars continue to be accepted and circulated in the Confederacy throughout the war? Was it confiscated by the CSA government? Did people just hide it under their mattresses and use it to trade with foreign merchants and/or use it again after the war was over?

Mike
To be fair a definition of money is needed.
In 1860, a typical American thought of money as it related to the silver dollar, which itself was based on the Spanish 8 Real piece.
There was no Federal paper money at the start of the CW
Money might be represented on paper as numbers, but money was the cold, hard coinage that all understood.
Outside of a very small number of coins, the CSA never issued any money. Rather the CSA issued promissory notes whose value related to the possible final independence of the CSA. In addition, those notes were paper, and Americans did not take paper seriously as it did gold or silver. Not even Federal paper when it came later in the war..
Of course US monry circulated in the CSA, the coinage as it always had.. the CSA had no coinage. When Federal paper came, it usually came with the Federal military, which meant it could be traded back, so it was no problem.
 

Polloco

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In the East it seems like too much money was in circulation but in tbe western region it was like they had an opposite problem. Even worthless paper money was scarce in the Trans Mississippi Department. How was it smuggled across the River after Vicksburg fell? I've read there was a Sub Treasury in Marshall, Texas. But it did not have the printing facilities available. Gen. Kirby Smith supposedly partially remedied the situation by re-issuing old money. He had older bills stamped. These bills were used mainly to pay the soldiers and He didn't feel it right to pay a soldier with money that would soon be reduced in value by an Act of Congress.. When a new issue of money was put into circulation by Richmond, the West was only given a 3 month longer grace period than the East before it was to be "redeemed".
 
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