How Effective Were The Union Counterfeit Operations Against The South?

Money & Finance in the Confederate States of America, an article by Marc Weidenmier of McKenna College, is the best history of the CSA economy I have found. Here is a summery of the pertinent parts:

'Confederate Money Prices in Richmond 1861-1865.'

A graph shows the conversion rate of Graybackss for gold. Following defeats at Antietam, Gettysburg, etc. prices depreciated. I find it strange that the US Conscription/Finance Bill that established the financing for the war & pay for drafting soldiers caused a dip in the value of the Graybacks. The final breaking point was in the late spring of 1864 when the CSA gov't repudiated 1/3rd of the money supply with a currency reform act. New bills were cranked out in volume again in the fall of 1865. From that point, Graybacks deprecated until February 1865 when gold dealers packed up & left Richmond.

'Counterfeit Money & the Yankee Scoundrel'

It is hard for scholars to pin down the exact effect of counterfeit Graybacks because there are no hard numbers. However, during the war & after it has been noted that bogus money used a serious problem for the Confederacy. More money chasing the same number of goods created inflation. A contributing factor in the CSA's currency problem was the lack of sophisticated printing equipment n the South. It was often quipped that the best way to detect a counterfeit note was by its higher quality than government issued currency.

Scholars cite Upham as having produced 15,000,000 in bogus rebel notes. He had a mail order business & placed adds in Louisville & St. Louis. Smugglers used Uphman's Graybacks to purchase cotton. Confederate Treasury Secretary Memminger made the following comments abut the "Yankee Scoundrel" in June 1862.63,

"Organized plans seem to be in operation for introducing counterfeiting among us by means of prisoners & traitors, & printed advertisement have been found stating that the counterfeit notes, in any quantity, will be forwarded by mail from Chestnut Stree (Upham's address), in Philadelphia to the order of any purchaser."

President Davis placed a $10,000 bounty on Upham. It has been suggested that Secret Service agents protected Upham.

Between June 1862 & August 1863, Upham printed between 1.5 & 2.5 % of Confederate currency. At that point, Confederate money had depreciated so much that it was no longe accepted as a medium of exchange by smugglers. Given that Upham was one among many, it is safe to assume that bogus money had a large impact on Confederate price levels. It fueled Confederate inflation via a large increase in money stock.

Taht is my summery of the pertinent sections of the article. I found the clearly written essay very illuminating on a subject I was profoundly ignorant about & recommend it to all our contributors.

<eh.net/encyclopedia/money/-ane-the-finance-in-the-confederate-states-of-america/>
 
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I've often heard or read the same thing but really I don't see much activity in the counterfeiting of Southern Currency. It was an interesting idea but I don't think it was too widespread other than a guy named Upham from Philadelphia selling souvenir notes out of his candy store. I've seen an article about how these notes could be used to purchase cotton in the South, but were they really?
 
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There must have been some counterfeiting going on since the Confederate Congress did (I think) impose the death sentence on convicted counterfeiters. This guy Upham later boasted that the Confederacy put a $10,000 reward on him..dead or alive. But this was probably just bragging on his part.But Senator Foote is on record as saying that Upham's fake notes "had done more to injure the Confederate cause than General McClellan and his army."
 
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The north flooded the CS with counterfeit money. The CS treasury had to in act several changes in CS paper money to try and combat it. Original CS counterfeit is highly collectable, so much so there are collector books on the subject.
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I read that some in the Lincoln Administration didn't like the idea of copying Confederate currency. They were worried the South might retaliate and print up some "Northern Greenbacks". But Upham or any other individual were within their legal rights because the Lincoln Administration did not recognize the Confederate States of America.
 
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PS to previous, in December 1863 a paper $1 was worth 66c in silver. As the US postal contract with Great Britain required settlements to be calculated in silver, the different values caused by depreciated currency caused real problems.

I have an exhibit entitled “Paying the Postage” which examines many of those issues. See page of links here

An 1862 page shows a cover with 66c coin rate could be paid with the new $1 note shown in previous.
 
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Almost every article about the printing up of bogus bills mentions cotton smugglers possibly using these bills for their trade and to flood the Confederate economy. But from what few articles I've read on cotton smuggling it never mentions these bills. Contraband cotton was usually paid for in specie wasn't it?
Also Samuel Upham was investigated by administration officials because he was alleged to be printing up Northern currency in addition to over a million Confederate notes. Secretary of War Stanton personally intervened and had the case dismissed. Some historians allege that Stanton was the source of genuine banknote paper. If true, it did show that he put forth some effort to destabalize the economy. But this is more of a conspiracy theory than historic fact.
 
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The March 16, 1862 Philadelphia Sunday Dispatch notice of SC Upham (which is the earliest I find quickly for currency is shown below). It is typical - he was a snake-oil salesman primarily. Pimple remover, etc. His numerous stamp productions are well documented on my website.

Please show me something that would support a theory that he was making anything that could be construed as a genuine U.S. paper scrip of currency.

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I am not so sure that there was any real necessity for printing counterfeit Confederate bills. Local merchant John Spence in Murfreesboro TN kept a journal during the war. In November 1862, Bragg ordered what was left of the Army of Tennessee after the retreat from Kentucky to concentrate in Middle Tennessee. Bragg's HQ was in Murfreesboro, only thirty two miles from Rosecrans' HQ in Nashville.

November 1st, 1862
Confederate Soldiers Make Their Appearance

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The Courthouse Square, Murfreesboro TN where John Spence had his store.

By November 1, 1862, the confederate soldiers are making their appearance, in small forces from different points. A regiment or two, said from North Carolina, have the appearance of being healthy, stout men.

Also, a portion of Bragg's forces from their return trip from Kentucky. Every train from the South brings quite a number in -- are setting up their tenets round the suburbs of town.

A brisk business is now commenced, collecting army stores -- such as Bacon, Flour, wheat, & corn. This shipped south for safety.

Things are moving on in a quiet & easy manner, considering the war times. No one is molested in doing business of any sort.


notes00044.jpg

The soldiers, when they made purchase of any article, were disposed to pay & were liberal undoing so. They had quteia variety of more amongst them. Very little of it was of much value but appeared to answer the purpose with them. Some of the money had not much better look than a picture out of a newspaper & then all kind of promises to pay some way.

John C. Spence, page 55, A Diary of the Civil War, Rutherford County Historical Society, Murfreesboro, Tennessee 1993
 
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The first Greenback did not appear until August 1862. Money and currency in US included an ever decreasing supply of silver as bad money, such as scrip, fractional currency, tokens, etc drove away good money (silver and gold). It is a fascinating subject.

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Interesting to note that Salmon P. Chase, who as Secretary of the Treasury was given the responsibility for designing the new one dollar bill, cheerfully adorned it with his own picture.
 
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