Mississippi State Currency Devaluation

[atlantis]

I can't recall but I read sometime back that Mississippi state currency held its value for awhile because it was backed by cotton. Does anyone know why it devalued.

 

[Lubliner]

I can't recall but I read sometime back that Mississippi state currency held its value for awhile because it was backed by cotton. Does anyone know why it devalued.

I do know that Mississippi was in terrible debt when the Confederacy began. When Jefferson Davis sent over commissioners to England that first year hoping to secure financial backing for the confederacy, the main cause for non-support was due to the State of Mississippi being in heavy debt, and unless whatever loans were already delinquent were to be consolidated and resubmitted in view of a plan that the England representative offered, no support would be given. How home currency was based on gold in their own treasury I am uncertain. But Louisiana supplied a lot to the Government in Richmond. I wasn't aware each State had it's own standard for monies.
Lubliner.

 

[Pollaco]

Louisiana supplied alot to Richmond because they had alot to supply, they seized the U.S. mint. (I'm guessing)

 

[LetUsHavePeace]

The State of Mississippi issued notes that were to be redeemed in the State's 8 Per Cent bonds ten years after the date of issue for the note - in this case 7/1/72. The notes were essentially bills of credit that could be used to pay state taxes at par but were only promised to be funded by the 8 Per Cent bonds; the notes themselves did not offer any interest.

 

[LetUsHavePeace]

Here is the best brief summary that I have read about Money and Finance in the Confederacy.

https://eh.net/encyclopedia/money-and-finance-in-the-confederate-states-of-america/

This is the link to another piece written by the same author - Marc Weidenmier - that discusses how the Confederate Treasury pushed redemption of currency for bonds and what the ironic results of that policy were.

https://econpapers.repec.org/paper/nbrnberwo/9230.htm