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The Confederate currency was too remarkable a feature of the times to be omitted in any account of them. The depreciation which began spontaneously at various places was many months in becoming general; nor was it ever nearly uniform throughout the South. In the beginning it arose from no distrust of the currency itself. The great majority of the people were willing to receive, and actually did receive it at par, till the action of speculators forced up prices. Even then it passed as gold in the rural parts of North Carolina to the close of 1862. In fact, till the great twin disasters of July, 1863, destroyed ninety per cent. of the value of Confederate notes, there had been no great difference in the price of gold North and South. After that the currency sank with ever-increasing rapidity. The attempt of the Confederate Congress, by the act of February 11, 1864, to restrict the circulation by forcing the conversion into bonds of all notes over five dollars, the first of the ensuing April, under penalty of a repudiation of one third their value, proved not only futile, but really disastrous. We felt the instant effect in the destruction of thirty-three per cent. of the value of every dollar in circulation, the small notes sympathizing with the larger ones. When the new issue, of which so much had been fondly hoped, was at last uttered, it had far less purchasing power than the old before the damaging currency bill was passed. But for the device of the government in bolstering up the currency by steadily selling gold, for many months towards the last, at sixty for one, the notes must have lost even the shadow of value they retained. During 1864 returned prisoners protested that a dollar in “bluebacks” would buy more at Point Lookout than in Richmond.
Indeed, to the extreme scarcity of all goods and supplies in the South, as much as to the inflation and consequent distrust of the currency, must be ascribed its depreciation. Excepting the considerable influx of counterfeit Confederate notes smuggled through the lines from the North, there were just fifteen times as many dollars in circulation per capita, counting the population actually within the limits of the Confederacy, in January, 1864, as in the same month of 1860. The fact that specie possessed five times its normal purchasing power is an apparent but not a real refutation of this assertion. Owing to the urgent demand for specie for the blockading and smuggling trade, gold was no longer a standard of value. Some idea of the influence of this demand on the value of specie may be formed from the fact that the fall of Wilmington and the close of the blockade lessened the price of gold appreciably, although the Confederacy was tottering to its fall, with scarcely two months of life before it. Such an object of cupidity did the all-powerful silver — gold being rarely or never seen in general circulation — become to the whole people that years of vexatious experience with the unwieldy medium have hardly yet destroyed their veneration and affection for it.
As for the last two years, at least, no one hoarded or even husbanded Confederate money, it seemed a great deal more abundant than it really was. Never before, away from the gaming-table, did money ever change hands so rapidly. Each individual being bent and determined not to hold it, the whole community was on the rack to keep the last dollar in circulation. That this should have been at all difficult, in face of the exorbitant prices that prevailed, is sufficient proof of the extreme scarcity of everything that man needs or wishes. A young subaltern in Richmond, in 1864, who, on a day’s furlough, before leaving for camp, went into a restaurant to disencumber himself of $400 in “Jeff Davis shucks,” and to make doubly sure took two acquaintances with him, found, when the reckoning came, after a by no means sumptuous repast, that he had not only succeeded in doing so, but had incurred an indebtedness of $800 besides. Then indeed money burned every pocket. If there was anything that the people valued less than money I never heard of it. A practical treatise pointing out reliable ways of spending money would doubtless have had as many students then as one giving the opposite process now.
The very appearance of the majority of the notes in circulation was calculated to destroy the traditionary respect of the people for money. While the execution of some of the larger Confederate notes was, under the circumstances, of extraordinary merit, the popular complaint that the smaller bills and fractional currency, especially the state notes, did not even look like money was a just one. At their lowest ebb, neither in material nor execution would they have reflected credit on a village printing-office. A few months’ use sufficed pretty thoroughly to efface the letterpress, and at the same time to reduce the note to as many fragments as there had been creases in it, which fragments were commonly kept together by being pasted on a backing of newspaper, homespun cloth, or other material that came to hand.
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Dodge, David; “Domestic Economy in the Confederacy,” The Atlantic Monthly, Volume 58, Issue 346; pp. 229-243; August 1886; Boston: Atlantic Monthly Co.
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