Confederate States Issues

By Arlyn G. Sieber November 28, 2011

Excerpted from Warman’s Companion to U.S. Coins and Currency, 2nd edition, by Arlyn G. Sieber, available from www.ShopNumisMaster.com.

The story of Confederate paper money is in some ways reminiscent of that of Continental currency. Under desperate wartime circumstances, and with the best intentions, the government attempted to finance the war effort by printing unbacked paper currency. The initial series, backed by cotton, held its value at first and restraint was used in the quantities issued, but as the war continued more and more were printed, causing inflation.

According to the legends on the later notes, they could not be redeemed until “two years after the ratification of a treaty of peace between the Confederate States and United States.” Ultimately the seventh and final issue was authorized in unlimited quantity.

After two billion dollars were issued, the currency’s value eroded almost completely. Measured in gold dollars, its decline can be seen as follows, along with rough quantities issued or authorized:

1861 March $150,000,000 95¢
1862 $265,000,000
1863 $515,000,000 33¢
1864 $1,000,000,000
1865 April none 1-2/3¢
1865 May none 1/12¢

For many years Confederate currency was synonymous with worthlessness, and some people even burned it. From the 1960s onward it has taken on value as a collectible. Since the late 1990s, there has been a particularly strong market for this series. Prices have increased drastically.

The first issue of Confederate currency of March 1861 was initially issued in Montgomery, Ala., but the wording was changed to Richmond, Va. This is because the capitol of the Confederacy was moved to Richmond in May after Virginia withdrew from the Union. Throughout the war the production of Confederate notes was plagued with difficulties. The Northern printers, who had originally been hired to print notes before hostilities erupted, were no longer available. Paper was in short supply.

It was also not always practical to import notes, paper or even plates due to the Union blockade of Southern ports. Some paper was brought in from the North by smugglers and from Great Britain by blockade runners. As a result some of the designs use improvised images not initially prepared for Confederate currency. More suitable images used include portraits of Confederate President Jefferson Davis and members of his cabinet, as well as of Southern agriculture.