James Ford Rhodes (1848–1927). History of the Civil War, 1861–1865. 1917.

Page 385

  silver. In North Carolina ten-penny nails passed current at five cents apiece. At times postage stamps circulated. Tobacconists, grocers, barkeepers and milk dealers put out shinplasters. In 1862 the Confederate government began the issue of one-dollar and two-dollar bills and of fractional amounts under one dollar. It was a carnival of fiat money.  20   Early in 1864, it was conceded that something must be done to contract the currency. The financial history of the American Revolution and the French Revolution repeated itself on February 17 of that year in a measure of virtual repudiation. This was a provision for the compulsory funding of the notes into four per cent bonds; if the bonds were not taken, all notes of the denominations under one hundred dollars might be exchanged for new ones in the ratio of three dollars of old money for two dollars of the new. If neither exchange was made the old notes were to be taxed out of existence. This was really a confession of bankruptcy by the Confederate Congress and the President: the financial situation was hopeless unless independence could be won.  21   The people of the South recognized the superior resources of the North by accepting readily in trade United States greenbacks. They were quoted in Richmond and might be seen in the brokers’ offices. Another symptom of the debasement of the Confederate currency was the resort to barter. Manufacturers and merchants advertised in the newspapers, offering their goods in exchange for farm and other products. To obtain supplies for the army, wrote Seddon to Lee on March 29, 1864, we must not “recur to the most expensive and mischievous of all modes—the issue of a redundant currency.… I expect to introduce and to rely upon to a considerable extent a system of barter.”  22