Significance: Confederate currency—produced by the Confederate government and by individual states in the Confederacy—was critical to the South during the U.S. Civil War in its attempts to establish its own union. This currency was to be credited after the Confederacy’s victory but became worthless after its defeat. It later became a collector’s item, fetching prices from a few dollars to tens of thousands of dollars for the rarest denominations.
The Confederate government began to issue currency in April of 1861, the month the Civil War began. The main printing press for central government- issued currency was in Richmond, Virginia, but currency was also printed by states, local municipalities, and merchants. Paper money was printed as well as coins, and both included symbolic representations of the Old South, including images of historical figures, military technology, and slavery.
Because it was philosophically opposed to federalism, the Confederate government was not able to tax its citizens sufficiently to prepare for the war effort. In addition, European markets were gaining access to alternative sources of cotton, such as India and Egypt. As a result, American cotton was selling for lower prices overseas, exacerbating the South’s financial problems. Thus, Confederate currency was sure to experience high inflation should the South struggle in the war.
Counterfeiting of Confederate currency was common. Since Confederate currency was printed at a number of different venues and by different levels of government, Northern counterfeiters were easily able to buy Southern goods with replica money. The resulting increase in the amount of currency in circulation contributed to the high inflation that began to mount as the tide of the war turned in the North’s favor.
Confederate money was relatively valuable when the Civil War began. The gold dollar was the standard of value at the time, and a Confederate dollar was worth as much as 95 cents against the gold dollar. Shortly after the Battle of Gettysburg (1863), as the likelihood of a Southern victory decreased, the value of a Confederate dollar dropped to roughly 33 cents against the gold dollar. Investors shied away from trading for currency that could become worthless if the South lost the war. Instead, they began to accumulate goods and services that would be redeemable regardless of the war’s outcome. At the end of the war, the value of a Confederate dollar was about one penny against the gold dollar, and the currency ceased to be traded soon thereafter.
Shull, Hugh. Guide Book of Southern States Currency. Florence, Ala.: Whitman, 2006.
Slabaugh, Arlie. Confederate States Paper Money. Lola, Wis.: Krause, 1998.
Tremmel, George. Confederate Currency of the Confederate States of America. Jefferson, N.C.: McFarland, 2003.
See also: U.S. Mint