Confederate Dollar Scale of Depreciation, North Carolina: 1865

Confederate Money

Jokes are made about the value of Confederate currency/notes, which in many respects became worthless when the Civil War ended. I own many of these notes, some of which are of interest to numismatists.

However, what about contracts entered into during the Civil War based upon Confederate money? How were these contracts to be resolved? A scale of depreciation was adopted. Was the NC legislature being generous in only depreciating the Confederate dollar to 100 (100 Confederate dollars required to buy one gold dollar) in April 1865? Was this bill the final depreciation scale adopted? What about other Confederate states?

Confederate Dollar Scale of Depreciation: 1865

A BILL TO BE ENTITLED AN ACT TO ESTABLISH A SCALE OF DEPRECIATION OF CONFEDERATE CURRENCY.

WHEREAS, By an ordinance of the Convention, entitled "An Ordinance declaring what laws and ordinances are in force, and for other purposes," ratified on the 18th day of October, A. D., 1865, it is made the duty of the General Assembly to provide a scale of depreciation of the Confederate Currency from the time of its first issue to the end of the war, and it is further therein declared that "all executory contracts, solvable in money, whether under seal or not, made after the depreciation of said currency before the 1st of May, 1865, and unfilled (except official bonds and penal bonds payable to the State) shall be deemed to have been made with the understanding that they were solvable in money of the said currency," subject, nevertheless, to evidence of different intent of the parties to the contract [parol evidence]; therefore,

Be it enacted by the General Assembly of the State of North Carolina, and it is hereby enacted by the authority of the same, That the following scale of depreciation be and the same is hereby adopted and established as the measure of value of one gold dollar in Confederate currency, for each month, and the fractional parts of the month of December, 1864, from the 1st day of November, 1861, to the 1st day of May, 1865, to wit:

AND, WHEREAS, many grave and difficult disputes may arise between executors, administrators, guardians and trustees, and their legatees, distributees, wards and cestuysque trust, in the settlement of their accounts and trust, arising from the depreciation of Confederate currency, State Treasury notes and Bank notes, incident to and growing out of the late war; and that law suits and expensive litigation may be obviated;

Be it further enacted, That in all such cases the parties are hereby empowered to form a full and perfect statement of the case on both sides, which case shall be committed to the determination of one of the Judges of the Superior Courts, chosen by the parties, who is hereby authorized to consider and determine the same, according to equity and good conscience: Provided, however, That no part of this section shall be construed to estop or hinder any person from proceeding in the usual course of law, if he shall deem the same necessary.

A true copy.

J. A. ENGELHARD,

Clerk of Senate.

See: Branson

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The Confederate Note Case, 86 U.S. 548 (1873): Appeal from the Circuit Court for the District of North Carolina: Confederate Note Case

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60% From Printing Money

There are three sources of government revenue: taxation, borrowing, and printing money. Given that the Confederate States of America was established on the principle of states’ rights, many Southerners were suspicious of granting the central government powers to impose and collect taxes. With opposition from the general public as well as leading political figures, it is not surprising the Confederate government collected approximately only 8.2% of its total revenues from taxes. Tariffs, another potential source of tax revenue, were hampered by the Union blockade of Southern ports.

The Confederacy then turned to debt issue as a means of war finance. The South successfully sold some long-term government securities during the early stages of the war. Bond issues proved a limited source of war financing as Southern prospects diminished, however. Investors increasingly shied away from purchasing securities offered by a government with little or no tax base and a deteriorating military situation.

The government resorted to money financing as its primary source of revenue. Overall, debt issue and the printing press accounted for nearly 32 and 60 percent of the South’s total real revenues during the war.

Source: Confederate Finance and Money