"When Money was Easy" (1862–1865)

BY GEORGE CARY EGGLESTON (1874)

THE financial system adopted by the Confederate government was singularly simple and free from technicalities. It consisted chiefly in the issue of treasury notes enough to meet all the expenses of the government, and in the present advanced state of the art of printing there was but one difficulty incident to this process; namely, the impossibility of having the notes signed in the Treasury Department, as fast as they were needed. There happened, however, to be several thousand young ladies in Richmond willing to accept light and remunerative employment at their homes, and as it was really a matter of small moment whose name the notes bore, they were given out in sheets to these young ladies, who signed and returned them for a consideration. I shall not undertake to guess how many Confederate treasury notes were issued. Indeed, I am credibly informed by a gentleman who was high in office in the Treasury Department, that even the secretary himself did not certainly know. The acts of Congress authorizing issues of currency were the hastily formulated thought of a not very wise body of men, and my informant tells me they were frequently susceptible of widely different construction by different officials. However that may be, it was clearly out of the power of the government ever to redeem the notes, and whatever may have been the state of affairs within the treasury, nobody outside its precincts ever cared to muddle his head in an attempt to get at exact figures.

We knew only that money was astonishingly abundant. Provisions fell short sometimes, and the supply of clothing was not always as large as we should have liked, but nobody found it difficult to get money enough. It was to be had almost for the asking. And to some extent the abundance of the currency really seemed to atone for its extreme badness. . . .

. . . Money was so easily got, and its value was so utterly uncertain, that we were never able to determine what was a fair price for anything. We fell into the habit of paying whatever was asked, knowing that tomorrow we should have to pay more. Speculation became the easiest and surest thing imaginable. The speculator saw no risks of loss. Every article of merchandise rose in value every day, and to buy anything this week and sell it next was to make an enormous profit quite as a matter of course. . . .

Naturally enough, speculation soon fell into very bad repute, and the epithet "speculator" came to be considered the most opprobrious in the whole vocabulary of invective. The feeling was universal that the speculators were fattening upon the necessities of the country and the sufferings of the people. Nearly all mercantile business was regarded at least with suspicion, and much of it fell into the hands of people with no reputations to lose, a fact which certainly did not tend to relieve the community in the matter of high prices.

The prices which obtained were almost fabulous, and singularly enough there seemed to be no sort of ratio existing between the values of different articles. I bought coffee at forty dollars and tea at thirty dollars a pound on the same day.

My dinner at a hotel cost me twenty dollars, while five dollars gained me a seat in the dress circle of the theatre. I paid one dollar the next morning for a copy of the Examiner, but I might have got the Whig, Dispatch, Enquirer, or Sentinel, for half that sum. For some wretched tallow candles I paid ten dollars a pound. The utter absence of proportion between these several prices is apparent, and I know of no way of explaining it except upon the theory that the unstable character of the money had superinduced a reckless disregard of all value on the part of both buyers and sellers. A facetious friend used to say prices were so high that nobody could see them, and that they "got mixed for want of supervision." He held, however, that the difference between the old and the new order of things was a trifling one. "Before the war," he said, "I went to market with the money in my pocket, and brought back my purchases in a basket; now I take the money in the basket, and bring the things home in my pocket." . . .

. . . Everybody knew, long before the surrender, that these notes never could be redeemed. There was little reason to hope, during the last two years of the war, that the "ratification of a treaty of peace between the Confederate States and the United States," on which the payment was conditioned, would ever come. We knew the paper was worthless, and yet it continued to circulate. It professed to be money, and on the strength of that profession people continued to take it in payment for goods. The amount of it for which the owner of any article would part with his possession was always uncertain. Prices were regulated largely by accident, and were therefore wholly incongruous. . . .

In the winter of 1863–64 Congress became aware of the fact that prices were higher than they should be under a sound currency. If Congress suspected this at any earlier date, there is nothing in the proceedings of that body to indicate it. Now, however, the newspapers were calling attention to an uncommonly ugly phase of the matter, and reminding Congress that what the government bought with a currency depreciated to less than one per cent. of its face, the government must some day pay for in gold at par. The lawgivers took the alarm and sat themselves down to devise a remedy for the evil condition of affairs. With that infantile simplicity which characterized nearly all the doings and quite all the financial legislation of the Richmond Congress, it was decided that the very best way to enhance the value of the currency was to depreciate it still further by a declaratory statute, and then to issue a good deal more of it. The act set a day, after which the currency already in circulation should be worth only two thirds of its face, at which rate it was made convertible into notes of the new issue, which some, at least, of the members of Congress were innocent enough to believe would be worth very nearly their par value. This measure was intended, of course, to compel the funding of the currency, and it had that effect to some extent, without doubt. Much of the old currency remained in circulation, however, even after the new notes were issued. For a time people calculated the discount, in passing and receiving the old paper, but as the new notes showed an undiminished tendency to still further depreciation, there were people, not a few, who spared themselves the trouble of making the distinction. . . .

The government’s course in levying a tax in kind, as the only possible way of making the taxation amount to anything, led speedily to the adoption of a similar plan, as far as possible, by the people. A physician would order from his planter friend ten or twenty visits’ worth of corn, and the transaction was a perfectly intelligible one to both. The visits would be counted at ante-war rates, and the corn estimated by the same standard. . . .

How did people manage to live during such a time? I am often asked, and as I look back at the history of those years, I can hardly persuade myself that the problem was solved at all. A large part of the people, however, was in the army, and drew rations from the government. During the early years of the war, officers were not given rations, but were allowed to buy provisions from the commissaries at government prices. Subsequently, however, when provisions became so scarce that it was necessary to limit the amount consumed by officers as well as that eaten by the men, the purchase system was abolished, and the whole army was fed upon daily rations. The country people raised upon their plantations all the necessaries of life, and were generally allowed to keep enough of them to live on, the remainder being taken by the subsistence officers for army use. The problem of a salt supply, on which depended the production of meat, was solved in part by the establishment of small salt factories along the coast, and in part by Governor Letcher’s vigorous management of the works in southwestern Virginia, and his wise distribution of the product along the various lines of railroad.

In the cities, living was not by any means so easy as in the country. Business was paralyzed, and abundant as money was, it seems almost incredible that city people got enough of it to live on. Very many of them were employed, however, in various capacities, in the arsenals, departments, bureaus, etc., and these were allowed to buy rations at fixed rates, after the post-office clerks in Richmond had brought matters to a crisis by resigning their clerkships to go into the army, because they could not support life on their salaries of nine thousand dollars a year. For the rest, if people had anything to sell, they got enormous prices for it, and could live a while on the proceeds. Above all, a kindly, helpful spirit was developed by the common suffering, and this, without doubt, kept many thousands of people from starvation. Those who had anything shared it freely with those who had nothing. There was no selfish looking forward, and no hoarding for the time to come. During those terrible last years, the future had nothing of pleasantness in its face, and people learned not to think of it at all. To get through to-day was the only care. Nobody formed any plans or laid by any money for to-morrow or next week or next year, and indeed to most of us there really seemed to be no future. . . .

Towards the last, as I have already said, resort was had frequently to first principles, and bartering, or "payment in kind," as it was called, became common, especially in those cases in which it was necessary to announce prices in advance. To fix a price for the future in Confederate money when it was daily becoming more and more exaggeratedly worthless, would have been sheer folly; and so educational institutions, country boarding-houses, etc., advertised for patronage at certain prices, payment to be made in provisions at the rates prevailing in September, 1860. In the advertisement of Hampden Sidney College, in the Examiner for October 4, 1864, I find it stated that students may get board in private families at about eight dollars a month, payable in this way. The strong contrast between the prices of 1860 and those of 1864 is shown by a statement, in the same advertisement, that the students who may get board at eight dollars a month in provisions, can buy wool at twenty-five dollars a cord and get their washing done for seven dollars and fifty cents a dozen pieces.

George Cary Eggleston, (New York, 1875), 78–105 passim.