Financial History 100th Edition Double Issue (Spring/Summer 2011) | Page 46
thing causing the decline of the Confederate dollar. The value of Treasury notes
relied to a great extent on something the
Confederate Congress couldn’t control: the
public’s perception of whether the South
was winning the war. The better the Confederacy fared, the better chance it would
keep its promise to eventually exchange its
notes for gold or silver, and thus the more
desirable the bills. Some Treasury notes
made this connection explicit, like the $5
bills that Upham first counterfeited, which
promised their redemption six months
after the ratification of a treaty between
the Confederacy and the Union.
In the second half of 1862, the decline
in the value of Southern currency picked
up speed. On August 1, a gold dollar cost
two Confederate paper dollars; by the end
of the year, it cost $3.25, an increase of
more than 60%. This precipitous drop in
value coincided with a series of events that
changed the Southern view of the war. The
Battle of Antietam took place on September 17, Lincoln introduced the Emancipation Proclamation on September 22, and
by November 4, most Northern states
had voted in the congressional elections,
leaving the Republicans in control of Congress. Taken together, these developments
demonstrated the Union’s will to fight.
The North sacrificed thousands of men
to eke out a narrow victory at Antietam,
and then committed itself to waging total
44 Financial History | Spring/Summer 2011 | www.MoAF.org
Ben Tarnoff is the author of Moneymakers: The Wicked Lives and Surprising
Adventures of Three Notorious Counterfeiters (Penguin Press, 2011). He has
worked as an assistant editor at Lapham’s
Quarterly and lives in New York.
© Bettmann/CORBIS
The Library Company of Philadelphia.
Advertising circular from Samuel Curtis Upham, dated May 30, 1862.
war by targeting the South’s core institution. Continued Republican supremacy in
Congress ensured that Lincoln’s policies
would remain in place, and eliminated
any possibility of a negotiated peace. The
consequences for the Southern money
market were clear. A protracted struggle
would prolong the redemption of the
notes, perhaps indefinitely. And, in the
event of a Union victory, not only would
Confederate currency be worthless but the
entire economic system it was based on
would be dismantled.
Upham abandoned the counterfeiting
busine