With the beginning of the American Civil War and a secession taking place, the southern states were in the midst of a crisis. As a result of the separation from the rest of the country, southern states were blockaded and cut off from the majority of the world. This led to foreign trade being nearly impossible and a war in need of dire finance. As discussed in the first part of this series, Confederate paper money was born.
Authorized Treasury notes were issued through the Act of March 9, 1861. The following stipulated the issuing of the notes: “authorized Treasury notes to be issued for such sum or sums as the exigencies of the public service may require, but not exceed at any time one million dollars, and of denominations not less than fifty dollars for any such note.” Notes were made payable “twelves months after date” with an interest of one cent per day for each 100 dollar increment. With the Act expiring on March 1st of 1862, a face value sum of $2,021,100 was issued between the denominations. (Note: not all at one time).
First Issue Notes - Montgomery (Alabama) - 1861
Dated the first notes issued after the Act was authorized, Montgomery, Ala., notes from $50 to $1000 were engraved and printed by the National Bank Note Company in New York. Montgomery was the Confederate capital until Virginia seceded. The capital was then moved to Richmond in May of 1861. Due to the proximity of the printing of the notes, Virginia seemed like the right move for the issuing of the brand new Confederate paper money.
Although first issued in Montgomery (South), New York (North) encompassed much more skilled engravers than those in the South as it was arranged for the first notes printed in the North only to have them be shipped quickly to the South afterward. Although it may seem odd to have a company in the North proceed with such a task, banknote companies were more concerned with business rather than politics.
The vignettes, or simply the designs, used on Confederate notes took hours of engraving and was not something to be taken lightly. Although for southern state usage, a lot of the vignettes ended up not depicting scenes in the South but were scenes used beforehand from the North. Companies made sure to copyright their designs as many were used in a number of different combinations for different banks. These notes also feature different written dates (most commonly May or June 1861) and are endorsed on the back by the Register and Treasurer of the Confederacy. Denominations include $50, $100, $500, and $1000 while found to be in a number of different conditions in today’s market.
Second & Third Issues - 1861
After the expiration of the first issued notes, the Act of May 16, 1861, was soon authorized as its treasuring notes were not to exceed a total of $20 million. This issuing of notes under this Act saw smaller denominations produced in addition to the arrangement with Southern banks for a loan of their notes. Over $10,000,000 ended up being loaned by the banks.
The third and last issuing of notes in 1861 occurred under the Act of August 19, 1861. It was not to exceed $100 million and was eventually supplemented by $50 million from the Act of December 24, 1861. Due to Union forces at the First Battle of Bull Run on July 21st, these notes were made payable “six months after the ratification of a treaty of peace” instead of the previously stated two years.
With the issuing of this authorized batch of notes, paper became a problem for the Confederate Treasury in terms of printing. At the time of the Civil War, paper was not produced in mass quantities like it is today as paper was made from linen and cotton rags. The South was not active upon the idea of using wood pulp even though the process had been invented at the time. Instead, a great portion of the paper used for production was smuggled from the North but mainly from England. This paper also started being watermarked and notes were being grouped by engravers and their work rather than denominations. It was also determined during this issuance of notes that printers began to move to Columbia, South Carolina, from Richmond as the capture of the Confederate capital became possible.
Source: Confederate States Paper Money: Civil War Currency From the South (12th Edition) by George S. Cuhaj & William Brandimore