The secession of the southern states in the early 1860s led to the formation of the Confederacy. After South Carolina seceded on December 20, 1860, seven states followed although it was thought that there would be double that initially. Secession was a delegate decision state by state and after the election and fall of Fort Sumter in April of 1861, some states decided against it. However, once the Confederate States were established, currency circulated heavily throughout the South during the American Civil War. But as we have come to learn throughout this blog series, that currency still was not enough in the South. This led to the enactment of individual states issuing their own currency.
Tennessee
Of all the southern states to secede from the Union, Tennessee was undoubtedly one of the most conflicted. They did not hold just one election, but two that would ultimately enter them into the Confederacy on June 8, 1861. The first one held on February 9, 1861, would fail until the attack at Fort Sumter would change minds across the state. Combined with a governor who favored secession from the onset, their entry was voted on with a two-thirds majority. Those against secession, primarily those who occupied East Tennessee, were very pro-Union. Of the total 165,000 soldiers provided for the war from the state, around 50,000 fought for the Union.
The state of Tennessee was predominantly occupied by Union forces from the beginning, so notes issued from 1861-1863 are not known to be genuine. They relied mostly on local scrip which were notes from various banks and “Greenbacks” which were Federal. However, Confederate currency was used as well depending on which parts of the states were under southern control. A large number of those bank issues were also redeemable in Confederate notes.
After the war was over, Tennessee was restored to the Union on July 24, 1866. Unlike other states, they did not go through a Reconstruction Act that other states suffered from. They did not, however, avoid tensions post-war as those who supported the Confederacy and those that supported the Union were at arms. One of the results from the growing conflict was the formation of the Ku Klux Klan in 1865.
While Tennessee was able to avoid Reconstruction via the quick adoption of the 13th and 14th amendments, they were not exempt from a governor who installed his own version of it. They were also not exempt from the issue of bonds during his leadership from 1865-1869. At the time, bonds were inadequate and were not meeting the needs of the bankrupt state. Notes were issued in lower denominations post-war in 1875 and again in 1883 due to debts from the war.
Again, notes were issued in post-war Tennessee as the first issue was dated May 1, 1875. It featured $1, $2, $5, $10, $20, and $50 denominations. They were printed by the American Bank Note Co., N.Y., with the exception of the 1883 issued notes that were dated July 1, 1883. They were redeemable for a period of five years and were for the redemption of notes from the Bank of Tennessee. Those notes were printed by Louisville Lithographic Co.
Source: Confederate States Paper Money: Civil War Currency From the South (12th Edition) by George S. Cuhaj & William Brandimore