I understand that Federal money from the Civil War, like all US currency, can be spent at face value. I realize that since the Confederacy was never "America", it cannot be spent in this way. What I don't understand is why Federal money from this area seems to be worth less than Confederate money? You might argue that the Southern money is more rare, but I don't think that is it. Any ideas?
Ah, interesting question. You are comparing Apples with Oranges. One one hand you discuss LEGAL TENDER issues, while on the other you deal with NUMISTIC issues. Yes, Union currency was and is legal tender and may still be considered as such, just as silver or gold coins may be handled. But most everyone knows that silver and gold coins have a far greated numistic value. The standard for Union currency of the ACW was that it was backed by SPECIE, silver or gold coin, while Secessionate shinplaster were not. There is controvery today (2015) that the money we have is Federal Reserve money, not even backed by the government but by a private corperation.
I understood the question a little differently #6. The reason that Confederate money isn't spendable or worth anything other than for it's collectors value is because it wasn't worth anything to begin with. Beyond the actual gold and silver values of coinage, the paper stuff was based on "trust." The bills were distributed with a promise that if the Confederacy was successful with the cessation, then the money could be redeemed because it would then be backed. I think you will find that the Continental dollar suffered from the same disease. Much of that wasn't even authorized by the Continental Congress because of the lack of backing. Today's American money went off of the Gold standard (backing was either gold or silver) during the Nixon administration and then went on the "trust" standard. Hence, one of our problems with our national debt. We can print all of the bills we want but they have to be backed with something. China has provided the "collateral" for about 17 trillion dollars of our money otherwise the bills we use would be totally worthless. The general public doesn't even know if there is anything left in Ft. Knox even if we went back to gold backed money. Peter could probably weigh in on this and take us all to school on the subject of money, old and new.
Interrogator#6 nailed it with respect to legal tender versus numismatic value. The Confederate dollar, contrary to popular belief, was not backed by a hard asset like gold, silver, or cotton. Its value dwindled toward the end of the war and then became worthless as legal tender afterward. Its numismatic value, however, is quite high. Original notes can go for a few dollars to much, much more than that. A while back I had a couple notes, but sold them. I didn't make much, but it was quite a bit more than the printed face value.
Prior to the ACW much American currency was not even "legal tender" (government issued) but bank-notes. Bank-notes was script issued by BANKS, with the promise the bill could be presented to the bank of issueance in exchange for a Specie coin of equal value. As it was easier to carry bank-notes and as long as everyone played along, this worked just fine. It also lead to a common practise among issueing banks where they could realize a profit, above the costs associated with printing, transportation (printer to bank), security, et cetera. Pre-ACW was also pre-New Deal, and prior to Federal Depositor Guarentee regulations, which assures each account is backed by the US government as a means to stifle BANK RUNS. Runs, also called PANICs, occured when depositors lost faith in a bank. In the case of Issueing Banks (printers of Bank Notes) if suddenly people started exchanging Notes for GOLD or SILVER coins, a bank might become embarrassed (not having enough ready coin) and have to close doors. This is because Issueing Bankers at some point became aware they could issue Notes in far greater number than the coins they held in reserve, realizing profit on LOANING their Notes. But there is inherent danger, though slight, of Runs or Panics. Private banks, from Joes Pawn and Loan to Chase Manhattan, no longer are permitted wild speculation due to reforms of Frank D. Rossevelt's New Deal. Alas the Republican Party has been chipping away at the New Deal for many decades.
Yes, I know I discussed legal tender and then switched to their value in rarity/historical senses. I was unaware that the Confederate money was not backed by anything of value. How was it ever worth anything then? I know that following the conclusion of the Civil War, it wasn't worth the paper it was printed on, and many people destroyed it. I imagine Federal employees also demanded it be destroyed. This may be the reason the paper money is rare today, and worth more, which is sort of ironic. Incidentally, did the Confederates do any coining?
As I understand it, the "value" in the Confederate dollar was contingent upon Southern victory. It was sort of a promissory note, if you will. As the tides of war changed, the value plummeted. The South did not mint much in the way of coinage as precious metals were needed for the war effort. There was at least a one cent piece and a half dollar minted in New Orleans. A picture of the latter appears below:
That's very cool. Thank you for the post. It makes sense that they would not use supplies, that could be used for other things. Look at the shortages in WWII. Since the South was far poorer than the North, I would think they would not coin pennies at all. Even in the 1860s pennies were not worth much. They would have been better off using the copper for buttons, war machinery and the like.
Interesting you mention the shortages in WWII. One of the items that are still floating around in circulation is the steel penny. Due to the need for copper for ammunition, in 1943 they minted the penny in steel rather than the regular material. A small number were also made in 1944, but production shifted back to the regular type. I have at least one of them (1943) at home and they crop up from time to time in loose change.
The Confederate Mint at New Orleans issued coins only in 1861 and 1862 for the city of New Orleans was captured by Union forces in 62.
To find anything in history that is rare, would be worth much more than it would have been at the time. I watch a lot of Pawn shows, and they always pay more when there aren't that many left around.
