OF THE TIME WHEN MONEY WAS "EASY."
It seems a remarkable fact that during the late Congressional
travail with the currency question, no one of the people in or out
of Congress, who were concerned lest there should not be enough
money in the country to "move the crops," ever took upon himself the
pleasing task of rehearsing the late Confederacy's financial story,
for the purpose of showing by example how simple and easy a thing
it is to create wealth out of nothing by magic revolutions of the
printing-press, and to make rich, by act of Congress, everybody not
too lazy to gather free dollars into a pile. The story has all the
flavor of the Princess Scheherezade's romances, with the additional
merit of being historically true. For once a whole people was rich.
Money was "easy" enough to satisfy everybody, and everybody had it
in unstinted measure. This money was not, it is true, of a quality
to please the believers in a gold or other arbitrary standard of
value, but that is a matter of little consequence, now that senators
and representatives of high repute have shown that the best currency
possible is that which exists only by the will of the government, and
the volume of which is regulated by the cravings of the people alone.
That so apt an illustration of the financial views of the majority in
Congress should have been wholly neglected, during the discussions,
seems therefore unaccountable.
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. Going the rounds of the pickets on the coast of
South Carolina, one day, in 1863, I heard a conversation between a
Confederate and a Union soldier, stationed on opposite sides of a
little inlet, in the course of which this point was brought out.
_Union Soldier._ Aren't times rather hard over there, Johnny?
_Confederate Soldier._ Not at all. We've all the necessaries of life.
_U. S._ Yes; but how about luxuries? You never see any coffee
nowadays, do you?
_C. S._ Plenty of it.
_U. S._ Isn't it pretty high?
_C. S._ Forty dollars a pound, that's all.
_U. S._ Whew! Don't you call that high?
_C. S._ (after reflecting). Well, perhaps it is a trifle uppish, but
then you never saw money so plentiful as it is with us. We hardly
know what to do with it, and don't mind paying high prices for things
we want.
And that was the universal feeling. 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 to-morrow 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. So
uncertain were prices, or rather so constantly did they tend upward,
that when a cargo of cadet gray cloths was brought into Charleston
once, an officer in my battery, attending the sale, was able to
secure enough of the cloth to make two suits of clothes, without any
expense whatever, merely by speculating upon an immediate advance. He
became the purchaser, at auction, of a case of the goods, and had no
difficulty, as soon as the sale was over, in finding a merchant who
was glad to take his bargain off his hands, giving him the cloth he
wanted as a premium. The officer could not possibly have paid for the
case of goods, but there was nothing surer than that he could sell
again at an advance the moment the auctioneer's hammer fell on the
last lot of cloths.
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."
As I was returning to my home after the surrender at Appomattox
Court House, a party of us stopped at the residence of a planter for
supper, and as the country was full of marauders and horse thieves,
deserters from both armies, bent upon indiscriminate plunder, our
host set a little black boy to watch our horses while we ate, with
instructions to give the alarm if anybody should approach. After
supper we dealt liberally with little Sam. Silver and gold we had
none, of course, but Confederate money was ours in great abundance,
and we bestowed the crisp notes upon the guardian of our horses,
to the extent of several hundreds of dollars. A richer person than
that little negro I have never seen. Money, even at par, never
carried more of happiness with it than did those promises of a dead
government to pay. We frankly told Sam that he could buy nothing
with the notes, but the information brought no sadness to his simple
heart.
"I don' want to buy nothin', master," he replied. "I's gwine to keep
dis al_ways_."
I fancy his regard for the worthless paper, merely because it was
called money, was closely akin to the feeling which had made it
circulate among better-informed people than he. 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.
But the disproportion between the prices of different articles
was not greater than that between the cost of goods imported
through the blockade and their selling price. The usual custom of
blockade-running firms was to build or buy a steamer in Europe, bring
it to Nassau in ballast, and load it there with assorted merchandise.
Selling this cargo in Charleston or Wilmington for Confederate money,
they would buy cotton with which to reload the ship for her outward
voyage. The owner of many of these ships once told me that if a
vessel which had brought in one cargo were lost with a load of cotton
on her outward voyage, the owner would lose nothing, the profits
on the merchandise being fully equal to the entire value of ship
and cotton. If he could get one cargo of merchandise in, and one of
cotton out, the loss of the ship with a second cargo of merchandise
would still leave him a clear profit of more than a hundred per cent.
upon his investment. And this was due solely to the abnormal state
of prices in the country, and not at all to the management of the
blockade-runners. They sold their cargoes at auction, and bought
cotton in the open market.
Their merchandise brought fabulous prices, while cotton, for want of
a market, remained disproportionately low. That the merchants engaged
in this trade were in no way the authors of the state of prices may
be seen from two facts. First, if I am correctly informed, they
uniformly gave the government an opportunity to take such articles as
it had need of, and especially all the quinine imported, at the price
fixed in Richmond, without regard to the fact that speculators would
pay greatly more for the goods. In one case within my own knowledge
a heavy invoice of quinine was sold to the government for eleven
hundred dollars an ounce, when a speculator stood ready to take it
at double that price. Secondly, the cargo sales were peremptory,
and speculators sometimes combined and bought a cargo considerably
below the market price, by appearing at the sale in such numbers as
to exclude all other bidders. In one case, I remember, the general
commanding at Charleston annulled a cargo sale on this account, and
sent some of the speculators to jail for the purpose of giving other
people an opportunity to purchase needed goods at prices very much
higher than those forced upon the sellers by the combination at the
first sale.
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.
I am sometimes asked at what time prices attained their highest
point in the Confederacy, and I find that memory fails to answer the
question satisfactorily. They were about as high as they could be
in the fall of 1863, and I should be disposed to fix upon that as
the time when the climax was reached, but for my consciousness that
the law of constant appreciation was a fixed one throughout the war.
The financial condition got steadily worse to the end. I believe the
highest price, relatively, I ever saw paid, was for a pair of boots.
A cavalry officer, entering a little country store, found there one
pair of boots which fitted him. He inquired the price. "Two hundred
dollars," said the merchant. A five hundred dollar bill was offered,
but the merchant, having no smaller bills, could not change it.
"Never mind," said the cavalier, "I'll take the boots anyhow. Keep
the change; I never let a little matter of three hundred dollars
stand in the way of a trade."
That was on the day before Lee's surrender, but it would not have
been an impossible occurrence at any time during the preceding year.
The money was of so little value that we parted with it gladly
whenever it would purchase anything at all desirable. I cheerfully
paid five dollars for a little salt, at Petersburg, in August, 1864,
and being thirsty drank my last two dollars in a half-pint of cider.
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. In the early
spring of 1865 I wanted a horse, and a friend having one to spare, I
sent for the animal, offering to pay whatever the owner should ask
for it. He could not fix a price, having literally no standard of
value to which he could appeal, but he sent me the horse, writing, in
reply to my note,--
"Take the horse, and when the war shall be over, if we are both alive
and you are able, give me as good a one in return. Don't send any
note or due-bill. It might complicate matters if either should die."
A few months later, I paid my debt by returning the very horse I
had bought. I give this incident merely to show how utterly without
financial compass or rudder we were.
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. I remember the start it gave me when
a clergyman, visiting camp, asked a number of us whether our long
stay in defensive works did not afford us an excellent opportunity
to study with a view to our professional life after the war. We were
not used to think of ourselves as possible survivors of a struggle
which was every day perceptibly thinning our ranks. The coming of
ultimate failure we saw clearly enough, but the future beyond was a
blank. The subject was naturally not a pleasant one, and by common
consent it was always avoided in conversation, until at last we
learned to avoid it in thought as well. We waited gloomily for the
end, but did not care particularly to speculate upon the question
when and how the end was to come. There was a vague longing for rest,
which found vent now and then in wild newspaper stories of signs and
omens portending the close of the war, but beyond this the matter was
hardly ever discussed. We had early forbidden ourselves to think of
any end to the struggle except a successful one, and that being now
an impossibility, we avoided the subject altogether. The newspaper
stories to which reference is made above were of the wildest and
absurdest sort. One Richmond paper issued an extra, in which it was
gravely stated that there was a spring near Fredericksburg which had
ceased to flow thirty days before the surrender of the British at
Yorktown, thirty days before the termination of the war of 1812, and
thirty days before the Mexican war ended; and that "this singularly
prophetic fountain has now again ceased to pour forth its waters." At
another time a hen near Lynchburg laid an egg, the newspapers said,
on which were traced, in occult letters, the words, "peace in ninety
days."
Will the reader believe that with gold at a hundred and twenty-five
for one, or twelve thousand four hundred per cent. premium; when
every day made the hopelessness of the struggle more apparent; when
our last man was in the field; when the resources of the country
were visibly at an end, there were financial theorists who honestly
believed that by a mere trick of legislation the currency could be
brought back to par? I heard some of these people explain their
plan during a two days' stay in Richmond. Gold, they said, is an
inconvenient currency always, and nobody wants it, except as a
basis. The government has some gold,--several millions in fact,--and
if Congress will only be bold enough to declare the treasury notes
redeemable at par in coin, we shall have no further difficulty with
our finances. So long as notes are redeemable in gold at the option
of the holder, nobody wants them redeemed. Let the government say to
the people, We will redeem the currency whenever you wish, and nobody
except a few timid and unpatriotic people will care to change their
convenient for an inconvenient money. The gold which the government
holds will suffice to satisfy these timid ones, and there will be
an end of high prices and depreciated currency. The government can
then issue as much more currency as circumstances may make necessary,
and strong in our confidence in ourselves we shall be the richest
people on earth; we shall have _created_ the untold wealth which our
currency represents.
I am not jesting. This is, as nearly as I can repeat it, the
utterance of a member of the Confederate Congress made in my presence
in a private parlor. If the reader thinks the man was insane, I beg
him to look over the reports of the debates on financial matters
which have been held in Washington.
The effects of the extreme depreciation of the currency were
sometimes almost ludicrous. One of my friends, a Richmond lady,
narrowly escaped very serious trouble in an effort to practice a wise
economy. Anything for which the dealers did not ask an outrageously
high price seemed wonderfully cheap always, and she, at least, lacked
the self-control necessary to abstain from buying largely whenever
she found anything the price of which was lower than she had supposed
it would be. Going into market one morning with "stimulated ideas of
prices," as she phrased it, the consequence of having paid a thousand
dollars for a barrel of flour, she was surprised to find nearly
everything selling for considerably less than she had expected.
Thinking that for some unexplained cause there was a temporary
depression in prices, she purchased pretty largely in a good many
directions, buying, indeed, several things for which she had almost
no use at all, and buying considerably more than she needed of other
articles. As she was quitting the market on foot,--for it had become
disreputable in Richmond to ride in a carriage, and the ladies would
not do it on any account,--she was tapped on the shoulder by an
officer who told her she was under arrest, for buying in market to
sell again. As the lady was well known to prominent people she was
speedily released, but she thereafter curbed her propensity to buy
freely of cheap things. Buying to sell again had been forbidden under
severe penalties,--an absolutely necessary measure for the protection
of the people against the rapacity of the hucksters, who, going
early into the markets, would buy literally everything there, and by
agreement among themselves double or quadruple the already exorbitant
rates. It became necessary also to suppress the gambling-houses in
the interest of the half-starved people. At such a time, of course,
gambling was a very common vice, and the gamblers made Richmond
their head-quarters. It was the custom of the proprietors of these
establishments to set costly suppers in their parlors every night,
for the purpose of attracting visitors likely to become victims.
For these suppers they must have the best of everything without
stint, and their lavish rivalry in the poorly stocked markets had
the effect of advancing prices to a dangerous point. To suppress the
gambling-houses was the sole remedy, and it was only by uncommonly
severe measures that the suppression could be accomplished. It
was therefore enacted that any one found guilty of keeping a
gambling-house should be publicly whipped upon the bare back, and as
the infliction of the penalty in one or two instances effectually
and permanently broke up the business of gambling, even in the
disorganized and demoralized state in which society then was, it may
be said with confidence that whipping is the one certain remedy for
this evil. Whether it be not, in ordinary cases, worse than the evil
which it cures, it is not our business just now to inquire.
The one thing which we were left almost wholly without, during the
war, was literature. Nobody thought of importing books through the
blockade, to any adequate extent, and the facilities for publishing
them, even if we had had authors to write them, were very poor
indeed. A Mobile firm reprinted a few of the more popular books of
the time, Les Misérables, Great Expectations, etc, and I have a
pamphlet edition of Owen Meredith's Tannhäuser, bound in coarse
wall-paper, for which I paid seven dollars, in Charleston. Singularly
enough, I bought at the same time a set of Dickens's works, of
English make, well printed and bound in black cloth, for four dollars
a volume, a discrepancy which I am wholly unable to explain. In
looking through a file of the Richmond Examiner extending over most
of the year 1864, I find but one book of any sort advertised, and the
price of that, a duodecimo volume of only 72 pages, was five dollars,
the publishers promising to send it by mail, post-paid, on receipt of
the price.
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 wood at twenty-five
dollars a cord and get their washing done for seven dollars and fifty
cents a dozen pieces.
This matter of prices was frequently made a subject for jesting
in private, but for the most part it was carefully avoided in the
newspapers. It was too ominous of evil to be a fit topic of editorial
discussion on ordinary occasions. As with the accounts of battles
in which our arms were not successful, necessary references to the
condition of the finances were crowded into a corner, as far out of
sight as possible. The Examiner, being a sort of newspaper Ishmael,
did now and then bring the subject up, however, and on one occasion
it denounced with some fierceness the charges prevailing in the
schools; and I quote a passage from Prof. Sidney H. Owens's reply,
which is interesting as a summary of the condition of things in the
South at that time:--
"The charges made for tuition are about five or six times as high as
in 1860. Now, sir, your shoemaker, carpenter, butcher, market man,
etc., demand from twenty, to thirty, to forty times as much as in
1860. Will you show me a civilian who is charging only six times the
prices charged in 1860, except the teacher only? As to the amassing
of fortunes by teachers, spoken of in your article, make your
calculations, sir, and you will find that to be almost an absurdity,
since they pay from twenty to forty prices for everything used, and
are denounced exorbitant and unreasonable in demanding five or six
prices for their own labor and skill."
There were compensations, however. When gold was at twelve thousand
per cent. premium with us, we had the consolation of knowing that it
was in the neighborhood of one hundred above par in New York, and a
Richmond paper of September 22, 1864, now before me, fairly chuckles
over the high prices prevailing at the North, in a two-line paragraph
which says, "Tar is selling in New York at two dollars a pound. It
used to cost eighty cents a barrel." That paragraph doubtless made
many a five-dollar beefsteak palatable.