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the city population in collecting food material from the country districts was much impaired.

The harvests in the South during the war were fairly abundant, as far as they were not destroyed by the advancing Northern armies. Maize was raised in large quantities, and, in general, the raising of food products instead of tobacco and cotton was encouraged by legislation and otherwise. The scarcity of food in the armies and cities was chiefly due to the breaking down of the means of transportation, and to the paper money policy and its attendant repressive measures.

The specie holdings of the Southern banks largely found their way into the Confederate treasury in payment for the $15,000,000 loan effected early in 1861. In addition, the government secured the specie in the various Federal offices which fell into its power. These sums were soon sent to Europe in payment of foreign war supplies. The gold and silver in general circulation also soon left the country almost entirely, driven out by the rising flood of paper money. Aside from the payment of the above loan the government never secured any specie revenue, and was driven headlong into the wholesale issue of paper money. The first notes were issued in March 1861, and bore interest. They were soon followed by others, bearing no interest and payable in two years, others payable six months after peace. New issues were continually provided, so that from an initial $1,000,000 in circulation in July 1861, the amount rose to 30 millions before December 1861; to 100 millions by March 1862; to 200 millions by August 1862; to perhaps 450 millions by December 1862; to 700 millions by the autumn of 1863; and to a much larger figure before the end of the war.

This policy of issuing irredeemable paper money was copied by the individual states and other political bodies. Alabama began by issuing $1,000,000 in notes in February 1861, and added to this amount during each subsequent session of the state legislature. The other states followed suit. Cities also sought to replenish their treasuries in the same way. Corporations and other business concerns tried to meet the rising tide of prices with the issue of their individual promissory notes intended to circulate from hand to hand. As a result of this redundancy of the currency the price of gold rose to great heights. It was quoted at a premium in Confederate notes in April 1861. By the end of that year a paper dollar was quoted at 90 cents in gold; during 1862 that figure fell to 40 cents; during 1863, to 6 cents; and still lower during the last two years of the war. The downward course of this figure, with occasional recoveries, reflects the popular estimate of the Confederacy’s chance of maintaining itself against the Northern invasion. The fluctuations of the gold premium in the North during the same years are a complementary movement, and correspondingly reflect the periods of popular elation and depression as to the final outcome of the war.

The redundant currency drove the price of commodities to exorbitant heights, and deranged all business. It affected different classes of commodities differently. Those the supply of which was entirely from abroad, like coffee, rose to the greatest height owing to their scarcity produced by the blockade. Ingenious substitutes were found for such articles, and enormous profits were secured by the merchants who successfully ran the blockade and imported such much-needed articles of foreign origin. These speculators were continually abused for making such importations instead of confining themselves to supplying the government with foreign. war supplies. Articles that were produced in the South and marketed abroad or in the North during normal times rose least in value. Tobacco and cotton, for instance, which found no buyers owing to the blockade, actually fell in value as quoted in gold. The great divergence of the price of these two commodities in the South and abroad the Northern price of cotton increased more than tenfold during the war-offered the strongest inducement to evade the blockade and export them. A small amount of cotton reached the world’s market by way of the Atlantic ports or Mexico, and netted those concerned in the venture handsome profits. The same motive operated to encourage trade with the enemy. Tobacco and cotton were smuggled through the military lines in exchange for hospital stores, coffee and similar articles. The military authorities tried to suppress this illicit trade, but at times even they were carried away by the desire to secure the much-desired foreign supplies. The civil government also vacillated between the policy of encouraging exports, especially to Europe in exchange for foreign goods, and the policy of forbidding such trade in view of the supposed advantage accruing to foreigners, who it was hoped would be compelled to acknowledge the independence of the Confederacy in order to secure Southern cotton.

The derangement of prices, their local differences and fluctuations, produced wild speculation in the South. Normal business was almost impossible, and the gambling element was forced into every transaction. Speculation in gold was especially pronounced. Legislation and popular feeling were aimed at it, but without avail. Even the government itself was compelled to speculate in gold. Speculation in food and other articles was, equally inevitable and was much decried. Laws were formed to curb the speculators, but had no effect. The policy of the Southern banks during the war encouraged speculation. The New Orleans banks had been well managed, and remained solvent until September 1861. The banks of the other states suspended specie payments at the end of 1860, and thereafter enlarged their note issue and their loans, thereby adding to the general redundancy of the currency and stimulating the prevalent speculative craze. They did a large business by speculating in cotton, making advances to the planters on the basis of their crops. The state governments also used their note issues for this purpose, the planters urgently demanding relief as their cotton could not reach a market. The Confederate government also made advances on cotton and secured large quantities by purchase, to serve as the basis of cotton bonds. The rise of prices reflecting the redundancy of the currency was no advantage to the producer. Frequent efforts were made by legislation and otherwise to reduce the prices demanded especially by the agriculturists. As a result, the production of food products fell off, at least the agriculturists did not bring their products to market for fear of being forced to sell them at a loss. Supplies for the army were obtained by impressment, the price to be paid for them being arbitrarily fixed at a low figure. As a result, the army administration found it almost impossible to induce producers of food willingly to turn over their products, and the army suffered from want. Under these confused industrial circumstances the sufferings of the debtor class were loudly asserted, and laws were passed to relieve them of their burdens, making the collection of debts difficult or impossible. The debts of Southerners to Northerners contracted before the war were confiscated by the Confederate government, but did not amount to a large figure.

The effectiveness of the Federal blockade and the peculiar industrial development of the South removed the possibility of an ample government revenue. Though import duties were levied, the proceeds amounted to almost nothing. A small export duty on cotton was expected to produce a large revenue sufficient to base a loan upon, but the small amount of cotton exports reduced this source of revenue to an insignificant figure. There being, moreover, no manufactures to tax under an internal revenue system such as the North adopted, the Confederacy was cut off from deriving any considerable revenue from indirect taxation. The first Confederate tax law levied a direct tax of twenty millions of dollars, which was apportioned among the states. These, with the exception of Texas, contributed their apportioned share to the central government by issuing bonds or notes, so that the tax was in reality but a disguised form of loan. Real taxation was postponed until the spring of 1863, when a stringent measure was adopted taxing property and earnings. It was slowly and with difficulty put into effect, and was re-enacted in February 1864. In the states and cities there was a strong tendency to relax or postpone taxation in view of the other demands upon the people.