FOR BETTER OR WORSE:

A HISTORY OF BANKING IN THE UNITED STATES

Part II --An Economic History of the War Between the States

Text: "Thou shall have a perfect and just weight, a perfect and just measure shalt thou have: that thy days may be lengthened in the land which the Lord thy God giveth thee." (Deuteronomy 25:15)

Economics may have played a more significant role in deciding the outcome of the War Between the States than the battles fought. Few people are aware that due to the lack of coining metals at the outbreak of the War, the Confederacy minted only 16 coins – 4 half-dollars and 12 cents. The cents were struck by George Lovett of New York, who, fearing prosecution, hid in his cellar both the cents and the dies used to strike them. The half-dollars were struck at the New Orleans mint after it was seized by the Confederacy in January 1861, just 5 days after Louisiana seceded from the Union.

At the outbreak of the War, the Confederacy had no treasury; and when it was first established, it lacked sufficient money to pay for its Secretary’s writing desk. An estimated $85,000,000 in bank notes was in circulation, but due to the lack of backing by gold and sliver, the banks themselves were in danger of collapse and their fiat money was eyed with increasing suspicion. When people are compelled to accept paper money as the equivalent of gold and silver, that currency is properly a fiat currency.

In an attempt to solve her economic woes, the Confederacy resolved to issue its own paper money. Christopher Gustavus Memminger,

Secretary of the Treasury, perceived the dangers of inflated or fiat paper money, but he turned to it for economic salvation. In 1861, the National Bank Note Company of New York printed $8,000,000 in currency. The notes were to be smuggled through the Union blockade and issued in Montgomery, Alabama. Most of the paper, however, was seized, and the Confederacy was obliged to obtain bank note paper and lithographic materials from England. The first shipment was seized upon the open seas and in the words of Horace White, "It would have been better for the Confederacy if all other efforts to obtain these fatal instruments had likewise failed."

A second issue of currency was printed in Richmond, Virginia the same year. Then followed a third issue, and then a fourth.

The last issue alone totaled $150,000,000.

On account of inadequate specie reserves (i.e. gold and silver) the redemption of paper money in these metals was suspended. According to the "Richmond Enquirer" of December 1861, runners were traversing the country buying up gold and silver at a 30-50 percent premium.

In the following year, three issues of currency appeared.

A total of $165,000,000 was printed in the first issuance alone.

When Southerners balked at accepting the paper money at its face value, a Legal lender Act was passed in an attempt to bolster the legitimacy of the currency. Its effect was however miniscule. The names of people who refused to accept the paper for its imprinted value was posted publicly. Still the people were suspicious. God commanded, "Thou shalt have a perfect and just weight, a perfect and just measure shalt thou have."

The Act of March 23, 1803 authorized the printing of an additional $50,000,000. Bacon rose from $1 to $4 per pound, and beans soared from $4 to $30 per bushel. Food riots were a constant threat to the Confederacy. By December gold reached a ratio of 20 to 1, or it took 20 paper dollars to purchase what 1 dollar in gold could purchase. The value of paper money rested upon the viability of other paper currency. God had given fair warning as to the immoral consequences of utilizing varying standards in weights and measures and said a just weight was His delight and any other kind was an abomination. (Proverbs 11:1)

In 1864, the Confederacy issued its last paper money. A total of $200,000,000 was authorized but a total of 2 billion may have been printed. The more prices rose, the more money was printed. The more prices rose, the more money was printed, the more prices rose.... By October 1, it required 26 dollars in Confederate currency to purchase what 1 dollar in gold could purchase. Due to the lack of coinage, Confederate stamps were printed and circulated.

An attempt was made to patch the economy. An act passed on February 17, ordering all Confederate notes over $5 be turned in to the Treasury in exchange for 20-year bonds and certificates. The government placed a 33½% tax on all $100 notes and added a 10% penalty every month they were not redeemed. All $100 notes not turned in by the end of the year would be axed 10O percent. This amounted to repudiation, and Secretary of the Treasury Memminger tried in vain to reconcile his plan with honesty and integrity. "No contract," he declared "however solemn can require national ruin, and in such case the maxim must prevail that the public safety is the supreme law."1 Southerners, however, did not relish the idea of exchanging their currency that would purchase something for bonds and certificates that would without a doubt prove worthless. They accordingly ignored the threat.

Other problems plagued the Confederate economy. First, the

Union naval blockade had proved effective, and cotton exports were brought to a screeching halt early in the War. Second, at the sight of the approaching Union Army, Southerners burned their property to keep it from falling into enemy hands. Third, the prevalence of "wildcat" banking practices enhanced her woes. Individual states printed their own paper money, as did banks, towns, counties, businesses and even a few individuals. But perhaps of even greater importance in contributing to the depreciation of Confederate currency was counterfeiting.

Printing presses in the North eagerly printed Confederate money. Some was sold as "souvenirs", but more was printed to flood the Confederacy with counterfeit paper money. "Thou shalt have a perfect and just weight, a perfect and just weight shalt thou have." This is the command of God, and history bears witness that when the Law of God is violated in regard to the tender of a country, counterfeiting will flourish. In order to remedy the situation, the Confederacy pronounced the death penalty upon any Northerner who attempted to pass counterfeit money; and upon any officer commissioned by the Union who tolerated such notes to be passed under his command.

By April 1865, gold reached a ratio of 100 to 1. It now required 100 dollars in Confederate currency to purchase what 1 dollar in gold could purchase.

In his Southern History Of The War, Mr. E. A, Pollard summarized the conditions brought about by the Confederate fiat money.

"The evils of the expanded currency of the Confederacy were not only financial. They were also moral. The superabundance of paper money was the occasion of a wild speculation, which corrupted the patriotism of the country; introduced extravagance and licentiousness in private life; bestowed fortune on the most undeserving, and above all bred the most dangerous discontents in the army. As long as there was a spirit of mutual sacrifice and mutual accommodation in the war our soldiers were content and cheerful. But when they had to compare their condition -- the hardships of the camp, the pittance of eleven dollars per month that could scarcely buy a pair of socks, the poverty of the dear ones left behind them --with the easy and riotous wealth of those who had kept out of the army merely to wring money out of the necessities and distress of the country, who in snug shows in Richmond made thousands of dollars a day, it is not to be Wondered at that bitter conclusions should have been drawn from the contrast and that the soldier should have given his bosom to the bullets with less alacrity and zeal when he reflected that his martyrdom was to protect a large class of men grown

rich on his necessities and that too with the compliance and countenance of the government he defended. "2

"Thou shalt have a perfect and just weight, a perfect and just measure shalt thou have."

When President Jefferson Davis was captured in May, 1865, the remaining Confederate funds was also seized --a total of

Footnotes

1 White, Horace. Money And Banking, Copyright 1895. Boston: Ginn and Company, p. 170.

2 Ibid. pp. 173-174.

BIBLIOGRAPHY

Coin Press: "The Richest Man in the World --In Confederate Currency" by Ed Rochette. October 1961.

Coin World: "The Confederate Cent --Second Restrike" by Robert Bashlow. January 26, 1962.

Maine, Franklin J.: Library Of Universal Knowledge. Copyright 1949, Chicago.

Reinfeld, Fred: The Story Of Civil War Money. Copyright 1959 by Sterling Publishing Company.

White, Horace: Money and Banking. Copyright 1895. Boston: Ginn and Company.

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I was awakened at 5:30

by a policeman knocking at the back door of the church. He told me the body of a man was found on the church lawn. I went to investigate. It was the gray-bearded man who walked about with a cane. He carried his head to one side having suffered a gunshot wound to the neck years before.

He was often misunderstood. On one occasion he suffered multiple stab wounds from a jealous lover when he tried to carry on a conversation with a waitress. Now he was dead due to a heart attack.

After having laid down his hat and cane, he lay down directly before our sign which carries the words of the hymn by Samuel Stennett:

In the words of the police officer, "What a place to die!"

I hope he knew the Lord, but I have no reason to believe he did; yet there are lessons to be learned from his passing. First, when Death, as a servant of God, summons us, it will not matter who we are, how old we are, or in what physical condition. Neither will it matter what time it is. Second, it will not matter where we are. No place is impervious to Death. To die on the street or in a castle does not matter, but what happens after death is of the gravest importance. It will not matter whether we were rich or poor in life, or whether we were educated or uneducated. All that will then matter will be whether or not we will land on the happy shore of heaven. The words of Samuel Stennett’s hymn are most striking.

ON CAPTURING OUR THOUGHTS

Text: "...bringing into captivity every thought to the obedience of Christ." --(II Corinthians 10:5b)

Most people sit before their television and view programs designed to inflame their passions. They listen to the songs that flood the airways; they read the licentious sheets at the grocery checkout counter. They do so because they consider it of little consequence what they think about, but "as a man thinketh in his heart, so is he." (Proverbs 23:7)

The Godly man is at war with his mind "casting down imaginations", and pursuing each fleeting thought to capture it and to bring it into obedience to the Law of God. God cares what we think about, and it is to this "heart" of man that the Lord looks. (I Samuel 16:7)

"As a man thinketh in his heart so is he." Tell me what you think about, and I will tell you what you are. "Either make the tree good, and his fruit good, or else make the tree corrupt and his fruit corrupt: for the tree is known by his fruit." "Not that which doeth into the mouth defileth a man; but that which cometh out of the mouth, this defileth the man." Yet how many there ate who are more concerned about washing their hands before eating than they are about the filthiness of their heart. "For out of the heart proceed evil thoughts, murders, adulteries, fornications, thefts, false witness, blasphemies." (Matthew 12:33; 15:11,19)

The Lord Jesus Christ said, "A good man out of the good treasure of his heart bringeth forth good things: and an evil man out of the evil treasure bringeth forth evil things." The heart is the most deceitful thing in creation. It is desperately wicked. Who is he who can unravel such a network of iniquity? Or who can journey through this chambered nautilus? "I the Lord search the heart," and He it is who discerns between the thoughts and intents thereof. (Matthew 12:35)

The war for the control of our mind is a series of battles fought each day. It is an incessant war, and must be fought thought by thought, hour by hour.

My soul, be on thy guard;

Ten thousand foes arise;

The hosts of sin are pressing hard

To draw thee from the skies.

Isaac Watts wrote,

Are there no foes for me to face?

Must I not stem the flood?

Is this vile world a friend to grace,

To help me on to God?

"Blessed are the pure in heart for they shall see God." But "wherewithal shall a young man cleanse his way?" Only by taking heed to the Word of God. It is not enough to be a hearer of the Word: we must be a doer of the Word. They who content themselves with only hearing the Word deceive themselves. May God be pleased to make us like the Psalmist, who could say, "With my whole heart have I sought Thee: O let me not wander from Thy commandments." (Matthew 5:8; Romans 2:15;

James 1:22; Psalm 119:9,10)

"Keep thy heart with all diligence; because out of it are the issues of life." The saints of God are commanded to keep or set double guards on their heart. They are to keep it with all keeping because out of it are the issues of life. Therefore, so long as such important issues flow out of it, they are to keep it with all diligence. Can the affections, the desires, the purposes and the pursuits of the heart be guarded if we ingest Rock ‘N’ Roll music, the very name of which is suggestive of its themes of fornication? Is country-western music any more Godly with its themes of drunkenness, brawling and adultery? And does it not have a corrupting affect to label any music as "Gospel" that adopts the sleazy attitudes common to a godless world? --and that makes use of the bar room heat? Can the heart be kept clean if lewdness and lawlessness are meditated upon? (Proverbs 4:23)

Does God care what we think about? Hear His Word through the Apostle Paul--

"Whatsoever things are true, whatsoever things are honest, whatsoever things are just, whatsoever things are pure, whatsoever things are lovely, whatsoever things are of good report; if there be any virtue, and if there be any praise, think on these things." (Philippians 4:8)

"My son, give Me thine heart, and let thine eyes observe My ways," Can you hear this admonition? Will you hear it? It is the voice of God. (Proverbs 23:26)

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PRAISE GOD FOR EVANGELIST I. B. --

who on Thursday, September 20, discovered we had no groceries. He picked me up in his automobile explaining he wanted to do something for us. We arrived at a grocery store, and he directed me to pick up whatever our family needed. When we arrived at the checkout, he explained he had a total of 49 cents in his pocket, and took out his food stamps. Then turning to me he said, "So long as I have 2 bites of food, you will have one!"