franklin:
Those are some gaudy numbers, indeed! Where did the CSA obtain that wealth? There was some money (bullion and specie) in US Mints located in the South in the Spring of 1861. Various banks had some - and there was private wealth (although I believe many "rich" planters were deeply in debt to domestic and foreign creditors).
With all due respect, the figures I've seen are quite different:
DECEMBER 6, 1864.
Fellow- Citizens of the Senate and House of Representatives:
Again the blessings of health and abundant harvests claim our proyear, over and above all losses by shipwreck or in battle, of 83 vessels, 167 guns, and 42,427 tons.
The total number of men at this time in the naval service, including officers, is about 51,000.
There have been captured by the Navy during the year 324 vessels and the whole number of naval captures since hostilities commenced is 1,379, of which 267 are steamers.
[Pro?]foundest gratitude to Almighty God.
The receipts during the year, from all sources, upon the basis of
warrants signed by the Secretary of the Treasury, including loans
and the balance in the Treasury on the 1st day of July, 1863, were
$1,394,796,007.62, arid the aggregate disbursements, upon the same
basis, were $1,298,056,101.89, leaving a balance in the Treasury, as
shown by warrants, of $96,739,905.73.
Deduct from these amounts the amount of the principal of the
public debt redeemed, and the amount of issues in substitution there-
for, and the actual cash operations of the Treasury were: Receipts
$884,076,646.57; disbursements, $865,234,087.86; which leaves a cash
balance in the Treasury of $18,842,558.71.
Of the receipts, there were derived from customs $102,316,152.99;
from lands, $588,333.29; from direct taxes, $475,648.96; from internal
revenue, $109,741,134.10; from miscellaneous sources, $47, 511,448.10;
and from loans applied to actual expenditures, including former
balance, $623,443,929.13.
There were disbursed for the civil service, $27,505,599.46; for pensions
and Indians, $7,517,930.97; for the War Department, $690,791,842.97;
for the Navy Department, $85,733,292.77; for interest on the public
debt, $53,685,421.69; making an aggregate of $865,234,087.86, and
leaving a balance in the Treasury of $18,842,558.71, as before stated.
...The public debt on the 1st day of July last, as appears by the books
of the Treasury, amounted to $1,740,690,489.49.
p975 Series 3 - Volume 4
Financing The Confederacy | Page 2 | American Civil War Forums
Confederate Secretary of the Treasury Christopher G. Memminger assumed his duties in February 1861 by floating government loans and creating an instant national debt. In 1861 the Confederacy sold bonds worth $150 million in the so-called Bankers Loan, which secured much-needed specie. The government also tapped agricultural staples through the Produce Loan, in which planters pledged their produce in exchange for government paper. Against the receipts of these loans, Memminger issued Treasury notes, circulating paper money with which the government paid its bills. In August, 1861 the Confederate Congress passed a War Tax on various kinds of property to increase government resources. Unfortunately Memminger's department was inefficient in collecting the produce subscribed to the Produce Loan, and he allowed taxes to be paid in inflated state currency. Consequently government paper money fed inflation, which served as an inverse tax on Confederate citizens.
By 1863 Memminger realized that inflation was threatening the government's ability to support itself and the war. Accordingly he proposed and Congress passed a graduated Income Tax and a 10% Tax In Kind on agricultural products. In March, 1863 the Confederacy accepted a $15 million loan from the French banking house of Emile Erlanger that yielded much less than its face value (about $8.5 million), but given the tenuous nature of Southern nationhood, the Confederates made the best deal possible. Still, Memminger's printing presses moved faster than the government could collect revenue, and inflation accelerated. In desperation, in 1864 Memminger imposed a Compulsory Funding Measure, which devalued those Treasury notes not exchanged for noncirculating government bonds. This failed too, as Confederates continued to exchange government paper for goods and services.
In July 1864 Jefferson Davis replaced Memminger with another South Carolinian, George A. Trenholm, but there was little Trenholm could do. The Confederacy never had more than $27 million of specie. The national debt ran over $700 million and the overall inflation was about 6,000%. That the Confederacy persisted as long as it did amid this financial chaos was a wonder.
The Confederacy lost their opportunity at financing the war, by the loss of the lower Mississippi and New Orleans in early 1862, stopping any opportunity to export much cotton.
The Confederacy could never compete against the debt structure of the Union.
Source: "Historical Times History of the Civil War"
Good luck to all,
~The Old Bookaroo
