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 always."
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.