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CONFEDERATE STATES

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Originally appearing in Volume V06, Page 901 of the 1911 Encyclopedia Britannica.
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CONFEDERATE STATES OF' See also:

AMERICA, the See also:title of the See also:independent See also:government, formed by the seceding See also:Southern States at the opening of the See also:American See also:Civil See also:War, in the See also:winter of 186o-1861. These States contained roughly See also:half the See also:population of the See also:Northern States which remained in the See also:Union. In See also:pro-portion to their population they had played a more important See also:part in the previous See also:political See also:history of the See also:United States than was their See also:share. The formation of the new Confederacy was in the hands of experienced statesmen, well schooled in the politics of their respective states and in the halls of the Federal See also:Congress to undertake such a task. See also:Jefferson See also:Davis of See also:Mississippi was almost naturally chosen See also:president, his See also:rival candidates being See also:Alexander H. See also:Stephens, subsequently chosen to fill the See also:vice-See also:presidency of the Confederacy, an important exponent of states' rights, and during the war a strong antagonist of President Davis's policy, and See also:Robert See also:Toombs of See also:Georgia, a strong secessionist. The latter became a prominent member of the See also:Con-federate Congress, and, like Stephens, opposed the despotic See also:powers of the See also:Richmond government. President Davis had been trained in the Federal See also:army, as well as in the Congress and in the See also:National See also:administration. His administration of the Confederate presidency cannot be called brilliant. The difficulties he contended with, however, were insurmountable; but his See also:official acts were always the result of an unselfish See also:desire to do what seemed best for the cause he espoused. The president's See also:cabinet contained, among others, See also:Judah P. See also:Benjamin, secretary of See also:state; C.

G. Memminger (1803–1888), and later See also:

George A. Trenholm (1806–1876), secretaries of the See also:treasury; G. W. See also:Randolph (1818–1878) and See also:James A. See also:Seddon (181 5–188o), secretaries of war; S. R. Mallory (1813–1873), secretary of the See also:navy, and See also:John H. See also:Reagan, postmaster-See also:general. Of these Benjamin was distinctly the most powerful intellectually. Memminger, with little training or aptitude for his difficult position, did not distinguish himself as a financier, and was succeeded in the summer of 1864 by Trenholm, a See also:Charleston banker, of high intelligence and See also:good training, who, however, found it impossible to See also:save the Confederacy from See also:financial ruin. Of other Confederates prominent in official positions the following may be mentioned: See also:Howell See also:Cobb, a former member of the Federal Congress and of President See also:Buchanan's cabinet, serving as See also:speaker of the provisional Confederate congress and later in the See also:field; Robert W.

Barnwell (1801–1882) and See also:

William L. See also:Yancey; Benjamin H. See also:Hill (1823–1882) and A. H. Keenan of Georgia; John A. See also:Campbell (181r–1889), before the war a See also:judge of the U.S. Supreme See also:Court; Judge A. G. Magrath (1813–1893), a prominent judge of the Confederate court in See also:South Carolina; See also:Governors Z. B. See also:Vance of See also:North Carolina, and J. E.

See also:

Brown of Georgia (°1821-1894). In framing their provisional and permanent constitutions in 1861 the Confederate statesmen emphasized the points of view which had characterized them in the See also:great constitutional discussions of the previous half-See also:century. They also aimed to correct certain defects in the United States Constitution by amending that document in various directions. The Southern " States' Rights " view of the See also:sovereign and independent position of the individual states was emphasized in the Con-federate constitutions, which even went so far as to allow a state legislature to impeach a Confederate official acting within that state. Moreover, in the provisional Confederate constitution state officials were not See also:bound by See also:oath to support the central government. The powers of the executive were increased as against the prerogatives of the congress. The president was allowed to See also:veto particular appropriations and approve others in the same See also:bill. His See also:term of See also:office was lengthened to seven years, and he was declared ineligible for a second term of office. The cabinet See also:officers were allowed seats in either See also:house of congress, in See also:imitation of the practice in Great See also:Britain, which Alexander H. Stephens especially was anxious to transplant to the American See also:continent. The congress could appropriate See also:money for particular purposes only by a two-thirds See also:majority, unless the See also:appropriation were asked for by the See also:head of that See also:department. Every bill was to refer to one subject, and that subject was to be expressed in the title, a See also:provision aimed at preventing " See also:omnibus " and confused legislation, in which it signally failed.

The Southern attitude toward a protective See also:

tariff was emphasized by the constitutional provision that no See also:bounty should be paid and no taxes levied for the benefit of any branches of See also:industry. Similarly the central government could not authorize See also:internal improvements except for See also:aids to See also:navigation. Also the expenses of the See also:post office were not allowed to exceed its receipts. The old Constitution had carefully avoided the use of the word " slave," but the Confederate constitutions had no such scruples, and, moreover, recognized the legitimate existence of See also:slavery, and forbade all legislation which might impair the right of See also:property in See also:negro slaves. These changes all had reference to times of See also:peace. The war powers of the government were See also:left unchanged from those provided for by the Federal Constitution. Provisions of that document as to suspending the See also:writ of habeas corpus and the provisions regarding See also:conscription were left equally vague in the new Confederate Constitution. These led to acrimonious discussion and much See also:bitter feeling against the centralized war powers of the government at Richmond. As the war progressed, the Richmond authorities became necessarily more and more oppressive and aroused the " Stags' Rights " feeling prevalent in the South. It became evident that a confederated See also:form of government, such as was planned by the Southerners, was unsuited to the stringent requirements of war times and contributed doubtless somewhat to the final See also:cataclysm. The provisions of the new constitution regarding the issue of legal See also:tender See also:paper money remained the same as of old. In the North such legal tender paper began to be issued in the See also:spring of 1862, and later opened the question of the constitutionality of such a practice.

No Confederate legal tender See also:

act was ever passed, though the agitation in that direction was often strong. The objections which prevented the passage of such an act were the same as those offered by the minority in later years against the constitutionality of the Federal legal tender act. The Southerners were too true to their strict constructionist views of the constitution to admit the constitutionality of a legal tender act. The personnel of the Confederate congress and administration was materially weakened by the military field's See also:drawing off the most brilliant Southern leaders. It was largely owing to the strategical skill of these generals that the Southern armies, smaller and more poorly equipped than their opponents, maintained the unequal contest for four years. In the See also:naval operations the North had an overwhelming See also:advantage, which was promptly and effectively used. The See also:blockade of the Southern ports, beginning in the spring of 1861, was much less spectacular than the operations of the army, but was quite as effective in breaking down the Confederacy. It cut off the South from obtaining See also:foreign war supplies, and reduced it to dependence upon its own products, which were almost exclusively agricultural. Manufacturing See also:industries hardly existed in the South. A few See also:iron See also:works attempted with little success to meet the demand for See also:ordnance. This and small-arms were obtained from the Federal arsenals in 1861, by See also:capture and to some extent by eluding the blockade. See also:Powder factories were established and vigorously operated.

The scarcity and high See also:

price of clothing put a large See also:premium on the See also:establishment of textile factories, but their product was far below the demand. The South was unfortunate in having a poorly See also:developed railway See also:system. As compared with those of the North, its See also:railways were inadequately equipped and did not form connected systems. During the war, the inroads of the Federal troops, and the natural deterioration of the lines and their See also:rolling stock, greatly reduced the value of the railroads as a military See also:factor. They continued to be active in distributing the relatively small amount of imports through the blockaded ports of Charleston, See also:Savannah and See also:Wilmington. Their usefulness to the army and the See also:city population in See also:collecting See also:food material from the See also: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. See also:Maize was raised in large quantities, and, in general, the raising of food products instead of See also:tobacco and See also: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 See also:measures. The specie holdings of the Southern See also:banks largely found their way into the Confederate treasury in See also:payment for the $15,000,000 See also:loan effected See also:early in 1861. In addition, the government secured the specie in the various Federal offices which See also:fell into its See also:power. These sums were soon sent to See also:Europe in payment of foreign war supplies.

The See also:

gold and See also:silver in general circulation also soon left the country almost entirely, driven out by the rising See also:flood of paper money. Aside from the payment of the above loan the government never secured any specie See also:revenue, and was driven headlong into the wholesale issue of paper money. The first notes were issued in See also:March 1861, and See also:bore See also: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 $r,000,000 in circulation in See also:July 1861, the amount See also:rose to 30 millidns before See also:December 1861; to Too millions by March 1862; to zoo millions by See also: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. See also:Alabama began by issuing $r,000,000 in notes in See also: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 See also:tide of prices with the issue of their individual promissory notes intended to circulate from See also: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 See also:April 1861.

By the end of that See also:

year a paper See also:dollar was quoted at 90 cents in gold; during 1862 that figure fell to 40 cents; during 1863, to 6 cents; and still See also:lower during the last two years of the war. The down-See also:ward course of this figure, with occasional recoveries, reflects the popular estimate of the Confederacy's See also:chance of maintaining itself against the Northern invasion. The fluctuations of the gold premium in the North during the same years are a complementary See also: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 See also:supply of which was entirely from abroad, like See also: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 See also:world's See also:market by way of the See also:Atlantic ports or See also:Mexico, and netted those concerned in the venture handsome profits.

The same See also:

motive operated to encourage See also:trade with the enemy. Tobacco and cotton were smuggled through the military lines in See also:exchange for See also: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 See also:independence of the Confederacy in See also:order to secure Southern cotton. The derangement of prices, their See also:local See also:differences and fluctuations, produced See also:wild See also:speculation in the South. Normal business was almost impossible, and the gambling See also: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. See also:Laws were formed to curb the speculators, but had no effect. The policy of the Southern banks during the war encouraged speculation.

The New See also:

Orleans banks had been well managed, and remained solvent until See also:September 1861. The banks of the other states suspended specie payments at the end of 186o, and thereafter enlarged their See also: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 See also:relief as their cotton could not reach a market. The Confederate government also made advances on cotton and secured large quantities by See also: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 See also: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 See also:impressment, the price to be paid for them being arbitrarily fixed at a See also: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 See also: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 See also:

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 See also:duty on cotton was expected to produce a large revenue sufficient to See also: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 See also:taxation. The first Confederate tax See also:law levied a See also:direct tax of twenty millions of dollars, which was apportioned among the states. These, with the exception of See also: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 See also:people., With no revenue from taxation, and with the disastrous effects of the wholesale issue of paper money before it, the Confederate government made every effort to See also:borrow money by the issue of bonds. The initial 15-million loan was soon followed by an issue of one See also:hundred millions in bonds, which it was, however, difficult to See also:place. This was followed by even larger loans. The bonds rapidly fell in value, and were quoted during the war at approximately the value of the paper money, in which See also:medium they were paid for by subscribers.

To avoid this circumstance a system of produce loans was devised by which the bonds were subscribed for in cotton, tobacco and food products. This policy was subsequently enlarged, and enabled the government to secure at least a part of the armies' food supplies. But the bulk of the subscriptions for these bonds was made in cotton, for which the planters were thus enabled to find a market. It was hoped to keep the currency within See also:

bounds by holders of paper money exchanging it for bonds, which the law allowed and encouraged, but as notes and bonds fell in value simultaneously, there was no inducement for holders to make that exchange. On the contrary, a note-holder had an advantage over a See also:bond-holder, in that he could use his currency for speculation or for purchases in general. In the autumn of 1862 the Confederate law attempted to compel note-holders to fund their notes in bonds, in order thereby to reduce the redundancy of the currency and lower prices. Disappointed in the result of this legislation, the Congress, in February 1864, went much farther in the same direction by passing a law requiring note-holders to fund their notes before a certain date, after which notes would be taxed a third or more of their See also:face value. This drastic measure was accepted as meaning a partial repudiation of the Confederate See also:debt, and though it for the See also:time reduced the currency outstanding and lowered prices, it wrecked the government's See also:credit, and made it impossible for the Treasury to See also:float any more loans. During the last months of the war the Treasury led a most See also:precarious existence, and its actual operations can only be surmised. During the entire war the notion that the South possessed a most efficient See also:engine of war in its See also:monopoly of cotton buoyed up the hopes of the Southerners. The government strained every effort to secure recognition of the Confederacy as a nation by the great powers of Europe. It also more successfully secured foreigners' financial recognition of the South by effecting a foreign loan based on cotton.

This favourite notion was put into practice in the spring of 1863. The See also:

French banking house of Erlanger & See also:Company undertook to float a loan of £3,000,000, redeemable after the war in cotton at the See also:rate of sixpence a See also:pound. As cotton at the time was selling at nearly four times that figure and would presumably be quoted far above sixpence See also:long after the establishment of peace, the bonds offered strong attractions to those speculatively inclined and in sympathy with the Southern cause. The placing of the bonds in Europe was mismanaged by the Confederate agents, but notwithstanding a considerable sum was secured from the public and used for the purchase of naval and military stores. At the See also:close of the war these foreign bonds were ignored by the re-established Federal authorities like all the other bonds of the Confederate government. Compared with the partial success of this financial recognition by Europe, the South conspicuously failed in securing the political recognition of the Confederate government. Early in 1861 W. L. Yancey and others went to Europe to enlist the sympathy of foreign governments in the Southern cause. J. M. See also:Mason and John See also:Slidell followed early in 1862, after a See also:short detention by the Federal government, which had removed them from a See also:British See also:vessel en route to Europe.

Though these Con-federate commissioners made every effort to induce foreign governments, especially those of Great Britain and See also:

France, to recognize the Confederacy, they were foiled in their efforts, largely by the skill and persistence of the Federal See also:minister in See also:London, See also:Charles See also:Francis See also:Adams. The political history of the Confederate States is the See also:culmination of an inevitable conflict, the beginnings of which are found901 in the earlier history of the Union. The financial and industrial history of the South during 1861 to 1865 is the See also:story of a struggle with overwhelming odds. The mistakes of the Confederate government's policy are overshadowed by its desperate efforts to maintain itself against the irresistible attacks of the North. In making that effort the South sacrificed everything, and emerged from the war a financial and industrial See also:wreck.

End of Article: CONFEDERATE STATES

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