Southern Historical Association

Graybacks and Gold: Confederate Monetary Policy. by James F. MorganReview by: Larry SchweikartThe Journal of Southern History, Vol. 53, No. 2 (May, 1987), pp. 335-336Published by: Southern Historical AssociationStable URL: http://www.jstor.org/stable/2209123 .

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BOOK REVIEWS 335

the drawings were photographically reduced to make the sheets of manage- able size, and the actual scales are roughly half of the stated values of one- fourth inch to the foot for the hull drawings and one-eighth inch to the foot for the sail plan.

Ohio State University JOHN F. GUILMARTIN, JR.

Graybacks and Gold: Confederate Monetary Policy. By James F. Morgan. Southern History and Genealogy Series, Vol. II. (Pensacola, Fla.: Per- dido Bay Press, 1985. Pp. xii, 161. $19.95. Order from Perdido Bay Press, Route 2, Box 323, Pensacola, Florida 32506.)

Explaining the failure of financial policy in a nation at war, especially a nation that lost that war, can lead to a tangled thicket of counterfactuals. In the Confederacy's case, one can ask what would have happened if the rebel government had given its Treasury notes legal tender status or if there had been no blockade. Indeed, it can be useful to ask whether, in light of a southern victory, the rebel government's program would have provided a reliable and an effective money supply and system of exchange for the new nation.

James Morgan's Graybacks and Gold raises many of these questions, answers some, and adds confusion to others. Morgan, a numismatist, in topical fashion examines Confederate coinage, Treasury notes, bonds, and each southern state's monetary policy as well as notes issued by two south- ern Indian nations. Using almost exclusively primary sources, Morgan sifts through a mountain of legislation related to note issues and coinage to reveal the origin and fate of, it seems, every piece of paper used by the Confeder- acy as money from 1861 to 1865. He concludes that "the lesson to be learned from Confederate monetary policy is thatfiat currency can work, that gold and silver can be withdrawn from circulation and denied to the citizens, but both policies cannot go on indefinitely" (p. 135). He indicts the Confederate government for "fail[ing] to meet the circulating medium needs of the coun- try" (p. 8), and finds the Confederacy's monetary system plagued by "mis- taken judgment, poor management, declining morale, confusion, and failure" (p. 9).

When Morgan traces the history of money he is in his element, and for this reason his work will be indispensable to students of southern financial history. However, when it comes to explaining policy or analyzing eco- nomic developments, he is confusing at best and often simply wrong. His overview of southern banking contains a series of errors: When southern states chartered banks in the 1850s, they were not "under stricter state con- trol" (p. 2) than in the 1830s and 1840s; most southerners had more than a "little contact with money" (p. 2); states other than "only Arkansas" lacked banks in 1861 (p. 2), and the credit system in place before the war did not make "the South virtually a colony of the North" (p. 2). The reader learns that Confederate Secretary of the Treasury Christopher G. Memminger pushed "to get paper accepted as money" (p. 35), after being told earlier, without explanation, that he opposed legal tender status for Confederate Treasury notes (p. 26).

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3 3 6 THE JOURNAL OF SOUTHERN HISTORY

Far more serious is the absence of any real economic theory or historical setting. Except for references to extremely dated articles and John Schwab's standard work on Confederate finance, there is no indication that the author is aware of a vast body of literature from new economic historians on the topic of wartime finance. (Charles Calomiris, for example, has done con- siderable work on greenbacks and on Revolutionary War fiat money.) This omission leads to other problems: Many economists now challenge the con- cept of Gresham's law, freely invoked by Morgan, and he never makes clear what "legal tender status" really implies. Is it more important that people are obligated to accept money for all debts, or that they can use it to pay taxes? Finally, there is virtually no discussion of the dilemma of the Con- federacy's monetary policy, wherein if money is given legal tender status and accepted for taxes (giving it value), then taxes must be levied by the central government, an idea that flew in the face of Confederate ideals of state sovereignty. Ultimately, the question of how a government can finance a common liability -a war- when it does not have common assets remains to be answered by another study that can come to grips with these critical economic and historical themes.

University of Dayton LARRY SCHWEIKART

Why the South Lost the Civil War. By Richard E. Beringer, Herman Hatta- way, Archer Jones, and William N. Still, Jr. (Athens, Ga., and Lon- don: University of Georgia Press, c. 1986. Pp. xii, 582. $29.95.)

At Appomattox in 1865 Robert E. Lee stated simply that "after four years of arduous service marked by unsurpassed courage and fortitude the Army of Northern Virginia has been compelled to yield to overwhelming numbers and resources" (Stanley F. Horn, ed., The Robert E. Lee Reader [New York, 1949], p. 447). Now in 1986 in Why the South Lost the Civil War Richard E. Beringer, Herman Hattaway, Archer Jones, and William N. Still, Jr., argue otherwise. "No amount of argument," they say, " . . . can obscure the fact that at the end the South still had large combat-ready armies and that these armies surrendered and went home. When Lee met Grant at Appomattox Court House, surrender was not the only choice open to him" (p. 20).

The analysis of Confederate defeat offered by these four historians is quite interesting. Analysis began, they say, in a series of informal discus- sions at meetings of the Southern Historical Association and grew into nearly six hundred printed pages. Why the South Lost the Civil War is an integrated collaboration; the authors do not identify themselves with spe- cific chapters of the work, and four scholars have managed to write consis- tently as one.

Beringer, Hattaway, Jones, and Still contend from the beginning that "overwhelming numbers and resources" did not determine the outcome of the Civil War. Indeed, they insist that the war defied military solution - "For the Union to defeat the Confederacy, it needed more than military victories .. . .The armies [and navies] alone could not bring victory" (p. 107). To sustain this assertion, the authors offer a military chronicle in which they measure Union and Confederate commanders and campaigns against the

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