Page 9 - Beyond the Capacity of Any Man

total wealth. The secondary and tertiary economic effects from slavery meant
that planter interests prevailed, and many non-planter whites showed deference
for planter values and ideology. With planters making up 40 percent of
Congress, they were well represented. However, a problem arose when planters
pursued their own self interest, rather than supporting a nation established for
their benefit. The South also enjoyed one of the lightest tax burdens of any
nation. When war broke, public opinion in the South was strongly divided on the
government’s power to tax. Finally, nearing the end of the Free Banking Era, the
South lacked the financial infrastructure to effectively guide a wartime economy.

During the course of the war, over 57 percent of the Confederacy’s
revenue relied on non-interest bearing Treasury notes. Bonds and interest-
bearing debt made up 36.5 percent while taxes accounted for just 3.6 percent.
All other non-debt revenue equaled 2.6 percent. This over-reliance on Treasury
notes caused a remarkable inflation, unseen in the United States to this day.2

This study follows the analysis of Confederate finance in J.C. Schwab’s
The Confederate States of America (1901), Richard Cecil Todd’s Confederate
Finance (1954), and more recently, Douglas B. Ball’s Financial Failure and
Confederate Defeat (1991). Both Schwab and Todd restricted their studies to a
narrative account of Confederate finance. Ball has criticized both works, stating,
“they make little effort to try to ascertain why Confederate officials did what they
did, or why the Confederacy did not manage its affairs more efficiently….
Schwab and Todd explicitly assume that no matter who was secretary of the

2 Richard C.K. Burdekin, & Farrokh K. Langdana, “War Finance in the Southern Confederacy,
1861-1865.” Explorations in Economic History. 30 (1993): 352-376, 355.

2