WHAT IS 'Confederate Dollar'

The Confederate dollar, or Confederate States of America dollar, was the currency issued by the government of the Confederate States of America right before the beginning of the Civil War to finance the war. As the Confederacy lost the war, the Confederate dollar lost value until it was worth approximately 6 cents to the dollar by the end of the war. The currency symbol for the Confederate dollar is CSD, and it is informally referred to as a Greyback.

BREAKING DOWN 'Confederate Dollar'

The Confederate dollar was first issued in April 1861, only two months after the Confederate States of America was formed, as a way to finance the war against the United States of America. The Civil War broke out several months later and the Confederacy was able to engage in the war because of funds raised through this currency. The Confederate dollar was not backed by anything, as were U.S. dollars at the time, but instead was a bill of credit which promised the bearer compensation six months after the end of the war. In essence, Confederate dollars were loan documents for money the bearers were loaning to the Confederate States of America with the promise that the war would be successful and they would be repaid.

The U.S. government was also issuing money at the time to finance the war, and their bills were called Greenbacks. To distinguish Confederate money from American money, the Confederate bills were referred to as Greybacks. The Confederacy had limited numbers of trained printers and lithographers, and most of the printing equipment on the continent was in the U.S., so the Confederate government did what it could with the designers and equipment it had and created a hodgepodge of bills with different types of images on them, from Confederate politicians to gods and goddesses from mythology. The Confederate dollar was divided into 100 pennies, but because of limited technical capabilities, only 14 penny coins and four half-dollar coins were ever produced.

The End of the Confederate Dollar

As the war went on, the Confederacy needed more money, so it continued to print more money. This created severe inflation of the Confederate dollar and, since the Confederate dollar was not backed by any resources, inflation spiraled out of control and the Confederate dollar lost value to be worth 6 cents per dollar by the end of the war. As soon as the war was over and the Confederacy was dissolved, the Confederate dollar was worthless.

The Confederate dollar has no value as currency now, but surviving bills and coins have strong value to collectors of Confederate and Civil War memorabilia and obsolete currencies.

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