In this lesson plan, students will explore the purpose of, and system for, selling Confederacy war bonds by: examining a bond found in the TIDES database; interpreting a graph depicting the rise and fall of the value of “graybacks;” and reading and analyzing a memorandum by the Secretary of the Confederate States of America, in order to understand the economic policy of the South during the Civil War and the personal and political beliefs behind that economic policy.
Created by Angelia Greiner, December 2007
Students will be able to understand the economic principles and purpose behind war bonds, especially those issued by the Confederacy during the Civil War.
TEKS §113.24. Social Studies Grade 8. (b) 1(C), 11(C), 30(A,B,C, F,H), 31(A), 32(A,B).
Today, buying Confederate war bonds is only for the collector and Civil War enthusiast, but during the American Civil War, buying Confederate bonds was a major way for the South to finance the war. The Confederacy was formed under the principle idea of state’s rights - meaning that the Confederate government did not have the right to tax the states in order to finance the war. Any individual, company, or other group could “loan” the Confederate States of America a designated amount of money. Once the money was loaned, the CSA issued a signed certificate like the one shown above that promised to pay the stated amount of the loan plus interest within a certain amount of time. The CSA was successful in financing the war in the beginning, relying heavily on the patriotic zeal and early military successes of the war. Selling to individuals and companies in Europe was a much more difficult task because loans to the CSA were based on pure profit not political philosophy. When the South lost the war, the bonds could not be repaid. Many had invested heavily in Confederate war bonds and economic disaster followed in the South.
Part A: Viewing the Confederate Bond
Students will need to examine the Confederate bond, found on the TIDES database, and answer the following questions.
Part B: Interpreting a Graph
Students will examine the graph provided and answer the questions that follow.
Note: The graph depicts the amount of confederate dollars needed to equal a gold dollar (the standard for a dollar’s actual value) in increments of 10 grayback dollars at a time (see far left). The bottom of the graph gives dates by year beginning with May 31, 1861. The blue line in the graph depicts the rise and fall of the value of graybacks at a specific date or event when noted on the graph.
Students need to be aware that when the blue line rises, it takes more graybacks to equal a gold dollar; therefore, the more confederate dollars needed to purchase an item the LESS one confederate dollar’s value is. This is the basic principal of inflation.
* Given the severe financial situation at the end of the Civil War, what suggestions could you give to the United States government to help the South recover economically?
Part C: Memorandum from the Treasury Department Confederate States of America
Introduction: Numerous memorandums were written to and from the Secretary of the Treasury for the Confederate States of America, Mr. C. G. Memminger, concerning various financial situations during the war. The memorandum included here begins with a series of questions regarding whether or not the Confederacy should continue to allow for subscriptions from southern planters. Subscriptions is the term used here to refer to Confederate bonds (the promise to pay a certain amount once money has been paid to the planter and transferred to the Confederacy at the amount stated on the bond). The problem with this is obvious. The planter has promised to pay the Confederacy and yet the planter most often cannot complete the transaction of selling his crop to the buyer due to the effective Federal blockade of the Southern coastline. Blockade runners were in high demand in the South and paid well if they could get Southern goods out of the country to known buyers. Without the planter receiving money for his goods, he could not make good on his promise to the Confederacy and the bond he has signed. For a variety of reasons, including a strong sense of patriotism, planters continued to sign bonds with the hope of giving to “the cause” in the near future.
A discussion with students concerning Secretary Memminger’s response to the inquiry concerning whether or not the Confederate Treasury should continue to secure bonds by planters would make for a good class debate. If the Confederacy suddenly stopped issuing Confederate bonds what message would that send to the people? To prospective buyers? If the Confederacy continues to rely on “IOU’s” for funding the war, what could happen to the value of Confederate money?
The second inquiry in the memorandum involves the Treasury considering an advanced payment to a planter until his crop can be purchased by an outside buyer. Secretary Memminger’s reply is interesting and also worthy of debate. At the very least, a reading of the Secretary’s memorandum characterizes the Confederacy and the administration’s belief that the Confederacy would win the war.
Note to Teachers: The directions are to read the memorandum in sections assigned to small groups. You may want to read as a whole class, have the class work in partners, or assign the reading as a supplement to Advanced Placement U.S. History students or American History honors classes. The entire memorandum can be found at the following website:
Divide the students into groups to read the memorandum by Confederate Secretary of the Treasury, C. G. Memminger. Instruct each group to highlight any words they are unfamiliar with and write down any questions they have about the meaning of the text. On a large piece of paper, each group should list at least five important pieces of information from the section of the memorandum they have been assigned and be prepared to share their information with the class. Groups should also be prepared to share any words or ideas in the text they were unfamiliar with.
