The Curious Story of the Confederate ‘Greyback’
By Chris Moran
In April of 1862, Samuel Schmidt, an obscure printer in New Orleans, raced against two forces that threatened to overtake him. One was the Union Army, fast approaching his city and the other an impatient boss, Confederate Treasury Secretary C. G. Memminger. Each posed great risks to Schmidt, one to his life, the other to his reputation. He was printing rebel currency—primarily notes of five and ten dollar denominations—too well and too fast for the approaching Union Army and not fast enough for the Confederacy, which desperately required its “greybacks” to wage war.
By April 12, Schmidt would ship the last of his notes to Memminger. Soon afterward, Union Army Major General Benjamin Butler occupied New Orleans and seized the engraving plates Schmidt had used. Butler, more politician than soldier, and with a renowned sense of his own interests, made a gift of the plates to U.S. Treasury Secretary Salmon P. Chase. The plates are perhaps the best quality used by the Confederacy and the currency they produced is highly prized by collectors today. These plates are now in the collection of the Smithsonian Institution.
As the South set up its government in the early days of secession, a sovereign currency was necessary. Shortly after the election of Confederate President Jefferson Davis on Feb. 9, 1861 (Lincoln was first inaugurated on March 4, 1861), the rebels seized the U.S. mints in New Orleans, Dahlonega, Ga., and Charlotte, N.C. They sought the means to establish and produce their own currency. Bullion supplies quickly ran out, and the need for paper currency took flight.
Beginning on March 9, 1861, the Confederacy issued its own currency by acts of the Confederate Congress. The bills were called “greybacks” because of their color and in contrast to Union “greenbacks.” In all, more than 70 bill types in seven series were issued from 1861 to 1864, totaling more than one billion dollars.
Memminger had to make quality currency under the difficult conditions of war. He engaged the American Bank Note Company in New York, but quickly found it difficult to transport engraving plates, and finished currency safely over enemy lines. Memminger needed a southern alternative.
He found it in Schmidt, manager of the New Orleans branch of the American Bank Note Co. Schmidt cleverly renamed it Southern Bank Note Co
The South lacked a tradition of fine engraving and the artistry and imagery on the bills was limited. Images of mythological figures were copied from existing bills. Indigenous imagery did arise: It centered on docile depictions of slavery and images of leading southern figures like Andrew Jackson, Jefferson Davis and Memminger himself.
In printing its bills, the South relied heavily on lithography, which made counterfeiting easy. This paper currency was dubious. There were many regional issuers and much of the paper was of good use only in a limited geographic area. Some of the local “currencies” that arose were of such poor quality they were known as “shinplasters,” cheap bits of scrap paper.
Moreover, the greyback was a fiat currency, not exchangeable for specie: it was a peculiar sort of I.O.U. And so its perceived value relied heavily on confidence. On most of the bills this was printed: SIX MONTHS AFTER THE RATIFICATION OF A TREATY OF PEACE BETWEEN THE CONFEDERATE STATES AND THE UNITED STATES”—then across the middle—THE CONFEDERATE STATES OF AMERICA WILL PAY [amount] TO BEARER or …WILL PAY TO BEARER ON DEMAND [amount of bill].”
This language reveals a lot about the early-war motives and expectations of the Confederacy. An article from the 2004 issue of The Southern Economic Journal speculates that the South thought that it would emerge from the war into a world of conciliation and cooperation with the North.
The perceived value of Confederate currency was based on this notion of a meaningful postwar reconciliation of equals. This philosophy was thought viable perhaps because initial Northern war motives centered on the preservation of the Union. The South believed that victory or reconciliation would allow it to exist while upholding its primary cultural and economic institution: slavery.
When Lincoln issued his Jan. 1, 1863 executive order, the Emancipation Proclamation, it became clear war motives in the North and the consequences of defeat in the South centered on the abolition of Slavery. This realization had a deleterious effect on the general confidence in the Confederate currency. Massive devaluation ensued, and inflation skyrocketed.
Chris Moran is the founder and owner of The Happy Coin in Cos Cob. He is a life member of The American Numismatic Association and a member of The Industry Council for Tangible Assets. He can be reached at 203-340-9777 or email@example.com