February 2, 1864: Economic troubles in the south

Confederate 100 dollar bill

Inflation was hitting the Confederacy pretty hard, and the Confederate Congress responded with some bills to raise more revenue, while at the same time raising government salaries. The bill “regulating the currency” replaced bills of value over 5 dollars with bonds. Any bills not exchanged by April were reduced in value by 1/3. This constriction of the money supply temporarily ended the runaway inflation they had been seeing. This chart shows the effect:

Confederate inflation

THE REBEL CONGRESS.

The principal proceedings in the rebel Congress, such as the consideration of the Tax Bill, the Currency and Conscription Bills, are carried on in secret session. The Examiner says:

“It is understood that the Senate Committee on Finance have reported a substitute for the House Bill regulating the currency. We trust that the two Houses may speedily agree upon some measure of financial relief. It is almost ‘fiddling while Rome burns,’ to consider other and unimportant subjects whilst this one remains undisposed of.”

The Congress has passed a bill increasing the salaries of Government employees which are under $3,000,100 per cent, and those over $3,000, 50 per cent.

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