Coin Lore column from Oct. 17, 2016, Weekly issue of
As Union forces closed in on New Orleans in
April 1862, the city carried on as best it could, though cotton, “the
wealth of the South,” was burned by the bale on the levies to prevent
it from falling into Union hands, and precious metals were removed
from the city.
The Confederacy suspended specie payments Oct. 16, 1861, to, in the
words of Louisiana Gov. Thomas O. Moore, force
acceptance of Confederate Treasury notes as “a currency of real
value.” Commerce was conducted in Confederate bills, privately issued
bank notes and much cursed shinplasters. Shinplasters, notes
denominated below $1, replaced coins during the war.
Coffeehouse owner George W. Holt, a prolific issuer of shinplasters,
advertised a few weeks before the Union takeover that his bills were good.
Connect with Coin World:
Sign up for our free eNewsletter
The week before the Union takeover, the presidents of the city’s 13
banks met to discuss how to settle accounts before the city fell. All
but one or two decided to liquidate.
The Daily True Delta reported, “Some
redeemed their outstanding circulation and deposits in either gold or
silver, as suited the views of the claimants, while others offered to
redeem their bills only in specie: and a third class restricted its
movements to the redemption of their bills at 50 percent in specie and
the balance in Confederate treasury notes.”
At the time, Confederate currency had depreciated to the point that
it took nearly $2 in Rebel paper money to buy a gold dollar.
On Friday, April 25, Union warships easily subdued the forts
defending New Orleans, sailed to the city’s riverfront and demanded surrender.
The Daily True Delta reported the next day: “The war movements
during the past week have almost entirely absorbed the public mind, to
the exclusion of financial and other operations of ordinary interest.
The banks, or a majority of them, redeemed their circulation in specie
up to Wednesday [April 23] when an official notice to discontinue was
received from the government at Richmond. ... The enemy’s approach,
however, would have in any event caused a suspension of operations,
and the removal of the precious metals to points of safety has claimed
no inconsiderable portion of the time of our most active financiers.”