Edward Alfred Pollard, The lost cause; a new Southern history of the War of the Confederates ... Drawn from official sources and approved by the most distinguished Confederate leaders.

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[651] new issue at the rate of three dollars of the old issue for two dollars of the new; and that non-interest-bearing notes of the denomination of one hundred dollars should be subject in addition to a further tax of ten per cent. per month, for the time they should remain outstanding after the 1st of April. All the notes of the old issue were to be receivable in payment of taxes after the 1st of April, 1864, at the reduced rate at which they were exchangeable for the new issue. But it was provided that notes of the denomination of one hundred dollars should not be exchangeable for notes of the new issue. The privilege of exchanging should continue until the 1st day of January, 1865, and should then cease. After that date, all treasury notes of the old issue remaining outstanding were to be subject to a tax of one hundred per cent. Notes of the new issue, and notes of the old scaled to two-thirds of their full value, might be exchanged at the treasury for call certificates, bearing four per cent. interest and payable two years after the notification of a treaty of peace with the United States; but notes of the old issue of the denomination of one hundred dollars were not to be thus exchangeable.

The effect of this measure was, to compel the conversion of all notes of the denomination of one hundred dollars into the four per cent. bonds. It also presented to the holders of notes of the other denominations, the alternative of exchanging them at par for the four per cent. bonds, or of submitting to the tax of one-third, and converting them into notes of the new issue. This latter course was preferred by a large majority of the note holders, under the conviction, that the reduction effected by the Act in this volume of the circulation, would so strengthen the value of the new issues, as to render the two new dollars which they received for the three old ones more valuable than the three.

The effect of the measure was, to produce a reduction in the mass of currency to the extent of rather less than three hundred millions of dollars; and to leave, during the latter part of the year 1864, and the beginning of 1865, the amount of treasury notes in circulation in the Confederacy, at three hundred and twenty-five millions of dollars, an amount which was found to be perfectly manageable; and which, indeed, under the depreciation of the new issue, which took place towards the close, was found to be inadequate to the wants of the country. For, at the rate of sixty for one, at which the Confederate Government itself sold specie for several months in Richmond, this three hundred and twenty-five millions of currency represented only the value of five millions in specie and general property; and the natural result was a very great stringency in the money market.

But the currency act of February signally failed in its object. The new currency was not issued promptly. The old currency remained in circulation, depreciated in value by the operation of causes which preceded the currency act, aided by the trenchant provisions of the Act itself. The exchange