The Man Who Bankrupted the Confederacy

His Face Went on the Money He Destroyed

Christopher Memminger spent December 1860 writing the legal case for why South Carolina should leave the United States.

A few weeks later, he helped write the Confederate constitution. Then Jefferson Davis handed him the treasury.

What followed was one of the worst financial collapses in American history, and Memminger had warned everyone it would happen.

He begged Congress to raise taxes.

They refused. So he printed money, more and more of it, until a turkey cost $155 and Confederate soldiers couldn’t afford bread on their own pay.

By the time he resigned in 1864, his portrait was on the $5 bill, and that bill was nearly worthless.

Memminger Writes the Case for Secession

Four days after South Carolina voted to leave the Union in December 1860, the secession convention needed someone to explain why.

They picked Christopher Memminger, a German-born lawyer who had spent 20 years running the state’s finance committee.

The document he produced laid out the primary reasoning behind South Carolina’s decision to secede, which was described as increasing hostility from non-slaveholding states toward the institution of slavery.

The declaration clearly outlined the primacy of fears over slavery in South Carolina’s decision to leave the Union.

It became the template other Southern states would follow.

Four Days to Write a Constitution

When delegates from the seceding states met in Montgomery, Alabama, in February 1861, Memminger took charge again.

He chaired the 12-man committee that drafted the Provisional Constitution of the Confederate States.

They produced it in only four days. The document borrowed heavily from the U.S. Constitution but explicitly protected slavery.

Memminger had now written both the justification for the new nation and the framework for its government. Jefferson Davis noticed.

When Davis formed his first cabinet, Memminger was appointed Secretary of the Treasury on February 21, 1861.

Davis Hands Him an Empty Treasury

The job was impossible from the start. When Memminger assumed his duties, there was neither money in the Treasury nor paper on which to print it.

The Union blockade was already forming along the Southern coast, and it would eventually choke off cotton exports, the Confederacy’s only product that could demand cash on the international market.

His plan to raise money through tariffs was hampered by the Union blockade. Memminger had built his reputation on fiscal discipline in South Carolina.

Now he was supposed to fund a war with nothing.

Congress Refuses to Raise Taxes

Memminger knew how governments were supposed to pay for wars: taxes, then bonds, then printing money as a last resort.

He pushed for taxes first.

Ignoring the recommendations of the secretary of the treasury, congressmen refused in 1861 to levy taxes to meet the government’s expenses.

The Confederate Congress was full of states’ rights believers who hated the idea of a strong central government taking money from citizens.

The Confederacy ultimately raised only a few percentage points of its revenue through taxation. That decision guaranteed what came next.

He Starts Printing Money

Inflation in the Confederacy began in May 1861 with an issue of $20 million in non-interest-bearing treasury notes.

Congress continued to issue treasury notes throughout the remainder of the year so that it had $105 million in such notes outstanding at the end of 1861.

Memminger had wanted to use paper money sparingly.

Despite warning that printing money was the most dangerous of all methods of raising revenue, the Confederacy had little choice.

Most Southern wealth was tied up in land and slaves, not cash. There simply wasn’t enough money to borrow.

The Currency Loses Value Immediately

The paper dollars depreciated almost immediately, setting off a spiral of rising prices that threatened to undermine the Confederate cause.

At the start of the war, one Confederate dollar equaled one U.S. gold dollar. By May 1861, it took $1.05 in Confederate currency to purchase one gold dollar.

That was just the beginning.

By the end of 1862, treasury notes outstanding plus issues by the various southern states totaled $500 million and were worth only one-third that amount in gold.

The printing presses kept running.

Memminger Witnesses 9000 Percent Inflation

Between 1862 and 1865, more than 60 percent of total Confederate revenue was created by printing money.

The North doubled its money supply during the war. The money supply in the South increased twenty times over.

The result was catastrophic.

The annual inflation rate rose from 60 percent in 1861 to 300 percent in 1863 and then 600 percent in 1864.

During the war, prices in the Confederacy rose more than 9,000 percent. By the end of the war, the cost of living had increased 92 times compared to before the war.

Louis Wigfall Called Out The Monopoly

In October 1863, Confederate Senator Louis Wigfall of Texas said that a Confederate soldier received $11 per month in pay, which was worth the same as $1 had been worth at the beginning of the war.

Soldiers couldn’t feed their families on wages that shrank every month. On Christmas Day 1864, a turkey sold for $155 and a ham for $300.

By the war’s end, a cake of soap could sell for as much as $50, and an ordinary suit of clothes was $2,700.

People with cash couldn’t spend it fast enough before it lost more value.

Food Riots Break Out Across the South

The inflation didn’t just make life hard. It made people desperate.

It was the inflation of Confederate currency that led to the food riots. In April 1863, hundreds of women marched through Richmond demanding bread.

They smashed store windows and looted shops until Jefferson Davis himself appeared and threatened to order troops to fire.

Similar riots erupted in Atlanta, Macon, and other Southern cities.

The suffering caused by runaway inflation led to widespread demands for action. The government that couldn’t tax its citizens now couldn’t feed them either.

Inflation Helps Lose the War

Military historians focus on Gettysburg and Vicksburg, but the economic collapse mattered just as much.

Military setbacks in the field also played a role by causing loss of confidence and fueling inflationary expectations.

But the reverse was also true: the inflation destroyed confidence in the government and made it harder to keep fighting.

At the beginning of the war, the Confederate dollar cost 90 cents in gold dollars. By the war’s end, its price had dropped to 1.7 cents.

Soldiers deserted to feed their families. Farmers refused to sell crops for worthless paper. The Confederacy was collapsing from within.

His Face on the Worthless $5 Bill

Christopher Memminger was featured on the Confederate $5 bill.

The Confederate Capitol at Richmond, Virginia was at the note’s center, and a portrait of Memminger was at the bottom right.

Millions of these bills circulated across the South, each one promising payment two years after a peace treaty that would never come.

The man who had warned against printing money now stared out from notes that people used as wallpaper and kindling. Near the end of the war, the currency became practically worthless as a medium of exchange.

Memminger Resigns and Disappears

Public clamor forced Memminger to resign in June 1864. He had spent three years begging Congress to do something other than print money.

They hadn’t listened. Now they blamed him. He returned to his summer residence in Flat Rock, North Carolina.

After the war, he received a presidential pardon, went back to practicing law in Charleston, and spent his final years working on public schools.

He died in 1888 at 85.

The house where he waited out the war’s final months later became famous as Carl Sandburg’s home. Memminger’s name is mostly forgotten, but his economic disaster helped end the Confederacy as surely as any battle.

This article was created with AI assistance and human editing.

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