Confederate Paper Money Series Part IV: The Trans-Mississippi Notes

The Civil War saw a number of disruptions from each side, making it more difficult to maintain their armies and military companies at full strength. Both the North and the South divided military theaters, or areas in which military events occur or progressing, into a number of departments. To just name a few for the South, the Confederacy divided had the Department of Northern Virginia and the Department of North Carolina and Southern Virginia. Our focus here in this edition of the Confederate Paper Money blog series is the Confederate’s Trans-Mississippi Department and the notes that came from it.

Trans-Mississippi Department

Created on May 26, 1862, the Trans-Mississippi Department included Arkansas, Missouri, Western Louisiana, Texas, and the Indian Territory. It was the biggest department for the Confederacy as it was in large part the most sizable supplier of agricultural products for the East. The biggest question in knowing that this department was a major contributor to the movement of goods is why it was not protected more than it was. Throughout the war, however, the transfer of goods was almost entirely West to East which left the Trans-Mississippi Department in dire need of Confederate currency, something that the East was in abundant in.

It was only after numerous pleadings with the Treasury Department in Richmond, Virginia, would the East start to see currency sent to them from the West and even before the closing of the Mississippi River by Union troops in the summer of 1863. By then it was too late as the combination of payments to suppliers of goods and the payrolls of soldiers was constantly keeping them behind. Dissatisfaction from a number of areas was a constant battle and the Trans-Mississippi Department suffered from lack of funding.

In early 1863, General E. Kirby Smith was named the commander of the Trans-Mississippi Department and was constantly at Richmond’s feet begging for Confederate currency. By February of 1865, he found that the department owed over $50 million. At this same time, a semi-independent branch of the Treasury Department was opened in Marshall, Texas. P.W. Gray was given the power to “discharge any duty or function on the other side of the Mississippi which he, the said Secretary (Memminger), is competent to discharge.”

Trans-Mississippi Notes

While all of this was established, it still did not change the fact the Trans-Mississippi Department itself was not capable of providing the facilities to produce the engraved currency that was being printed by the Confederacy in the East. Because of the continued lack of currency from the East failing to make up for the portion that was required of them, General Kirby ordered that the notes on hand had to be reissued. However, the Act of March 23, 1863, included conditions that featured retired notes dated prior to the Act taking place to be funded into bonds. To avoid funding them into bonds and figuring out a way to distinguish the reissued notes, the department decided to stamp them with red or black circular handstamps. These stamped notes, depending on the type and on the date, increase in value.

However, the Act of February 17, 1864, issued a new set of Confederate notes and also provided conditions to which it would tax earlier non-interest bearing notes out of existence. The West was given only three short months of a grace period until the Act would take effect. General Smith, however, refused to use earlier notes after the Act took place because he felt that the soldiers should not receive notes worth only two-thirds of the face value after waiting months to be paid in the first place. This refusal took form and at the same time, exchanged certificates were issued as a receipt to keep track of the older notes which had been deposited. The Confederate States Depository Office also recognized that it might take a while for the new notes to be received, therefore the certificates stated when they were to be exchanged “when this office shall be supplied with funds for this purpose, upon surrender of this certificate.”

Source: Confederate States Paper Money: Civil War Currency From the South (12th Edition) by George S. Cuhaj & William Brandimore