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The Emancipation Proclamation, Confederate Expectations, and the Price of Southern Bank Notes

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  • Gary Pecquet
  • George Davis
  • Bryce Kanago

Abstract

We examine the behavior of a semimonthly series of the Confederate dollar price of bank notes. These notes traded at par with Confederate dollars from October of 1861 until November 5, 1862. We use a model of the demand for two currencies to argue that this departure from par results from altered Southern expectations after the 1862 Congressional elections assured the enactment of the Emancipation Proclamation. Previously, Southerners believed a win or a negotiated settlement would allow a return to the Union intact. When these expectations changed, bank notes appreciated against Confederate dollars. In addition, our empirical work shows that notes appreciated following Northern victories.

Suggested Citation

  • Gary Pecquet & George Davis & Bryce Kanago, 2004. "The Emancipation Proclamation, Confederate Expectations, and the Price of Southern Bank Notes," Southern Economic Journal, John Wiley & Sons, vol. 70(3), pages 616-630, January.
    • Handle: RePEc:wly:soecon:v:70:y:2004:i:3:p:616-630
    DOI: 10.1002/j.2325-8012.2004.tb00592.x
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    References listed on IDEAS

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