Dollars were hard in 1861. Except for growing industrial areas in New England and the eastern seaboard, the country was still essentially rural, and agriculturally oriented. Service pay and allowances were basically “in line” with the times, or, at least, with the era preceding the conflict. The problem on soldiers pay was not what it was, but rather the infrequency of a muster to get at it. To be sure, there were notable inefficiencies in the pay master department.
Scarcity of source material did not permit a good solid look at the Confederate side. It is reported that the confederates had a more effective conscription set- up and administered it more effectively. They most certainly did not have the excesses of the bounty system. They could not indulge in that extravagance.
Soldiers pay and bounty systems were separate, but merged in effect. After a final bounty was set, the records of same were entered on soldiers’ pay records, administered and disbursed by the paymaster’s office. Thus, the two categories joined.
After Sumter, the call for volunteers was enthusiastically met. After all, the whole thing was going to be a big party, and over shortly. So, even at $11.00/per month (private’s pay), in 1861 things were not too bad. The main reason, however, was that the states, at the outset, came up with generous awards and funds for the volunteers. The money was raised to pay to the volunteers to help their families, and to maintain support continuity. This is phase one of the Bounty System. It was essentially well-motivated. It produced men. Rhode Island, for example, contributed $350.00 per volunteer. Philadelphia at this stage raised one million dollars for the purpose.
Then came Bull Run. This shook things up. Volunteering fell off. Reports drifted back of inefficiencies in the army—poor commissary facilities, worse medical service, poor officer material and low morale. This was mid-1861.
Congress approved a legalized federal bounty of $100.00 for all volunteers or regulars enlisting for three years and serving at least two years or to the end of the war. This started things off. If only someone in Washington had taken the trouble to dope things out, they could have easily raised soldiers monthly pay by $4.00 to $6.00, plus setting up a strong recruitment organization controlled uniformly, state to state, by the War Department. It was not to be. I hasten to add that this $100.00 bonus was to be paid at discharge only. Thus, the gesture of $100.00 was negated because one had to wait until the term was up. This hurt volunteer surge, which it was intended to promote. Only state funds kept the enlistments moving at all. Yet, until now, the flow into the army was good. Secretary Stanton even decreed an end to recruitment. This little decree was short-lived. We are now up to April 1862. Shiloh came along and the failure of the Peninsular Campaign truly dried up volunteering. Quickly the government amended the discharge proviso to allow a $40.00 advance on enlistment. This helped mildly.
From April 15, 1861 to April 14, 1865 there was a total of men in armed forces of 2,656,553. Total pay disbursed July, 1861 to October 1865 was $1,029,239,000.00. The bounties by the states and extra federal grants and the payroll amounts to quite a sum.
As to paying troops, there was a regulation act of July 5, 1838, which provided that whenever volunteers or regulars were called to service, the president was granted the authority to appoint paymasters at a rate of one paymaster to every two regiments. Said paymasters were to remain in service only so long as needed to pay the troops. Paymasters were under the command of a paymaster general with the rank of Colonel. Under him would be two deputy paymasters with the rank of Lieutenant Colonel. Under these would be deputies, totaling 25, with the rank of major. This then, was the paymaster department. The so-called deputies or additional paymasters were appointed to temporary duty only.
According to all reports and diaries, the paymaster department was a mass of inefficiencies. There built up considerable pressure for a complete investigation of the inefficiencies in the pay department and to effect a general house cleaning. It was, however, not until March of 1863 that any semblance of qualification for additional or deputy paymasters was attempted. Until this point there was no examination for selection on any basis. Even after March of 1863, the selection routine was hardly adequate. At least there was some delineation as to mental and moral fitness; also, a physical examination was now required. These are admirable but minimum qualities and hardly seemed to cover the specific knowledge required to keep accounts and to fill out all the necessary forms. It is safe to assume the additional paymasters were indeed a sorry lot, probably mostly political appointees and those looking for a soft spot away from the action. In 1864 the war department regulations were up dated and amended to include examination of candidates for the paymaster department. Those who would apply now had to demonstrate the ability to write an intelligent business letter. At long last it was required to prove the ability to solve a mathematical problem accurately. All of this was necessary plus a knowledge of basic accounting and pay systems. This was in 1864!
1. Who pays: Additional paymasters.
2. When Paid: Regulations required that troops were to be paid in such a manner that arrears at no time were to exceed two months UNLESS circumstances made longer interims unavoidable, in which case, the paymaster involved was to report the situation and details to the paymaster general.
Further, troops were to be paid on the last day of February, April, June, August, October and December. As might be expected, the pay forms were to be made out in quadruplicate with one copy to the adjutant general, two copies to the paymaster general and one copy to regimental headquarters.
3. How Paid: Troops were required to muster and parade by companies. Each company commander was required to attend the muster and be present at the Pay table. The officers were paid first, then the noncoms and finally the privates all in alphabetical order. Company commanders picked up the pay for any men on duty, sick or on leave.
4. Pay scales: In 1860, the United States army private base was $11.00 per month. In 1861 to June 1864, union army private’s base was $13.00 per month. Confederate private remained at $11.00 per month until June 1864, when the rebel’s pay was increased actually to a base slightly higher than union private—to $18.00 per month. That was a $7.00 hike but it meant less, actually, due to the serious inflation taking hold in the south. This general pay raise of 1864 took place on both sides in the same month, almost as though both governments agreed between each other that it was time to raise pay across the board. It appeared to be a sort of “We’ll do it if you will” type of situation.
A. Cavalry, in the early days of the war could draw extra allowances for forage. It was not uncommon for one to furnish one’s own mounts. When the war department caught up, the government would furnish all the mounts and discontinue the allowances.
B. Colored troops. Privates, 1861-64 received $7.00 per month but were allowed $3.00 per month for clothes, a rather odd arrangement. In 1864, at the time of general increases, colored troops were put on the same basis as the white troops.
C. In 1862 it was authorized that those unlucky enough to be taken prisoner would receive pay credit as though on normal duty. I could find no record of retroactivity to cover prisoners taken prior to enactment.
D. Allotments: A general order was issued in 1861 which provided means for a soldier to allot a specified sum of money to parents or other designee. The set-up was that a soldier signed a roll. This was endorsed by his company commander and forwarded to the state treasury which in turn sent it out to the soldier’s town or village. This roll designated to whom and how much money was to be paid to the donee. Local official notified the donee of the allotment or grant. At the same time of enrolling, tickets were issued to the soldier. He mailed these to his donee. The donee presented the ticket when he was notified by the village official. The two instruments were matched and the payment was made. Considering mails, plus cumbersome rolls, this system probably was fraught with error but it at least had the merit of insuring money reached the proper party.
E. It is interesting to note that coming out of a soldier’s hide was the fact that he had to pay for any clothing lost in battle or on the march. If the clothing wore out then he could claim reissue without charge. This seems incredible. Following are typical costs to the soldier for replacements:
$7.20 overcoat 6.71 dress coat 2.95 blanket
2.63 blouse 3.03 trousers 1.14 pair of shoes
1.35 hat 0.50 drawers 0.26 socks
The matter of benefits comes up. In 1861, a government act authorized that a volunteer who was wounded or otherwise disabled in service should be entitled to the same benefits which accrue under the same circumstances to regulars. To the widow, if there was one, or, if not, the legal heir of such that die in battle should receive $100.00 in addition to all arrears in pay and allowances as might exist at the time of death. In July of 1862, it was ordered that all officers and enlisted men who were totally disabled by wound or disease dating from March 1862 should receive the following pensions: Lt. Colo. and up -$30; Majors -$25; Captain - $20; First Lieuts. - $17; Second Lieuts. - $15; Enlisted men - $8O .
Confederate pay scales ran close to, but until 1864, slightly under union rates. Aside from a desperate lack of resources and drying up of credit, it was true that Confederate paydays, from the start, ran usually six months in arrears.
An account of Confederate soldier’s pay in the Arkansas Historical Quarterly for the winter of 1959 details an account of the pay problems besetting the Confederacy in the trans-Mississippi area. About the last so-called payday was in September of 1863. General Edmund Kirby Smith had come out west to see if he could salvage anything from the wreckage. He did stabilize the military situation up to a point, and then turned to such items as pay. He managed to catch up on one year’s arrears and bring troops up to only four months behind in schedule. The Confederate government’s notes and letters of credit were worthless. It was just paper. The area commands could not purchase stores or food on the government notes. Actually, the troops simply melted away. This was in 1864.
So we come to the reckoning and the bill for pay. From June through October of 1865, final payments were made efficiently. More then 800,000 were paid off and disbursements ran for this period $270,000,000.00. All accounts were squared, bounty commitments allowances, arrears not to mention fines and debits.
We have already noted that the total pay for the war ran $1,029,239,000.00. If the Confederacy total ran somewhat less one could safely estimate the pay for the Civil War ran about $2,000,000,000.00. Add to this, bounties for the states and you come close to a total of $2,500,000,000.00 for soldiers pay.
(Source: Soldiers Pay, by William C. Moffat, Jr. January 1965, ©2000 The Cincinnati Civil War Round Table)
Both South and North were forced to issue huge amounts of paper money to pay for the war. This paper money was not backed by gold or silver - a fragile concept in the 1860s. Union “greenbacks” (Legal Tender notes and Demand notes, printed with green ink on one side) were instead backed by bonds. An investor could purchase bonds with greenbacks, and then redeem the bonds for gold. The emergence of “war bonds” helped create a more solid economy for the Union; similar bonds were used by the U.S. to control inflation again during both world wars.
The first greenbacks were issued in mid 1861 by the Federal Government to pay for domestic war material. These were called Demand Notes and were only produced in $5, $10 & $20 denominations. They were hand signed & lacked the red Treasury Seal. As the demand for more currency mounted, the U.S. Treasury decided to break with tradition and used printed signatures on the new United States Notes. Local, State & Confederate governments continued to hand sign In spring 1862, the lowest Federal note was still the $5 greenback, soldiers and civilians could not make change, so shinplasters (merchant/store scrip… script are for plays or movies) or cut up State Bank notes were used. As a result of this hoarding of coins, postage stamps (“gumbacks”) became the standard medium for making change (1c, 2c (issued July 1st, 1863), 3c, 5c, 10c, 12c & 24c stamps). Most were placed in paper envelops marked “25 Cents Postage Stamps” or other values but the gum on stamps could become wet (and sticky), canceled stamps could be passed off as new ones or the amount in stamps might be less than the printed value. Bankers and merchants did not like accepting clumps of sticky stamps or cut up State Bank notes but there was little choice.
Due to public demand, the US Treasury reluctantly introduced small pieces of paper with images of postage stamps on them. They were called Postage Currency (1st Issue) and greatly improved commerce (the $1 & $2 greenbacks were also issued in late August, 1862). The first Postage Currency was issued August 1st, 1862 to Union Paymasters and then to the general public in late September, 1862. Postage Currency were issued until May, 1863 but were common after the War. The 2nd and other Issues are called Fractional Currency and were to replaced the easily counterfeited Postage Currency. The 2nd Issue has George Washington on the front with a large bronze “O” overprint and were issued from October, 1863 to late 1864. Fractional Currency was issued until 1878 when the coin supply was finally restored to pre-war levels (Morgan Silver Dollars and Silver Certificates were massed produced in 1878 onward to redeem the flood of greenback issued 17 years earlier!)
During 1863, the US greenback traded for 79c to 63c in coin, the CSA notes for 33c to 15c before July, 1863. After the defeats of Gettysburg and Vicksburg, the CSA dollar declined to 10c then 5c by December 1863. A common pre July, 1863 trade was $3 or $4 in CSA notes for a $1 Greenback … 8:1 or more after. In 1864, the CSA currency lost value quickly but so did the Greenback. On July 11th, 1864, the Greenback was only worth 34c ($3 in paper for $1 in coin) before recovering to 71c in the middle of 1865.their notes (except for the CSA 50c note) believing this would deter counterfeiting.
For the Confederate States, the problem was more acute than it was in the North - none of the States rich in gold or silver had joined the Confederacy, and the banking system in the South was underdeveloped. The South’s economy was almost exclusively based on agriculture, leaving the Confederacy dependent on trade to obtain the goods it needed to fight. As the conflict progressed, inflation ran rampant in the South and made it all but impossible to continue the war effort.
After the Civil War broke out in 1861, the newly established Confederate government began to issue its own money as legal tender to the citizens of the South. The gamble was that if the South won the war, the money would be redeemable. The 1st note from the Government of the Confederate States of America was issued in April of 1861. From then on, notes were issued on through 1864. Almost every Confederate note was painstakingly hand signed and numbered. It is not uncommon for these notes to have uneven, or rough borders since scissors or shears were used to hastily cut the sheets of notes apart.
Counterfeiting became a major problem for the South. The North played a big role in this action by printing counterfeit notes and distributing them in the South causing massive inflation. Towards the end of the War, Southern citizens lost confidence in the Confederate currency, and many destroyed their notes, believing them to be worthless. Bartering and the black-market Northern “greenbacks” took over as main forms of exchange for goods and services.
Today, the value of these notes is far from worthless. Their prices range from under one hundred dollars for the most common and heavily printed series, to the tens of thousands for the rarest. Most of the heavily printed issues are still readily available to some extent, while the rarer issues are tightly held by collectors, and don’t surface that often. One thing is certain though, quality Confederate notes have shown to steadily increase in value over the years, and make a good investment.
(Confederate note: Women of the South” featuring Lucy Pickens, the wife of Francis W. Pickens who was governor of South Carolina 1860-1862. Confederate cabinet member George Randolph rightside. Two Confederate soldiers at lower left.)
(Source: Revised U.S. Army Regulations. Washington: Government Printing Office, 1863
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