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Was the Confederacy a Tool of International Finance? Part 3

[1]1,856 words

Part 3 of 3. Part 1 here [2], Part 2 here [3].


Lincoln’s status as a hero among sections of the Right and monetary reformers rests in large measure on his issue of the famous Greenbacks to bypass the debt-finance system of the international bankers. This, we are told, means the Union was in a fight against international finance, which was using the Confederacy to destroy the US and thereafter impose its financial dictatorship.

For instance, LaRouche supporter Rochelle Ascher describes Lincoln as fighting the “British-backed New York banking system” by bringing banking under his control and issuing $450 million state-created Greenbacks to fund the war.[1]

As has been shown above, the assumptions both in regard to Judah P. Benjamin and the oft-claimed Rothschild support of the Confederacy, are groundless. Did the Confederacy then have alternative systems of finance that also sought — like Lincoln — to bypass the international financial system; especially given that the South, unlike the North, was cut off from rather than subsidized by international finance?

Donations and taxes were insufficient for funding the war effort, as were taxes on imports and exports, considering that trade was greatly reduced. Taxation by a central government was anathema to the concept of states’ rights that formed the basis of the Confederacy, thus taxes amounted to only 8.2% of the CSA’s revenue.[2] Even bond issues were not successful, given the unknown fortunes of war.

The major source of finance was the Government issue of currency. This took the form of the Graybacks. While the efficacy of governments issuing currency is not the subject of this essay, it should be noted that price-inflation was caused in significant part by large-scale counterfeiting of Graybacks by the North, and was also affected greatly according to public confidence or loss of confidence according to the course of the war. Marc Weidenmier states:

In the event of a Confederate defeat, for example, people forecasted higher government spending and money growth in the future and bid up prices immediately. Moreover, mounting Confederate defeats also drove up prices as people were unsure about the fate of the fledging nation. War news, a measure of fiscal confidence, was an important determinant of the Confederate price level and helps to explain the low correlation between the money stock and price level.[3]

The extent of the Northern counterfeiting of the Grayback “posed a serious problem for the Confederacy”:

More money chasing the same number of goods created inflation, reducing the central government’s take from the inflation tax. The Confederacy was unable to curtail counterfeiting because they lacked the resources and equipment to produce high quality money. Counterfeiting was such a widespread problem that people sometimes joked that fake money was of higher quality than government issued currency.[4]

Weidenmier states: “It is probably safe to assume that bogus money makers had a large impact on the Confederate price level. The actions of bogus money makers fuelled the Confederate inflation via a large increase in the money stock.”[5]

Therefore the problems encountered by the Confederate economy are not a true reflection of the efficacy of state currency and credit creation, which was successfully utilized on many occasions elsewhere.[6] However, the purpose of this essay is to show not only that the Confederacy was no lackey of international finance, but that the CSA created its own system of finance to circumvent the plutocrats.

State currency amounted to 60% of the CSA revenue during the war.[7] The loans floated in Europe, cotton bonds, and “junk bonds” issued through a Dutch firm, accounted for less than 1% of the war expenditure. The cotton bonds could be redeemed for cotton within the South.

Wiedenmier states that the money issued by the CSA was interest-free:

. . . [N]on-interest-bearing money remained the predominant medium of exchange in the Southern Confederacy despite the existence of large quantities of interest-bearing money . . .  state and Confederate governments forced banks to accept both types of money through de facto legal restrictions.[8]

What can be said in summary is that:

  1. Judah P Benjamin was not a Rothschild agent any more than he was a “Rothschild relative.”
  2. The presence of a Jew in Government does not in itself offer sufficient proof that the Government is a tool of the Rothschilds or an international conspiracy. Indeed, Benajmin was not the only Jews would served the Confederacy with distinction.[9]
  3. The Confederacy failed in its extensive efforts to secure diplomatic recognition from Britain and the rest of Europe at a time when the Rothschilds and Barings were perceived to be “the true lords of Europe.”
  4. The only notable financial dealing with international finance was the $2.5 million loan secured from Erlanger, the conditions of which Benjamin regarded as usurious.
  5. The only financial firm that was helpful to the Confederacy was the Liverpool firm of Fraser, Trenholm and Company, directed by a Southerner.
  6. The Rothschilds specifically did not have any noticeable investments with the Southern states, or interests in cotton.
  7. Most CSA expenditure was based on non-interest bearing state currency.

A Clash of Civilizations

Following Benjamin’s reference to “Puritans” and “Cavaliers” to explain the dichotomy between North and South, the Union represented industrial-capitalism, urbanization, wage-slavery, and an ethic of money and business. The Confederacy represented one of the final vestiges of European tradition: agrarianism, ruralism, and an ethic of honor and chivalry. These economic and moral conflicts are obfuscated by the issue of Slavery, which is mistakenly promoted as the central cause and meaning of the Civil War, just as “The Holocaust” has obscured all other facets of World War II or the controversy of “Apartheid” has obscured the real forces at work behind the destruction of Afrikaner rule in South Africa.

The American War of Secession was a “clash of civilizations.” Slavery or no slavery, the North and South had different values and ways of life that were bound to come into conflict. The agrarian Southern “cavalier” was an anachronism in the new industrial-capitalist “Puritan” world, just as the Afrikaner is an anachronism is the world of globalization. Slavery was used as the pretext for a moral crusade to destroy the Southerner and his unique civilization. Apartheid was used in the same way against the Boer. The antagonists were similar in both situations, and in both instances, the plutocrats won.

A number of historians have remarked upon the “anti-bourgeois” spirit of the South. The “ruling class” or what we might call the “culture-bearing stratum” possessed an “aristocratic, antibourgeois spirit with values and mores emphasizing family and status, a strong code of honor, and aspirations to luxury, ease, and accomplishment [that] set it apart from the mainstream of capitalist development.”[10]

Eugene Genovese has stated that the divide between the North and South was so wide culturally that a “final struggle [was] so probable that we may safely call it inevitable.”[11]

Traveling through the South in 1861, London Times correspondent William Howard Russell found this “conflict of civilizations” to be a pervasive theme. “The tone in which [Southerners] alluded to the whole of the Northern people indicated the clear conviction that trade, commerce, the pursuit of gain, manufacture, and the base mechanical arts, had so degraded the whole race” that Southerners wished to eschew all association with them. Russell continued: “There is a degree of something like ferocity in the Southern mind [especially] toward New England which exceeds belief.”

A South Carolinian told Russell: “We are an agricultural people, pursuing our own system, and working out our own destiny, breeding up women and men with some other purpose than to make them vulgar, fanatical, cheating Yankees.”

Former US Senator Louis Wigfall of Texas said to Russell:

We are a peculiar people, sir! . . . We are an agricultural people. . . .We have no cities — we don’t want them. . . .We want no manufactures: we desire no trading, no mechanical or manufacturing classes. . . . As long as we have our rice, our sugar, our tobacco, and our cotton, we can command wealth to purchase all we want. . . . But with the Yankees we will never trade — never. Not one pound of cotton shall ever go from the South to their accursed cities.[12]

In 1861 Charles Colcock Jones, Jr.[13] stated of this deep cultural dichotomy:

In this country have arisen two races[14]which, although claiming a common parentage, have been so entirely separated by climate, by morals, by religion, and by estimates so totally opposite to all that constitutes honor, truth, and manliness, that they cannot longer exist under the same government.[15]

From the North, in 1860 Theodore Parker,[16] stated of the South that she was “the foe to Northern Industry — to our mines, our manufactures, and our commerce . . .”[17]

To my mind, the South represents the repository of a genuine “American culture” that was one of the few centers of resistance against the cycle of Western decadence and death about which Oswald Spengler warned. The above statements show a level of cultural vitality in revolt against the spirit of decay manifested by the North with its City and Money values.[18] It is such a sentiment that caused the present-day Southern scholar Dr. Clyde Wilson to defend the display of the Confederate battle flag with these words:

But why [the Confederate battle flag] really gets so much attention (and will continue to do so) is this: it is the most potent symbol in the world today of brave resistance to authoritarian government. That is why it was unfurled by the Eastern Europeans a few years ago when they were liberated. That is why it is hated by every New World Order flunky in the universe. That is why it is now banned from the public space of the world, though it appeared with honor as an American symbol until very recently.[19]


1. Rochelle Ascher, “The Lessons of Abraham Lincoln,” American Almanac, 1992, http://american_almanac.tripod.com/ascher1.htm [4]

2. Marc Weidenmier, Money and Finance in the Confederate State of America, E H Net, http://eh.net/encyclopedia/article/weidenmier.finance.confederacy.us [5]

3. Weidenmier.

4. Weidenmier.

5. Weidenmier.

6. For example, the First New Zealand Labour Government in 1935 funded its iconic State Housing project with 1% state credit, thereby with this one measure reducing 75% of the unemployment in the midst of the World Depression.

7. Weidenmier.

8. Weidenmier.

9. Just as Jews fought with distinction for Germany during World War I, and for the most part German-Jews during the Weimer period were not only anti-Marxist but anti-Zionist, German patriots. See: K. R. Bolton, Nazism? An Answer to the Smear-Mongers (Paraparaumu, New Zealand: Spectrum Press, 2005), 10–12. Of course a comeback could be that the Jewish Confederates fought as agents of the international Jewish conspiracy; however, I am only concerned with reality.

10. Charles Grier Sellers, “The Travail of Slavery,” in Sellers, ed., The Southerner as American (Chapel Hill: Univ. of North Carolina Press, 1960), 40.

11. Eugene D. Genovese, The World the Slaveholders Made (New York: Pantheon, 1969), 33.

12. William Howard Russell, My Diary North and South, ed. Fletcher Pratt (New York: Harper and Brothers, 1954), 99.

13. Southern scholar and mayor of Savannah, Georgia.

14. Northern and Southern.

15. Robert Manson Myers, ed., Children of Pride: A True Story of Georgia and the Civil War (New Haven: Yale University Press, 1972), 648.

16. Northern preacher and social reformer.

17. John L. Thomas, ed., Slavery Attacked: The Abolitionist Crusade (Englewood Cliffs, N.J.: Prentice-Hall, 1965), 149.

18. Oswald Spengler, The Decline of The West, 2 vols. (London: George Allen and Unwin, 1971).

19. Clyde Wilson, “The Universal Symbol of the Spirit of Liberty,” LewRockwell.com September 14, 2000, http://www.lewrockwell.com/orig/wilson1.html [6]