Prices of Domestic Produce in Confederate Treasury Notes from 1 January 1861 to 1 January 1865

The Confederate dollar, often called a "Greyback", was first issued into circulation in April 1861, when the Confederacy was only two months old, and on the eve of the outbreak of the Civil War. At first, Confederate currency was accepted throughout the South as a medium of exchange with high purchasing power. As the war progressed, however, confidence in the ultimate success waned, the amount of paper money increased, and their dates of redemption were extended further into the future. As the war progressed, the currency underwent the depreciation and soaring prices characteristic of inflation. For example, by the end of the war, a cake of soap could sell for as much as $50 and an ordinary suit of clothes was $2,700. Near the end of the war, the currency became practically worthless as a medium of exchange. This was because Confederate currency was actually not money, but bills of credit, as in the Revolutionary War, not secured or backed by any assets. Just as the currency issued by the Continental Congress was deemed worthless because they were not backed by any hard assets, so, this became the case with Confederate currency also. Even though both gold and silver may have been scarce, some economic historians have suggested that the currency would have retained a relatively material degree of value, and for a longer period of time, had it been backed by hard goods the Confederacy did have, perhaps such as cotton, or tobacco. When the Confederacy ceased to exist as a political entity at the end of the war, the money lost all value as currency.