Turning Points in the Civil War: Views from the Greenback Market
affiliation not provided to SSRN
Timothy W. Guinnane
Yale University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)
Harvey S. Rosen
Princeton University - Department of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute)
NBER Working Paper No. w5381
In early 1862, the United States government began issuing Greenbacks, a legal tender currency that was not convertible into gold. The government promised to redeem the Greenbacks in gold eventually, but speculators understood that the probability of redemption depended on Union Army military fortunes and political developments that affected the total cost of the war. To serve the speculative interest in gold, a market emerged for the purpose of trading Greenbacks for gold dollars. Because the market price of a Greenback reflected the public's perceptions of future war costs, the movement of these prices provides unique insights into how people at the time perceived various events. We use daily quotations of the gold price of Greenbacks to identify a set of dates during the Civil War that market participants regarded as turning points. In some cases, these dates coincide with events familiar from conventional historical accounts of the war. In other instances, however, market participants reacted strongly to events that historians have not viewed as very significant.
Number of Pages in PDF File: 40
Date posted: June 11, 2000
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