The goodwill towards the Southern states that one might expect from monetary reformers has been clouded by the claim that the War of Secession was instigated by international bankers for the control of the USA, and specifically that it was the South that was for this purpose backed by the Rothschilds and other European banking dynasties in Europe. While monetary reformers often allude to Abraham Lincoln having issued state credit in the form of the “Greenbacks,” and therefore Lincoln has become something of an icon among those who advocate alternatives to the usurious world financial system, seldom realized is that the Confederacy issued its own “Graybacks,” and did not have any type of fellowship with international finance. The condemnation of the South often includes an anti-Semitic element, because the Confederate Secretary of State, Judah P Benjamin, was Jewish, and from there flights of fancy roam free, including the claim that Benjamin was a “Rothschild agent” and even a that he was a “Rothschild relative.” This paper examines the claim as to whether the Rothschilds and other banking dynasties supported the South, and in particular examines the manner by which the Confederacy was really funded.
The “Grayback” served the Confederacy as the “Greenback” served the Union, and perhaps moreso, as the Confederacy was shut out of financial markets. It was a pragmatic move and one that better served the Confederate States of America (CSA) by force of circumstances than by going cap-in-hand to the international money-lenders, as most states then did and still do. Hence, the “Grayback” is an example of state credit used on a wide scale that allowed the functioning of an economy without recourse to usurious debt, and stands with other examples such as the use of Reserve Bank state credit by the 1935 New Zealand Labour Government.[i] Given the present widespread economic tumult caused by the compound interest intrinsic to the debt-finance system that controls much of the world, a concentration of alternative systems of banking and finance are of vital importance, but are presently problems seldom understood by the “Right.” This was not always the case, as exemplified by the writings of Ezra Pound[ii] and the “Social Justice” movement of Father Coughlin,[iii] et al.
The very fact that the Confederacy was not supported by international finance caused the necessity of the Confederacy to generate its own credit. While an examination of the efficacy of government currency issue is not the subject of this essay, what should be noted is that price-inflation was caused in significant part by large-scale counterfeiting of Graybacks from the North, and was also affected greatly by public confidence or loss of confidence, depending on the development of the war. State currency amounted to 60% of the CSA revenue during the war.[xii] Marc Wiedenmier states that the money issued by the CSA was interest-free:
