TY  - JOUR
AU  - Weidenmier,Marc D.
AU  - Oosterlinck,Kim
TI  - Victory or Repudiation? The Probability of the Southern Confederacy Winning the Civil War
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13567
PY  - 2007
Y2  - November 2007
UR  - http://www.nber.org/papers/w13567
L1  - http://www.nber.org/papers/w13567.pdf
N1  - Author contact info:
Marc D. Weidenmier
Robert Day School of Economics and Finance
Claremont McKenna College
500 East Ninth Street
Claremont, CA 91711
Tel: 909/607-8497
Fax: 909/621-8249
E-Mail: marc_weidenmier@claremontmckenna.edu

Kim Oosterlinck
Solvay Business School
Université Libre de Bruxelles
(visiting Rutgers)
E-Mail: koosterl@ulb.ac.be
AB  - Historians have long wondered whether the Southern Confederacy had a realistic chance at winning the American Civil War. We provide some quantitative evidence on this question by introducing a new methodology for estimating the probability of winning a civil war or revolution based on decisions in financial markets. Using a unique dataset of Confederate gold bonds in Amsterdam, we apply this methodology to estimate the probability of a Southern victory from the summer of 1863 until the end of the war. Our results suggest that European investors gave the Confederacy approximately a 42 percent chance of victory prior to the battle of Gettysburg/Vicksburg. News of the severity of the two rebel defeats led to a sell-off in Confederate bonds. By the end of 1863, the probability of a Southern victory fell to about 15 percent. Confederate victory prospects generally decreased for the remainder of the war. The analysis also suggests that McClellan's possible election as U.S. President on a peace party platform as well as Confederate military victories in 1864 did little to reverse the market's assessment that the South would probably lose the Civil War.
ER  -