Turning Points in the Civil War: Views from the Greenback Market
Kristen L. Willard, Timothy W. Guinnane, Harvey S. Rosen
NBER Working Paper No. 5381 (Also Reprint No. r2079)
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.
Document Object Identifier (DOI): 10.3386/w5381
Published: American Economic Review, vol. 86, no. 4, pp. 1001-1018, September 1996. citation courtesy of
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