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Texas Treasury Warrants, 1861-1865: A Test Of The Tax-Backing Of Money

  • Gary M. Pecquet

    ()

    (Department of Economics, Central Michigan University)

  • Clifford F. Thies

    (Shenandoah University)

vThe Confederacy relied heavily on inflationary finance. Of the states of the Confederacy, only Texas was able throughout the war to enforce mandatory tax payments. In November 1864, Texas enacted fiscal measures designed to support the value of its state-issued currency, while it was increasing the amount in circulation. These measures were effective in doubling the value of the Texas warrants. As a result, Texas was able to continue to operate even after the defeat of the Confederacy elsewhere, until the state was overrun by Union forces. These results strongly support the tax-backing theory of money.

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File URL: http://college.holycross.edu/RePEc/eej/Archive/Volume32/V32N2P191_203.pdf
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Article provided by Eastern Economic Association in its journal Eastern Economic Journal.

Volume (Year): 32 (2006)
Issue (Month): 2 (Spring)
Pages: 191-203

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Handle: RePEc:eej:eeconj:v:32:y:2006:i:2:p:191-203
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  1. Calomiris, Charles W, 1988. "Price and Exchange Rate Determination during the Greenback Suspension," Oxford Economic Papers, Oxford University Press, vol. 40(4), pages 719-50, December.
  2. Pecquet, Gary M., 1987. "Money in the trans-Mississippi confederacy and the confederate currency reform act of 1864," Explorations in Economic History, Elsevier, vol. 24(2), pages 218-243, April.
  3. Bordo, Michael D., 1986. "Explorations in monetary history: A survey of the literature," Explorations in Economic History, Elsevier, vol. 23(4), pages 339-415, October.
  4. Marc D. Weidenmier, . "Turning Points during the U.S. Civil War: Views from the Grayback Market," Claremont Colleges Working Papers 1999-24, Claremont Colleges.
  5. McCallum, Bennett T, 1992. "Money and Prices in Colonial America: A New Test of Competing Theories," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 143-61, February.
  6. Richard C. K. Burdekin & Marc D. Weidenmier, 2001. "Inflation Is Always and Everywhere a Monetary Phenomenon: Richmond vs. Houston in 1864," American Economic Review, American Economic Association, vol. 91(5), pages 1621-1630, December.
  7. Bordo, Michael D. & Marcotte, Ivan A., 1987. "Purchasing power parity in colonial America: Some evidence for South Carolina 1732-1774 a comment," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 27(1), pages 311-323, January.
  8. Kristen L. Willard & Timothy W. Guinnane & Harvey S. Rosen, 1995. "Turning Points in the Civil War: Views from the Greenback Market," NBER Working Papers 5381, National Bureau of Economic Research, Inc.
  9. Burdekin Richard C. K. & Langdana Farrokh K., 1993. "War Finance in the Southern Confederacy, 1861-1865," Explorations in Economic History, Elsevier, vol. 30(3), pages 352-376, July.
  10. Davis, George K. & Pecquet, Gary M., 1990. "Interest Rates in the Civil War South," The Journal of Economic History, Cambridge University Press, vol. 50(01), pages 133-148, March.
  11. Michener, Ronald, 1987. "Fixed exchange rates and the quantity theory in colonial America," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 27(1), pages 233-307, January.
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