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Repudiation: The Crisis of United States Civil War Debt, 1865-1870


  • Noll, Franklin


From 1865 to 1870, a crisis atmosphere hovered around the issue of the massive public debt created during the recently concluded Civil War, leading, in part, to the passage of a Constitutional Amendment ensuring the “validity of the public debt.” However, the Civil War debt crisis was not a financial one, but a political one. The Republican and Democratic Parties took concerns over the public debt and magnified them into panics so that they could serve political ends—there was never any real danger that the United States would default on its debt for financial reasons. There were, in fact, three interrelated crises generated during the period: a repudiation crisis (grounded upon fears of the cancellation of the war debt), a repayment crisis (arising from calls to repay the debt in depreciated currency), and a refunding crisis (stemming from a concern of a run on the Treasury). The end of the Civil War debt crisis came only when there was no more political advantage to be gained from exploiting the issue of the public debt.

Suggested Citation

  • Noll, Franklin, 2012. "Repudiation: The Crisis of United States Civil War Debt, 1865-1870," MPRA Paper 43540, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:43540

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    References listed on IDEAS

    1. English, William B, 1996. "Understanding the Costs of Sovereign Default: American State Debts in the 1840's," American Economic Review, American Economic Association, vol. 86(1), pages 259-275, March.
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    Cited by:

    1. Dominique Jacob, 2013. "Quels sont les enseignements de l'histoire du fédéralisme américain pour la zone euro actuelle ?," Larefi Working Papers 1305, Larefi, Université Bordeaux 4.
    2. Dominique Jacob, 2013. "Quels sont les enseignements de l'histoire du fédéralisme américain pour la zone euro actuelle ?," Working Papers hal-00863029, HAL.

    More about this item


    debt crisis; united states; civil war; 1865; politics;

    JEL classification:

    • N42 - Economic History - - Government, War, Law, International Relations, and Regulation - - - U.S.; Canada: 1913-
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • H6 - Public Economics - - National Budget, Deficit, and Debt

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