Commentary: What were the turning points of the U.S. Civil War? This is a question that history buffs, like myself, love to turn and twist, and debate to no end. A list of the most important events of the U.S. Civil War typically has the First Battle of Bull Run, the Capture of New Orleans, and Gettysburg among others.
We, looking back 50 plus years, have a perspective that allows us to evaluate the significance of an event in a historical context. But at least as interesting is what people living at the time thought. Which events did the people of the era think important, and are those the same events we today think important?
One way to answer this question is to look at how financial markets react to events, and in particular, how the Greenback market reacted. Greenbacks were issued by the Union government as a mechanism for financing the war. Critically, they came with a promise of redemption for gold at some unspecified time in the future after the War’s end.
The value of the Greenback depended critically on this promise of gold redemption. The longer the War lasted, the further in the future was redemption; the more costly the War, the less likely would the Union be able to afford redemption.
Thus, the Union’s progress toward defeating the Confederacy was a critical factor determining the market value of Greenbacks. When the War was going well for the Union, Greenbacks rose in price; when things went against the Union, Greenbacks price fell.
Economists Kristen Willard, Timothy Guinnane, and Harvey Rosen in fact have looked at Greenback markets to determine turning points. What they found is interesting both for what they found to be turning points and what were not turning points.
Not surprising is the inclusion as a turning point the near simultaneous Union victories at Gettysburg and Vicksburg in July 1863. These were perceived at the time and also by us today as “the” turning point of the War. It was the highwater mark for the Confederacy, so thought of then and so thought of now. The Greenback market reflected this with an upward shift in prices.
Another not surprising turning point in the Greenback market was Antietam and the formal announcement of the Emancipation Proclamation in September 1862. Rumors of peace talks late in the War also caused Greenback prices to rise.
A financial market turning point most modern Civil War buffs would not view as a turning point is the defeat of Early’s attempted raid on Washington, DC. Most historians view Early’s Raid as an interesting side note of no strategic significance, but financial investors reacting in real time did not agree.
Items not on the list that one might that from today’s perspective, one might expect to see include Abraham Lincoln’s re-election and the Surrender at Appomattox. That these events are absent may reflect more their inevitability rather than their lack of historical significance. They don’t convey new information, so do not affect financial market prices. Rather, these two obvious historically important moments were already set in motion of historical circumstances.
Christopher A. Erickson, Ph.D., is a professor of economics at NMSU. He was a history major as an undergraduate. The opinions expressed may not be shared by the regents and administration of NMSU. Chris can be reached at chrerick@nmsu.edu.