The Confederate States of America dollar was first issued into circulation in April 1861, when the Confederacy was only two months old, and on the eve of the outbreak of the Civil War.
Under desperate wartime circumstances the Government wanted to finance to war effort by printing unbacked paper currency. Originally the first series was backed by cotton and, at first, held its value. As the war continued a lot more were printed which created inflation. For example, by the end of the war, a cake of soap could sell for as much as $50 and an ordinary suit of clothes was $2,700. On the later notes printed however, they could only be redeemed "TWO YEARS AFTER THE RATIFICATION OF A TREATY OF PEACE BETWEEN THE CONFEDERATE STATES AND THE UNITED STATES OF AMERICA" then across the middle, the "CONFEDERATE STATES OF AMERICA will pay" [the amount of the bill] "to BEARER." The last issue (7th) was authorized in an unlimited quantity and after 2 billion dollars were printed the currency’s value pretty much went to zero. The Confederacy ceased to exist as a political entity.
Because of such a lost of value people actually would burn the money but it has become collectable and an ever increasing market has been created.
Designs
The South, being limited in skilled engravers and printers as well as secure printing facilities, often had to make do with unrelated designs in early banknote issues. Some were abstract depictions of mythological gods and goddesses. Southern themes did prevail with designs of black slaves, naval ships, and historical figures, including George Washington. Images of slaves often had them depicted as smiling or happily carrying about their work. John Jones has recreated these images as large acrylic paintings in a contemporary series called "Confederate Currency: The Color of Money."
Paper ran in short supply due to the Union Blockade of Southern Ports. Some paper was smuggled in from the North and from Great Britain by blockade-runners
Later note issues pictured notable Southern politicians, military leaders, and citizens. Some Southerners who appeared on CSA currency included Jefferson Davis, Alexander Stephens, Lucy Pickens, George Randolph, R. M. T. Hunter, and Stonewall Jackson.
Banknotes were ultimately issued in 10-cent, 50-cent, $1, $2, $5, $10, $20, $50, $100, $500, and $1,000 denominations with a variety of designs, issuers and redeemable obligations. The amount of currency issued under the various acts of the Confederate Congress totaled $1.7 billion. Bills were released in 72 different note "types" in seven "series" from 1861 through 1864.
Since there were many types of Confederate notes as well as notes issued by the states of the Confederacy, and since banks could issue their own notes, counterfeiting was a major problem for the Confederacy. Many of these contemporary counterfeits are identifiable today and they can be as valuable to a collector as a real note. Samuel Upham of Philadelphia made 1.5 million Confederate and Southern State Notes as a joke, all with the notice “Facsimile Confederate Note – Sold wholesale and retail, by S.C. Upham, 403 Chestnut Street, Philadelphia” in the margin. In 1954, repo’s were in Cheerios cereal boxes as a promotion. Note that most counterfeits have printed signatures where as all authentic notes were hand signed except for the 50-cent denominations.