On Christmas Day 1864 in the American South, a turkey cost $155, a ham $300, a cake of soap $50, and an ordinary suit of clothes $2,700. The money behind those prices was the Confederate States dollar, the grayback, first issued in April 1861 when the Confederacy was two months old. It was a bill of credit with no gold or silver behind it. Most notes promised payment six months after the ratification of a treaty of peace between the Confederate States and the United States, which made every bill a wager on victory.

This episode examines the economics and logistics of that wager without endorsing the Confederacy or the institution of slavery it fought to preserve. It tracks how battlefield news moved the currency, how roughly $1.7 billion in unbacked paper fed runaway inflation, and how a government cut off from engravers, paper mills, and presses resorted to lithography and hand-signed notes that invited forgery. When the Confederacy ceased to exist, the money went to zero at once.

• News of the defeat at Gettysburg cut the currency’s value by 20 percent. By September 1864 one paper dollar was worth three cents in gold.
• In October 1863 Senator Louis Wigfall of Texas noted that a soldier’s $11 monthly pay bought what a single dollar had at the start of the war.
• Jefferson Davis asked citizens to agree among themselves to buy and sell at reduced prices while the government kept printing.
• Up to 200 clerks, often women, hand-signed notes for the Register and Treasurer, so a forger only needed a scribble that looked official.
• Philadelphia engraver Robert Lovett Jr. struck sample Confederate cents in 1861, feared a treason charge, and hid the coins and dies in a cellar. Fourteen are known today.