Gunboats, reputation, and sovereign repayment
Subtitle: lessons from the Southern Confederacy
By: Marc Weidenmier.
Contributors: National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10960; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10960.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Bonds -- Confederate States of America.
Description: "Many states that formed the Southern Confederacy defaulted on sovereign debt sold in international capital markets during the 1840s.  The Confederacy also elected President Jefferson Davis, who openly advocated the repudiation of U.S.  states' debts while a member of Congress.  Despite its poor credit record, the Confederate government managed to float cotton bonds in England that constituted under two percent of its expenditures.  The bonds were largely issued to settle overdue debts with gun contractors who had cut off trade credit.  The South serviced the bonds as late as March 1865, a time of domestic hyperinflation and weeks before the fall of Richmond.  Although the Confederate experience shows that trade sanctions can promote debt repayment, the gunboat model can only account for a small amount of lending.  A reputation or another type of sanction would be necessary to support higher levels of lending in international capital markets"--National Bureau of Economic Research web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 1/11/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.