Gunboats, reputation, and sovereign repayment: lessons from the Southern Confederacy

• 成果类型: Article
• 署名作者: Weidenmier, MD
• 署名单位: Claremont Colleges; Claremont McKenna College; Claremont Graduate University; National Bureau of Economic Research
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2004.07.006
• 发表日期: 2005
• 页码: 407-422
• 关键词: debt repayment; gunboats; reputation; confederacy

摘要

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 2% 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. (c) 2004 Elsevier B.V. All rights reserved.