depreciation of Confederate currency

Elva Haggard Preddy, 1607 Woolen Mills Road

The company's business was further hindered by financial deficiencies. Payment of stock subscriptions failed to keep pace with the requirements of the firm, and in January, 1862, the board of directors attempted to enforce collection by ordering payment of overdue stock accounts immediately. Difficulties were compounded by the continuing depreciation of Confederate currency. The government tried ineffectively to correct this latter development. After two previous attempts to deflate the circulating medium, an act of February 17, 1864, called for the exchange of certain classes of Treasury notes for interest-bearing bonds. Such fluctuations made the conduct of business quite complicated. The Charlottesville Manufacturing Company was the therefore forced to adjust its accounts by discounts of as much as one-third. These complications were apparently too much for Marchant's associates. In 1864 the mill went through another reorganization. Heretofore, changes in ownership had been in a direction indicating that the Charlottesville mill was following the stages of maturation quite typical of the industry as a whole. Under the impact of the war, however, this trend was reversed; ownership reverted to individual control for a period of some four years. The company during the period of incorporation had probably never sold more than 320 shares of stock, making a total capitalization of only $16,000. At some point during the war, John Marchant recovered nearly complete control of the business by purchasing all but fourteen shares. He was prevented from acquiring all shares because the owners were serving in the Confederate forces. The corporation then became practically a single-owner concern. Finally, on June 20, 1864, Marchant sold the mill, machinery, and real estate to his son, Henry Clay Marchant, for $17,000. The legality of this transaction seems open to question since the outstanding shares had not yet been retired; but John Marchant pledged himself to purchase and deliver them as soon as practicable.
--Harry Poindexter