Erlanger Bonds:
The Confederates needs funds to finance the Civil War, but faces difficulty attracting investors in Europe. There is little trust in its currency.
The French banking house of Emile Erlanger & Company underwrite a bond (known as "Erlanger Bond") priced at 7 percent. The Erlanger Bond was issued in five European cities -- London, Liverpool, Paris, Amsterdam and Frankfurt -- on March 19, 1863 and raised £1,759,894 ($8,535,486). These bonds were printed in four denominations : £100 (Fr2,500 or 4000 lb of cotton), £200 (Fr5,000 or 8,000 lb of cotton), £500 (Fr12,500 or 20,000 lb) and £1,000 (Fr25,000 or 40,000 lb). The bonds sold at 90% of face value, and were redeemable for Confederate government-owned cotton in the Confederacy itself.
At the time cotton was worth twenty-four pence a pound, and the Erlanger loan made cotton available to holders at six pence per pound.
Erlanger cotton bonds was oversubscribed at the time!
However, bond price quickly plunged as news of Confederates defeat at Gettysburg July 1–3, 1863, reached Europe...
http://www.britannica.com/EBchecked/topic/191662/Erlanger-Loan
http://mshistory.k12.ms.us/articles/291/cotton-and-the-civil-war
http://www.scripophily.net/costofamb15.html
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