Page "Union (American Civil War)" Paragraph 25

In 1860 the Treasury was a small operation that funded the small-scale operations of the government through the low tariff and land sales.

Revenues were trivial in comparison with the cost of a full-scale war, but the Treasury Department under Secretary Salmon P. Chase showed unusual ingenuity in financing the war without crippling the economy.

Many new taxes were imposed, and always with a patriotic theme comparing the financial sacrifice to the sacrifices of life and limb.

The government paid for supplies in real money, which encouraged people to sell to the government regardless of their politics.

By contrast the Confederacy gave paper promissory notes when it seized property, so that even loyal Confederates would hide their horses and mules rather than sell them for dubious paper.

Overall the Northern financial system was highly successful in raising money and turning patriotism into profit, while the Confederate system impoverished its patriots.