How the North Financed the Civil War
- Created by: siobhan
- Created on: 08-04-14 12:04
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- How the North Finance the Civil War
- Already had an established treasury and gold reserves
- System nearly collapsed over winter of 1861-1862
- Chase raised loans and issued bonds
- 1 million Northerners bought shares in national debt
- 2/3 war funding came from loans and bonds, 1/5 from taxes
- 1861 - first income tax of 3% on wages over $800
- Internal Revenue Act (taxed everything) raised 10x more than income tax
- Congress approved inflationary monetary policy and printed $150 million in bonds (Legal Tender Act)
- Act provided treasury with a way to repay bills, restoring investor confidence and selling 500 million more bonds
- 'Greenback' notes worth $431 million issued
- 1863 and 1864 National banking acts pumped paper money into systems
- 10% tax on this ensured North was not overrun with paper money
- Inflation over the was was 80%
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