The North in 1865 was an extremely prosperous region. Its economy had boomed during the war, bringing economic growth to both the factories and the farms. Since the war had been fought almost entirely on Southern soil, the North did not have to face the task of rebuilding.
Despite its relative prosperity, the war had been costly for the North. Three methods had been employed to raise funds:
Northern attitudes reflected much bitterness toward the South, but few calls for outright revenge. Few Confederate leaders were imprisoned and only the commander of the infamous Andersonville prison camp was executed following the war.
Taxation: Protective tariffs, excise taxes on luxury goods, and an income tax were all employed during the war
- Printing paper money: The Union government printed more than $450 million in “greenbacks” during the war - these notes were not redeemable in gold and their value fluctuated widely during the conflict. Consequently, a great greenback controversy developed
- Selling bond (borrowing): Union securities were marketed to investors both in the North and in Europe.
The South, however, had sustained immense damage. Entire cities lay in ruins. Thousands of people lacked the means to provide food, clothing, or shelter for themselves or their dependents. The Federal government did little to assist the needy. The creation of the Freedmen’s Bureau was one of the few efforts to do so.
The South harbored deep feelings of hatred toward the North, but lacked an effective forum for venting those feelings. Tensions were heightened by the actions of the “scalawags and carpetbaggers.” Efforts to regulate relationships between the newly freed slaves and their former masters were made in the black codes.
The Confederacy had printed more than $800 million in paper money during the course of the war. Massive inflation had resulted. The currency and other government securities were worthless, destroying the savings of thousands.
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