I am reading a little book called “101 Things You Didn’t Know about the Civil War” by Thomas R. Turner, PhD. In it Dr. Turner talks about how both sides poured millions of dollars into their war machines. He says “the citizens of the Union and the Confederacy ultimately taking the brunt through ever-increasing taxes.” And we thought all that was NEW!
In fact, a Federal income tax was enacted by Secretary of the Treasury, Salmon B. Chase, as a way of funding the war effort. At the same time Congress passed the Legal Tender Act. The war effort, Turner says, was costing $2.5 million dollars a day by 1862 – Hello!
The Confederacy had an even tougher time. Memminger from South Carolina was the first Secretary of the Treasury for the South. At first he sold war bonds which could be redeemed when the war was over. They sold briskly at first, following the capture of Fort Sumter, but sales dried up when it was evident the effort was doomed.
Ultimately, according to Turner, the Confederate government had to impose a series of taxes that made “those imposed by the federal government look positively friendly”. In addition to a federal income tax, the Confederacy required a 10% “tax in kind” which required farmers to turn over to the government a portion of all the crops they grew. I bet that went over like a “lead balloon”!