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Re: Lincoln<< Printing huge amounts of money changes the picture in a way Lincoln never thought about. >> You raise an interesting point but there was, apparently, a certain amount of money printing on both sides to fund the civil war, and especially in the south. Excerpts: “In the 1850s, federal expenditures had averaged roughly $1 million a week. By the middle of 1861, the government was spending at the rate of $1.5 million a day. By the end of the war, it was spending $3.5 million a day, and the government of the U.S. became the first to spend more than $1 billion in a single year. (The word billion wasn't even coined until 1834.) THERE ARE ONLY THREE WAYS to finance a great war. A government can tax, it can borrow and it can print. Both the federal and Confederate governments did all three, but the particular mix of each turned out to be fundamentally important to the outcome of the war. Fully two-thirds of federal government revenue came from bond sales, thus throwing most of the cost of the war onto the future. In 1860, the national debt had amounted to a relatively paltry $64 million. By 1866, it was $2.68 billion, a 40-fold increase. THE NORTH ISSUED ABOUT $450 million in greenbacks, so named because of the color of the ink used on the reverse. Greenbacks could not be used to pay taxes or be converted into gold at a set ratio. (Instead the ratio was determined by speculators on Wall Street. It tended to vary, based on Union fortunes on the battlefield.) As fiat money always does, it set off a considerable inflation. But at about 180% of antebellum prices by 1865, the inflation was manageable in the North. It was a different story in the South. The Confederacy printed fiat money to cover more than half its expenses. Worse, because its paper mills were primitive, counterfeiting was easy and rampant. The result was a 700% inflation rate in the Civil War's first two years and a rate exceeding 9,000% by its end. Hoarding, shortages, and black markets spread relentlessly. Manufacturers were less and less willing to accept Confederate money in payment for goods. By the end of the war, Lee's Army of Northern Virginia was out of food, out of supplies and out of alternatives to surrender.” http://www.barrons.com/articles/SB50001424052970203990104576191061207786514#printMode |
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Msg # | Subject | Author | Recs | Date Posted |
20763 | Re: Lincoln | follow the sun | 0 | 10/14/2016 2:07:18 PM |