In addition to having a much larger population that could produce goods and material for the Union war effort, it also boasted a large agrarian economy as well, big enough to feed its people as well as its military. The North also enjoyed 69% of all railroad capacity in the U.S. compared to the South’s 31%, and it also held all the currency reserves of the federal government. The government used that reserve to secure the funding necessary to pay for the war effort. First, by issuing a massive bond measure where citizens, and financial institutions were asked to buy bonds to fund the war. After this failed to yield enough funding for the war, Secretary of the Treasury Chase, made the calculated decision that the war would only cost $320 million dollars. This would prove incorrect and in 1862, all the levied funds had been exhausted. This placed a huge burden on the North, already overburdened by taxes, and led to the Legal Tender Act of 1862, which authorized Chase to print $150 million in paper money to continue to pay government debts. While this effort helped to stem inflation, the government looked for more ways to gather money. The federal government introduced the first income tax in 1862, and the Bureau of Internal Revenue, later known as the IRS, was established. All of these …show more content…
In the first two years of the war (1861-62), Lee understood that the defensive strategy desired by Davis was impractical when pitted against the industrial capabilities of the Northern states. Lee’s realization then manifested itself in an offensive-defensive strategy. Lee saw the impracticality of entrenching troops along the Southern coast mostly because of advancements in riffling technology that allowed the Northern artillery to make short work of Confederate fortifications. In order to properly utilize the Confederacy’s limited resources, both in personnel and logistics, Lee recognized that an offensive-defensive strategy needed to replace the purely defensive strategy of Davis. Only through attacking could the Confederacy hope to counter the Union numbers and industrial power. Lee saw that an offensive-defensive strategy, with well-coordinated attacks by Confederate divisions would force the Union to react and focus upon limited areas. This, in turn, would limit the Union’s ability to attack the South at a variety of points simultaneously. Within the strategy of offensive defensive attacks Lee focused upon the operational tasks of swift attacks by concentrated forces against a larger, but divided forces. Rapid communications, coordinated attacks, and the destruction of rail transportation were all