War and the Economy
Since the war had started the North had borrowed over $2 billion dollars for the troops, and the South had borrowed over $700 million. Northern money was called greenbacks because of their color. The Northern Economy had boomed which caused inflation which was a general increase in prices, because the troops needed supply such as food, guns, powder, and ammunition to live.
The South lacked factories to create guns and ammuntition for the troops in the war. By the end of the war most Southerners were homeless! Since the North blocked Southern ports they had shortages of essential goods. Inflation was much worse in the South. The prices in the South rose 9,000 percent as in the North it only rose 80 percent due to the war!
