Title: The High Cost of the U.S. Civil War | Barron's
Headings: The High Cost of War
The High Cost of War
Fort Sumter's shelling ignited a war that made the U.S. government the first to spend over $1 billion in a year.

Content: In 1864, the upper rate was doubled, to 10%. Altogether, the federal government was able to get 21% of its revenue from taxation. The South, with its less developed and cash-poor agricultural economy, was able to raise only 6% that way. 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. Jay Cooke, a Philadelphia banker, devised the bond drive—a feature of every major war since—selling war bonds directly to the people and bypassing the banks that had bought most federal debt until then. Bonds could be bought in denominations as small as $50 and paid for in installments. In all, Cooke sold bonds to about 5% of the Northern population, an astonishing figure when one considers that fewer than 1% of Americans then had bank accounts. The effect on Wall Street of this vast upsurge in the number of securities holders would be profound.