In the North, the sale of government bonds was the one measure for raising funds that seemed to work. Even that, however, with the lure of compounded interest to be paid in gold at a future date, failed to raise more than about half the needed amount. So the Union faced a real dilemma. The only options remaining were (1) terminate the war or (2) print fiat money. For Lincoln and the Republicans who controlled Congress, the choice was never seriously in doubt.
G. Edward GriffinDuring the fiscal year ending in 1861, expenses of the federal government had been $67 million. After the first year of armed conflict they were $475 million and, by 1865, had risen to one billion, three-hundred million dollars. On the income side of the ledger, taxes covered only about eleven per cent of that figure. By the end of the war, the deficit had risen to $2.61 billion. That money had to come from somewhere.
G. Edward Griffin[...] it is generally accepted that the Civil War was fought over the issue of slavery. That, at best, is a half-truth. Slavery was an issue, but the primary force for war was a clash between the economic interests of the North and the South. Even the issue of slavery itself was based on economics.
G. Edward GriffinWhen banks place credits into your account, they are merely pretending to lend you money. In reality, they have nothing to lend. Even the money that non-indebted depositors have placed with them was originally created out of nothing in response to someone else's loan. So what entitles the banks to collect rent on nothing? It is immaterial that men everywhere are forced by law to accept these nothing certificates in exchange for real goods and services. We are talking here not about what is legal, but what is moral.
G. Edward Griffin