The Confederate Treasury Secretary Christopher Memminger had no choice but to ask the Confederate Congress to authorize treasury notes. Congress did so to ammounts of 20 million in May 1861, then another 100 million in August,a further 50 million in December and another 50 million in April 1862.

The first fiscal year of it's existence the government raise 3/4 of it's revenues from the printing press. Although loans and taxes would vary slightly, the Confederacy would finance itself primarily witha billion and a half dollars that depreciated from the moment it came into existence.

Southern States, cities and counties began to isssue notes and small-denomination "shinplasters". Lack of high quality paper and skilled engravers in the South meant that these notes were easily counterfeited. In fact some counterfeited notes could be detected because of their superior quality. Thus the South experienced runaway inflation. In Septem of '61 the proce index stood only 25 percent above January. The index went up 100 percent in the first half of ;62 and doubled again in the second half. By '63 it took seven dollars to buy what one did in '61.

At this time wage increase lagged behind price increases. In 1862 wages for skilled and un-skilled workers increase about 55% while prices rose 300&.

The worst problem on southern farms was the price of salt. It rose from 2 dollars a pound before the war to 60 dollars in some places by fall of 1862!! This would cause some few riots and breakins, especially in mountain areas.

Chase.