How did import taxes impact the South during the Civil War?
Unlike the North, the Southern states’ primary staple was King Cotton. The South depended heavily upon exporting cotton to overseas markets. Unlike the North, the South was an export-oriented economy. Thus import taxes on Southern cotton contributed greatly to the Federal tax revenue. CWG: Since the North could not depend on revenues brought in from exported goods (i.e., cotton), how did the North generate revenue internally? The North resorted to taxing it’s citizenry on such items as tobacco, alcohol, clothing, food stuffs, stamps, tools and even entertainment. The newly created Department of Internal Revenue (DIR) collected the taxes. Personal evasion of taxes was a common problem for the DIR. CWG: What percent did taxes cover for the Civil War expenses of the North? Taxes paid for roughly one-fifth of the North’s daily war efforts. CWG: Where did the rest (i.e., four-fifths) of the money come from for the North? It came from such forms as the creation of paper money, bonds and borr
