<P> The financing of war expenditures by the means of currency issues (printing money) was by far the major avenue resorted to by the Confederate government . Between 1862 and 1865, more than 60% of total revenue was created in this way . While the North doubled its money supply during the war, the money supply in the South increased twenty times over . </P> <P> The extensive reliance on the money - printing press to finance the war contributed significantly to the high inflation the South experienced over the course of the war, although fiscal matters and negative war news also played a role . Estimates of the extent of inflation vary by source, method used, estimation technique, and definition of the aggregate price level . According to a classic study by Eugene Lerner in 1956, a standard price index of commodities rose from 100 at the beginning of the war to more than 9200 by the war's de facto end in April 1865 . By October 1864, the price index was at 2800, which implies that a very large portion of the rise in prices occurred in the last six months of the war . This drop in the demand for money, the corresponding increase in "velocity of money" (see next paragraph) and the resulting rapid increase in the price level has been attributed to the loss of confidence in Southern military victory or the success of the South's bid for independence . </P> <P> Lerner used the quantity theory of money to decompose the inflation in the Confederacy during the war into that resulting from increases in money supply, changes in the velocity of money, and the change in real output of the Southern economy . According to the equation of exchange: </P> <P> M V = P Y (\ displaystyle MV = PY) </P>

What assets did the confederate congress exempt from raised taxes