<P> Customs revenue from tariffs totaled $345 million from 1861 through 1865 or 43% of all federal tax revenue . </P> <P> The U.S. government owned vast amounts of good land (mostly from the Louisiana Purchase of 1803 and the Oregon Treaty with Britain in 1846). The challenge was to make the land useful to people and to provide the economic basis for the wealth that would pay off the war debt . Land grants went to railroad construction companies to open up the western plains and link up to California . Together with the free lands provided farmers by the Homestead Law the low - cost farm lands provided by the land grants sped up the expansion of commercial agriculture in the West . </P> <P> The 1862 Homestead Act opened up the public domain lands for free . Land grants to the railroads meant they could sell tracts for family farms (80 to 200 acres) at low prices with extended credit . In addition the government sponsored fresh information, scientific methods and the latest techniques through the newly established Department of Agriculture and the Morrill Land Grant College Act . </P> <P> Agriculture was the largest single industry and it prospered during the war . Prices were high, pulled up by a strong demand from the army and from Britain (which depended on American wheat for a fourth of its food imports). The war acted as a catalyst that encouraged the rapid adoption of horse - drawn machinery and other implements . The rapid spread of recent inventions such as the reaper and mower made the work force efficient, even as hundreds of thousands of farmers were in the army . Many wives took their place and often consulted by mail on what to do; increasingly they relied on community and extended kin for advice and help . </P>

Advantage for northern states during the civil war