<P> However, the realities of the prolonged war, the necessity of paying interest on existing debt, and the drop in revenues from other sources, eventually forced both the central Confederate government and the individual states to agree to an imposition of a "War Tax" by the middle of 1861 . The law itself was passed on August 15, 1861 and covered property of more than $500 (Confederate) in value and several luxury items . The tax was also levied on ownership of slaves . However, the tax proved very difficult to collect--in 1862, only 5% of total revenue came from these direct taxes, and it was not until 1864 that this amount reached the still - low level of 10% . </P> <P> Taking account of difficulty of collection, the Confederate Congress passed a "Tax in Kind" in April 1863, which was set at one tenth of all agricultural product by state . This tax was directly tied to the provisioning of the Confederate Army and, despite the fact that it also ran into some collection problems, it was mostly successful . After its implementation it accounted for about half of total revenue, if converted into currency equivalent . </P> <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>

Where did the biggest source of war funding come from during the civil war