<P> The United States needed $3.1 billion to pay for the immense armies and fleets raised to fight the Civil War--over $400 million just in 1862 alone . Apart from tariffs, the largest revenue by far came from new excise taxes--a sort of value added tax--that was imposed on every sort of manufactured item . Second came much higher tariffs, through several Morrill tariff laws . Third came the nation's first income tax; only the wealthy paid and it was repealed at war's end . </P> <P> Apart from taxes, the second major source of income was government bonds . For the first time bonds in small denominations were sold directly to the people, with publicity and patriotism as key factors, as designed by banker Jay Cooke . State banks lost their power to issue banknotes . Only national banks could do that and Chase made it easy to become a national bank; it involved buying and holding federal bonds and financiers rushed to open these banks . Chase numbered them, so that the first one in each city was the "First National Bank ." Third, the government printed paper money called "greenbacks". They led to endless controversy because they caused inflation . </P> <P> The North's most important war measure was perhaps the creation of a system of national banks that provided a sound currency for the industrial expansion . Even more important, the hundreds of new banks that were allowed to open were required to purchase government bonds . Thereby the nation monetized the potential wealth represented by farms, urban buildings, factories, and businesses, and immediately turned that money over to the Treasury for war needs . </P> <P> Secretary Chase, though a long - time free - trader, worked with Morrill to pass a second tariff bill in summer 1861, raising rates another 10 points in order to generate more revenues . These subsequent bills were primarily revenue driven to meet the war's needs, though they enjoyed the support of protectionists such as Carey, who again assisted Morrill in the bill's drafting . The Morrill Tariff of 1861 was designed to raise revenue . The tariff act of 1862 served not only to raise revenue but also to encourage the establishment of factories free from British competition by taxing British imports . Furthermore, it protected American factory workers from low paid European workers, and as a major bonus attracted tens of thousands of those Europeans to immigrate to America for high wage factory and craftsman jobs . </P>

Where did union and confederate forces first meet