the last book I ever read (Rise to Greatness by David Von Drehle, excerpt six)

from Rise to Greatness: Abraham Lincoln and America’s Most Perilous Year by David Von Drehle:

The Confederacy’s long-term prospects were also being eroded by the North’s increasing financial strength. Lincoln had put it simply: “I must have money.” Expanding on the theme, he added, “The result of this war is a question of resources. That side will win in the end where the money holds out the longest.”

Accordingly, the House of Representatives was hard at work on developing a massive system of taxes to pay for a protracted war if necessary. Under their plan, a new commissioner of internal revenue would be appointed, and virtually every money stream in the Union would be tapped—starting with income, which had never been taxed before. Sales taxes were instituted: two cents per pound on sugar, a penny per pound on coffee, ten cents per gallon on coal oil, fifty cents per clock, ten cents per pound on cheap cigars and twenty cents per pound on good ones—on and on went the list, page after page of levies covering rail fares, steamboat tickets, stock transactions, and newspaper advertisements. “Nearly every class will probably find something to complain of,” one newspaper allowed.

The North’s ability to collect so much revenue from so many news taxes suggested its enormous economic advantage. In 1860, the eleven states that formed the Confederacy had just 10 percent of the nation’s industrial capacity. The North, by contrast, had not only a legion of thriving industries, but also nine of the ten largest cities, and two third of all railroad tracks. Meanwhile, the manufacturing capacity of many of the Southern states was shrinking. Between 1840 and 1860, Virginia lost one third of its manufacturing jobs; on the eve of the war, it employed approximately the same number of factory workers as the tiny state of Rhode Island.