FINANCES OF THE WAR.--Four years of war on land and sea cost the people of the North an immense sum of money. To obtain the money Congress began (1861) by raising the tariff on imported articles; by taxing all incomes of more than $800 a year; and by levying a direct tax, which was apportioned among the states according to their population. [9] But the money from these sources was not sufficient, and (1862) an internal revenue tax was resorted to, and collected by stamp duties. [10] Even this tax did not yield enough money, and the government was forced to borrow on the credit of the United States. Bonds were issued, [11] and then United States notes, called "greenbacks," were put in circulation and made legal tender; that is, everybody had to take them in payment of debts. [12] MONEY IN WAR TIME.--After the government began to issue paper money, the banks suspended specie payment, and all gold and silver coins, including the 3, 5, 10, 25, and 50 cent pieces, disappeared from circulation. The people were then without small change, and for a time postage stamps and "token" pieces of brass and copper were used instead. In March, 1863, however, Congress authorized the Issue of $50,000,000 in paper fractional currency. [13] Both the greenbacks and the fractional currency were merely promises to pay money. As the government did not pay on demand, coin commanded a premium; that is, $100 in gold or silver could be exchanged in the market (down till 1879) for more than $100 in paper money. NATIONAL BANKS.--Besides the paper money issued by the government there were in circulation several thousand different kinds of state bank notes. Some had no value, some a little value, and others were good for the sums (in greenbacks) expressed on their faces. In order to replace these notes by a sound currency having the same value everywhere, Congress (1863) established the national banking system. Legally organized banking associations were to purchase United States bonds and deposit them with the government. Each bank so doing was then entitled to issue national bank notes to the value of ninety per cent [14] of the bonds it had deposited. Many banks accepted these terms; but it was not till (1865) after Congress taxed the notes of state banks that those notes were driven out of circulation. COST OF THE WAR.--Just what the war cost can never be fully determined. Hundreds of thousands of men left occupations of all sorts and joined the armies. What they might have made had they stayed at home was what they lost by going to the front. Every loyal state, city, and county, and almost every town and village, incurred a war debt. The national government during the war spent for war purposes $3,660,000,000. To this must be added the value of our merchant ships destroyed by Confederate cruisers; the losses in the South; and many hundred millions paid in pensions to soldiers and their widows.