industrial activity was plainly out of the question. In the North, on the other hand, the conditions were very different. At the beginning of the war, a high protective tariff was established, partly to provide an increased revenue, and partly to encourage the rapid spread of home industries. The consequence was great industrial activity throughout the entire period of the war. As the Northern ports were all open, intercourse with foreign markets was easy, and the rise of prices was not so great anywhere as to cause considerable inconvenience. In fact, the North grew steadily in wealth during the war. =456. Financial Methods in the North.=—The cost of a great war is always so enormous that all the resources of taxation and credit must be resorted to. The necessities of the North were peculiarly stringent in 1861, owing to the fact that during Buchanan’s administration the Treasury was nearly bankrupt (§ 423). As soon as the war began, the financial pressure was felt throughout the country, and before the end of 1861, the banks everywhere were obliged to suspend specie payment. A few months later, Congress authorized an issue of $150,000,000 of paper currency, and made it legal tender for the payment of all debts. In 1863, the amount of such notes was increased to $450,000,000; and from the color of the ink used, they came to be known as “greenbacks.” As they were not redeemable in gold at any specific time, the price of gold began to rise as soon as the first issue was made, and increased as the war progressed, until, in 1864, the premium on gold reached its highest point,—two hundred and eighty-five per cent. Of course, this premium was not an increase in the value of gold, but a decrease in the value of paper currency. As the current money became cheap, the prices of commodities naturally rose. It has been ascertained that the average increase in the prices of real estate, rents, and goods was about ninety per cent, while the increase in the price of labor was only about sixty per cent. Thus it is evident that the men of means profited most, or suffered least, by the inflation, while the laborer suffered most. Another source of income was the issue of government bonds at a high rate of interest. These amounted before the end of the war to $2,850,000,000. As during the first years of the contest the success of the North, and consequently the ability of the government to pay, appeared uncertain, it was difficult to sell the bonds except at a considerable discount.