When the Civil War began in the spring of 1861, it was predicted by many that it would be a brief, though somewhat costly, conflict. Secretary of the Treasury Salmon P. Chase held that opinion. He predicted the war would cost the Union approximately $320 million (nearly $12 billion today).
Via tariffs and taxes, the federal government projected raising $70 million, and Congress authorized the Treasury to sell $250 million worth of bonds. Chase’s prediction quickly proved woefully inadequate, as the Union faced bankruptcy by the war’s first winter.
