1857-- Democrats lowered tariffs further. An economic panic hit soon thereafter, precipitating a fall-off in imports in the wake of the recession that followed. Government revenues plummeted by 30%. In response, the nascent Republican Party called for higher tariffs.
In order for the bond program to be successful, the North needed an unrestricted currency supply for citizens to pay for them and a source of income to guarantee the interest. The Legal Tender Act filled the first requirement. Passed in February, 1862, the Act authorized the issue of $150 million in Treasury notes, known as Greenbacks.
The Civil War was expected to be short and relatively low cost. Treasury Secretary Salmon Chase initially financed the war effort by borrowing. As Northern losses mounted, it became obvious that the war would be long, bloody, and expensive. The Revenue Act of 1862 increase taxes dramatically, including the first federal income tax, the creation of the Office of Internal Revenue, and the first federal use of adhesive revenue stamps. The total cost of the war to the federal government was $3 billion, about a quarter of it financed through taxes, customs duties, and other federal revenues
Yeah happy birthday, first deficit this large in the nation's history, fiat money, the first income tax, and internal improvements that brought forth a bankrupt railroad. The Republican Party of the 1800s was not the conservative party of the time
BUMP. Worth repeating.