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How to Fight Inflation With Lessons From History



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Up NorthAnnual spending in the Union reached a staggering 16 times its prewar budget. Despite the need for funds, there was great fear in Congress of increasing taxes because of Americans’ well-known antipathy to taxation.But Salmon P. Chase, the fiscally conservative Treasury secretary, was mortally afraid of inflation. He recognized that without revenue the government would have to resort to the printing press. After the southern states seceded, interest rates on the country’s debt soared and foreigners refused to lend.Thaddeus Stevens, the chair of the House Ways and Means Committee, went further than Mr. Chase imagined by inventing an entirely new tax code. Previously, the Union had funded itself with tariffs on foreign trade, which it raised several times. Alongside that it …

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