Final answer:
The Confederate currency failed primarily because it was fiat money not backed by tangible assets and depreciated rapidly as the people lost faith in their government, leading to inflation rates exceeding 9,000 percent by the war's end.
Step-by-step explanation:
The Confederacy's practice of issuing currency was less successful than the Union's for several key reasons. Firstly, Confederate currency, being fiat money and not backed by specie (gold or silver), largely depended on people's confidence in their government. As the war continued, the southerners' faith in their government waned, leading to a rapid depreciation of the Confederate treasury notes. By the end of the Civil War, $1 in Confederate currency was equivalent to only about $.02 in Union currency.
To combat the financial decline, Confederate leaders attempted to make war bonds more enticing and establish a comprehensive tax policy. Despite their efforts, switching from fiat money to bonds was largely ineffective due to citizens' diminishing faith in the war effort. Additionally, since Confederate notes weren't made legal tender, citizens weren't obligated to accept them, further reducing their usefulness and value. These factors, along with the overreliance on printing money, which financed over 60 percent of their war effort, led to massive inflation and economic hardship for the Confederacy. By the war's closing months, the inflation rate had jumped to over 9,000 percent.