Final answer:
The Confederacy had limited resources to draw from to finance their effort to defend secession. They received some money confiscated from the Union and issued war bonds and treasury notes, but these measures were not enough to cover their expenses. By the end of the war, the value of Confederate currency had depreciated significantly.
Step-by-step explanation:
The Confederacy had limited resources to draw from to finance their effort to defend secession. They received some money confiscated from the Union and authorized the sale of war bonds totaling $15 million. However, a second issue of $100 million did not sell well, leaving the government short of funds. To address this, the Treasury Department issued $20 million in treasury notes or paper currency which people could not convert into gold or silver coin until two years after the conflict ended. The value of Confederate currency depreciated over time due to inflation and a lack of faith in the government, so by the end of the war, $1 in Confederate currency was worth about $0.02 in Union currency.