Memminger had served as Secretary since February the 21st, 1861 until September the 29th, following the battles of Alexandria (a major confederate victory). As the confederate casualties in the battle amounted to some 20 000 men, it was soon apparent for the Davis' administration that they did not have the means to replenish the losses in any effective way, while continuing the buildup of forces in the West. Also, the major Confederate victory in the field (G. T. Beauregard was the biggest hero of the South,) didn't seem to result in the end of the conflict, as many officials believed it would. "One big battle and it will all be over" was the norm of thinking, on both sides of the conflict.
Well, Lincoln obviously had other plans, as the war dragged on for several months. A new strategy was needed. Jefferson Davis held a cabinet meeting on the 25th of August to confer with his advisors and secretaries on what would need to be done in order to win the war.
His friend and military advisor, General Robert E. Lee suggested that since the union had struck the first blow since the southerners were forced to fire at Fort Sumter, and that the union had since then invaded both "neutral" border-states of Missouri and Kentucky, the war should be brought to the enemy.
Inspector-General of the Army, General Samuel Cooper voiced concern over the fact that while the union blockade of southern port were at that point in time totally ineffective, and war-equipment and supplies were pouring into the southern ports, there simply was no means availible to afford even more equipment.
Sir Memminger had already raised taxes on the population and issued war-bonds in an attempt to raise assets, and while those measures were successfull, it didn't provide the necessary means to finance an invasion of the north. Being a moderate conservative (like the rest of the cabinet at the time), he was reluctant to take more drastic measures to raise the funds needed. No orders of impressments, and no un-backed fiat currency were to issued under his leadership of the Treasury.
After confering with his advisors, President Davis forced Memmingers resignation and appointed Brig. General Magic to lead the combined War-and-Treasury Department. In this role, Magic started a major campaign of impressment throughout the land (upsetting many governors, most notably governor Brown of Georgia (who threatened to secede from the Confederacy) and governors Rector and Pickens of Arkansas and South Carolina.
In addition to requisitioning war-material, the population were subject to harsh taxation, and the printing press in Richmond was working overtime, printing paper money for the government. Inflation was soaring.
The new assets were quickly put to use though, as the Secretary of the Navy, sir Stephen Mallory noted in the official records of the Confederacy, dated november 11th 1861, 28 new blockade runners had either been commisioned or were in construction, 12 new ironclads were being fitted out and 6 frigates (excluding two being built in Liverpool).
The army also grew substantially, as the army of the Potomac now numbered some 60 000 men, the Army of the Shenandoah another 30 000, and the Army of Tennesse over 80 000. In the Trans-Mississippi, the department could call upon 12 000 men. As winter came and the Confederate armies were readying for winterquarters, the spirit in the military leadership was great, as they knew that the spring of 1862 would bring the end to the war and complete victory for the South, as campaigns were being drawn up for simultanious invasions of Kentucky, Missouri, Maryland and Arizona...
And here's the question, having printed money at every possible moment, and using the surplus to increase war-manufacturing capabilities, I now have an income of heavy war-materials at over 100 per turn (I think 130 + blockade runners), I have nearly 300 locomotives and 100 riverboats for transporting supplies, and my armies as of December 1861 are as noted, my inflation of course is rampant, and I won't go into details of the number, as I'm sure even the Treasury Department doesn't quite know the figures. However, I now have an army that I think equals or even outnumbers the federals at some sectors of the front, I have a navy that can make a stand against the enemy, and my only shortage of resources are really manpower... What is the long-term downside of using this strategy? (Appart from the suffering of the population. Though I'm quite sure the Davis' administration will devalue the CS Dollar following an end of hostilities and repay the war-bonds at the promised interest rate)
Well, I'm looking forward to the campaigns of the spring of 1862.
PS: I know this was a long and out-drawn post, I just needed some time away from AACW, but not too far away
Edit: just thought I'd add a link for those economists out there interested in history: http://eh.net/encyclopedia/article/weidenmier.finance.confederacy.us
I'm not sure if the rate of inflation is taken into account in the victory level or not.
