In the face of the conflict, the American public debt soared from $64,844,000 in 1860 to a staggering $524,178,000 in 1862. This led to inflation, which, however, remained under control: only 7% per year, while wages grew only 4%. By contrast, the Confederacy suffered annual inflation of 350% during the same period, with wages increasing only 35%. The Confederacy’s hope for European intervention due to the shortage of Confederate cotton was dashed by excellent harvests in India, which met European demand. France and England, however, remained highly sympathetic to the Southern cause.
