How did the Union and Confederacy compare in terms of resources, leadership, and military strategies in the period 1861-1863? Why was that important to the outcome of the war?

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Both the North and the South during the Civil War had specific advantages and disadvantages that would contribute to the eventual outcome of the war.

One advantage the Union had over the Confederacy was that the Union had a powerful central form of government that could create and enact laws to be implemented by the entire Union; this included taxes. The Confederacy had a weak central form of government with very limited powers under Confederate president Jefferson Davis. The process of taxation was left in the hands of individual southern states, which, seeking approval from their constituents, implemented very few—if any—taxes. So we see the Union had tangible assets to back their paper money and a powerful central form of government with the ability to levy and collect taxes, while the Confederacy had nothing to back their paper money with, leaving the South with relatively little buying power with foreign nations to purchase supplies and goods for their troops and an inability...

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