During the Civil War, both the Union and the Confederacy were forced to run large budget deficits that were financed by issuing debt. Why was this form of war finance necessary? b. In both the Union and the Confederacy much of this debt issue took the form of note issue. What was the effect of such note issue on prices in both nations? Why did note issue affect prices? c. The following table provides data on the stock of money and the price level in the Union during the years of the Civil War. Both variables are measured as an index with 1860 set equal to 100