1. Why was it so challenging for the Confederacy to issue currency?
Because of the Confederacy's focus on States' Rights, every state could print its own currency. In this way, soldiers from different states would have money from all over the South, and could not be sure how much it was worth as they traveled throughout the region. The government also had to deal with inflation as the war continued. Soldiers' money bought less and less goods over time, meaning the government had to print more and more which led to an endless cycle of the same.
2. Explain why soldiers sometimes referred to the days when they received money as "worthless paydays."
Soldiers were issued few items for personal use--especially clothing which they found would wear out under the harsh conditions of everyday use. They would then have to purchase more clothing, might even miss out on receiving new clothing if they were absent when it was issued, and could be charged for losing certain items. While in camp when not in battle, soldiers often turned to activities like playing cards and gambling to take their minds off of the trauma of war. The debts they collected were also deducted from their salary come payday.
3. Inflation is the general rise in prices over time. Why is this situation so harmful to an economy?
Although the steady rise of prices may seem harmless over time, it doesn't always coincide with a rise in wages. That is, as goods became more expensive for soldiers to buy, they were not paid more to keep up with the increasing costs. Over time, soldiers' paychecks bought less and less, as did the money they sent back to their families. Without money to spend, the Confederacy's economy began to suffer, endangering the viability of a new nation during war.