The economic costs of the war were also high. As their forces abandoned their fixed positions in July-August 1922, the Republicans burned many of the administrative buildings and businesses that they had been occupying. In addition, their subsequent guerrilla campaign caused much destruction and the economy of the Free State suffered a hard blow in the earliest days of its existence as a result. The material damage caused by the war to property came to over £30 million. Particularly damaging to the Free State's economy was the systematic destruction of railway infrastructure and roads by the Republicans. In addition, the cost to the Free State of waging the war came to another £17 million. By September 1923, Deputy Hogan estimated the cost at £50 million. The new State ended 1923 with a budget deficit of over £4 million. This weakened financial situation meant that the new state could not pay its share of Imperial debt under the treaty. This adversely affected the boundary negotiations in 1924-25, in which the Free State government acquiesced that border with Northern Ireland would remain unchanged in exchange for forgiveness of the Imperial debt. Further, the state undertook to pay for damage caused to property between the truce of July 1921 and the end of the Civil War; W.T. Cosgrave told the Dáil:
Question: What caused the worst damage to the country?
Answer: systematic destruction of railway infrastructure