The financial difficulties of Virginia excited more interest than did those of any other commonwealth, for this State had the largest pre-war debt. Its $33,000,000 with accrued interest had amounted to about $45,000,000 in 1870. In 1871 the question of settlement was taken up; one-third of the debt was assigned to West Virginia, and the remainder was funded into new bonds bearing interest at five and six per cent. The coupons were made receivable for taxes and other debts due the State. The amount recognized was beyond the ability of the State to pay, and many members of both parties felt that some compromise must be made. So many of the coupons were paid in for taxes that money to keep the Government going was found with difficulty. Various attacks on the privilege were made, but these "coupon killers" were usually declared unconstitutional by the Supreme Court of the United States. Meanwhile the contest had split the State. Some were in favor of paying the whole debt according to the agreement of 1871; others wished to reduce the interest rate; while the radicals wished to repudiate part of the debt and reduce the rate of interest upon the remainder. The last named faction, under the leadership of H. H. Riddleberger, organized a political party known as the Readjusters and in 1879 captured the Legislature. Riddleberger then introduced a bill which scaled down the debt to less than $20,000,000, but it was vetoed by the Governor. Two years later the new party captured both Governorship and Legislature and sent General William Mahone to the United States Senate, where he usually voted with the Republican party.
The Legislature repassed the Riddleberger bill, which the creditors refused to accept, and an ingenious "coupon killer." Similar acts were passed in 1886 and 1887. The United States Supreme Court, before which these acts were brought, pronounced them unconstitutional in that they impaired the obligation of contracts, but the Court also stated that there was no way in which the State could be coerced. Meanwhile the credit of the State was nonexistent, and all business suffered. In 1890 a commission reported in favor of compromising the debt on the lines of the Riddleberger Act and, in 1892, $19,000,000 in new bonds were exchanged for about $28,000,000 of the older issue. Interest was to be 2 per cent for ten years and then 3 per cent for ninety more.
West Virginia steadfastly refused to recognize the share of the debt assigned to her on the ground that the principal part had been incurred for internal improvements in Virginia proper, and that one-third was an excessive proportion. The matter dragged along until the Supreme Court of the United States decided in March, 1911, that the equitable proportion due by West Virginia was 23.5 per cent instead of one-third. West Virginia, however, made no move to carry out the decision, and in 1914 Virginia asked the Court to proceed to a final decree. A special master was appointed to take testimony, and on June 14, 1915, the Supreme Court announced that the net share of West Virginia was $12,393,929 plus $8,178,000 interest. The State, by a compromise with Virginia in 1919, assumed a debt amounting to $14,500,000.
[BIBLIOGRAPHICAL NOTE.]
Many of the references for the period of Reconstruction are also valuable for the subject of this volume, as it is impossible to understand the South today without understanding the period which preceded it. Much enlightening material is to be found in W. L. Fleming's Documentary History of Reconstruction (2 vols., 1906-07) and in the series of monographs on Reconstruction published by the students of Professor W. A. Dunning of Columbia University, among which may be mentioned J. W. Garner's Reconstruction in Mississippi(1901); W. L. Fleming's Civil War and Reconstruction in Alabama (1905); J. G. de R. Hamilton's Reconstruction in North Carolina (1914); C. M. Thompson's Reconstruction in Georgia, Economic, Social, Political, 1865-1872 (1915).
GENERAL WORKS
Some of the older books are interesting from the historical standpoint, but conditions in the South have changed so rapidly that these works give little help in understanding the present. Among the most interesting are A. W. Tourgée's Appeal to Caesar (1884), based upon the belief that the South would soon be overwhelmingly black. Alexander K. McClure, in The South; its Industrial, Financial and Political Condition (1886), was one of the first to take a hopeful view of the economic development of the Southern States. W. D. Kelley's The Old South and the New (1887) contains the observations of a shrewd Pennsylvania politician who was intensely interested in the economic development of the United States. Walter H. Page's The Rebuilding of Old Commonwealths (1902) is a keen analysis of the factors which have hindered progress in the South.
No recent work fully covers this period. Most books deal chiefly with individual phases of the question. Some valuable material may be found in the series The South in the Building of the Nation, 13 vols., (1909-13) but not all of this information is trustworthy. The Library of Southern Literature (16 vols., 1907-1913), edited by E. A. Alderman and Joel Chandler Harris, contains selections from Southern authors and biographical notes. Albert Bushnell Hart's The Southern South (1910) is the result of more study and investigation than any other Northerner has given to the sociology of the South, but the author's prejudices interfere with the value of his conclusions. The late Edgar Gardner Murphy in Problems of the Present South (1904) discusses with wisdom and sanity many Southern questions which are still undecided. A series of valuable though unequal papers is The New South in the Annals of the American Academy of Political and Social Science, vol. 35 (1910). Another coöperative work which contains material of value is Studies in Southern History and Politics, edited by J. W. Garner (1914). Why the Solid South, edited by H. A. Herbert (1890), should also be consulted. A bitter arraignment of the South as a whole is H. E. Tremain's Sectionalism Unmasked (1907). The best book on the Appalachian South is Horace Kephart's Our Southern Highlanders (1913). William Garrott Brown's The Lower South in American History (1902) contains some interesting matter.