Virginia Board of Public Works - Massive State Debt

Massive State Debt

In 1861, with the onset of the American Civil War, Virginia's investments in "Public Works" was interrupted. The State had purchased a total of $48,000,000 worth of stock in turnpike, toll bridge, canal, and water and rail transportation enterprises.

After the War, many of the improvements had been destroyed but the debt remained to be paid. This state debt became a major issue during Reconstruction, including questions about an apportionment to the newly created State of West Virginia. Politicians Harrison H. Riddleberger of Woodstock, an attorney, and former Confederate Major General William Mahone, a railroad builder, organized the Readjuster Party largely based upon this issue. Their coalition of newly-enfranchised blacks, Republicans, and Conservative Democrats was a factor in state politics, electing William E. Cameron as governor, and sending both Riddleberger and later Mahone to the U.S. Congress. Mahone held a powerful swing vote in the U.S. Senate during the short administration of President James A. Garfield, who was assassinated. By the 1890s, the Readjusters were no longer a major force, and Conservative Democrats ruled Virginia until the late 1960s.

Virginia's infrastructure debt issue with West Virginia was finally resolved in 1915, when the United States Supreme Court ruled that West Virginia owed Virginia $12,393,929.50. The final installment of this sum was paid off in 1939.