A Saga of the New South: Race, Law, and Public Debt in Virginia by Brent Tarter (review)

Brent Tarter traces a spiraling tangle of post-1865 legal and political controversies over repaying debt that Virginia had contracted before the Civil War. As the story twists and travels, Tarter manages to make decades of legislative debate, legal briefings, and financial arguments readable, occasionally even gripping. In his hands, the debt controversy becomes a test of whether elite Virginians would cling to prewar culture, values, and politics or accept the very different postwar world.

With Virginia in a predictable postwar state of ruin, with nearly one-third of her former territory abstracted away into West Virginia, political leaders felt trapped between honorably keeping promises made when times were bright and the impossibility of doing so given post-defeat productive capacity. While watching them thrash around in this trap, Tarter reveals how much the war really swept away.

White men, allied with British and northern creditors, invoked the honor of the state, and the obligations of their own manhood, to force full payment of the debts. But they could not pay without general tax increases. Poor white and formerly enslaved Virginians, excluded from both decision-making and benefits before the war, righteously disclaimed any responsibility for either the debts or the precious honor of discredited white elites. Virginia's white matrons even were moved to bail out their men. Though noting cheekily that true men would pay debts they alone had contracted, the women nevertheless indicated a willingness to absorb a 20 percent increase in property tax through their traditional "economy, self-denial and sacrifice" (39). Evidently, neither honor nor male superiority was safe in this new, debt-ridden world.

Virginia localism likewise fell a casualty to the debt-crisis. Before the war, city and county tax collectors could deposit their take in state coffers at their leisure, and actual revenue collection rarely met expectations (37). As state revenue strained to manage the debt, this honor system gave way to highly policed immediate deposits of all tax revenue.

From 1871 until the final settlement in 1936, a series of election-driven compromises muddied the situation further, and attempts to find a workable economic solution were driven by partisan competition, legal battles in state and federal court, special masters, commissions, and diplomatic intrigue. But ordinary Virginians, white and black, believed that being taxed for loans they had not approved and from which they had not benefited was far more dishonorable than repudiating or adjusting the prewar debt.

William Mahone (1826–1895) and his debt Readjusters offered a pragmatic approach to repayment, taking into account the financial devastation most people faced. Allied with the Republican Party and its African American voters, Readjusters challenged the white "Funder" Democrats to look forward rather than back. Democrats, seeking public funds to fully repay the enormous debt, used Readjusters biracial alliance to discredit them.

As Virginians on both sides sought popular support for their debt schemes, public education became a crucial bargaining chip. The warmly welcomed school system ultimately fell victim to depressed state revenue rooted in the poorly managed debt crisis. By 1874, white elites were reduced to declaiming that "our fathers did not need free schools to make them what they were" (50). Voters retorted, "Right. Precisely!" That was part of the problem, as they indicated their own preference for free public schooling over covering secessionist shame.

Tarter's narrative hints that Virginia's white political leaders clung so long and desperately to economically ruinous commitments to escape acknowledging that the world had shifted beneath their feet. They fulminated against adjusting the debt as though "honorable" repayment would somehow reestablish prewar Virginia norms. Reducing the debt to something the devastated citizens could actually pay seemed like accepting everything—defeat, emancipation, even Yankee moral superiority.

White elites vainly sought the "honorable" past, while poor whites and poor blacks united against taxes levied to purchase this spurious honor. Balked of...