THE FISCAL HISTORY OF VIRGINIA FROM 1860 TO 1870*

Abstract

s of Doctoral Dissertations 543 Virginia financed its Civil War operations principally by taxation and short-term debts. Virginia Treasury notes were hoarded, while Confederate notes circulated with ever increasing velocity. During the war the state's chief fiscal officer, the Auditor of Public Accounts, replaced legislative committees in preparing estimates of income and expenditures and in recommending needed changes in fiscal laws. By Act of Congress, Civil War debts were declared null and void. However, between 1865 and 1870, the prewar debt weighed heavily on the destitute Commonwealth. Accrued interest was funded several times. Though there was no long-term state borrowing during the Reconstruction, by 1870 the debt amounted to almost $45 million. Throughout the Reconstruction, Virginia was governed by conservative military commanders, and at no time did the radicals gain control of the state government. However, radicals did frame the Constitution of 1867-68. As finally adopted, this constitution represented great progress in the tax and spending policies of Virginia. The errors it contained were eliminated by amendments, but improvements which it made in Virginia's fiscal system have endured through the years. The state's fiscal system was more favorable to the development of a free-market economy after the adoption of this constitution required the reassessment of property every five years; it limited the rate of the capitation tax; and it prohibited the contracting by the state for debt except under stringent conditions. As Virginia entered the decade of the 1870's, the problem facing its legislature was: How can Virginia pay interest and principal on the public debt and conduct the functions required by its new constitution? This content downloaded from 40.77.167.85 on Mon, 11 Jul 2016 06:07:39 UTC All use subject to http://about.jstor.org/terms