The Republic for Which It Stands: The United States during Reconstruction and the Gilded Age, 1865-1896 (Oxford History of the United States)

by Richard White

When conservatives redeemed Virginia, the legislature had, however, decided to fund most of the antebellum state government’s debt, which meant that the members of the old plantation elite and investors who had bought the debt at steep discounts reaped a windfall at the expense of taxpayers. The Virginia Bourbons declared the debt a matter of honor and used it as a way to cripple government and common schools. In lieu of interest, the legislature issued coupons to bondholders and accepted those coupons for taxes. By 1878 nearly half the state’s taxes were paid in the coupons, leaving the government strapped for cash. The Bourbons opposed public schools and used the lack of revenue to defund them and to institute poll taxes, which made it difficult for the poor, black or white, to vote.