Bond Issued After the Funding Act of 1871
This financial instrument, known as a deferred certificate or a West Virginia certificate, was issued on July 1, 1871, by the treasurer of the Commonwealth of Virginia. Samuel Benjamin, a resident of London, England, had purchased before the Civil War a Virginia state bond worth $4,633.33. In accordance with the terms of the Funding Act of 1871, passed by Virginia's General Assembly in March of that year, Benjamin received this certificate worth just one-third of the original amount—the portion that would be the responsibility of West Virginia. The Funding Act required that antebellum stockholders receive new bonds from Virginia for two-thirds of their holdings and a certificate known as a West Virginia certificate, or a deferred certificate, for the remaining one-third. This act was adopted in response to the state debt Virginia had generated between 1822 and 1861 and the subsequent interest that had accrued. Virginia held West Virginia—a former part of Virginia that became a separate state in 1863—accountable for one-third of the Virginia debt. This act was amended in subsequent years, but West Virginia refused to pay its portion of the debt—the terms of which had been dictated by Virginia—until the legal controversy between the states was resolved in 1919.
Citation: Virginia Commissioners of the Sinking Fund, West Virginia debt certificates, 1871-1894. Accession 21652. The Library of Virginia, Richmond, Va. 23219.