This isn't the first, or second, time we've been here
by Jack Neely
Maybe we're lucky. The state budget crisis of the Reconstruction era lasted for about 15 years. It's legendary; one article can't do it justice. You could write a book about that debt crisis. The problem, of course, is that no one would read it.
In the 1870s, the state owed $43-46 million: adjusted for inflation, it was at least comparable with the nearly $1 billion shortfall we're staring at. At the time, it was the second-biggest state debt in the nation, a distinction we haven't earned recently.
In those days, legislators could carry a debt for some years without affecting state-government services. It's an easy trick if you don't offer state-government services, anyway. There were no state parks to close, no highway department to shut down (most of our longer roads and bridges were paid for by toll booths). There was no medical plan, nor much need for one; the few who could afford expensive medical treatments in the 1870s generally did not fare much better than those who couldn't.
There wasn't even much in the way of state-sponsored education. Knoxville's tiny "university" never had regular state support, anyway; its funding came from private sources and from the federal government under its postwar Morrill Act status.
State-funded grade-school education was spotty at best. Many proud, independent Tennesseans avoided taxes by relying on the kindness of Northern philanthropists like banker George Peabody; over the years he donated hundreds of thousands of dollars to endow Tennessee's public schools. A progressive minority of legislators complained that, nationally, Tennessee was "third in ignorance." Ignorance is an old tradition here, and it's hard for us to give it up without a fight.
That hulking $46 million shortfall became known as the "Brownlow Debt." It was named for a sick old man who lived in downtown Knoxville, in a big white house on Cumberland Avenue. It wasn't altogether fair to name the whole debt for former Gov. William G. Brownlow. By some accounts the red ink had its origins in the 1830s, before Parson Brownlow even moved to Tennessee. But as Reconstruction governor, he'd led the movement to back government bonds to rebuild railroads in the war-ruined state. When the state defaulted on the bonds, and when some in his administration were accused of graft and embezzlement, Dem-ocrats were happy to name the state's whole debt in Brownlow's honor.
Republicans returned fire, claiming that most of those who profited from the Brownlow-era graft were Democrats. Knoxville's Rep. Henry Gibson called the state's Dem-ocratic party "the Tennessee Tammany." Several Knoxvillians were implicated, among them railroad financier Joseph Mabry, a Democrat accused of abusing tens of thousands in state credit.
As accusations flew, the bitterly divided General Assembly considered creative ways to deal with the debt. One of the more appealing ways, and one I wonder whether some of the current low-tax legislators have considered, was simply to cancel it: "repudiation," it was called, based on the claim the entire debt was fraudulent. When Washington Republicans made veiled threats about sending back the troops, the repudiationists backed down a little.
Former President Andrew Johnson, a repudiationist, stumped across the state claiming that paying the debt would make the people of Tennessee "slaves to the bondholders." A Chattanooga paper remarked on his "communistic harangue." Karl Marx, a German author then in his 50s, might have been bewildered by the reference. By 1875, the Republicans were comparing the Democrat-dominated legislature to Nero, fiddling while Rome burned.
There followed years of stalling and stonewalling. Few wanted to step forward and deal with the consequences. Republicans accused Gov. Albert Marks (not Marx) of "possum policy": a perpetually useful term, it seems to me. But he at least put a proposal to repudiate some of the debt, and pay portions of the rest of it, to a referendum. The Tennessee electorate voted it down. Another plan to pay it off was declared unconstitutional.
The Brownlow debt split the Democratic party, a fact which would have made its namesake proud; the Republicans elected a governor, Alvin Hawkins, in 1880. Of course, Hawkins wasn't able to figure the debt out, either.
A bizarre coda to the long story began to unfold just after Christmas, 1882. Marshall Polk, once the troubled nephew and ward of President James K. Polk, had grown up to become state treasurer. The Republican Knoxville Chronicle and others accused Polk of financial improprieties, and as it unfolded, he couldn't account for $400,000 of state funds. The treasurer vanished, only to be captured some weeks later near the Mexican border. He died in prison soon afterward.
In 1883, desperate to prevent another Republican coup, Democrats led by Sen. Isham G. Harris, former Confederate governor of Tennessee, came up with a patchy sort of compromise, repudiating some bonds, paying some in full, and paying the rest at various rates ranging between 50 and 80 percent, coming up with the money by selling bonds.
Were those bonds ever paid off? Beats me. Maybe that's the origin of what we're dealing with now. Even if it's not the same debt, it seems to be the same phenomenon. Our political divisions remain deep and bitter. As always, Tennesseans are terrified at the prospect that other Tennesseans might get what they want.
July 11, 2002 * Vol. 12, No. 28
© 2002 Metro Pulse
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