Debts Incurred During Rebellion

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

Amendment XIV, Section 4

The effort to make the national debt sacrosanct and to repudiate the Confederate debt was the least controversial of the sections of the Fourteenth Amendment, at least in the North. As Representative Thaddeus Stevens of Pennsylvania put it, "I need say nothing of the fourth section, for none dare object to it who is not himself a rebel." The only objection to it was from owners of slaves in the loyal slave states who thought they should be compensated.

In applying the section, federal courts held that no contracts involving Confederate bonds could be enforced and that "a court of the United States must hesitate to give them any recognition whatever." Contracts involving Confederate currency, on the other hand, were enforceable "to prevent injustice to people who, when war was flagrant, had no other currency in which to make the exchanges required in the ordinary business of life." Branch v. Haas (1883).

The issue of the repudiation of the United States debt again emerged when Congress took the United States off the gold standard, and some of the Gold Clause Cases (1935) involved United States bonds. The Supreme Court did hold that Congress had exceeded its power under the Constitution in refusing to repay the bonds in gold, but it concluded that the bondholders had suffered only nominal damages and could not recover. Although Section 4 "was undoubtedly inspired by the desire to put beyond question the obligations of the Government issued during the Civil War, its language indicates a broader connotation [that embraces] whatever concerns the integrity of the public obligations." Gold Clause Cases.

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Paul Moreno
William and Berniece Grewcock Chair in Constitutional History
Associate Professor of History
Department of History and Political Science
Hillsdale College