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Chapter 11

This webpage reproduces a chapter of
History of North Carolina

The Lewis Publishing Company
Chicago and New York, 1919
Volume II by
William K. Boyd

The text is in the public domain.

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and I believe it to be free of errors.
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Chapter 13
This site is not affiliated with the US Military Academy.

Vol. II
Chapter 12
The Whig Regime, — Domestic Policy

Railroads and Finance

The cleavage in national politics, resulting in the rise of the whig party, and the issues of constitutional reform and economic development were not only contemporary, but were closely related. For the revolt against Jacksonian democracy to be successful, it was necessary for its leaders to adopt some local issues which would make a popular appeal. These were found in constitutional reform, internal improvements, and the establishment of a public school system. It was not strange, therefore, that the cause of reform was endorsed by many of the anti-Jackson leaders, notably Mangum and Gaston, and that the whig party became the advocate of constitutional revision and social progress. An important result was the sectional alignment of parties. As the west gained by constitutional reform and was also in greater need of internal improvements, that region logically became the stronghold of the whig party, while the east naturally remained the bulwark of the democracy. However, the extreme eastern counties along the coast, which were not so well developed on account of their swamp lands, were attracted by the whig issue of internal improvements and gave their allegiance to that party. On the other hand the Jacksonian tradition was powerful in the west; this, together with the spread of the slave system into that region, brought about an alliance between certain counties of the west and the large slave holding counties of the east within the democratic party. Just as the whigs favored, the democrats opposed, state aid to internal improvements. One cause of the opposition was the fear on the part of the slavocracy that  p226 it might have to meet an unproportionate share of the increase in taxes, which was essential to the whig policy.

The gubernatorial campaign of 1836 may be taken as the point of departure for the new epoch. State problems were scarcely mentioned, the contest being waged over national issues. But the whig nominee, Edward B. Dudley of New Hanover, was directly interested in internal improvements as the president of the Wilmington and Raleigh Railroad and in August he defeated his opponent, Governor Spaight; yet the prestige of Johnson was still strong enough to insure the choice of democratic electors in the presidential contest in November. The sectional alignment was characteristic of party history down to 1860. Dudley carried the following eastern counties: Beaufort, Brunswick, Carteret, Camden,  p227 Columbus, Halifax, Hertford, Hyde, Jones, Northhampton, Pasquotank, Perquimans, Tyrrell and Washington. Spaight carried the following western counties: Ashe, Caswell, Haywood, Lincoln, Macon, Mecklenburg, Person, Granville, Rockingham, Richmond, Surry, and Yancey. With these exceptions the west and the east were respectively whig and democratic.


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Governor Edward B. Dudley

A liberal policy toward economic and social reform was the basic principle in the local policy of the whigs. Dudley's administration afforded its first test. However the condition of the treasury was not auspicious. For several years expenditures had exceeded income and so diminished the balance accumulated before 1830. In addition a subscription of $375,000 to the Bank of the State of North Carolina had been made in 1835, which fell due in 1836. As the state's income was not sufficient to meet the obligation, the democratic legislature of 1835 had authorized the issue of "certificates binding the state for the payment of the money purporting to be due thereon, to the amount of $400,000," bearing interest at five percent, redeemable in 1860, and secured by the state's share of stock in the bank. The certificates were accordingly issued and were disposed of in two subscriptions; one of $100,000, made by the trustees of the University, the other of $300,000, by the Treasurer of the United States.

Thus a certificate debt secured by the bank stock was created by the democrats, while nothing was done to adjust the increasing difference between regular income and expenditures. Such a situation apparently was not favorable to state aid to public improvements. A rare fortune, like a bolt from the blue, gave immediate relief. That was the distribution of the federal surplus revenue among the states. The first three installments of North Carolina's share, amounting to $1,433,757.39, were apportioned in 1836. Thus was provided the means to adjust the state's finances and initiate a new policy of public improvement. A joint committee of the legislature, whose chairman was William A. Graham, a whig, recommended that $900,000 be placed to the credit of the Literary Fund and the remainder be used for internal improvements. This was an example of the whig program of progress; the state's debt  p228 should be allowed to run its course, and the entire federal fund be devoted to economic and social needs. On the other hand the democrats, led by William H. Haywood, proposed that all special funds held by the state, excepting the bonds from the sale of Cherokee lands, should be lumped together for four purposes, — the redemption of the state debt, the increase of the Literary Fund and the Fund for Internal Improvements, the drainage of swamp land in the east, and the construction of railways. Thus the whig program of progress was linked with the democratic policy of economy by providing for the extinction of the public debt. The principle rather than the details of Mr. Haywood's plan was adopted. Accordingly $300,000 of the surplus revenue was applied to the redemption of the certificates held by the Treasury of the United States and $100,000 of stock in the Bank of the State of North Carolina was exchanged for the $100,000 of certificates held by the University. To the Literary Fund $500,000 were appropriated on condition that $300,000 be invested in stock of the Bank of the Cape Fear and $200,000 be used in the drainage of swamp land; $100,000 were appropriated for current expenses and the remaining $533,457.33 were appropriated to the Fund for Internal Improvements. A practical example of state aid was a mandate to the Board of Internal Improvement to subscribe on behalf of the state for two‑fifths of the stock of the Wilmington and Raleigh Railway, amounting to $600,000. This line was chartered in 1834 to connect Raleigh and Wilmington, but when construction was begun it was diverted so as to connect Wilmington and Weldon near the Virginia line, the corporate name being changed to the Wilmington and Weldon in 1854. Moreover this stock and all future subscriptions to railway stock by the state were placed to the credit of the Literary Fund. Thus the policy of state aid to railway construction was initiated and also practically the entire assets of the Fund for Internal Improvements were assigned to the Literary Fund. The relative position of the two parties toward the policy was shown by the vote on the Wilmington and Raleigh Railroad Bill. In the Senate seventeen of the twenty-six ayes were whigs and eight of the thirteen nays were democrats; in the House of Commons  p229 forty-one whigs favored and nine opposed the bill, while twenty democrats favored and twenty-three opposed it.

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First Railway Office in Halifax County

(Wilmington and Weldon Railroad)

The above legislation truly marks an epoch. Just as the convention of 1835 made the government more responsible to the demands of the people, these financial measures of 1836 made possible a new period of economic and social development. Nor were the people unresponsive to the fact, for in 1838 Dudley was re-elected and the whigs secured a majority in both houses of the legislature, a supremacy maintained in the legislative department with one exception until 1848 and in the executive department until 1850. The policy of state aid was therefore continued. In fact it became imperative, for the nation-wide business depression known as the panic of 1837 made it exceedingly difficult to secure private capital for railway construction. So in 1838 assistance was given to a second line, the Raleigh and Gaston, chartered in 1835 to connect the capital with a railroad to Petersburg at Gaston. Its bonds to the amount of $500,000, redeemable in 1860, were endorsed and returned for a mortgage of all its  p230 property. Even more clearly than the Wilmington and Raleigh legislation, this was a whig measure; of the thirty ayes in the Senate twenty-two were whig, and of the fifty-four in the House of Commons forty were whig. In 1841 a further endorsement of $300,000 of the company's bonds was made, redeemable in ten installments from 1845 to 1854, for which a second mortgage was taken. At the same time additional protection of the first mortgage was made by the personal notes of the stockholders, amounting to $500,000. This again was a whig measure; in the Senate twenty-one of the twenty-three ayes, and in the Commons twenty-six of the fifty-three, were whig. Aid was also given to the Wilmington and Weldon; first by a loan from the Board of Internal Improvements, $150,000 in 1837 and $150,000 in 1838; then in 1840 by a bond endorsement for $300,000, the bonds to be redeemed in annual installments of $50,000 from 1842 to 1847, a mortgage on the road being taken as a security. This was also a whig measure; of the twenty-three ayes in the Senate twenty-one were whig and likewise of the fifty-five in the House of Commons fifty-two were whig.

By these measures the roads were completed, both in 1840, the Wilmington and Raleigh also opening a steamboat line from Wilmington to Charleston.

But the railways did not immediately prosper. The city of Raleigh was not a trade center and little freight was sent over the Raleigh and Gaston. The steamboat line to Charleston did not secure the freight expected, since South Carolina capitalists and merchants were primarily interested in the development of railways within that state. Moreover both roads used wooden rails covered with iron strip, which proved inefficient and made necessary their replacement with metal rail; rates were so high that they were prohibitive; rolling stock was far from plentiful, and the territory served had not recovered from the panic of 1837. The inevitable result was financial embarrassment of the roads and the liability of the state as endorser. Thus in 1843 the Raleigh and Gaston could not meet the interest on its bonds, and the Wilmington and Raleigh failed to redeem $50,000 of bonds then maturing, thus making the state liable for $92,884. To meet the crisis  p231 the Literary Fund was used, its directors being ordered by the legislature to purchase $50,000 of Wilmington and Raleigh bonds, and the state treasurer was ordered to draw on the Literary Fund and the Fund for Internal Improvements to meet the interest from the Raleigh and Gaston bonds. Again, in 1844 the state's liability for interest and principal on $50,000 of Wilmington and Raleigh bonds was met by use of the Literary Fund. In 1847 an extension of time was granted on the debts due the state for its endorsement of bonds and also the amount due the Literary Fund.

In the meantime, in 1845 suit for foreclosure under the mortgage was instituted against the Raleigh and Gaston. The road in vain resisted. The state, being the only bidder, purchased the property for $363,000, being the principal and interest due on the second mortgage. Then early in 1848 proceedings were ordered against the stockholders for the road's debt and their security under the first mortgage.

These experiments in state aid naturally became a political issue. The policy was never injected into the party platform but the democrats berated the whigs, spoke of repudiation of the state's liabilities, and the Committee on Internal Improvements in the democratic legislature of 1842 condemned the entire policy.

However the necessity for state aid still existed for, although many roads were chartered, none were constructed by private enterprise. Especially strong were the needs of the western counties. There the condition of trade had not improved, In 1845 a crop failure in the piedmont and mountain counties drove the price of corn from 50 cents to $1.50 per bushel; in the eastern counties the harvest was plentiful, surplus corn rotting in the field, but there was no adequate means of transporting food supplies from the east to the west. Consequently railroad agitation in the west revived. Two plans were prominent. One was to connect Charlotte and Danville, Va., at which points contact would be made with roads under construction from Columbia and Richmond, respectively. The other plan was to build a road from some point on the Wilmington and Weldon to the west with the financial assistance of the state. The decision between the  p232 two plans lay with the legislature of 1848. The democrats, having raised the issue of manhood suffrage in the election of state senators during the preceding campaign, had greatly reduced the whig gubernatorial majority and had tied with the whigs in the legislative vote. Calvin Graves, democrat, was chosen Speaker of the Senate and Robert Gilliam, whig, of the House. Such an equal division of parties was apparently not favorable to state aid, especially since the promoters of the Charlotte and Danville line asked no public appropriation, only a charter. On the other hand there was a strong feeling that a road from Charlotte to Danville would strengthen the dependence of the people on the markets of Virginia and South Carolina and do nothing to abate the sectional feeling still existing. Moreover, the existing roads were in need of larger resources, which might be secured by the increase of traffic from a line connecting them with the west. Thus a lively contest was furnished. Governor Graham in his annual message recommended the extension of the Raleigh and Gaston to Charlotte, with branches to Fayetteville and Goldsboro. In the legislature the friends of the Danville connection were the first in the field, Mr. Ellis of Rowan introducing a bill for its charter the day after the House of Commons perfected its organization. Bitter opposition was offered by eastern leaders, notably Edward Stanly, who denounced the measure as "the Danville steal," and after Ellis, its author, was elected superior court judge the measure made little headway. In the meantime Governor Graham's recommendation was worked into a bill by Senator Shepard, chartering the North Carolina Railroad, which should absorb the Raleigh and Gaston, also connect Raleigh and the west, build branches to Fayetteville and to some point on the Wilmington and Raleigh, to which the state should subscribe $500,000.

This bill did not have the support of the east, for contact with the Wilmington and Weldon was not one of its essential features, and it was therefore rejected. In the meantime the eastern leaders also prepared a railroad bill, which provided for a line, also known as the North Carolina Railroad, to extend from Goldsboro, on the Wilmington and Raleigh, to Charlotte via Fayetteville, with state aid to the amount of  p233 $2,000,000. Finally realizing that no bill for state aid could pass which did not also have the support of the Raleigh and Gaston interests and the politicians from that section of the west which would benefit by the Danville route, the details of the bill were changed so that the road should run via Raleigh, Hillsboro, Greensboro, Salisbury, and Charlotte. It is notable that not only were the Raleigh and Gaston interests catered to, but that Hillsboro was the home of Governor Graham, that Greensboro was the home of Ex-governor Morehead, and that Salisbury was the home of John W. Ellis. The final draft of the bill, made by Senator William S. Ashe of New Hanover, was introduced in the House of Commons by Mr. Mebane of Orange. The crisis in the debate was reached in January 1849. Rufus Barringer of Cabarrus made a final plea for the Danville connection. Mr. Stanly interrupted with a charge of "selling out" to Virginia and South Carolina. "This I resented," says Barringer, "and defied him to make us an offer of any bill providing for a general North Carolina system, likely to pass, and with sufficient state aid to secure its completion, and I for one, would vote for it."​1 Stanly's reply was to hold up the Ashe bill with the pledge of the support of himself and his eastern friends. Thereupon the Danville bill was tabled and a few days later, January 18, the Ashe bill, with amendments for the relief of the Raleigh and Gaston, was adopted by the House with a majority of eight. Then it was sent to the Senate. There the outlook for its passage was doubtful. The democrats, conservative toward state aid, had a majority and the Speaker, Calvin Graves, came from Caswell County, which would benefit directly by the Charlotte and Danville route. The first and second readings were formal, the test being on the third, which took place on January 25. The galleries were packed with visitors. Walker of Mecklenburg, committed to the Danville connection, spoke against the bill, pointing out the state debt involved and the superiority of the Danville connection, to be built by private enterprise entirely. Gilmer of Guilford spoke for the bill. The vote showed a tie. Thereupon "the slender form  p234 of Speaker Graves stood up, and leaning slightly forward, with gavel in hand, he said, 'The vote on the Bill being equal, twenty-two ayes and twenty-two nays, the Chair votes yea.' The Bill had passed its third and last reading." Wrote one of the spectators: "I have seen and read of many memorable and famous contests, and have witnessed many outbreaks of popular applause; but never anything like that then following. Even the granite capitol seemed to shake for joy, but this was not all. There was then no electric telegraph in North Carolina; no express lines; no mail delivery; but immediately every man and woman, every boy and girl, became a sort of message bearer. News was hastened in every possible way to every nook of the Old Commonwealth, and the one phrase was 'Speaker Graves has saved the State — the Railroad Bill has passed.' "2

The charter as finally adopted created the North Carolina Railroad Company with a capital stock of $3,000,000, two‑thirds of which was to be subscribed by the State of North Carolina, to be met by the issue of six percent bonds. There was some difficulty in completing the private subscription of $1,000,000 and opponents of the road openly talked of repealing the charter. But certain friends of the cause assumed responsibility for the unsold stock and the organization of the corporation was perfected at a public meeting in Salisbury on July 11, 1850, where the sale of the stock for which liability had been assumed was begun. There was little response to the request for stock subscriptions until William Boylan of Raleigh arose and said: "This morning I happened to recall that when I was a boy spelling books and geographies all said that the main staples of North Carolina were tar, pitch and turpentine, and I asked to see one of the new books to find out if there is any change. They brought it to me and there was the same old picture! My friends, I want to see this changed, and that too before this feeble frame goes to its grave. Do you say so? Shall it be done?" This appeal aroused the audience and the stock in question was soon sold. "As instance of noble response, Dr. John Fink of Concord,  p235 worth probably $4,000, took stock for $8,000 and made it good: two maiden ladies of Cabarrus, Betsie and Kattie Burns, worth probably $2,000, took $1,000 each." July 11, 1851, the work of construction was begun. Additional state aid to the amount of $1,000,000 was granted in 1854, the state at the same time assuming the right to appoint eight of the twelve directors. The road was completed, from Goldsboro to Charlotte, in 1856.

Stock subscription to the North Carolina Railroad was not the only state aid extended by the legislature of 1848. The charter of the North Carolina Railroad also provided for the organization of a new Raleigh and Gaston Railroad Company, to which the state would make over one-half of the road's property and also release the original stockholders from suits pending against them, upon condition that the incorporators subscribe and expend $500,000 on the physical improvement of the road. Moreover the state also subscribed one-half the amount necessary to connect the Raleigh and Gaston and the Wilmington and Weldon between Littleton  p236 and Weldon, the state's share amounting to $87,500. In 1850 a further reorganization was made by which the capital stock was fixed at $800,000, one-half to be taken by the state which should appoint three directors to the company's four. In 1848 assistance was also given the Wilmington and Raleigh by endorsing its bonds to the amount of $250,000, for which a mortgage was taken. Less important were the appropriation of $40,000 to the improvement of the Neuse River between Smithfield and New Bern, $40,000 for connection of the upper Cape Fear and Deep river, $25,000 for improvement of the Tar River for Washington to its fall, the subscription of three‑fifths of the stock of the Fayetteville and Western Plank Road, and the diversion of the proceeds of land sales in Cherokee, Macon and Haywood counties for a turnpike from Salisbury to the Georgia line.


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Locomotive, R. & G. R. R.
with W. W. Vass, President of the Road

The railway policy above outlined marked an epoch in the economic history of the state. The land-locked farmers, on whom long distance from market had for generations imposed a burden through the high cost of transportation, found relief in the railroad. Illuminating is the following extract from the minority report of the Committee on Internal Improvements made to the legislature of 1842;

The first striking advantage resulting from Rail Roads is seen in the certainty and dispatch with which persons and produce are conveyed on them. Persons travel on them at the rate of one hundred and fifty to two hundred miles in twelve hours, with as much safety as by any other mode of conveyance, and at a great saving of time and expense. The transportation of produce on them, although not quite so expeditious as the conveyance of persons, is yet five times more so than by wagons. This speedy transportation, always advantageous, is frequently of the utmost importance. A rise in the price of produce often takes place, which continues but for a short time, and it is very material that farmers and merchants should be in a situation to avail themselves of such rise. A single example will sufficiently illustrate this advantage. During the last fall, the price of wheat in Petersburg opened as $1.12½ a bushel. In these times of low rates for all articles, this price was considered very good, and every one felt anxious of profiting by it, for it was forseen that it would continue but a few weeks. A farmer and merchant in Granville promptly availed himself of the Rail Road in his neighborhood, hastened his wheat to market and obtained for it the price before mentioned; whereas, those who had to depend on the more tardy transportation of wagons, generally sold at but seventy-five cents per bushel.  p237 But a still more striking and conclusive advantage, results from the great reduction effected in the expense of carrying produce to market. Previous to the construction of Rail Roads in the neighborhood of the falls of Roanoke River, the price of waggoning cotton and other articles to Petersburg was from seventy-five cents to one dollar per hundred, so that the saving to the grower of produce is, at the lowest estimate, twice as much as the freight per hundred on the Rail Road. Again, a merchant of much intelligence in Raleigh, has furnished the minority with a statement, showing the rates formerly paid on the transportation of produce, by wagons, to Petersburg, and the rates now paid by the Rail Road. From this statement it appears, that the price by wagons was from one to two dollars per hundred, the average being one dollar and fifty cents. The price now paid by the Rail Road for the same articles is seventy cents, being a saving of more than one-half of the former rate. By wagons the price paid on salt was two dollars per sack; the price now paid by the Rail Road on the same article, is sixty-five cents, being a saving of double the amount now paid by the Rail Road. The saving to the growers of produce, who send to market by the Wilmington and Raleigh Rail Road, has also been very great.

No less important were the effects of the railroads on social life. Intercourse between the people of the east, predominantly of English extraction, and the sturdy yeomanry of the western counties, mainly of Scotch-Irish and German descent, was facilitated by the North Carolina Railroad. The stress of local sectionalism was thus reduced. The spirit of individualism was tempered by a wider acquaintance and a new sense of public duty. The democrats, who bitterly denounced state aid in its early years, themselves adopted the policy after they came into power in 1850.

The early history of the railroads is replete with matters of antiquarian and other interest. Of these the character of the rails was notable. As stated, the first type used was the "strap iron," consisting of a long wooden sleeper with strips of iron nailed on the top side. Often these iron strips became loose, and as a train passed over them they would fly up and cause a wreck. Said the president of the Wilmington and Raleigh in 1848: "We are aware that the public generally have a dread of traveling upon strap iron roads, and although by the most unremitting exertions our road has been kept in such condition that no serious accidents have occurred, yet, it can not be disguised that the common read of traveling on such roads is not without just cause." The re-railing of the  p238 Wilmington and Raleigh and the Raleigh and Gaston with T iron became a necessity. The low state of railway finances brought about an appeal for state endorsement of new bond issues. To the Wilmington and Raleigh's appeal the legislature of 1848 did not respond; instead it permitted a bond issue of $520,000 supported by a first mortgage. But the bonds would not sell at home or abroad. Finally 9,000 tons of rails were secured in England, payment being made in bonds. But when the rails reached the United States the duty and freight amounted to $125,000, and there was not sufficient money in the company's treasury to pay the bill, to say nothing of the expense of laying the new track. To meet the crisis the company adopted the policy of calling in its stock by offering reduced passenger fares in return for each $100 share surrendered. It was hoped that the value of the stock would thus appreciate and passenger traffic would also increase. Congress and the legislature were also appealed to; the former allowed the rails to be delivered, provided that the duty be deducted from the amount paid by the post office department for carrying the mails over the road. The legislature authorized an increase of the capital stock to $2,500,000. By these mentions were the rails paid for and money secured to place them. Provision for rehabilitation of the Raleigh and Gaston was made in the reorganization of the corporation in 1848.

Rates and passenger fares also constituted a problem. As the prevailing belief in the days of early railroad agitation was that passenger travel would afford the chief income, the early fares were high. On the Wilmington and Raleigh a through ticket from Wilmington to Weldon, a distance of 161 miles, cost $20; it was later reduced to $12, resulting in an increase of travel. Over discrimination in freight rates there was complaint; likewise of free passes. Meetings of stock holders were usually gala occasions, attended by stockholders, directors, officers and their families, all traveling on special trains. Connections with roads outside the state and competition with other lines were a problem. It was hoped that the Wilmington and Raleigh through its steamboat lines would secure through freights from Charleston. But the Charlestonians  p239 were interested in transportation schemes of their own; hence in 1847 the Wilmington and Manchester was chartered to directly penetrate the plantation region of South Carolina. Somewhat later difficulty arose with the Virginia railroads, which sought to divert traffic from the far South over the Virginia and Tennessee Railroad, a line extending to Chattanooga, away from the South Carolina and North Carolina lines. The least prosperous of the roads was the Raleigh and Gaston, but its business took on a new life with the construction of the North Carolina Railroad, which proved from the very beginning a profitable investment. There were also legal problems before the builders of railways, notably the question of eminent domain, which was affirmed by the Supreme Court in 1837.​3 In 1855 the Wilmington and Raleigh established a hospital for the treatment of its employees, a policy which proved permanent.

The whig program of state aid to railroads and other means of transportation made a reform of the public finances necessary. Spite of the $100,000 assigned to unappropriated revenue from the federal surplus in 1836, another period of deficits arose within a few years. For this one cause was the construction of the new capitol. Its total cost, $572,070.53, was made in installments beginning in 1836. When the last, amounting to $31,581.00, fell due in 1841, the revenue was insufficient to meet it and the crisis was tided over by use of the Literary Fund. Then followed responsibility for railway obligations. In 1843, when the Raleigh and Gaston and the Wilmington and Weldon failed to meet their bonded indebtedness endorsed by the state, there was another deficit, also met by the use of the Literary Fund. The following year the Literary Fund was again used to meet an obligation arising from the default of the Wilmington and Weldon in redeeming its bonds. In 1845 a deficit of $27,000 in general expenses was met in the same way, raising the full indebtedness to the Literary Fund to $97,997.00. In 1846 practically the entire Fund for Internal Improvements was wiped out by appropriating its principal, $75,839, to meet another deficit in general expenses.


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The Capitol

 p240  In the meantime a revision of the tax system was undertaken. The first step was to utilize more thoroughly the existing schedule and rates by the reassessment of landed property and a new enumeration of the polls. This was ordered in 1836; it disclosed an increase of over 3,000,000 acres; yet the resulting increase from the land tax was less than $7,000.

Another valuation in 1846 added 1,500,000 acres and 1,809 polls, bringing an increase in the land tax of nearly $6,000 and in capitation tax of over 41,500. However re-valuation and re-enumeration were not sufficient to meet the constant increase in expenditures. As there was much conservatism toward increasing the rates on land and polls, an effort was made to find new tax schedules. In 1846 and 1848 rates were placed upon inheritances, incomes, licenses, and luxuries, which rates were revised and expanded in 1854 and 1858. The agrarian standard of living and also rural prejudice were reflected in the income tax which levied three dollars on each $500 of salary and fees, and in the tax of three cents on each one dollar of interest, increased to four cents in 1854. The principle of the license tax was not new; its schedule was widened to include bowling alleys, playing cards, mortgages, marriage licenses, insurance companies and bank agencies. The old discrimination between local and state business also continued; thus drovers bringing cattle from other states were assessed $5 for each county, agents for vehicles not manufactured in North Carolina $100 for each county, while agents for North Carolina vehicles were assessed only $50, and liquor dealers buying from distilleries located in other states were assessed 10%, but only 5% when purchasing from North Carolina distilleries. The luxury tax included gold and silver plate, carriages, bowie knives, canes, pianos, harps, and pistols. Investment taxes of one-fourth, later of one‑third of one per cent on the capital invested, were levied on merchants and five per cent on the value of drugs, provided the owner was not a native of North Carolina. Not until the policy in the above schedule was well established was there any change in the rates upon land and poll. In 1854 these, which since 1817 had been 6 cents on $100 value of land and 20 cents on the poll, were increased to 12 cents and 40 cents respectively; in 1856  p241 the rate on land was fixed at 15 cents and that on the poll at 50; in 1858 they were increased to 20 and 80 cents respectively; but in 1860 the land tax was reduced to 18 cents. The general effectiveness of these measures is shown by the increase in taxes; in 1835 the amount raised was $71,740, in 1850 $141,610, in 1860, $667,708. There were, however, inequalities in the revenue system, especially the light tax on slave property when compared with similar values on land or income, for which it paid only the rate on the poll.

Undoubtedly the principal cause of the expansion of the revenue in 1848 and thereafter was to meet the interest on the bond issues. The policy of issuing bonds was begun in 1848 as a means of meeting obligations for stock subscription to the North Carolina Railroad, the Fayetteville and Western Plank Road and other public works, and also of paying off temporary loans and meeting obligations for the Raleigh and Gaston subscription. These early issues were successful and the policy continued under the democratic régime from 1850 to 1860. At the latter year the total bonded debt amounted to $9,125,505.

The Author's Notes:

1 History of the North Carolina Railroad.

2 Ibid.

3 R. & G. R. R. Co. vs. Davis.

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Page updated: 5 Dec 11