Tennessee also struggled with a debt which it was unwilling and perhaps unable to pay.

The amount, which in 1861 was about $21,000,000, incurred principally in aid of railroads and turnpikes, was largely increased under Republican rule, and most of the money received for the bonds was stolen or wasted.

No interest had been paid during the War, and the accrued interest was funded in 1865, 1869, and 1873.

The debt was somewhat reduced by permitting the railroads to pay their debt in state bonds which they purchased cheaply on the market.

Other defaulting railroads were sold, but the State still could not meet the interest.