The last named faction, under the leadership of H.H.Riddleberger, organized a political party known as the Readjusters and in 1879 captured the Legislature.

Riddleberger then introduced a bill which scaled down the debt to less than $20,000,000, but it was vetoed by the Governor.

Two years later the new party captured both Governorship and Legislature and sent General William Mahone to the United States Senate, where he usually voted with the Republican party.
The Legislature repassed the Riddleberger bill, which the creditors refused to accept, and an ingenious "coupon killer." Similar acts were passed in 1886 and 1887.

The United States Supreme Court, before which these acts were brought, pronounced them unconstitutional in that they impaired the obligation of contracts, but the Court also stated that there was no way in which the State could be coerced.

Meanwhile the credit of the State was nonexistent, and all business suffered.