The 1923 Highway Bond Referendum

With the invention of the automobile, improved production, and lower prices, so-called motor cars became the preferred means of transportation for many Americans early in the 1900s. To help make car travel easier, better roads became a necessity. By 1923, Virginia—like many other states—faced the question of how to finance a new highway system—with bonds or gasoline taxes? A state highway commission had been established in Virginia as early as 1906, but with inadequate funds, road-building languished. In fact, Virginia's roads were so bad that travelers were cautioned to avoid the state entirely.

When the issue of improved highways had emerged as a necessity, the General Assembly of Virginia in 1918 authorized a highway system of more than 3,800 miles by matching federal funds with its own revenues. Voters approved a state constitutional amendment in 1920 to permit the use of bonds to build the system, but citizens in areas that had good roads were already objecting to the possibility of increasing taxes to pay off the bonds. Their views were best represented by Winchester's state senator, Harry Byrd, who endorsed a "pay-as-you-go" policy of funding road-building with gasoline taxes.

Byrd's first priority, however, was not the bonds issue itself but instead reorganization of the highway department. George Coleman, the department's commissioner since 1913, had enormous power to determine the types of roads to build, their location, and the materials to be used, issues over which he and Byrd had already differed. Coleman's support for bonds as a way to complete the primary road system further antagonized the senator from Winchester, who decided that the department needed "a complete housekeeping." After much haggling, a compromise was reached in 1922 that established a five-member commission, one of whom would be its chairman. The restructuring retained the office of highway commissioner for purely engineering functions, which saved face for Coleman.

With the reorganization issue settled, the 1922 general assembly turned to the question of funding future road building. Senators C. O'Conor Goolrick and C. C. Vaughn, with the support of Governor E. Lee Trinkle and the Virginia Good Roads Association, introduced a $12 million highway bond bill that Byrd condemned. Bills supporting a bond issue passed both houses, but the differences in the two bills were never reconciled and they died, in part because of Byrd's opposition. He also pressured Trinkle to appoint two of his own close friends to the highway commission, which gave him greater influence on future highway policy and road selection.

To counter new bond proposals, Byrd, along with state representative Tom Ozlin of Lunenburg, and state senator Louis Epes of Nottoway, offered a three-cents-per-gallon gasoline tax that would build highways in almost the same time but without bonded indebtedness. This threesome, who would lead the pay-as-you-go forces in the subsequent legislative struggle, reflected the important connection between the Shenandoah Valley and the rural Southside, whose citizens wanted no higher property taxes but assurances that they would get their fair share of roads.

When Governor Trinkle summoned the legislature to convene in special session on February 28, 1923, Byrd arranged for anti-bond men to be placed on the road and finance committees. Not surprisingly, Byrd was appointed chairman of the Roads Committee. In the governor's opening address to the special session, Trinkle shockingly reversed his position and voiced a preference for pay-as-you-go, suggesting that revenues from the gas tax alone would be enough to complete the highway system within seven years. The debate between the competing plans—the three-cent gas tax versus a $50 million bond issue—raged on for the duration of the month-long session, each side challenging the estimated costs of the other, each side looking for the votes to sustain its position.

>By mid-session it was clear that the anti-bond forces dominated the more rural House of Delegates, which passed the gas tax, but in the Senate the issue was much more in doubt. The gas tax plan emerged from Byrd's committee by the narrow margin of 9 to 7, and, after a very bitter debate, the Senate passed the three-cent gas tax bill, 24 to 15. Reflecting political trading, the bill gave the counties one cent for their roads. In a spirit of compromise, the upper chamber, with the concurrence of the House, then passed a referendum bill that allowed a statewide vote on a $50 million bond issue in November. It was a risk that Byrd and the pay-as-you-go advocates were now willing to take.

Having staked so much of his reputation on the superiority of a pay-as-you-go road-building plan, Byrd knew that his political future depended upon defeating the bond issue. He urged the governor to expedite road construction, hoping to influence a voter's decision about whether to spend more money on new construction. He also reminded Democratic Party leaders of the importance of paying poll taxes before May 5, urging them to establish a network of county and precinct chairmen to recruit enthusiastic workers for the fall campaign. Bond spokesmen, led by the Virginia Bankers Association and George Coleman, who now headed the Virginia Good Roads Association, argued that highway building would be faster and more predictable and state development more rapid under their plan.

Although wet weather on election eve turned unpaved roads into quagmires, dampening the spirits of the anti-bond faction, they need not have worried. Their victory was substantial: 127,187 to 81,220. Only in the cities and in some mountain counties did the bond issue do well. The rural sections of the Shenandoah Valley and Southside, where taxes and debt were anathema, overwhelmingly rejected the proposal. The only consolation for bond supporters was the fulfillment of their prediction that the roads would not be built on time. Seven years later, the gasoline tax was up to five cents per gallon and the system was still not complete. The 1923 bond referendum, however, had significance far beyond that of the speed with which roads would be built in Virginia. Everyone recognized Harry Byrd as the driving force behind the victory. This effort confirmed his leadership of the Byrd Organization and launched his campaign for the governorship in 1925. Years later, Byrd observed that his political career would have died had he lost this referendum. The vote also solidified a pay-as-you-go mentality in Virginia that would be the ideological basis for the state's fiscal policy for the next several decades.