[2] From 1868 to 1869 the government of North Carolina authorized the issuing of $27.83 million worth of bonds and stocks to the benefit of 18 railway companies so they could furnish internal improvements for the state.
[3] In 1868 the Western North Carolina Railroad was taken over by Milton S. Littlefield and George W. Swepson through their purchase of a majority of its bonds.
Swepson convinced Republican Governor William Woods Holden that state tax revenue would be sufficient to pay the interest owed for the bonds.
Little railroad construction was actually done and North Carolina's government was left in heavy debt with its credit worthiness threatened.
[1] On February 9, 1871, the North Carolina House of Representatives adopted an article of impeachment against Governor Holden accusing him of conspiring with Swepson to defraud the state in the bonds scandal.