206 U.S. 290 (1907), argued 11–12 Mar. 1907, decided 27 May 1907 by vote of 9 to 0; Fuller for the Court. The first of nine cases concerning the division of fiscal responsibilities between one state and another formed from its territory, Virginia v. West Virginia sorely tested the power of the Supreme Court to enforce decrees against a state. When West Virginia separated from Virginia in 1863 during the Civil War, no settlement was made concerning its respective share of its parent's prewar state debt. Delayed by Virginia's disputes with the state bondholders even as to the share it concededly owed, negotiation on West Virginia's portion did not begin until 1894. Virginia attributed one-third of its debt to West Virginia since the latter had succeeded to one-third of its territory, while West Virginia offered to pay a much smaller share based on the proportion of the borrowed money actually expended within its borders. Negotiation proved fruitless, and in 1906 Virginia commenced an original action in the Supreme Court on behalf of the bondholders. After fact-finding by a court-appointed master, a decree was issued in 1911 apportioning West Virginia's share on the basis of property values (exclusive of slaves) at the time of separation; by this reckoning West Virginia owed less than a quarter of the original debt, plus accrued interest. When West Virginia failed to pay, Virginia—in marked contrast to its usual states’ rights position—asked the Court to consider means of coercion. The possibility was raised that the Supreme Court might order the West Virginia legislature to levy a tax, or even that the Court might levy the tax itself. In 1919 West Virginia admitted liability and began payment on its share of the debt, which was completed in 1939.
John V. Orth