Conroy Mounting an Attack Over Unpaid Civil War Debt : Government: Assemblyman says the federal government owes California $82 million including interest for providing troops.

The federal government owes California a 132-year-old debt from the Civil War that now totals almost $82 million with interest, according to the Assembly Office of Research and Orange Assemblyman Mickey Conroy.

The debt, they say, came after Congress passed legislation in 1861 directing federal officials to reimburse states for expenses incurred in providing troops for the war.

Three months later, then-Secretary of State William Seward wrote to the California governor urging the state to raise war funds and assuring officials that California would have no trouble getting compensated.

“There is every reason to believe that Congress would sanction what the state should do and provide for its reimbursement,” Seward wrote.

In 1863, California began selling state bonds to support the Union cause by “clothing, supplying and arming, paying and transporting troops,” according to the Assembly report.

Since then, 25 states have been paid back--but not California, which initially sold $668,000 in bonds and then refinanced that amount with a $2.3-million bond sale in 1873, the Assembly report said.

“You’re looking at the first unfunded [federal] mandate,” said Chris Manson, chief of staff for Conroy (R-Orange), whose office is drafting a legislative resolution to ask for the money.

The U.S. Senate approved legislation six times to reimburse California, but the House refused.

In 1954, California sought nearly $7.6 million in war bond compensation interest, but the U.S. Court of Claims awarded the state only $8,985.

The ruling cited Treasury Department regulations that barred paying “bounties” for enlistments and disallowed expenses for maintaining troops as “home guards.” (California officials said they had to pay more to entice 1860s miners away from the gold fields.)

“California troops . . . were not used to do any fighting; they did only garrison and patrol duty,” the court said.

But Rick Stevenson, a former president of the Sacramento County Historical Society and a Civil War buff, said the court was wrong in saying California troops “never engaged Confederates directly.”

“That’s not true, they did,” Stevenson said, referring to the 16,000 California soldiers who marched into what is now Arizona and New Mexico to repel a Confederate invasion. “They went all the way to Texas.”

According to two works on the “California Column,” those troops fought at least one skirmish with rebels and clashed several times with Native Americans.

Besides, Stevenson added, Nevada was reimbursed nearly $600,000 in 1929, even though its troops never fought Confederates and it used California’s Civil War bonds as a model for its bonds.

Stevenson first heard about the bond debt from his father, who was a state budget analyst. “It always galled him that the Feds would not pay that back,” Stevenson said.

He persuaded Conroy, whom he met at a speaking engagement, to look into the subject.

Manson said the assemblyman’s office is “in the process of drafting an Assembly joint resolution to the President and Congress asking them to honor their obligations to the state of California.