In 1878, in Petersburg, the Readjuster Party was gaining control of the Virginia General Assembly led by General (CSA) William Mahone and Parson John E. Massey. The readjusters wanted to protect public schools from cuts due to state debt and promised better representation for workers of all races. These efforts included state ownership of railroads. In this climate, in 1878, the Virginia General Assembly gave the City of Petersburg the right to form a board and take over ownership of the Petersburg Railroad.
