After the American Civil War, Mahone tried to combine many southern Virginia railroads into a system leading to the port of Norfolk, Virginia. However, the Atlantic, Mississippi and Ohio Railroad competed with the Chesapeake and Ohio Railroad (particularly in the northwestern part of the state) and went bankrupt in the Panic of 1873. That same financial crisis devastated Virginia, leading to large deficits as well as economic stagnation while wiping out the state's second mortgages and out-of-state interests were able to purchase the existing high interest 1871 bonds for pennies on the dollar.