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This section has NEVER been the center of litigation, so there is no court decision about it.
But the debates in Congress on the proposed 14th Amendment make clear that "aid of insurrection or rebellion" was meant to include the southern Confederacy in the Civil War.
This meant that altho the US govt was going to spend money rebuilding the South, it was not going to pay off the expenses and debts run up by the Confederate government, including pensions to Confederate soldiers (the Veterans Administration has never extended benefits to Confederate vets or their widows, altho many - maybe all - states that made up the Confederacy has sent them money out of state funds). Nor, of course, would the US govt redeem or exchange Confederate currency.
Additionally, the section made it clear that former slave-owners were not going to get any compensation for their freed slaves.
THe last half-sentence of this section says all such debts and claims are illegal and void. I am not sure, but I think it means that not only would the US govt not pay those debts, but the suppliers, lenders, and other creditors of the Confederate govt were without any means for suing anyone or anything to recover their money.
As I said, this has not been the subject of any litigation, so we don't have any court's explication of the section.
By the way, it was proposed by Congress on June 13, 1866, approximately 14 months after the last battle of the Civil War. It received the last ratification necessary to adopt it on July 9, 1868.
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