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 LIBRARY 
 
 UNIVERSITY OF CALIFORNIA 
 
 Xeceired 
 Accessions No. 2 ^T7/ Shelf No. 
 
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FISCAL HISTORY OF TEXAS. 
 
 EMBRACING AN ACCOUNT OF ITS 
 
 REVENUES, DEBTS, AND CURRENCY 
 
 THE COMMENCEMENT OF THE REVOLUTION IN 1834 TO 1851-52. 
 
 WITH 
 
 REMARKS ON AMERICAN DEBTS. 
 
 BY 
 
 WILLIAM M. GOUGE, 
 
 AUTHOR OF "A SHORT HISTORY OF PAPER-MONEY AND BANKING 
 IN THE UNITED STATES." 
 
 PHILADELPHIA: 
 LIPPINCOTT, GRAMBO, AND CO. 
 
 1852. 
 
V 
 
 " *> V **) "v% "i 
 
 % ^ . . *> ^ 
 
 Entered according to the Act of Congress, in the year 1852, by 
 
 
 
 - 
 
 LIPPINCOTT, GRAMBO, AND CO., 
 
 in the Office of the Clerk of the District Court of the United States in and for 
 the Eastern District of Pennsylvania. 
 
 PHILADELPHIA: 
 T. K. AND P. G. COLLINS, PRINTERS. 
 
PREFACE. 
 
 IN 1833, the author of this work published " A Short History of 
 Paper-Money and Banking in the United States," the reception of 
 which by the public was far more favorable than he anticipated. 
 He has been for some time collecting materials for a continuation 
 of that history ; and a visit to the capital of Texas, in the early 
 part of 1852, afforded him as good an opportunity as he could de 
 sire of making himself acquainted with whatever was most import 
 ant in the currency concerns of that distant region. A rise in the 
 waters of the rivers, which put an end to ordinary travelling, left 
 him at leisure to extend his inquiries further than he originally 
 intended. As he proceeded, he found the materials far more im 
 portant than he had supposed them to be, and the result is the 
 volume now presented to the public. It embraces much that could 
 not with propriety be introduced into a continuation of "A His 
 tory of Paper-Money and Banking in the United States," as most 
 of the important events it records occurred before Texas became 
 a member of the Union. 
 
 In the conduct of this work, the want of a good general history 
 of Texas has been much felt that by Kennedy extending no fur 
 ther than to 1839-1840. The general historian ought to have 
 prepared the way for the inquirer into the fiscal concerns of the 
 Republic; but he has had to prepare the way for the general his 
 torian. 
 
 Other difficulties have been encountered through the loss, by 
 fire, of part of the records of the Republic. But free access to 
 all that remained was courteously granted by the Texan authori 
 ties, and whenever the record was deficient, they kindly supplied 
 what was wanted by oral information. Especially are the thanks 
 of the author due to P. Hansboro Bell, the <v -Governor, James 
 
IV PREFACE. 
 
 B. Shaw, Comptroller, John M. Swisher, Auditor, James H. Ray 
 mond, Treasurer; to W. D. Miller the former, and Thomas S. 
 Duvall the present, Secretary of State; and also to Mr. Brewster, 
 the editor of the Texas State Gazette, and Mr. De Cordova, the 
 editor of the South- Western American. 
 
 The extracts, when of any length, are given in distinct type. 
 This gives the volume all the advantages of a documentary history, 
 and will enable the reader to distinguish at a glance what is said 
 by the author from what is said by others. It will also afford 
 those who have not leisure or inclination to read the whole work, 
 facilities in selecting the passages in which they may be most inte 
 rested. 
 
 If the book is not as amusing as the last new novel, the writer 
 cannot help it. He has done the best he could, in the short time 
 allowed him, with the dry and stubborn materials he had to handle. 
 He comforts himself with the hope that, as he does not write for 
 boarding-school misses, such dryness as necessarily arises from the 
 nature of the subject will be pardoned. Some of the details may 
 be interesting to few but citizens of Texas, and creditors of Texas; 
 but the principles involved are highly important, not only to those 
 whose political position requires them to study finance as a science, 
 but to all who are in any way interested in the preservation of the 
 public faith when pledged for the payment of public debts. 
 
 November, 1852. 
 
INTRODUCTION 
 
 IT may appear to some quite unnecessary to devote a whole 
 volume to the fiscal concerns of a people, who, at the beginning, 
 numbered but twenty thousand; who, when they were annexed to 
 the United States, did not exceed one hundred thousand ; and who, 
 according to the census returns of 1850, were then less than two 
 hundred thousand. But history is of importance only as it illus 
 trates principles; and principles may be as strikingly illustrated 
 in the small communities of Rhode Island, Delaware, or Texas, as 
 in the larger ones of New York, Massachusetts, or Virginia. 
 
 The founders of the Republic of Texas were quite as bold and 
 quite as brave as the founders of ancient Rome; and, in all pro 
 bability, quite as good. At all events, they did not invite their 
 neighbors of Arkansas and Louisiana to a camp-meeting, and then 
 steal their wives and daughters from them. 
 
 In the short period of seven months, they achieved the independ 
 ence of a country larger than Great Britain and Ireland, and 
 for ten years, without direct aid from any foreign government, 
 they sustained this independence, in defiance of all the attempts 
 which a nation of ten millions made to reduce them to subjection. 
 
 The history of such a people cannot be without interest. As 
 we proceed, it will be found that all the fiscal faults which the great 
 nations of Europe and America have committed on a large scale, 
 the Texans have committed on a small. 
 
 Owing to the connections which this people have since entered 
 into with the United States, interesting questions arise to the publi 
 cist. Texas is the first region that has been annexed to our Union, 
 by the free consent of both parties, without purchase and without 
 conquest ; but it will not probably be the last. It is important 
 that we should know what liabilities, in regard to the public debts 
 
VI INTRODUCTION. 
 
 of communities so annexed, are thus brought on the. United 
 States. 
 
 But in points even more important than these does the fiscal 
 history of Texas command attention. 
 
 The paper-money disease is hereditary with us Americans. If 
 it is subdued in one form, it breaks out in another. To the old 
 provincial paper-money, succeeded State paper-money and conti 
 nental money. Then, brought almost to death s door by the vio 
 lence of our complaint, we searched for a remedy, and thought we 
 had found one in that provision of the U. S. Constitution which 
 declares that "no State shall emit bills of credit." The disease, 
 however, soon made its appearance with new vigor; the States 
 evading the principles of the Constitution by establishing corpora 
 tions to do that which they have not the power to do themselves. 
 
 Do the banks suspend specie payments? This only increases 
 the amount of paper issues, and the number of paper issuers. The 
 corporations of cities and towns, turnpike companies, bridge com 
 panies, railroad companies, and individuals in all the private walks 
 of life immediately commence the issue of notes for dollars and the 
 fractional parts of dollars. A new term is not then introduced 
 into the language, but a new application is made of an old term, 
 and "shin-plasters" mean in America what "shin-plasters" mean 
 nowhere else. 
 
 Does the United States Government want money? Instead of 
 borrowing gold and silver, it borrows paper from the banks, or 
 resorts to the issue of treasury notes, and makes them receivable 
 for duties. In the only very important war we have had since 
 the War of Independence, it kept on with the issue of these notes 
 till they were depreciated far below par; and the contrivances 
 resorted to in the times of Van Buren and Polk to throw into 
 circulation treasury notes bearing no interest, or only nominal 
 interest, show that even those statesmen from whose professed 
 principles better things might be looked for are themselves deeply 
 infected with the hereditary disease of the nation. If such slight 
 fiscal embarrassments as were felt in the times of Polk and Van 
 Buren could induce them to sanction or connive at the issue of 
 treasury notes bearing no interest, or only nominal interest, there 
 is every reason to believe that, in a period of real exigency, they 
 would have resorted to the issue of treasury notes of such small 
 
INTRODUCTION. Vll 
 
 denominations as would have driven gold and silver out of circu 
 lation. 
 
 Do we wish to get rid of a Bank of the United States ? "We 
 proceed in such a way that, in putting down one bank, we put up 
 five hundred. 
 
 Does the deep experience of the evils we have suffered under 
 both a national bank and a league of "pet banks" incline us to 
 separate bank and State ? Our sub-treasury system is so imper 
 fectly framed that disbursing officers must, of necessity, use banks 
 as depositories ; and then, though the revenues of government are 
 collected in gold and silver, they are paid out in paper. 
 
 Is one form of paper banking found not to answer? We then 
 resort to another. To acts incorporating each bank separately, 
 succeed general banking laws, by which they are incorporated 
 altogether. 
 
 Does a " safety fund" afford evidence, by its own action, that 
 there is no safety in it? Then we resort to "free banking," and 
 require, from the issuers of notes, deposits of mortgages and stocks 
 by way of security. This system does very well in fair weather, 
 and we inquire no further. 
 
 Do the States want money ? They perhaps, like Pennsylvania, 
 resort to a pitiful evasion of the organic law of the Union, and 
 issue " relief notes ;" or it may be, like Indiana, more boldly vio 
 late the Federal Constitution, by emitting small bills of credit, and 
 calling them treasury notes. 
 
 Do the banks throughout the country suspend specie payments ? 
 Then we have a good opportunity of getting rid of the whole con 
 cern. But we embrace it not. We re-establish the system by co 
 ercing a return to specie payments a measure which inflicts twice 
 as much evil on the community as would be produced by gradually 
 winding up the suspended institution. We will do anything, we 
 will suffer anything, rather than give up our paper-money. 
 
 Occasionally, in particular parts of the country, suffering in 
 tensely under our hereditary malady, we resort to severe legal and 
 even constitutional provisions to prevent further issues of paper. 
 But the power that makes State constitutions and State laws can 
 also unmake them ; and we hardly become convalescent before we 
 relapse into our old disease. 
 
 Texas, though it, from 1835 to 1845, formed no part of the 
 
Vlll INTRODUCTION. 
 
 American Union, was yet an American State. It was a State 
 without the Union. The people were Americans by birth, thought, 
 habits, feeling. Their political institutions distinguished them in 
 one particular only from the States within the Union. They had 
 within them that disease which taints all American blood, the 
 paper-money disease, inherited from their ancestors. This, " the 
 original sin" of Americans, had never been washed away by any 
 baptism of sufferings. It is interesting to trace the manner in 
 which this hereditary corruption displayed itself under the peculiar 
 circumstances in which the Texans were placed, free from the re 
 straints imposed by the United States Constitution. In this point 
 of view, the history of currency and finance in Texas becomes more 
 important than it would be if it were simply the history of currency 
 and finance in a small community of 20,000 to 100,000 persons, 
 distinguished in no way from the communities surrounding it. 
 
 Closely connected with the subject of paper-money, is that of 
 public debt. Where there is the first, there will be the last. And 
 it is no small objection to paper-money that it, in some instances, 
 involves governments in debt that would otherwise be exempt from 
 such burdens ; and that it, in other instances, where public debts 
 would be small, increases them to such an amount as to make them 
 intolerable. 
 
 Our own views on this subject are, in the main, as follows : 
 
 1. A public debt is a public evil. 
 
 2. Nevertheless, it is sometimes necessary to incur public debts 
 in order to secure the liberty and independence of a nation. In 
 such cases, we submit to one evil in order to avoid a greater. 
 
 3. In other cases, it seems expedient to incur public debts, even 
 when they are not absolutely necessary. The benefits resulting 
 from them may more than compensate for the evils. 
 
 4. Great caution should be had in incurring public debts, because 
 there is not naturally the same checks on them as on private debts. 
 The private man who incurs a debt has to depend on himself alone 
 for the payment of both principal and interest. The public men 
 who create debts throw all the burden of paying them on others. 
 They may incur these debts for their own special benefit, and the 
 community will have to pay them. Even when the selfish interests 
 of the lawgivers are not advanced in this way, great caution ought 
 to be had in incurring public debts, as too great facility in borrow- 
 
INTRODUCTION. ix 
 
 ing always leads to profusion in expenses. In addition to this, 
 there is an important check on private debts which does not apply 
 to public debts. A private man, when he incurs a debt, knows that 
 he must not only pay the interest punctually, but that he will 
 sooner or later be called on for the principal. But if a government 
 only pays the interest punctually, the principal may remain unpaid 
 forever. 
 
 5. Nothing but violations of constitution, and violations of law, 
 or gross frauds in the negotiation of public debts, will justify a 
 repudiation of them. No matter how unwise it may have been to 
 borrow it, and no matter how foolishly it may have been expended, 
 if the money has been borrowed according to law and constitution, 
 it ought to be paid. 
 
 6. There is no force in the observation that one generation is not 
 bound by the debts of another. The property created by the 
 industry of one generation passes to that which succeeds it, and 
 so on in perpetuity. The State never dies. The individuals that 
 compose the State are always changing, just as the atoms of the 
 human body are changing; and it is impossible to mark the succes 
 sion of individuals that compose a State in such a way as to say 
 that one class of them shall not be responsible for the debts incurred 
 in the times of their predecessors. The benefits that may arise 
 from incurring a public debt may extend through many genera 
 tions. If the wars of William Pitt were really necessary to pre 
 serve the independence of Great Britain, it is just and right for the 
 English people of the present day to pay. the interest on the debt 
 incurred in the prosecution of these wars. The Americans of the 
 present generation have done no more than justice in paying off 
 the debt of the Revolution, for they are in the full enjoyment of 
 the blessings of the Revolution. 
 
 7. After a government has once made a regular audit of a claim 
 against it, and issued a negotiable acknowledgment of the same, it 
 has no right in after years to reopen that audit. A negotiable 
 evidence of public debt, no matter what its form may be, transfers 
 all the rights of the original holder to the final possessor. This 
 point was very clearly set forth by Mr. Sedgwick, of Massachu 
 setts, in the debate in Congress, in February, 1790, on the fund 
 ing of the revolutionary debt. 
 
 " Whenever a voluntary engagement is made for a valuable considera- 
 
X INTRODUCTION. 
 
 tion for property advanced, or services rendered, and the terms of the con 
 tract are understood, if no fraud or imposition is practised, the party en 
 gaging is bound to the performance, according to the literal meaning of 
 the words in which it is expressed. Such contracts, whether of a govern 
 ment or an individual, may either be transferable or not transferable. The 
 latter species of contract receives an additional value from its capacity of 
 being transferred, if the circumstances of the possessor should render the 
 sale of it either necessary or convenient to him. To render the transferable 
 quality of such evidences of contract in any degree advantageous to the 
 possessor, it is necessary to consider, in case of sale, the alienee possessed 
 of all the property of the original holder; and, indeed, it is highly absurd, 
 and even contradictory, to say, that such evidences of debt are transferable, 
 and at the same time to say that there is in them a kind of property which 
 the holder could not convey by bona fide contract. 
 
 (l This is the construction which has invariably been given to these con 
 tracts, whether formed by government or by individuals." 
 
 These are the views which we, and the great majority of our 
 readers, have held from our youth upwards. But, in opposition to 
 these sentiments, Texas maintains, through her authorities, that a 
 State, in the times of her prosperity, is not bound to fulfil the 
 engagements she entered into in the times of her adversity, but is 
 at liberty to modify them to such extent as to herself may seem 
 equitable. 
 
 These views are very distinctly set forth in a message which 
 Governor Bell sent to the Legislature, on the 12th of November, 
 1851.* 
 
 " The Republic of Texas having executed her bonds and other evidences 
 of debt in an exceedingly dark and gloomy period of her history, it became 
 necessary to issue them for nominal amounts, bearing no sort of proportion 
 to the amount actually received, and to pledge her resources, arising mainly 
 at that time from her revenue, for their redemption. These securities, 
 generally speaking, were concentrated at very low rates in the hands of 
 moneyed speculators, who had contributed nothing to the achievement of 
 her independence, or to the relief of her actual necessities in the adminis 
 tration of the government at the time they were issued. This considera 
 tion, well understood and appreciated, induced an inquiry in respect to the 
 mode of redeeming these securities, as no one could entertain the opinion, 
 for a moment, that the government was under any obligation, either in 
 justice or morality, to redeem them by paying the amount expressed on their 
 face; and that inquiry resulted in the passage of the act of the State 
 Legislature of March 4 JO, 1848, to provide for ascertaining the debt of 
 
 * The reader musfhot hold Governor Bell personally responsible for these senti 
 ments, but regard him as the exponent of a community in which these principles 
 have .so long been taken for granted, that it is supposed to be unreasonable to doubt 
 their correctness. 
 
INTRODUCTION. XI 
 
 the late Republic of Texas/ which act required the auditor and comptroller 
 of the State to reduce all claims presented for liquidation to the actual par 
 value which was realized by the Republic at the time of their issue. The 
 evident meaning and contemplation of that act was, that the holders should 
 be paid in accordance with that amount thus ascertained by the auditorial 
 board, subject to the revision of the Legislature; and the amounts so ascer 
 tained were considered all that was actually due from the State to her 
 several creditors. 
 
 " That the Legislature had the right to pass this law, there can be no . 
 question ; and that individuals holding the bonds or other evidences against 
 the late Republic were bound by it, there can be as little." 
 
 If these principles be true, they ought to be universally adopted; 
 for what is right in Texas, cannot be wrong in Virginia, Pennsyl 
 vania, or Ohio. 
 
 If these principles be true, they will prove a great relief to ne 
 cessitous governments; for, according to the doctrine above laid 
 down, the stronger the necessity a State is under, in times of ad 
 versity, of entering into contracts for supplies of money, the 
 stronger the reason for setting aside such contracts in the days of 
 her prosperity. The greater the necessities of a government, the 
 less favorable, of course, the terms on which it can borrow ; but it 
 will lose nothing in the long run by that, for neither "morality nor 
 religion" requires it ever to pay more than it has received. More 
 especially is this true, if the evidences of public debt pass into the 
 hands of moneyed men ; and as the great mass of the evidences of 
 public debt always pass into such hands, the State is thereby re 
 lieved from its engagements. It is quite enough if it pays one- 
 half, one-quarter, or one-fifth of what it has promised to pay. 
 That the Legislature has a right to pass such a law as this, there 
 can be no question ; and as little question that the creditors are 
 bound by it! 
 
 Such are the principles of the authorities of Texas. If they be 
 true, they ought, as already remarked, to be universally adopted. 
 If they be not true, they ought to be promptly rejected. With 
 nearly all our States and cities, and many of our counties, running 
 into debt, it is of great importance that the nature of the obliga 
 tion which public debt imposes should be correctly understood. 
 Public opinion is, to a very great extent, the practical rule of 
 morality; and if a wrong public opinion prevails in one State, it 
 will be apt to spread into others. Ours is, moreover, a family of 
 
Xll INTRODUCTION. 
 
 States; and if one member of a family does ill, all the other mem 
 bers will suffer in reputation. 
 
 If sovereign States are not bound by their contracts, neither- are 
 railroad, nor canal companies, nor individuals; for there cannot 
 be one rule of justice and morality for men in public, and another 
 for men in private life. 
 
 There is already too much indifference in this country about the 
 payment of debts. The public authorities ought not to increase 
 the evil by setting the people a bad example. But if the States, 
 to whom men look up for the administration of justice, become lax 
 in the fulfilment of their public obligations, private men will be very 
 apt to become equally lax in the discharge of their individual 
 liabilities. 
 
 We can assure our friends in Texas that nothing was further 
 from our intention, when we visited them, than to make a book 
 about them. We were much pleased with their beautiful country, 
 and much pleased with the people, a few only excepted. But the 
 people with all their intelligence and enterprise, and their country 
 with all its advantages, will never be duly appreciated by the rest 
 of the world, till they review the decision to which they have come 
 respecting the debt incurred in achieving and sustaining their 
 independence. In our pages, we have carefully brought together 
 all the facts necessary for such review, together with whatever 
 else is interesting in the history of finance and currency in Texas. 
 If we have erred, it has not been from selfish interests, for we 
 have never been an owner of one dollar s worth of Texan securities. 
 
CONTENTS. 
 
 CHAPTER I. 
 
 PROCEEDINGS UNDER THE GENERAL CONSULTATION. 
 
 Meeting of the Consultation, October 16, 1835 Reassembling of the same, November 
 3 Report on supplies sent to the army, and on money in the treasury Glance at 
 military operations Extracts from the speech of Mr. Branch Tanner Archer 
 Money received from Mr. Thomas F. McKinney and from citizens of New Orleans 
 The land-offices closed Grants of land to settlers and soldiers . . 17 
 
 CHAPTER II. 
 
 LEGISLATIVE PROCEEDINGS UNDER THE PROVISIONAL GOVERNMENT. 
 
 Ordinances to raise an army and navy, and to supply them with necessaries Pro 
 vision for auditing claims Duties on imports and tonnage Collectors of public 
 dues Act to authorize a temporary loan of one hundred thousand, and a per 
 manent loan of one million dollars Other ways and means Liberal grants of 
 land to soldiers ........... 23 
 
 CHAPTER III. 
 
 EXECUTIVE PROCEEDINGS OF THE PROVISIONAL GOVERNMENT. FIRST PERIOD : 
 NOVEMBER 14, 1835, TO JANUARY 2, 1836. 
 
 Comprehensive proceedings in four months Pecuniary affairs of the General Coun 
 cil A treasurer appointed First report of Committee on Finance Donation of 
 Mr. Hutchins, of Natchez Proceedings in relation to a United States Bank note 
 Plan for raising a revenue Gov. Smith s objections to the way in which money- 
 matters were conducted Small costs of the campaign Loan from Mr. Brook- 
 field, of New Orleans 29 
 
 CHAPTER IV. 
 
 PROCEEDINGS UNDER THE PROVISIONAL GOVERNMENT IN RELATION TO THE PUBLIC 
 
 LANDS. 
 
 The Commissioner of the Nashville Colony arraigned for contumacy Great diffi 
 culties with the land-speculators in the Department of Nacogdoches Indig 
 nation of Governor Smith Determined action of the Council 37 
 
XIV CONTENTS. 
 
 CHAPTER V. 
 
 EXECUTIVE PROCEEDINGS UNDER THE PROVISIONAL GOVERNMENT. SECOND PERIOD: 
 JANUARY 2 TO MARCH 13, 1836. 
 
 Condition of affairs at the beginning of 1836 Two vessels of war procured Pros 
 pect of loans in New Orleans Conflicts of Governor Smith and the Council 
 Mr. Smith superseded, and Mr. Robinson made acting governor . . 42 
 
 CHAPTER VI. 
 
 PROCEEDINGS UNDER THE GOVERNMENT AD INTERIM, 1836. 
 
 Movements of Santa Anna His capture by the Texans David G. Burnett, Presi 
 dent ad interim Gloomy condition of affairs as set forth in his message to the 
 first Congress Small cost of the war to Sept. 1836 Small revenue of Provisional 
 Government Loans of Messrs. Erwin, Triplett, and their associates . . 49 
 
 CHAPTER VII. 
 
 PROCEEDINGS UNDER THE REPUBLIC. FIRST SESSION OF FIRST CONGRESS : 
 OCTOBER 3 TO DECEMBER, 1836. 
 
 Gen. Houston installed as President Deplorable condition of the navy Contribu 
 tions of Gen. Thos. J. Green Acts relating to the military establishment High 
 salaries of officers on the civil list New tariff, and sale of Galveston town -plot 
 " A public debt a public blessing" Unsuccessful effort to negotiate a loan of 
 twenty thousand dollars Act to establish a general land-office Questions whether 
 foreign volunteers should be allowed to sell their land-certificates to aliens, and 
 whether aliens should be allowed to hold lands in Texas Recognition of decree 
 for establishing the Agricultural and Commercial Bank Act to incorporate the 
 Texas Railroad, Navigation, and Banking Company Proceedings under this act 
 
 54 
 
 CHAPTER VIII. 
 
 SECOND SESSION OF THE FIRST CONGRESS : MAY 1 TO JUNE, 1837. 
 
 Pecuniary destitution of the Government of the Republic Recognition of its inde 
 pendence by the United States Statement by President Houston of the insuffi 
 ciency of the navy Governor Smith made Secretary of the Treasury Proceedings 
 of the agencies at Mobile and New Orleans The Secretary of the Treasury re 
 ports a plan for raising a revenue, and funding the outstanding debt Acts passed 
 accordingly Government liabilities worth only fifteen cents in the dollar Projects 
 for additional banks Deplorable condition of the treasury First effective act for 
 the issue of treasury notes ......... 62 
 
 CHAPTER IX. 
 
 " CALLED SESSION" OF THE SECOND CONGRESS : SEPTEMBER 25 TO NOVEMBER 4, 1837. 
 
 The opening of the land-offices postponed Differences of opinion of the Secretary 
 of the Treasury and Congress on the subject of treasury notes Reasons for not 
 
CONTENTS. XV 
 
 issuing land-script to the soldiers Low price of land-script at New Orleans Act 
 for augmenting the navy 68 
 
 CHAPTER X. 
 
 FIRST REGULAR SESSION OF SECOND CONGRESS : NOVEMBER 6 TO DECEMBER, 1837. 
 
 Issues of treasury notes commenced November 1, 1837 New difficulties between 
 the Secretary of the Treasury and Congress Want of money and want of credit 
 "Boundless revenue" expected from the opening of the land-offices The navy 
 almost extinct Moderate amount of public expenses up to November, 1837 A 
 new tariff Authority for the issue of more treasury notes Distinction between 
 original holders and assignees of Texan securities The agent sent to the United 
 States to sell land-script recalled Unreasonable expectations of the Texan 
 Government in relation to its public lands New act for opening the land-offices 71 
 
 CHAPTER XI. 
 
 ADJOURNED SESSION OF SECOND CONGRESS: APRIL 9, 1838, TO MAT 24, 1838. 
 
 Treasury notes at par Reasons for this New issues authorized The loan act 
 modified Increase of public expenditures ...... 77 
 
 CHAPTER XII. 
 
 THIRD CONGRESS : FROM NOVEMBER 5 TO DECEMBER 11, 1838. 
 
 Fraudulent land claims The navy totally destroyed Extensive entries of lands 
 Income and expenses Sanguine expectations of revenue Imports and exports 
 Plan for creating a creditor interest in the United States friendly to Texas 82 
 
 CHAPTER XIII. 
 
 THIRD CONGRESS : FROM DECEMBER 10, 1838, TO JAN. 26, 1839. 
 
 President Lamar s views of exchequer bills and treasury notes He recommends a 
 national bank, founded on the credit and resources of the Government of Texas 
 Government banking the worst form of banking Refusal to make treasury 
 notes a legal tender for private debts Authority given to raise additional troops 
 The steam-vessel "Zavalla" purchased A contract for the purchase of other ves 
 sels of war recognized by law Stock books again opened for funding the floating 
 debt Act to establish a sinking fund Officers of government required to re 
 ceive their dues in treasury notes ........ 87 
 
 CHAPTER XIV. 
 
 FROM THE CLOSE OF THE THIRD TO THE CLOSE OF THE FOURTH CONGRESS : FEBRUARY, 
 1839, TO OCTOBER, 1840. 
 
 Loan from the Commercial and Railroad Bank of Vicksburg frustrated Encouraging 
 prospects of a loan in Europe Hopes of a large revenue from customs, and other 
 taxes Joy on hearing of a loan from the United States Bank Removal of seat 
 of government to Austin Extracts from President Lamar s message to fourth Con 
 gress Deficiency of revenue New revenue act Act to provide for more certain 
 
XVI CONTENTS. 
 
 operation of the sinking fund For issue of treasury bonds For funding the 
 floating debt in eight and ten per cent, stocks Low price of treasury notes, and 
 gloomy condition of affairs ......... 95 
 
 CHAPTER XV. 
 
 PROCEEDINGS UNDER THE FIFTH CONGRESS: NOVEMBER, 1840, TO NOVEMBER, 1841. 
 
 Various devices for borrowing Remarks of the new Speaker of the House of Repre 
 sentatives Smallness of the revenues Great increase of the public debt Pro 
 ject of invading Mexico Repeal of act for funding treasury notes Retrenchment 
 of public expenses Annunciation that a loan had been negotiated in Europe 
 Effect of this news on the public mind, and on the price of Texan securities Mr. 
 Horseley Palmer, ex-Governor of the Bank of England, plans a national bank for 
 Texas, to be presided over by Mr. Jaudon, ex-cashier of the United States Bank 
 News of the negotiation of the loan confirmed Doubts subsequently arise Mr. 
 Bullock and his pigs Difficulties with M. de Saligny, the Minister of France to 
 Texas 103 
 
 CHAPTER XVI. 
 
 PROCEEDINGS UNDER THE SIXTH CONGRESS : NOVEMBER, 1841. 
 
 Connection of events, great and small The loan defeated Increased confusion in 
 finances The Secretary of the Treasury suggests that all debts of the government 
 be funded in a stock bearing two and a half per cent, interest This the first 
 suggestion of scaling or repudiation in Texas Contrast of financial affairs at the 
 beginning and close of President Lamar s administration .... 112 
 
 CHAPTER XVII. 
 
 PROCEEDINGS UNDER THE SIXTH CONGRESS, IN CONTINUATION: NOVEMBER, 1841, TO 
 
 NOVEMBER, 1842. 
 
 General Hunt s view of financial affairs at the commencement of President Houston s 
 second term Exchequer bills issued Treasury notes no longer received for cus 
 toms and direct taxes Extra session of sixth Congress Exchequer bills below 
 par Act making them receivable for public dues at only their market rates The 
 preliminaries for a loan of one million dollars entered into with Mr. Bourgeois 116 
 
 CHAPTER XVIII. 
 
 PROCEEDINGS UNDER THE SEVENTH CONGRESS : NOVEMBER, 1842, TO NOVEMBER, 1843. 
 
 Gloomy condition of public affairs as depicted in President Houston s message 
 The removal of the archives of the Land-Office forcibly resisted Exchequer bills 
 of small denominations issued 120 
 
 CHAPTER XIX. 
 
 PROCEEDINGS UNDER THE EIGHTH CONGRESS : 1843-44. 
 
 Repudiation denounced by President Houston The negotiation for a loan with 
 Mr. Bourgeois unsuccessful Commencement of hard-money policy Low rate 
 of exchequer bills Objections to paper issues receivable for public dues . 123 
 
CONTENTS. XV11 
 
 CHAPTER XX. 
 
 PROCEEDINGS UNDER THE NINTH CONGRESS : 1844-45. 
 
 The finances somewhat improved Contrast of expenditures in Lamar s and Hous 
 ton s second term Idem of imports and exports Sound views of President 
 Jones The further issue prohibited of exchequer bills, and other paper intended 
 to pass as money The receipt of paper for public dues forbidden . .126 
 
 CHAPTER XXI. 
 
 PROCEEDINGS UNDER THE NINTH CONGRESS, CONTINUED: 1845. 
 
 The Congress of the United States pass a resolution for annexing Texas to the 
 Union The people of Texas, in convention, assent to the terms, and adopt a 
 constitution for the State of Texas Provisions in relation to public debt and 
 government paper-money Extract from report of Commissioner of General Land- 
 Office Great extent of land held by individuals View of public lands as a 
 means of paying public debts . . . . . . . . .130 
 
 CHAPTER XXII. 
 
 GENERAL VIEW OF THE FISCAL POLICY OF TEXAS. 
 
 Comparison of powers of the Continental and of the Texan Congress Comparative 
 view of continental money and of Texan promissory notes The Texan promis 
 sory notes more effective as governmental means, but yet productive of great 
 evil Illusion of the Texan authorities in regard to loans and lands Frequent 
 changes of revenue laws, and of public tenders Evils of government issues 135 
 
 CHAPTER XXIII. 
 
 PROCEEDINGS UNDER THE FIRST LEGISLATURE OF THE STATE OF TEXAS : 1845-46. 
 
 Improved condition of fiscal affairs State constitution adopted Government of 
 the State ad interim Immediate benefits of annexation First meeting of the 
 Legislature Reports to the House and Senate in favor of ceding the public lands 
 to the United States, as a means of paying the public debt Scaling of the debt 
 recommended Its injustice Instances in which the Governments of England and 
 the United States have engaged to pay more than they received Texas borrowed 
 on good terms, all circumstances considered Men who have bought Texan 
 securities might have done better by other investments . . . .145 
 
 CHAPTER XXIV. 
 
 PROCEEDINGS UNDER THE SECOND LEGISLATURE: 1847-48. 
 
 The scaling policy sustained The fact that the debt is due to persons abroad 
 urged as one reason why it should not be paid in full Act " to provide for ascer 
 taining the debt of the late Republic of Texas" Creditors ordered to bring in 
 their claims to be scaled . ... 156 
 
XV111 CONTENTS. 
 
 CHAPTER XXV. 
 
 PROCEEDINGS UNDER THE THIRD LEGISLATURE : 1849-50. 
 
 Governor Wood recommends that land be given to the public creditors Reasons 
 why Texas had no longer a deep interest in sustaining her credit Hardships 
 endured by civil officers, by soldiers, and others Distinction between their cases 
 and that of contract creditors Auditor and comptroller make a report scaling 
 down the claims of creditors to half their original amount Time prolonged in 
 which audited claims might be scaled without being "barred" Audited claims 
 made exchangeable for land-script at fifty cents an acre Act declaring that all 
 liabilities of the Republic shall cease to bear interest after July 1, 1850 161 
 
 CHAPTER XXVI. 
 
 PROCEEDINGS AT FIRST SESSION OF THE THIRTY-FIRST CONGRESS OF THE UNITED 
 
 STATES: 1849-50. 
 
 Few, if any, of the creditors embrace the offer of land in payment of their claims 
 Reasons for this Difficulties about land-titles Change in the prospects of 
 Texas Motion of Mr. Benton in the United States Senate Motion of Mr. Clay 
 Extracts from Mr. Clay s speech Motion of Mr. Pearce, of Maryland Extracts 
 from Mr. Pearce s speech Passage of the "Boundary Bill," or bill for drawing the 
 line between Texas and New Mexico, and for paying the creditors of Texas 169 
 
 CHAPTER XXVII. 
 
 PROCEEDINGS OF THE LEGISLATURE OF TEXAS AT ITS SPECIAL SESSION, NOVEMBER, 1850, 
 AND AT ITS REGULAR SESSION, NOVEMBER, 1851. 
 
 The conditions of the "Boundary Bill" formally accepted Proud position of Texas 
 Different constructions of some provisions of the "Boundary Bill" Extracts 
 from Governor Bell s message, with remarks on the same Bill reported " to require 
 the creditors to sign releases to the United States" The money received applied 
 to other objects than to the payment of the debts for which the United States 
 were liable 179 
 
 CHAPTER XXVIII. 
 
 PROCEEDINGS OF THE FOURTH LEGISLATURE, CONTINUED. 
 
 Report of the auditor and comptroller scaling down the public debt Extracts from 
 and remarks on the same Treasury notes Ten per cent, consolidated fund of 
 1837 Eight and ten per cent, funded debt of 1846 Treasury bonds Loan 
 from Bank of the United States Debt due for steamship " Zavalla" Debts to 
 Dawson, Schott, and Whitney Difficulties in applying the scaling principle The 
 cases of assignees in some instances of greater hardship than those of original 
 claimants Injustice of stopping interest after July, 1850 Act confirming the 
 award of the auditor and comptroller Governor Bell vetoes the act, but it passes 
 by a large majority 191 
 
CONTENTS. XIX 
 
 CHAPTER XXIX. 
 
 PROCEEDINGS OF FOURTH LEGISLATURE, CONTINUED : 1851-52. 
 
 Act passed for the liquidation of the public debt Debt payable and debt sus 
 pended Effects of this act in dividing the creditors into two parties, and throw 
 ing the odium of non-payment on the United States The money received from the 
 United States applied to pay the current expenses of the State Government 203 
 
 CHAPTER XXX. 
 
 PROCEEDINGS OF THE THIRTY-SECOND CONGRESS OF THE UNITED STATES : FIRST SESSION, 
 
 1851-52. 
 
 Diversified action of the creditors Report to United States Senate by Mr. Pearce, 
 of Maryland Motion by Mr. Mason, of Virginia Remarks of Messrs. Houston, 
 Pearce, Butler, Pratt, and others Present condition of the creditors of Texas 
 Distinction between debts of the Republic and debts of the State . . 207 
 
 CHAPTER XXXI. 
 
 TEXAN PLEDGES OF FAITH AND TEXAN BREACHES OF FAITH. 
 
 Solemn league and covenant of the Provisional Government Audited drafts Five 
 million loan act and supplement Act of June 7, 1837, for consolidating public 
 debt Treasury notes Act of 1837 authorizing receipt of audited drafts for direct 
 taxes Act of 1838 for payment of interest on the funded debt Treasury bonds 
 act Funding act of 1840 Act to repeal the act providing for the redemption of 
 promissory notes Act for the issue of exchequer bills Resolution of annexa 
 tion Scaling act of 1848 Act barring all claims not presented before September, 
 1850 Act stopping interest after July 1, 1850 217 
 
 CHAPTER XXXII. 
 
 GENERAL VIEW OF CURRENCY IN TEXAS. 
 
 " Hammered dollars" the chief currency of Texas previous to the revolution Influx 
 of bank-notes from the United States in 1835-37 "Shin-plasters" Treasury 
 notes, first, second, and third issues Evil consequences thereof Exchequer 
 bills Gross amount of circulating paper Bank of Agriculture and Commerce 
 Texas Railroad, Navigation, and Banking Company Other bank projects Laws 
 of the Republic and the State, and constitutional provisions to prevent the issue 
 of circulating paper "Mills s money" A little paper-money panic in Texas 
 Good effects of the hard-money laws of Texas Efforts to change the constitution 
 so as to allow of paper-money banking ....... 227 
 
 CHAPTER XXXIII. 
 
 COMPARISON OF THE ACTION OF TEXAS, THE OTHER STATES, AND THE UNITED STATES, 
 IN RELATION TO PUBLIC DEBTS. 
 
 Laws of Texas concerning interest on private debts Their good effects Erroneous 
 views of the Texans concerning their public debts Arguments drawn from the 
 action of the United States in relation to continental currency shown to be un 
 founded Contrast of the conduct of Texas and that of the other States in rela 
 tion to public debts 240 
 
XX CONTENTS. 
 
 CHAPTER XXXIV. 
 
 PRESENT CONDITION OF TEXAS. 
 
 Improved condition of Texas as set forth in the inaugural addresses of Governor 
 Bell and Lieutcnant-Governor Henderson Contrast with its condition a few years 
 previous as set forth by President Houston This the result of annexation, and 
 this " a sufficient consideration" for all the debts Texas has incurred Complaints 
 against Texas Unreasonable demands of her public men Land-speculations in 
 Texas Their effects on the public mind Popular arguments of the Texans in 
 favor of scaling Led to scaling in part by the necessity of making equation of 
 currencies Audited claims not to be reopened Popular arguments in favor of 
 scaling briefly examined Less made by investments in Texan securities than by 
 other investments Prices of leading stocks in New York market in 1842, 1845, 
 and 1852 Prices of bank and other stocks in Philadelphia in 1842, 1845, and 
 1852 Bad effects on American reputation in Europe if Texas does not review her 
 course Indications of a change for the better in public sentiment in Texas The 
 interest of Texas will be promoted by her complying with her contracts . 249 
 
 APPENDIX. 
 
 A. Amount of audited drafts 267 
 
 B. Promissory notes 268 
 
 C. Revenues of the Republic of Texas from September, 1835, to October, 1851 270 
 D. Recapitulation of revenue of the Republic of Texas, showing the total 
 
 amount of each branch ......... 271 
 
 E. Kind of funds received .......... 273 
 
 F. Tabular view of the debt of Texas at different periods .... 275 
 
 G. Imports and exports of the Republic of Texas ..... 277 
 
 H. Receipts from customs during the year ending July 31, 1844 . . . 278 
 I. Statements showing the whole amount of exchequer bills issued by the 
 
 treasury department, and their market value ..... 279 
 
 K The public lands and land-script 280 
 
 L. Revenue laws of Texas 282 
 
 M. Tenders for public dues in Texas ........ 284 
 
 N. Revenue and expenditures of the State of Texas 286 
 
 O. Assessments in Texas 289 
 
 P. Agricultural statistics of forty-one counties in 1848 .... 291 
 
 Q. Act of annexation ........... 292 
 
 R. The boundary act 294 
 
 S. An act providing for the liquidation and payment of the debt of the late 
 
 Republic of Texas, January 31, 1852 295 
 
 T. Report to President of the United States, by the Secretary of the Trea 
 sury, on the public debt of Texas 298 
 
 U. Report of the auditor and comptroller to the fourth legislature on the 
 
 public debt of Texas 304 
 
 V. Mr. Pearce s report 312 
 
 W. Debts of the Republic and Debts of the State 317 
 
THE FISCAL HISTORY OF TEXAS. 
 
 CHAPTER I. 
 
 PROCEEDINGS UNDER THE GENERAL CONSULTATION. 
 
 Meeting of the Consultation, October 16, 1835 Reassembling of the same, November 
 3 Report on supplies sent to the army, and on money in the treasury Glance at 
 military operations Extracts from the speech of Mr. Branch Tanner Archer 
 Money received from Mr. Thomas F. McKinney and from citizens of New Orleans 
 The land-offices closed Grants of land to settlers and soldiers. 
 
 IT is no part of our plan to give a particular view of the con 
 siderations that induced the Texans to dissolve their connection 
 with Mexico. Suffice it to say that land-speculations and anti 
 pathy of race appear to have been the main causes of the revolu 
 tion, the incidents connected with which we propose to narrate so 
 far only as connected with the dehts thereby incurred. 
 
 On the 15th of August, 1835, the citizens of the town of Co 
 lumbia held a meeting, appointed a Committee of Safety and Cor 
 respondence, and resolved " that a Consultation of all Texas, 
 through her representatives, was indispensable." 
 
 On the 16th of October following, between thirty and forty 
 representatives, from eight different municipalities, assembled in 
 General Consultation at San Felipe de Austin ; but adjourned on 
 the next day to the 1st of November, because " there was not a 
 sufficient number to form a quorum, owing to the members being 
 absent in the army." Before adjourning, they authorized such of 
 their number as could not join the army to unite with a General 
 Council, which had been instituted on the llth. Of this Council, 
 Mr. R. R. Royal was President. 
 
 On the 1st of November, the General Consultation reassembled ; 
 2 
 
18 THE FISCAL HISTORY OF TEXAS. 
 
 but they were not able to form a quorum till the 3d. They then 
 elected Branch Tanner Archer President ; and on the same day, 
 the Council, of which Mr. Royal was President, resigned their 
 powers. 
 
 In their report to the Consultation, they say : 
 
 " On the 14th of October, Mr. Lewis Hall was commissioned as con 
 tractor for the army, from whose reports there are reasons to believe that 
 upwards of one hundred beeves and a considerable quantity of corn-meal 
 are on the way or repairing to head-quarters ; and as connected with this 
 subject, we will also inform you that supplies of sugar, coffee, bacon, blan 
 kets, shoes, tents, clothes, &c. have been forwarded from Columbia, Bra- 
 zoria, and Matagorda. 
 
 " We have reason to believe that one eigh teen-pounder and a twelve- 
 pounder of artillery are on the way, with a fair proportion of powder and 
 ball. 
 
 " The Council has made provisions for the collection of the public dues. 
 
 " We authorized a contract for a loan of one hundred thousand dollars of 
 the citizens of New Orleans, and appointed T. F. McKinney an agent to 
 repair to New Orleans, and to carry it into effect. 
 
 " Our finances arising from the receipt of dues for lands, as will appear on 
 file in Mr. Gail Borden s report, marked F, which were in his hands, are 
 fifty-eight dollars and thirty cents. This money has been exhausted, and 
 an advance by the President of the Council of thirty-six dollars. There 
 were also several hundred dollars in the hands of Mr. Money, the alcalde 
 of the municipality of Austin. Upon this money several advances have 
 been made by Mr. Cochran, and probably will nearly cover the amount 
 of the money in the alcalde s hands; as such, you may consider that at this 
 moment the Council is out of funds." 
 
 " Despise not the day of small things. As we proceed, we 
 shall find the Government of Texas running in debt to the amount 
 of millions, and, what is more, acquiring the ability to pay all it 
 owes. Even now we find all the germs of an extended fiscal sys 
 tem contracts for purchases measures for the collection of 
 public dues and authority to negotiate a loan. Besides this, 
 the Council suspended the proceedings of the land-offices, issued 
 letters of marque and reprisal, established a mail route, and au 
 thorized the raising of three companies of volunteer rangers, 
 amounting in all to eighty-five men, " promising each volunteer 
 one dollar and twenty-five cents a day." 
 
 Even before the Consultation assembled, the miniature armies 
 of Texas were active in the field. Hostilities may be said to have 
 commenced on the 20th of September, when a detachment of 
 about two hundred Mexican cavalry from Bexar arrived on the 
 western bank of the Guadaloupe, and attempted the passage of 
 
THE FISCAL HISTORY OF TEXAS. 19 
 
 the river ; but were repulsed by eighteen men under Captain 
 Albert Martin, the whole of the available force then at Gonzales. 
 (Kennedy, vol. i. p. 107.) On the 1st of October, under the 
 command of Colonel Moore, they put to route the Mexicans under 
 General Castonado ; and on the 8th, under Captain Collinsworth, 
 they attacked and captured the fort of Goliad, containing stores 
 to the amount of ten thousand dollars, with two brass cannon and 
 three hundred stand of arms. A still more important encounter 
 was that of the 28th of October, near the mission of the Concep 
 tion, when ninety-two Texans, under the command of Colonel 
 Bowie and Captain Fannin, met a detachment of the Mexicans, 
 consisting of about four hundred men, and obtained a complete 
 victory over them. 
 
 But the glories of the field we must leave to more ambitious 
 historians. The humble subject of dollars and cents engages our 
 attention. We cannot, therefore, stop to tell how, on the 3d of 
 November, a detachment of fifty men from Goliad, under Adju 
 tant Westover, attacked and entered Lipantitlan, near San Pa- 
 tricio, the garrison of which (in number twenty-one) surrendered, 
 and were dismissed on their parole on condition of not serving 
 again against Texas during the war. Neither can we give the 
 particulars of the " Grass Fight," in which five Mexicans were 
 killed and several wounded, while the Texans escaped with only 
 one man ? m wounded. It is enough to say that, on the 3d of No 
 vember, when the General Consultation was reorganized, the 
 only place of any importance in Texas Proper, in possession of 
 the Mexicans, was San Antonio de Bexar. 
 
 On taking the chair, Mr. Archer, the President elect, made an 
 address, in which he suggested the propriety of establishing a pro 
 visional government, to consist of a governor, lieutenant-governor, 
 and council, who should be clothed with both legislative and ex 
 ecutive powers. Adverting to financial affairs, he said : 
 
 " It will be necessary to procure funds in order to establish the contem 
 plated government, and to carry on the war in which we are now engaged : 
 it will, therefore, be our duty to elect agents to procure those funds. 
 Without funds, however heroically your armies may fight, however wisely 
 your councils may legislate, they will erect but a baseless fabric that will 
 fall of its own weight." 
 
 The soundness of these principles will not be contested by the 
 reader. In times of war, he who stays at home and works ren- 
 
20 THE FISCAL HISTORY OF TEXAS. 
 
 ders just as much service to his country as he who goes out to 
 fight. If everybody should go out to fight, everybody would 
 starve. Without money, wisdom and valor avail nothing. The 
 Rothschilds and the Barings are just as much entitled to the glory 
 that results from successful battles as are the Napoleons and the 
 Wellingtons. 
 
 To illustrate this by the case now before us : If Mr. Gail Bor- 
 den had not paid over the public money then in his hands, amount 
 ing to fifty-eight dollars and thirty cents ; if Mr. President Royal 
 had not advanced thirty-six dollars; and if Mr. James Cochran had 
 not made "several advances," amounting in all to " several hun 
 dred dollars," how could supplies have been sent to the army? 
 And if supplies had not been sent to the army, the glorious battle 
 of the Conception might never have adorned the annals of Texas. 
 The captures of Goliad and Lipantitlan did, indeed, occur before 
 the fiscal system of the Council was fully matured ; but the reader 
 will agree with us that, without supplies obtained from some quar 
 ter, it is as impossible to capture cities as it is to fight pitched 
 battles. 
 
 "Great events from little causes spring." "The rights and 
 liberties of thousands of freemen are in your hands," said Mr. 
 Archer, in his opening address to the Consultation ; " and millions 
 yet unborn maybe affected by your decisions." Yes; and the 
 rights and liberties of these thousands and millions, born and un 
 born, may be more dependent on Mr. Gail Borden s fifty-eight 
 dollars and thirty cents, Mr. Royal s thirty-six dollars, and Mr. 
 Cochran s "several hundred dollars," than perhaps any one of 
 these gentlemen has imagined. 
 
 But a truce to reflections. We must resume our narrative. On 
 the 6th, in the morning, it was resolved " that a committee of five 
 be appointed to provide for the necessities of our army and troops 
 on the road generally, with authority to borrow money, or origi 
 nate other debts for that purpose ;" and on the afternoon of the 
 same day, the committee made report as follows : 
 
 "The committee, to whom was referred the subject of providing for the 
 necessities of the army, beg leave to report that they have received of 
 Thomas F. McKirmey, by the hands of l)r. C. B. Stewart, a loan of five 
 hundred dollars, of which they have expended, in payment of drafts on the 
 authorities, the sum of two hundred and thirty-eight dollars, as will appear 
 by the accompanying account, which leaves a balance in the hands of Dr. 
 
THE FISCAL HISTORY OF TEXAS. 21 
 
 Stewart of one hundred and sixty-two dollars, and one hundred left with 
 Messrs. Robert Mills & Co., of Brazoria, leaving a balance in hand, in all, 
 of two hundred and sixty-two dollars. Paid to express twenty, after making 
 out the account, leaves two hundred and fifty-two dollars." 
 
 Here we find the national debt increasing, but not in such a 
 way as to cause regret, as it increased the national means. And 
 these means were further increased by subscriptions by the citizens 
 of New Orleans, which, as was formally announced to the Consul 
 tation on the 8th, amounted to seven thousand dollars, when the 
 agent, Mr. E. Hall, left that city, and were then probably aug 
 mented to ten or fifteen thousand dollars. 
 
 The Consultation expressed its sense of the obligation conferred 
 in a letter of thanks, and made Captain Hall a present of a league 
 of land, 4428 American acres. On the 9th, it made the captain 
 an agent to purchase military stores at New Orleans. On the 
 llth, it adopted the plan of a provisional government. On the 
 12th, it elected Henry Smith Governor, J. W. Robinson Lieu 
 tenant-Governor, and chose a Council of thirteen members. On 
 the same day, it elected Messrs. B. T. Archer, W. H. Wharton, 
 and S. E. Austin, commissioners to proceed to the United States. 
 On the 13th, the plan of the Provisional Government was enrolled; 
 and, on the 14th, the Consultation adjourned to meet on the 1st 
 of March, 1836, unless sooner called by the Governor and Council. 
 
 All the proceedings of the General Council, and of the Consul 
 tation, appear to have given satisfaction, except an order issued by 
 the first on the 27th of October, and afterwards strengthened by 
 the Consultation, to close the land-offices, and to forbid all further 
 surveys. It was not free from objection, inasmuch as prudent 
 men are not willing either to purchase land, or to expend labor and 
 capital in its improvement, till the title is fully secured. But, as 
 Mr. Barret said, in a report from a select committee on November 
 13: "The land-offices have been closed, that no advantage should 
 be taken over the soldier in the field, in making his selections of 
 lands." 
 
 From the beginning, the Texan leaders regarded the land as the 
 chief means of defraying the expenses of the war. Thus, Mr. 
 Archer said, in his opening speech : 
 
 " Some of our brethren of the United States of the North, hearing of our 
 difficulties, have generously come to our aid ; many more ere long will be 
 with us ; services such as they will render should never be forgotten. It 
 
22 THE FISCAL HISTORY OF TEXAS. 
 
 will be proper for this Convention to secure them the rights and privileges 
 of citizens, and to secure to them their laud in l head-rights/ and place 
 them on the same footing with those of our citizens who have not J et ob 
 tained their lands. 
 
 " Some fraudulent sales or grants of land, by the late Government of 
 Coahuila and Texas, will require your attention." 
 
 In like spirit, the Consultation said, in their letter of November 
 4, to the citizens of New Orleans: 
 
 " Any who embark in our cause, in the army or navy, shall be liberally 
 rewarded in land and money, and in the blessings of a grateful and re 
 deemed people." 
 
 And the policy of Texas was then fixed, as far as it could be 
 by Article XIV., in the plan of the Provisional Government, re 
 quiring all persons, "in any way concerned in the location of 
 lands, forthwith to cease their operations during the agitated and 
 unsettled state of the country, and until the land-office can be 
 properly systematized," and also by the following articles in ad 
 dition : 
 
 " ARTICLE XV. All persons now in Texas and performing the duties 
 of citizens, who have not acquired their quantum of lands, shall be entitled 
 to the benefit of the laws on colonization, under which they emigrated ; and 
 all persons who may emigrate to Texas during her conflict for constitutional 
 liberty, and perform the duties of citizens, shall also receive the benefits of 
 the laws under which they emigrated. 
 
 " ARTICLE XVIII. All grants, sales, and conveyances of land, illegally 
 and fraudulently made by the legislature of the State of Coahuila and 
 Texas, located or to be located within the limits of Texas, are hereby 
 solemnly declared null, void, and of no effect. 
 
 " ARTICLE XIX. All persons who leave the country in its present 
 crisis, with a view to avoid a participation in its present struggle, without 
 permission from the alcalde or judge of their municipality, shall forfeit all 
 or any lands they may hold or may have a claim to, for the benefit of the 
 government : Provided, nevertheless, that widows and minors are not in 
 cluded in this provision." 
 
 As the colonization laws of Texas granted a league and "labor" 
 of land, equal to 4604 American acres, to each settler who was 
 the head of a family, and the one-third of a league, 1476 acres, 
 to each single man, the bounty thus granted was sufficient to 
 induce residents of other countries to remove to Texas, and iden 
 tify themselves with her interests. 
 
THE FISCAL HISTORY OF TEXAS. 23 
 
 CHAPTER II. 
 
 LEGISLATIVE PROCEEDINGS UNDER THE PROVISIONAL GOVERNMENT. 
 
 Ordinances to raise an army and navy, and to supply them with necessaries Pro 
 vision for auditing claims Duties on imports and tonnage Collectors of public 
 dues Act to authorize a temporary loan of one hundred thousand, and a per 
 manent loan of one million dollars Other ways and means Liberal grants of 
 land to soldiers. 
 
 ACCORDING to the recommendation of Mr. Archer, the Provi 
 sional Government was endowed with both legislative and executive 
 powers, and it began to act almost immediately in its double 
 capacity. 
 
 It passed ordinances (November 26) " to raise a regular army" 
 of 1120 men, and "to organize a corps of rangers" of 178 men, 
 including officers ; (December 8-12), to accept the services of at 
 least 5000 volunteers ; (December 18), to create a legion of ca 
 valry, 380 strong; and (June 7) to raise an army to be called 
 " the Army of Reserve for the Protection of the Liberties of 
 Texas," to consist of 1145 men, officers included. 
 
 Not content with these formidable preparations on land, it turned 
 its attention to the sea, and (November 27) passed " an ordinance 
 and decree to establish a navy" " to consist of two schooners 
 of twelve guns each, and two schooners of six guns each." 
 
 Armies and navies must be fed, paid, and clothed. And, 
 accordingly, the Provisional Government passed an ordinance 
 (November 19) to purchase provisions for the army; two other 
 ordinances (November 30) to purchase munitions of war, provi 
 sions, arms, &c. ; a resolution (December 6) to purchase articles 
 for the volunteers; " an ordinance and decree (November 27) for 
 advancing the sum of fifteen hundred dollars for the benefit of the 
 volunteer army of the people, under the command of General 
 Stephen F. Austin;" and another (December 2) "for supplying 
 the army of the people, now before Bexar, with money." 
 
 That these duties might be properly performed, an ordinance 
 
24 THE FISCAL HISTORY OF TEXAS. 
 
 was passed (November 30) " for appointing a commissary, and 
 defining his duties;" another (January 22), appointing a sutler; 
 and another (December 22), " creating the office of commissary- 
 general, and regulating the offices of paymaster and quarter 
 master-general." 
 
 Nor was the Provisional Government insensible to the importance 
 of having claims properly audited, accounts regularly kept, and of 
 those various checks and guards which are necessary in the dis 
 bursement of public funds. For a time, the General Council itself 
 seems to have performed all these functions, governed solely by 
 its own discretion ; but (November 26) an ordinance was passed 
 " prescribing the manner and form of settling the accounts of the 
 volunteer army of Texas;" and, on the same day, another "for 
 appointing a treasurer, a secretary to the executive, and two chief 
 clerks, and defining their several duties." This was followed by 
 another (December 2-12), " altering and changing the manner of 
 drawing drafts on the treasurer;" by another (December 29), 
 " creating the offices of auditor and controller ;" by another (January 
 7), " prescribing the manner in which all claims by volunteers shall 
 be presented for payment, and also to prevent frauds and imposi 
 tions on the government ;" and, finally, by a resolution (January 
 17), for appointing a committee of finance to act in the place of 
 the General Council when it could not form a quorum. 
 
 But where the use of all this apparatus of treasurer, controller, 
 and auditor, if there was neither money to keep nor money to dis 
 burse ? The members of the Provisional Government were men of 
 too much sense not to see this. They turned their attention to 
 the ways and means which other governments have resorted to in 
 times of exigency. They found that they might all be resolved 
 into taxing, borrowing, begging, selling, and (if it be permitted to 
 use such rough words), robbing and cheating, and they appear to 
 have determined to try all six. 
 
 Their first act for raising a revenue by taxation was passed 
 December 12, and was entitled "An ordinance and decree establish 
 ing duties on imports and tonnage, and for other purposes." It 
 imposed duties of ten and twenty per cent, on foreign goods ; but 
 made free sundry articles. This was followed by a supplement 
 (December 15), imposing a tonnage-duty of one dollar and twenty- 
 five cents per ton, and establishing a duty of twelve and a half 
 
THE FISCAL HISTORY OF TEXAS. 25 
 
 cents a gallon on whiskey, American gin, rum, and brandy. But 
 hardly had this act time to reach the seaports, when (December 
 27), with worse than American instability in tariff matters, another 
 act was passed raising the duties to fifteen and twenty-five per 
 cent, ad valorem, and embracing a new list of non-dutiable articles. 
 
 This was followed (December 30) by an ordinance and decree 
 appointing collectors of public dues, i. e. on lands granted or sold, 
 an ordinance which amounted to nothing, so far as effective revenue 
 was concerned, inasmuch as it provided that " duly audited treasury 
 orders" should be received in payment. A supplemental ordinance 
 was passed on the same day, and another January 15. This last 
 was intended to obviate the inconvenience those persons sustained 
 whose audited drafts exceeded the amount they had to pay for land 
 dues. In such cases, the collector was authorized to indorse on 
 the back the amount the public debtor had paid in, and he could 
 apply the balance of the draft to other purposes. 
 
 The chief reliance of the Provisional Government was, however, 
 on loans, and it passed several acts with a view of effecting this 
 object. The first of these (November 24) authorized and empowered 
 Thomas F. McKinney, of Velasco, to borrow one hundred thousand 
 dollars for a period of not less than one year, at a rate not exceed 
 ing ten per cent, per annum. Another act, explanatory of this, 
 passed Jan. 10, 1836, authorized Thomas F. McKinney and Samuel 
 M. Williams to execute the bonds ; to borrow part of one hundred 
 thousand dollars, if they could not borrow the whole; and made the 
 bonds (in six months from the date of their issue) receivable at par 
 value in payment of any debts due to Texas for lands or other 
 revenues. 
 
 This was designed to secure a temporary loan. Another act, 
 passed December 4, " created a loan of one million dollars;" in 
 structed Messrs. Austin, Archer, and "Wharton to negotiate the 
 same at a rate not exceeding ten per cent, per annum ; and directed 
 the Governor to cause the bonds to be made out for one hundred 
 thousand dollars each, for a period of not less than five nor more 
 than ten years, payable in the city of New York, or any other city 
 of the United States, as the case might require. By another act 
 (December 5), the commissioners were instructed 
 
 " To pledge or hypothecate the public lands of Texas, and to pledge the 
 public faith of Texas, in such manner, and with such restrictions as shall 
 
26 THE FISCAL HISTORY OF TEXAS. 
 
 best comport with the honor and dignity of the State, and give effect to the 
 pledges : Provided, also, that the said commissioners shall be authorized 
 and instructed to create a stock or funded debt, upon such pledges as may 
 be agreed upon, to be sold in shares on terms such as will not exceed the 
 rate per cent, ordained in the ordinance authorizing a loan for Texas : 
 And be it aho further provided, that such part or parts of the public 
 revenues of the country may be pledged as shall be sufficient to pay the 
 annual interest upon any and all loans effected under the restrictions here 
 inbefore stated." 
 
 Thus the act gave the commissioners power to pledge the public 
 faith, the public lands, the public revenues everything that Texas 
 possessed. 
 
 The government tried to sell, offering land script in great 
 abundance, but found few willing to buy. 
 
 Begging is a mode of raising ways and means which the Kings 
 of England frequently resorted to in old times. But the Govern 
 ment of Texas did nothing more in this way than pass a resolu 
 tion (December 8) authorizing its foreign agents to receive all 
 moneys and donations of any kind that might be given or presented 
 to Texas, by citizens of the country which they might visit. There 
 was no impropriety in this, as many citizens of the United States 
 had shown a disposition to contribute before being solicited. 
 
 Robbing is another governmental mode of raising revenue. The 
 Provisional Government tried its hand at this in two ways ; at least 
 we find it difficult to give any other interpretation to a resolution 
 adopted January IT, 1836, in the words following, to wit : 
 
 " SECTION I. Whereas, the troops garrisoned at Bexar being without 
 the necessary provisions and clothing for their support and comfort, and 
 the probability of its being some time yet before the necessary supplies from 
 our agents in the United States, for the support, subsistence, and use of the 
 army, will be received ; and it being absolutely necessary to make immediate 
 provisions for the sustenance and support of these troops at Bexar ; and 
 it beiiKj impossible to drive beeves and procure provisions for their use, 
 without horses: 1 Therefore 
 
 " Be it resolved, by the General Council of the Provisional Government 
 of Texas, that Lieutenant-Colonel Neill, commandant at Bexar, be, and is 
 hereby authorized and empowered to employ as many Mexicans, or other 
 citizens, for the purpose of driving up beeves, and procuring provisions for 
 the troops under his command, as may be required for that purpose." 
 
 This, however, may have been regarded as only reprisal. Much 
 of the war between the Mexicans and Texans was of a predatory 
 character, and such will always be the character of war between 
 
THE FISCAL HISTORY OF TEXAS. 27 
 
 nations whose wealth consists principally in cattle, whether they 
 be Arabs, Tartars, Texans, or Mexicans. 
 
 The second way in which the Provisional Government tried its 
 hand at robbing was in granting letters of marque and reprisal. It 
 passed two acts with this object, by the first of which (Nov. 27) 
 it was provided that twenty per cent, of the proceeds of the prizes 
 should be paid into the treasury ; by the second (Nov. 30), the 
 amount was reduced to ten per cent. In thus authorizing indi 
 viduals to fit out privateers, it could plead the precedents of the 
 best-established and most righteous governments. 
 
 But its greatest and best stroke of financial policy the Provi 
 sional Government reserved for the last. This was embodied in an 
 act passed Jan. 7, 1836, but not approved of by the acting Gover 
 nor till the 20th, by which it was ordained and decreed 
 
 "That the Treasurer shall immediately cause to be printed in a neat form, 
 and shall issue in discharge of claims against the government and drafts 
 on the treasury, the amount of one hundred and fifty thousand dollars in 
 treasury notes, varying in specified value from one dollar to one hundred 
 dollars, specifying on the face thereof that they will be received in pay 
 ment for lands and other public dues, or be redeemed with any moneys in 
 the treasury not otherwise appropriated/ 
 
 Thus, in theory at least, the Provisional Government completed 
 the financial circle of taxing, borrowing, begging, selling, robbing, 
 and cheating, for governmental paper money always degenerates 
 into an instrument of fraud and oppression. 
 
 For the officers on the civil list the Provisional Government 
 made moderate but decent allowances. 
 
 To the army it was more liberal. They were placed on the 
 same footing, in regard to pay and rations, as the army of the 
 United States. 
 
 The public lands the Provisional Government bestowed very 
 freely. By one act (Nov. 24), it gave 640 acres to each soldier of 
 the regular army. By another, of Dec. 8, 640 acres were granted 
 to each volunteer who should enlist for the war, and 320 to those 
 who should enlist for three months. By an act of Dec. 12, it was 
 provided that 640 acres should be given to the representatives of 
 each volunteer who should be killed in battle or die in the service. 
 
 This seemed very liberal ; but the cash value of the article 
 bestowed was very small. Land, to him who has neither capital 
 to stock it nor skill to cultivate it, is worth only what others are 
 
28 THE FISCAL HISTORY OP TEXAS. 
 
 willing to give for it. The charges of the Mexican Government 
 for a league of land were less than four cents an acre. The amounts, 
 then, bestowed by the Provisional Government were equivalent 
 only to cash bounties of twelve and twenty-five dollars. 
 
 The offer, however, drew volunteers from the United States, 
 as they were more or less governed in estimating the value of the 
 bounty by the price which land bore in their own neighborhoods. 
 
 After they got their titles, they found they had to pay twelve 
 dollars for surveying 640 acres, and one dollar for the record, thus 
 reducing the bounty to the equivalent of about twelve dollars. The 
 result was that land was at a very low price, or at no price. 
 
 For a time, indeed, after the battle of San Jacinto, when certi 
 ficates were first issued, Nov. 1836, land-claims occasionally sold 
 as high as $200 or $300 for 640 acres. But they subsequently 
 sold as low as ten dollars for 640 acres, or at a fraction more than 
 one cent and a half an acre. 
 
THE FISCAL HISTORY OF TEXAS. 
 
 29 
 
 CHAPTER III. 
 
 EXECUTIVE PROCEEDINGS OF THE PROVISIONAL GOVERNMENT. FIRST 
 PERIOD : NOVEMBER 14, 1835, TO JANUARY 2, 1836. 
 
 Comprehensive proceedings in four months Pecuniary affairs of the General Coun 
 cil A treasurer appointed First report of Committee on Finance Donation of 
 Mr. Hutchins, of Natchez Proceedings in relation to a United States Bank note 
 Plan for raising a revenue Gov. Smith s objections to the way in which money- 
 matters were conducted Small costs of the campaign Loan from Mr. Brook- 
 field, of New Orleans. 
 
 " THE North Americans are the only people who, in defiance 
 of all obstacles, have struck the roots of civilization deep into the 
 soil of Texas. Even as I trace these lines, I reflect upon their 
 progress with renewed wonder and admiration. They are, indeed, 
 the organized conquerors of the wild, uniting in themselves the 
 threefold attributes of husbandmen, lawgivers, and soldiers." 
 
 Thus speaks Kennedy, an Englishman, the historian of Texas. 
 And he does our countrymen no more than justice. Let twenty 
 thousand unquiet spirits roll over into Tamaulipas, Chihuhua, 
 Sinaloa, Sonora, or any other neighboring territory, and they will, 
 in two months time, do precisely what was done by the Provisional 
 Government of Texas. They will substitute the common for the 
 civil law (with necessary modifications); establish trial by jury 
 and the writ of habeas corpus; Anglicize and Americanize every 
 thing. It matters not from what part of the Union you take them. 
 The forms of legislation are so fatniliar to all that, in any twenty 
 thousand, you will find men who can enact laws as numerous at 
 least as those of Solon or Lycurgus, and, perhaps, quite as just 
 and as wise. 
 
 The Provisional Government was four months in power, but in 
 two months it passed all the laws we have mentioned, besides many 
 others which it is not our province to record. The next question is 
 as to how it performed its executive duties ; and to answer this, we 
 must refer to the journals. 
 
30 THE FISCAL HISTORY OF TEXAS. 
 
 The General Council met, and was organized, Nov. 14, 1835. 
 Nov. 15, "accounts l V and i 2 were presented, and ordered to 
 lie on the table till to-morrow." Thus early did fiscal concerns 
 engage its attention. 
 
 Nov. 16, Mr. Barret, from the select committee to whom had 
 been committed the duty to make extracts from sundry communi 
 cations from the United States and elsewhere, made a report, from 
 which, among other things, it appeared 
 
 " That, at San Augustine, thirteen horses and four hundred dollars cash 
 had been subscribed since Sunday last, which, added to former subscriptions 
 for the support of the country, made in the aggregate a considerable amount; 
 and that much larger sums would be advanced if necessary ; that about eight 
 hundred dollars had been subscribed at Natchitoches, Louisiana, and two 
 thousand at Mobile, Alabama ; that if money was wanted, Mr. Thomas F. 
 McKinney would accept small drafts, five or six hundred dollars at a time, 
 till a loan could be effected in the United States ; and that the receivers of 
 public moneys of the Department of Nacogdoches, having a considerable 
 amount of funds on hand, had surrendered them to the Provisional Go 
 vernment, and they would be in a few days in the treasury." 
 
 All this was very encouraging, and on the same day a fiscal 
 committee, consisting of Messrs. Millard, Wilson, and Clements, 
 was appointed to attend to these important matters. 
 
 On the next day, Mr. Barret, from the Committee on the Af 
 fairs of State and Judiciary, made a report, in which it was made 
 a leading paragraph 
 
 " That the immediate appointment of a treasurer to the Provisional Go 
 vernment, whose duty shall be clearly defined, is now devolving upon this 
 body. Receipts and disbursements of the public moneys have been hitherto 
 carried on without system ; consequently, without any other responsibilities 
 to the public than that high sense of moral feeling which so eminently dis 
 tinguishes the free sons of that country in revolutionary times from which 
 our citizens have descended." 
 
 It was not till ten days afterwards that an ordinance was passed 
 for appointing a treasurer ; and the oath prescribed by the organic 
 law was not administered to Joshua Fletcher, Esq., Treasurer pro 
 tern., till the 28th of November. On the 5th of December, all was 
 made right by his being regularly elected treasurer. 
 
 Previous to this, however, on the 18th of November, the fiscal 
 committee made a report ; and this, as the first financial document 
 of a government which, in little more than a month from date, was 
 to have complete control of a territory larger than the kingdom of 
 France, deserves to be handed down to posterity. 
 
THE FISCAL HISTORY OF TEXAS. 31 
 
 " Mr. Millard, from the Committee on Finance, made the following re 
 port : 
 
 " Your Committee on Finance, to whom were referred the accounts of 
 Thomas Bray and Madison M. Stevens, beg leave to report : 
 
 " That the accounts so submitted against the Government of Texas are, 
 in their present form, unreasonable, and ought not to be paid. 
 
 " The account marked 6/ that of Thomas Bray, for furnishing Cole s 
 company of wagoners with one hundred and seven pounds of bread, at 
 twenty-five cents per pound, amounting to twenty-six dollars and seventy- 
 five cents, should be reduced to fourteen cents per pound ; and he be allowed 
 fifteen dollars and seventy-eight cents in full for the amount of his account. 
 And further, the account of Madison M. Stevens, for carrying one express 
 to Nacogdoches, that he be allowed compensation for ten days service, at 
 two dollars and fifty cents per day, amounting to twenty-five dollars, and 
 that the amount of his expenses already paid be deducted from the same, 
 leaving a balance due him of ten dollars and fifty cents. 
 
 " The above, in the opinion of this committee, would be paying the 
 above-named individuals full compensation for articles furnished and services 
 rendered. 
 
 HENRY MILLARD, 
 
 Chairman. 
 
 CHARLES WILSON, ) n 
 
 J. D. CLEMENTS, } Comm >Mee. 
 
 " The foregoing report, having been read, was ordered to lie on the 
 table." 
 
 What powerful influence Messrs. Bray and Stevens brought 
 to bear on the watchful guardians of the public treasury, we know 
 not ; but nearly a month afterwards the committee made a report, 
 in which it was recommended that their demands should be paid 
 in full. 
 
 So, in reports from the Committee of Finance, and the Com 
 mittee of Public Accounts, eighty-four accounts, amounting in all 
 to $7,764 78, besides a few others, the amounts of which are not 
 distinctly stated, appear to have been passed and allowed up to 
 January 25, 1836. Some ten or more were rejected for want of 
 sufficient vouchers ; six were laid over for further consideration ; 
 and six referred to the House for its special action. 
 
 The following extracts from the Journal are characteristic of the 
 times : 
 
 "November 80. By leave, General Houston presented to the Council 
 one hundred dollars, a donation from John Hutchins, of Natchez, Missis 
 sippi, to the Provisional Government, for the use of Texas in her present 
 struggle for liberty. 
 
 " Mr. Millard presented the following resolution, which was adopted 
 unanimously : 
 
32 THE FISCAL HISTORY OF TEXAS. 
 
 " Resolved, That the thanks of the General Council of the Provisional 
 Government of Texas be, and they are hereby presented to John Hutching, 
 of Natchez, Mississippi, for the interest and zeal he has evinced in the 
 cause of Texas, and particularly for his liberal donation to this government 
 of one hundred dollars, to defray the expenses of this government, and to 
 assist their efforts, for the security and establishment of their constitutional 
 liberty, against the tyranny and oppression of the government of the 
 usurper, Santa Anna. 
 
 " Mr. Mil lard moved that a copy of the foregoing resolution, signed by 
 the President and Secretary, be forwarded to Mr. Hutchins, which was 
 agreed to. 
 
 " December 1. The President stated to the Council that he had paid over 
 to the Treasurer the one hundred dollars presented by John Hutchins, of 
 Natchez, Mississippi, and taken the Treasurer s receipt, which was ordered 
 to be deposited in the executive office." 
 
 This is the last event of any importance in the fiscal history 
 of Texas previous to the 10th of December, the day on which 
 Cos and Utargechea capitulated, which ended the campaign. 
 
 Some time afterwards, December 16, we find nearly a page of 
 the Journal devoted to a report and resolution of the Committee 
 of Finance on a branch post-note of the United States Bank for 
 one thousand dollars. And it was resolved that 
 
 " The Treasurer be authorized to pass the said note to Mr. Thomas Gay, 
 or any other person, in exchange for cash or smaller notes; and that, if the 
 said note for one thousand dollars should prove to be spurious, the Treasurer 
 should be bound to refund the amount to Thomas Gay, or whoever shall 
 have changed the same, with interest, at the rate of ten per cent., from the 
 time he may lay out of the use of his money." 
 
 The reader will be gratified to learn that this thousand dollar 
 bill, the sum of the contributions of some people in the United 
 States, and the only bank-note that appears ever to have reached 
 the treasury of Texas, proved to be genuine. 
 
 Previous to this, however, and even previous to the receipt of 
 the hundred dollars from Mr. Hutchins, of Natchez, namely, on 
 the 27th of November, the Committee of Finance made a report, 
 in which, after dwelling for some time on the immense natural 
 resources of Texas, greater than those of New York, Pennsylvania, 
 Yirginia, and Ohio, all put together, they proceeded to develop a 
 plan for raising a revenue. The portion of the land granted to 
 individuals or settlers, they estimated at ten millions of acres, a 
 direct tax on which of one cent an acre would produce one hun 
 dred thousand dollars per annum. The United States Govern 
 ment having, from the sales of its public lands, derived a revenue 
 
THE FISCAL HISTORY OF TEXAS. 33 
 
 of a million per annum, the committee suppose that Texas may 
 derive from this source a quarter of a million a year, though not 
 immediately. As a means more readily available, they recom 
 mend a tonnage duty of two dollars and twelve and a half cents 
 a ton, and, believing the export of cotton to amount to sixty 
 thousand bales, they suppose "the amount derived from this 
 branch of the revenue (i. e. the tonnage duties) could be fairly 
 estimated at 125,000 dollars." 
 
 " Another sure and certain source of available revenue presents itself 
 to the consideration of your committee, viz., an export duty on cotton, 
 which it would not be deemed high to place at one quarter of a cent per 
 pound. The ease and facility with which this duty can be collected, and 
 the near approach of the season for the exportation of the article, must 
 necessarily render this subject of impost, in the opinion of your committee, 
 the first in the list of available means. Your committee, therefore, recom 
 mend a duty of one quarter of a cent per pound for every pound of cotton 
 exported out of Texas. Assuming the amount of bales exported as correct 
 in the preceding item on tonnage, the revenue would be increased by this 
 item of impost about 60,000 dollars." 
 
 The committee also proposed duties of fifteen and thirty per 
 cent, on imports, but offered no estimate of the amount they would 
 yield to the treasury. 
 
 Thus easy is it to cipher out a revenue on paper. But as our 
 concern is not now with the revenues of Texas in posse, but in esse, 
 we r must return to the consideration of the management of the 
 means which the Provisional Government actually possessed, con 
 sisting of a few thousand dollars (somewhere between $3,000 and 
 $10,000), found in the coffers of the Mexican Government it had 
 superseded, and the contributions of its own citizens, and those of 
 the United States. 
 
 For a short time, all orders on the Treasurer, after having been 
 passed by the General Council, were signed by the Governor and 
 Secretary; but, on the 2d of December, an ordinance was passed 
 making the signature of the chairman of the Committee of Finance 
 all-sufficient. 
 
 This did not please Governor Smith, who was something of a 
 precisian. 
 
 " I object to the bill for the following reasons: First. The Committee on 
 Finance, with whom the whole discretion of appropriating money and draft 
 ing on the treasury is vested, is, like all other committees belonging to 
 your body, liable to change and shift its members; as such, indiscreet appro 
 priations might be made, and money drawn for improper uses. A bare 
 3 
 
34: THE FISCAL HISTOHY OF TEXAS. 
 
 report to the Council of what has been done, in order that it be noted in 
 your journals, would afford no check to the acts of the committee, because 
 the appropriations and drafts on the treasury would be made prior to the 
 report of the committee; and, as such, they would be left without check 
 or corrective. 
 
 " Secondly. I consider that no appropriation of money should be made, 
 except by law; that no committee, or separate authority, should be privileged 
 to make appropriations, or draw money from the treasury, without the 
 necessary forms being complied with. Acting without the proper function 
 aries of secretary, comptroller, &c., it would be well to incorporate in our 
 plan as many checks and balances as would be consistent, without producing 
 complexity." 
 
 Governor Smith was clearly right. According to the established 
 principles of American polity, the legislature should make appro 
 priations ; a board, or an officer, specially appointed for the pur 
 pose, should audit all claims ; and the treasurer should pay them. 
 The General Council was betrayed into some improprieties by its 
 acting in both a legislative and executive capacity, and, on the 
 12th of December, by a vote of twelve to two, it passed the bill 
 in defiance of the Governor s veto. 
 
 Struck, however, as it would seem, with the force of the Gover 
 nor s observations, they previously, on the llth of December, re 
 solved 
 
 " That there should be appointed by the President a Standing Committee 
 of Public Accounts, to consist of one member from each of the principal 
 standing committees, except the Committee of Finance, and that it should 
 be the duty of said committee to receive, audit, and register said accounts, 
 entering in a book, to be purchased for that purpose, the title and amount 
 of said accounts, in such a manner as to show their situation at any particular 
 time, whether passed, rejected, or under consideration, and report upon the 
 same to the Council, as often as twice every week, say Wednesday and Satur 
 day." 
 
 Thus, everything was not left to the Finance Committee, and, 
 while one committee audited the accounts, another committee (such 
 accounts being first approved by the Council) ordered them to be 
 paid. 
 
 Soon afterwards, a regular system of account-keeping was intro 
 duced, by the appointment of an auditor and comptroller. 
 
 All this may seem like very trifling in a government, the imme 
 diate means of which were so insignificant as were those of the Pro 
 visional Government of Texas. But all that a government with 
 an empty treasury can do, is to promptly audit accounts, carefully 
 register them, reject such as are not supported by sufficient vouchers, 
 
THE FISCAL HISTORY OF TEXAS. 35 
 
 and give to creditors, whose claims are justly founded, some ac- 
 knowled foment of the same. All this did the Provisional Govern- 
 
 o 
 
 ment of Texas; and some of its principles of polity, especially that 
 of promptly auditing accounts, might be adopted with advantage 
 by the United States Government, and perhaps by some of the 
 States. 
 
 The actual doings, in a financial way, of the Provisional Govern 
 ment contrast most ludicrously with its magnificent enactments for 
 raising revenue and negotiating loans ; and yet be it remembered 
 that, during the period specially treated of in this chapter, a region 
 twice as large as Great Britain and Ireland was cleared of its Mexi 
 can foes. 
 
 How was this effected? The pecuniary means of the govern 
 ment were, as we have seen, very small. But everybody fought, and 
 everybody contributed. What was wanted for the use of the 
 army was, according to the custom of war, forcibly seized, if it 
 could not otherwise be got possession of; but the rule was always 
 to give an acknowledgment, making the government responsible for 
 the value of what was thus taken. 
 
 " Deficient in all the resources requisite for war, except moral 
 energy and courage, the colonists themselves contributed, from 
 their private means, whatever was calculated to be of use to the 
 troops. Leaden water-pipes and clock-weights were melted down 
 for ammunition, and even the women cheerfully assisted in mould 
 ing bullets and making cartridges." Kennedy, vol. ii. p. 115. 
 
 The actual cost of the campaign we have been curious to know, 
 but cannot tell. Others appear to have had a like curiosity, for 
 the first Congress under the Republic called for a report of the 
 transactions of the treasury under the Provisional Government, 
 but the desired report does not appear to have been made. Subse 
 quently to this, the Congress of Texas in humble imitation of the 
 Congress of the United States keeping its public records in 
 combustible buildings, suffered the loss of part of those in the 
 Treasurer s office from fire. The world must, therefore, for the 
 present, at least, be content with such account of receipts and 
 expenditures, under the Consultation and under the Provisional 
 Government, up to January 2, 1836, as we have been able to 
 gather from the journals. 
 
 Before concluding the history of this year, we ought to state 
 
36 THE FISCAL HISTORY OF TEXAS. 
 
 that a loan was effected; not a very large one, indeed, but yet 
 such as was deemed worthy of the following insertion in the 
 journals: 
 
 " December 29. Mr. Harris presented to the House the receipts of E. 
 Hall, our agent at New Orleans, for eleven hundred dollars received of 
 William Brookfield, money loaned for the use of Texas, to purchase arms, 
 ammunition, &c. 
 
 " On motion of Mr. Roy all, 
 
 " Resolved That the thanks of the General Council be presented to Mr. 
 Brookfield for his generous and patriotic conduct in loaning eleven hun 
 dred dollars to E. Hall, our agent at New Orleans, for the purpose of pro 
 curing and forwarding arms, ammunition, &c., and that the receipt of Mr. 
 Hall for the same be entered on the journals of the Council, the original to 
 remain on file among the papers of the Council, and a copy to be given to 
 Mr. Brookfield, as evidence of his claim, to be adjusted at some future 
 period. 
 
 i The following is a copy of the receipt : 
 
 "Received, New Orleans, December 7, 1835, from Mr. William Brook- 
 field, eleven hundred dollars as a loan for the service of Texas. 
 
 "$1100. EDWARD HALL, 
 
 "Agent for the Government. 
 
 " Approved by F. Thorn and A. C. Allen." 
 
 Thus grateful were the Texans, in those times, for the smallest 
 aid afforded them, and thus particular were they in acknowledging 
 the obligation. 
 
THE FISCAL HISTORY OF TEXAS. 37 
 
 CHAPTER IV. 
 
 PROCEEDINGS UNDER THE PROVISIONAL GOVERNMENT IN RELATION 
 TO THE PUBLIC LANDS. 
 
 The Commissioner of the Nashville Colony arraigned for contumacy Great diffi 
 culties with the land-speculators in the Department of Nacogdoches Indig 
 nation of Governor Smith Determined action of the Council. 
 
 THESE proceedings were of so much importance that we must 
 devote to them a distinct chapter. 
 
 It has already been mentioned that the order to close the land- 
 offices and to stop all surveys had given dissatisfaction in some 
 quarters. 
 
 December 1, Mr. Barret, from a select committee to whom the 
 subject had been referred, made the following report: 
 
 " Your committee, to whom was referred the report of the commissioners 
 appointed for securing the papers and documents of the several land-offices 
 of the Department of the Brazos, agreeably to the 14th section of the Pro 
 visional Government of Texas, passed by the Consultation of the chosen 
 delegates of all Texas, in general convention assembled, on the 13th of 
 November, 1835, report: 
 
 " That they have duly considered the conduct of Wm. H. Steele, the 
 commissioner of the colony of the Nashville Company, in refusing to recog 
 nize the authority of the commissioners, &c., and condemning the proceed 
 ings and orders of the delegates of the people of Texas, assembled in general 
 convention, and in refusing to obey, and treating with contempt the man 
 dates of the Provisional Government, organized by the people s representa 
 tives ; and are unanimous in advising that the General Council should 
 take prompt and efficient means to enforce obedience to the laws of the 
 country. To this end your committee advise the adoption of the following 
 ordinance." 
 
 So indignant was the Council, that its common rule was sus 
 pended ; the ordinance read a first, second, and third time ; and 
 passed immediately. In the body of it was distinctly set forth 
 "the contumely and contempt" with which Wm. H. Steele had 
 treated the people s representatives ; and the Governor was re 
 quested to issue a special commission, " with a writ of assistance, to 
 command, in the name of the people, all officers, whether civil or 
 
THE FISCAL HISTORY OF TEXAS. 
 
 military, and all good citizens, to give aid, and be aiding and assist 
 ing" in bringing the contumacious Wm. II. Steele before the 
 General Council. 
 
 As this was a point on which the Governor and Council were 
 agreed, any attempt at resistance on the part of Mr. Steele 
 would have been extreme folly. But he had no disposition to 
 resist. On the 15th of December, as appears from the Jour 
 nal, he came voluntarily before the Council, and stated 
 
 " That the warrant to arrest him had not been served upon him, but hear 
 ing that one had been issued, he appeared for the purpose of explaining 
 the reasons of his refusal. That the citizens of Viesca did not understand 
 that their delegates were clothed with conventional powers, but that they 
 generally approved of the doings of the Convention, so far as they were in 
 formed of them. That he lived at a great distance from the seat of govern 
 ment, from which communications were very uncertain. That the refusal was 
 made through misunderstanding, and in the moment of excitement, and not 
 from any disrespect to the government or its authorities." 
 
 On motion of Mr. Royall, the Council resolved that it was satis 
 fied with this explanation ; and not long afterwards (December 
 27), Mr. Steele gave unquestionable proof of his patriotism by 
 making a conditional purchase from them of one hundred and fifty- 
 three sheets of stamped paper (see printed Journal, page 229) no 
 trifling aid to the treasury in that time of trouble. 
 
 Ear greater difficulties had the Council to contend with in the 
 extensive Department of Nacogdoches, where the people generally 
 seemed to have little disposition to obey the order to close the 
 land-offices and stop the surveys. This appears from the Report 
 of the Committee on State Aifairs (December 4), in which, after 
 giving a view of the reasons that led to the issue of the order, and 
 of the authority by which it had been issued, they conclude with 
 expressing a belief that " the good citizens of the Nacogdoches 
 Department, in view of all these facts and necessities, will sub 
 mit, and yield obedience, especially when convinced that resistance 
 will not only be vain, but subject them to heavy penalties." 
 
 But " the good citizens" of the Department of Nacogdoches 
 were not so complaisant. There was hardly one of them, perhaps, 
 who had not at that time more land than he could make a proper 
 use of. But they were far removed from the seat of war ; and 
 while their brethren of western Texas had all the lively excitement 
 of fighting the Mexicans, they could not see why they might not 
 
THE FISCAL HISTORY OF TEXAS. 39 
 
 divert themselves with the minor excitement of land-specula 
 tions. 
 
 The next notice of this subject which we find in the Journal 
 is contained in a letter of Governor Smith, dated December 7 : 
 
 " I hasten to lay before your honorable body an official communication 
 from Dr. S. H. Everitt, one of your commissioners appointed to take charge 
 of the archives of the land-offices of the Department of Nacogdoches, &c. 
 You will see by his communication what has been done, and will, I hope, 
 take such immediate steps as will be calculated to carry the decree into 
 effect with the least possible delay. I make this a separate communication, 
 touching no other subject-matter, in order that it receive the prompt and 
 undivided attention of your body." 
 
 Dr. Everitt s letter not being printed in connection with the 
 Governor s message, we are left in ignorance of the exact doings 
 that called for the prompt and undivided attention of the Council. 
 But, on the next day, December 8, the Committee on State Affairs 
 made a report, in which they reaffirm what had been stated in 
 their report of the 4th, and then proceed as follows: 
 
 " Therefore, that this House cannot legally pass any ordinance granting 
 the power of making titles in any way until the said 14th article is com 
 plied with, at least so far as that the papers and documents are under the 
 control of the officers of the Provisional Government. When this shall 
 have been effected, your committee have no further hesitation in advising 
 that the several legal commissioners of each land-office, or some other per 
 son specially appointed, be authorized to proceed in completing all titles to 
 land made for settlers on surveys, returned before the passage of the said 
 14th section. But in doing this, all proper guarantees against injustice or 
 fraud should be carefully incorporated in the decree for such purpose. 
 
 "In the mean time, your committee have confidence in assuring this Coun 
 cil, and the people at large, that neither the orders of the Convention nor 
 decrees of the Provisional Government have any other object or effect than 
 of securing an equal and fair opportunity for all our citizens to obtain their 
 landed rights; and although the time of perfecting titles may be extended, 
 no acquired right or privilege either is or can be affected. The right exists 
 unimpaired, while the bare legal form remains to be executed." 
 
 Here let us stop to do justice to the Texans. However dark 
 their prospects, or however desperate their condition, they never 
 seem to have lost sight of the admirable advantages their country 
 affords for land-speculations. This is a credit due to them without 
 distinction of party, and to the Western Texans as well as the 
 Eastern. All the Provisional Government wanted was that " all 
 should start fair," and herein, we think, the Provisional Govern 
 ment was decidedly right. 
 
40 THE FISCAL HISTORY OF TEXAS. 
 
 The next record in the Journal relating to the troubles in the 
 Department of Nacogdoches, is contained in a letter from the Go 
 vernor, dated December 26. Some extracts follow : 
 
 " Mr. Forbes incloses back a commission which had been previously sent 
 to him. * * * And furthermore says that, owing to the com 
 bined and active opposition of some six or eight speculators, sustained by 
 individuals from the States, who employ them to engross the lands that are 
 properly the public domain, the intentions of the government, and its acts 
 relating to the public lands, and even its judicial acts, have been delayed 
 and interrupted, greatly to the injury of the public. 
 
 * * * * # * * 
 
 " Your honorable body will plainly see, from the foregoing, the situation 
 of the land-offices to the east, and that the acts of the Convention have not 
 been carried into effect; nor does it appear that they can be, short of a mili 
 tary force ; and whether such a course would be calculated to produce any 
 salutary effect, is for your honorable body to determine. That some kind of 
 effort should be made by us to sustain and protect the public interest must 
 be obvious to all. While we are contending with a powerful foe, even for 
 our very existence, that we should find men among us capable of committing 
 piracies both on sea and land, is, I must admit, rather discouraging; but 
 permit me to say to you that every opposition has a powerful tendency to 
 stimulate me to greater exertion, and I hope will have the same effect on 
 your honorable body. Opposition, strong, vigilant, and persevering, by me 
 was anticipated ; hence I am never taken by surprise, or deceived in the per 
 sons who stir it up. They never consider the public good, but seek their 
 own private interests; hence they are ever vigilant and on the wing. It is 
 made our duty to guard and protect that which they wish to destroy. They 
 dread organization as a great evil, because honest investigation follows as a 
 matter of course, which they dread, preferring darkness to light, because 
 their deeds have been evil. 
 
 " These men have their unprincipled hirelings and satellites to operate, 
 and endeavor to keep themselves behind the screen. They may not be 
 generally known to your body, and as such will, no doubt, often attempt 
 to practise fraud upon you by their insinuating approaches. Me, they sel 
 dom approach. They may overpower, but never can deceive." 
 
 In a report, dated December 28, a committee of the Council 
 took occasion to inform the Governor that they were as little 
 liable to be imposed on by these men as he was himself. This will 
 appear from the following extracts : 
 
 " Your Committee on State and Judiciary, to whom was referred the 
 Governor s message of the 26th instant, and various letters and documents 
 from Nacogdoches, respectfully report 
 
 " That, from the general information contained in the Governor s mes 
 sage, and letters from S. H. Everitt, Esq., the only acting commissioner 
 under the 14th section of the organic law, in the Department of Na 
 cogdoches, and the other documents referred, your committee are unwill 
 ingly convinced of the prevalence of a spirit of disorganization in some 
 
THE FISCAL HISTORY OF TEXAS. 41 
 
 parts of that country, which, in a more limited degree, also, exists else 
 where in Texas; and that this spirit is the natural consequence of the 
 revolutionary state of our country, a change in its form of government, a 
 mixed population coming from various parts of the world, strangers to each 
 other, and unassimilated in character or habit. But your committee are well 
 convinced, from their knowledge of the Anglo-American character, which 
 constitutes the greater part of Texas citizens, that the intelligence and moral 
 feeling of the mass of the people, ever reflective, would have, ere this, led 
 them to consistency of conduct and respect for the existing authorities, 
 created by their own representatives from the present necessity, however 
 crude in organization, yet giving order and affording protection for the time, 
 were it not for ambitious demagogues, designing and sinister speculators, 
 equally destitute of patriotism and regardless of the people s rights, and 
 every other consideration that obstructs the gratification of their own private 
 ends. Such men, even in a settled and well-regulated community, often 
 distract the minds of the honest and undesigning, and disturb the harmony of 
 society, until, by a severe rebuke from the people themselves, or by the 
 strong arm of the law, their career of wickedness is checked, and they 
 become objects of contempt and infamy. That the good people are troubled 
 by such men among them, is by no means unexpected. To guard against 
 the consequences of their evil machinations is our first duty, and involving 
 immense responsibility upon all the officers of the Provisional Government ; 
 and we cannot hope to effect this, unless union, prudence, justice, and 
 firmness, are the governing motives of all our conduct throughout all our 
 councils. 
 
 " Your committee most cordially respond to the principles of action re 
 commended to this Council, as necessary to the very existence of order and 
 respect for the laws ; and are fully aware of the magnitude of the evil, and 
 deep injury to the country consequent upon the intrigues, frauds, and un 
 controlled ravages of the daring and unprincipled land-speculators who infest 
 the country, agitating the public mind with base falsehoods, and keeping up 
 discord, distrust, and disrepute, to their own and only source of present 
 protection, and last barrier against anarchy and internal war, the Provisional 
 Government of Texas. Your committee confidently assure his excellency 
 that the General Council know these men too well to be deceived by them, 
 and while acting under the influence of principles hitherto governing the 
 conduct of this body, feel that the virtue and intelligence of the people 
 will sustain their acts." 
 
 The report was adopted. On the 31st of December, an address 
 was voted to the people, giving the reasons for closing the land- 
 offices. New commissioners were appointed to take possession 
 of the archives of the land-offices in the Department of Nacog- 
 doches, and the land-speculators rebellion was subdued without 
 bloodshed. 
 
42 THE FISCAL HISTORY OF TEXAS. 
 
 CHAPTER V. 
 
 EXECUTIVE PROCEEDINGS UNDER THE PROVISIONAL GOVERNMENT. 
 SECOND PERIOD: JANUARY 2 TO MARCH 13, 1836. 
 
 Condition of affairs at the beginning of 1836 Two vessels of war procured Pros 
 pect of loans in New Orleans Conflicts of Governor Smith and the Council 
 Mr. Smith superseded, and Mr. Robinson made acting governor. 
 
 WITH the beginning of 1836 commenced a new era in the fiscal 
 history of Texas. Its bills for raising a revenue and negotiating 
 loans had been passed, and its commissioners were on the way 
 to the United States, or had actually arrived there. Governor 
 Smith s rigid notions of correctness were no longer shocked by a 
 single committee appropriating money, auditing claims, and draw 
 ing drafts on the treasury. Texas had now her auditor and con 
 troller; and, so far as regards account-keeping, everything was as 
 regularly conducted as in the best-established g dynasties. It is 
 true that there was no money in the treasury, and claims were 
 daily accumulating against it; but this is the natural order of 
 things in revolutionary periods. 
 
 Nor did all the legislative acts of the General Council prove 
 ineffective. Early in January, two schooners, the " William Rob- 
 bins," (afterwards the "Liberty,") and the "Invincible," were 
 purchased from McKinney and Williams; but whether they had 
 or had not the formidable armament of six and twelve guns, 
 provided for in the " Ordinance for Establishing a Navy," is a 
 point on which history is silent. 
 
 " Communications," says Kennedy, " were received, in the be 
 ginning of January, from Stephen Austin, who was then at New 
 Orleans, where he had obtained a loan for 200,000 dollars, and 
 expected to procure another for 40,000 or 50,000 dollars. 
 
 The whole amount was not realized, as we shall hereafter have 
 occasion to show. No notice of it appears on the Journal of the 
 Council, but there is no doubt that the news was received, and it 
 was very encouraging. 
 
THE FISCAL HISTORY OF TEXAS. 43 
 
 That a nation of twenty thousand should successfully contend 
 with a nation of eight or ten millions, is certainly a remarkable 
 event in this world s history. Some have attributed it to the 
 factions which existed among the Mexicans, and which prevented 
 their bringing all their forces to bear on the revolted province. 
 No doubt this had its effect. But the Texans also had their 
 factions, as is evident from what we have already recorded, and 
 the difference in the character of the two nations is shown by the 
 fact that the factions among the Texans, violent as they were, 
 did not prevent their making an effectual resistance to the com 
 mon enemy. 
 
 From the beginning, there appears to have been little harmony 
 between Governor Smith and the Council. He had a due sense 
 of his dignity, as chief magistrate of a country twice as large as 
 Great Britain and Ireland, and judged of his powers by analogy 
 with those of the President of the United States. He claimed 
 the right of making appointments to office. The Council con 
 tended that it was his duty to commission whomsoever they might 
 appoint. They passed bills, and he vetoed them ; and they, by 
 constitutional majorities, passed the bills again in defiance of the 
 vetoes. He was a precisian in treasury matters ; they were 
 somewhat latitudinarian. 
 
 They differed also on points of policy. The Mexican revolu 
 tionist, General Mexia, had planned a descent on Tampico, and 
 some of the Texans were for making an attack on Matamoras. 
 Both of these projects had the sanction of a part, if not of the 
 majority of the Council, and both were pointedly disapproved of 
 by the Governor ; the last, as subsequently appeared, from his 
 having a private plot of his own for capturing that city of the 
 Mexicans. 
 
 On returning to the Council a bill they had passed, " author 
 izing persons to be appointed to make provisions for General 
 Mexia," he said : 
 
 " I have no confidence in General Mexia s co-operating in our favor. 
 That his intention is to make a descent on the seaports west of us, for 
 the purpose of robbing, to recuperate his own desperate fortune, I have 
 no doubt, but can see no possible advantage it would be to Texas. What 
 his designs or intentions are, I have no right to know, but really think 
 it would be unwise to run this government to the expense necessary to fit 
 him out without having any guarantee or control over him or his conduct. 
 
44 THE FISCAL HISTOKY OF TEXAS. 
 
 Furthermore, as the bill runs, it would seem that the outfit would be made 
 before this government would be advised of his plans. Besides, I consider 
 it bad policy to fit out or trust Mexicans in any matter connected with our 
 government, as I am well satisfied that we will in the end find them inimi 
 cal and treacherous. For these, and many other reasons not enumerated, 
 I cannot sign the bill." 
 
 This was December 9 ; and, on the next day, Mr. Harris pre 
 sented the following resolution, which was adopted : 
 
 " Whereas, the Provisional Government of Texas have received infor 
 mation, of which there is no doubt, that the enemy have large reinforce 
 ments on the road to our frontiers, with whom there are forty thousand dol 
 lars in money, and if the same is not cut off or prevented from uniting 
 with the force now at Bexar, our small but patriotic army will be com 
 pelled to retire, being overpowered by four times their number : Therefore 
 be it resolved, by the. General Council of the Provisional Government of 
 Texas, That General Mexia be, and he is hereby invited, together with the 
 brave officers and men under his command, to repair immediately to Bexar 
 by the way of Goliad, and there co-operate with the volunteer army of the 
 people. 
 
 " Resolved, That an express be dispatched immediately to General Mexia, 
 with a copy of this resolution." 
 
 Colonel Powers tendered his services to repair immediately to 
 Velasco, or any other point, to wait on General Mexia ; but the 
 Mexican declined co-operating, and Bexar was captured by the 
 Texans without his aid or assistance. 
 
 In few things, except hatred of the Nacogdoches land-specu 
 lators, do the Governor and Council appear to have been agreed ; 
 but they did not come to an open rupture till January 9, 1836. 
 Then Governor Smith sent them a message, which, for peculiarity 
 of diction, is unmatched by any North American state paper, 
 though it is hardly equal to some of the effusions of that great 
 European orator, Daniel O Connel. 
 
 We give some extracts from it, premising that the contemplated 
 expeditions against Tampico and Matamoras were what had spe 
 cially excited the Governor s wrath, the more so as they had drawn 
 away part of the forces necessary for the defence of the important 
 post of Bexar. 
 
 "To the Honorable the President and Members of the General Council : 
 " GENTLEMEN : I herewith transmit to your body the returns and cor 
 respondence of Colonel Neill, Lieutenant-Colonel Commandant of the post 
 at Bexar. 
 
 " You will in that correspondence find the situation of that garrison. 
 You will there find a detail of facts calculated to call forth the indignant 
 
THE FISCAL HISTORY OF TEXAS. 45 
 
 feelings of every honest man. Can your body say that they have not been 
 cognizant of, and connived at this predatory expedition ? Are you not 
 daily holding conference and planning co-operation both by sea and land ? 
 Acts speak louder than words; they are now before me, authorizing a ge 
 neralissimo, with plenary powers, to plan expeditions on the faith, the 
 credit, and I may justly say the ruin, of the country. You urge me by 
 resolutions to make appointments, fit out vessels as government vessels, 
 registering them as such, appointing landsmen to command a naval ex 
 pedition, by making representations urgent in their nature, and for what ? 
 I see no reason, but to carry into effect, by the hurried and improvident acts 
 of my department, the views of your favorite object, by getting my sanction 
 to an act disorganizing in its nature, and ruinous in. its effects. Instead of 
 acting as becomes the counsellors and guardians of a free people, you re 
 solve yourselves into low, intriguing, caucussing parties ; pass resolutions 
 without a quorum, predicated on false premises ; and endeavor to ruin the 
 country by countenancing, aiding, and abetting marauding parties ; and if 
 you could only deceive me enough, you would join with it a piratical co 
 operation. You have acted in bad faith, and seem determined by your 
 acts to destroy the very constitution which you are pledged and sworn to 
 support. I have been placed on the political watch-tower. I feel the 
 weight of responsibility devolving upon me, and I confidently hope I will 
 be able to prove a faithful sentinel. You have also been posted as sen 
 tinels ; but you have permitted the enemy to cross the lines, and, Mexican- 
 like, you are ready to sacrifice your country at the shrine of plunder. Mr. 
 President, I speak collectively, as you all form one whole, though at the 
 same time I do not mean all. I know you have honest men there, and of 
 sterling worth and integrity; but you have Judas in the camp corruption, 
 base corruption, has crept into your councils men who, if possible, would 
 deceive their God. 
 
 " Notwithstanding their deep-laid plans and intrigues, I have not been 
 asleep; they have long been anticipated, forestalled, and counteracted. 
 They will find themselves circumvented in every tack. I am now tired of 
 watching scoundrels abroad and scoundrels at home, and as such I am now 
 prepared to drop the curtain. ****** 
 
 "Look around upon your flock: your discernment will easily detect the 
 scoundrels. The complaint: contraction of the eyes; the gape of the mouth; 
 the vacant stare; the hung head; the restless, fidgety disposition; the 
 sneaking, sycophantic look ; a natural meanness of countenance ; an un 
 guarded shrug of the shoulders ; a sympathetic tickling and contraction of 
 the muscles of the neck, anticipating the rope; a restless uneasiness to ad 
 journ, dreading to face the storm themselves have raised. 
 
 " Let the honest and indignant part of your Council drive the wolves out 
 of the fold; for, by low intrigue and management of this kind, they have 
 been imposed upon, and duped into gross error and palpable absurdities. 
 Some of them have been thrown out of folds equally sacred, and should 
 be denied the society of civilized man. 
 
 " They are parricides, piercing their devoted country, already bleeding at 
 every pore. But, thanks be to my God, there is balm in Texas, and a phy 
 sician near. Our agents have gone abroad ; our army has been organized ; 
 our general is in the field. A convention has been called, which will afford 
 
46 THE FISCAL HISTORY OF TEXAS. 
 
 a sovereign remedy to the vile machinations of a conspiring, intriguing, and 
 corrupt Council. I now tell you that the course here pointed out shall be 
 rigidly and strictly pursued, and, unless your body will make the neces 
 sary acknowledgments to the world of your error, and forthwith proceed, 
 and with the same facility and publicity (by issuing a circular), and fur 
 nishing expresses, to give circulation and publicity, in a manner calculated 
 to counteract its baleful effects, that, after twelve o clock to-morrow, all com 
 munication between the two departments shall cease, and your body will 
 stand adjourned until the first of March next, unless, from the emergencies 
 of the country, you should be convened by proclamation at an earlier period. 
 
 "I consider, as the devisers of ways and means, you have done all con 
 templated by the organic law, and that your services are now no longer 
 needed. Until the Convention meets, I will continue to discharge my 
 duties as commander-in-chief of the army and navy, and see that the laws 
 are executed. 
 
 " The foregoing you will receive as notice from my department, which 
 will be rigidly carried into effect. You are further notified that audience 
 will not be given to any member or special committee other than in writing. 
 I will immediately proceed to publish all the correspondence between the 
 two departments by proclamation to the world, and assign the reasons why 
 I have pursued this course, and the causes which have impelled me to do it. 
 "I am, gentlemen, your obedient servant, 
 
 "HENKY SMITH, Governor: 
 
 "January 9, 1836." 
 
 Where the analogy of the United States Government failed 
 him, Governor Smith had recourse to that of Great Britain in de 
 termining the extent of his power. The King or Queen of Great 
 Britain has power to prorogue Parliament ; but the President of 
 the United States has not power to prorogue Congress. Our 
 Texan Oliver Cromwell had become tired of his "Long Parlia 
 ment," and was for dissolving it by a process as summary as that 
 adopted by his English prototype, and with apparently much the 
 same feelings. 
 
 The men who composed the General Council were not the men 
 to yield quietly to such a usurpation. If the "Praise God Bare- 
 bones Parliament" had surrendered to one tyrant, that was no 
 reason why free and independent Americans should tamely submit 
 to another. They received the Governor s communication, Janu 
 ary 11, and referred it to a committee, who forthwith made re 
 port 
 
 " That they are unable to express any other views to this House than 
 indignation at language so repulsive to every moral feeling of an honorable 
 man, and astonishment that this community should have been so miserably 
 deceived in selecting, for the high office of Governor, a man whose language 
 and conduct prove his early habits of association to have been vulgar and 
 
THE FISCAL HISTORY OF TEXAS. 47 
 
 depraved, and his present disposition that of a tyrant. That they repel the 
 infamous charges preferred against this Council and its members as false 
 and unfounded in every part ; and contemn the style and language as low, 
 blackguard, and vindictive, and every way unworthy of and disgraceful 
 to the office whence it emanated, and as an outrageous libel on the body 
 to whom it is addressed, and therefore advise the return of the paper, ac 
 companied with the following resolutions." 
 
 This report was unanimously adopted, together with resolutions, 
 declaring that the members of the Council were the immediate 
 representatives of the Sovereign People that they would sustain 
 the dignity of the government that Henry Smith be ordered 
 forthwith to cease the functions of his office, and answer certain 
 charges and specifications preferred against him, &c. &c. 
 
 On the next day, they issued an address to the people, in which 
 they repelled the charges brought against them in " that impu- 
 dential document," as they called the Governor s message, and 
 brought very serious charges against His Excellency himself, A 
 single paragraph will serve to show the character of the address : 
 
 "All these acts of stubbornness and pervcrseness were not sufficient to 
 gratify his thirst for sole dominion and arbitrary sway of the land. His 
 dignity was insulted at the idea of the existence of the co-ordinate branch 
 of the Government, to curb his acts and check his usurpation. He became 
 more and more restless, until, enraged at the presumption of the Council, 
 in the exercise of a constitutional right, and in conformity with the true 
 interests of the country, to pass an ordinance and decree, by a constitutional 
 majority, after it had been vetoed by l His Excellency/ he ignites : his fury, 
 in a blaze, consumes his prudence (what he had) ; he orders the Council to 
 disperse, shuts the door of communication between the two departments, 
 and proclaims himself the government." 
 
 Governor Smith appears to have been astonished by this act of 
 the Council, and sought to reconcile matters by sending them, on 
 the 12th, a kind of half apology. After confessing that he had 
 used "much asperity of language," but which he considered was 
 called for by what he deemed "imprudent acts" of the Council, 
 and much "intrigue and duplicity," he concluded as follows: 
 
 " If, therefore, your body should think proper to acknowledge their error 
 by an immediate correction of it, which I consider would only be their 
 reasonable duty, all difference between the two departments shall cease, 
 and, so far as I am concerned, be forever buried in oblivion; and that 
 friendly and harmonious intercourse resumed which should ever exist be 
 tween the different branches of the government. I suggest and solicit this 
 from the purest motives, believing the public good would thereby be ad 
 vanced. Believing the rules of Christian charity require us to bear and 
 forbear, and as far as possible to overlook the errors and foibles of each 
 
48 THE FISCAL HISTORY OF TEXAS. 
 
 other, in this case I may not have exercised towards your body that 
 degree of forbearance which was probably your due. If so, I have been 
 laboring under error, and, as such, hope you will have the magnanimity to 
 extend it to me, and the two branches again harmonize to the promotion 
 of. the true interests of the country." 
 
 Gov. Smith s " Christian charity" came too late. The Council 
 refused to revoke its acts. But the Governor refused to be tried 
 by them, held on to his seals of office, and on one occasion (Feb. 8), 
 sending to demand some papers, thus instructed his messenger : 
 
 " You will further notify them that, if these things are not promptly 
 complied with, and they immediately desist from their injurious and dis 
 organizing operations, I will immediately order their arrest and transmis 
 sion to the post of Bexar, to be tried by court-martial/ 
 
 "Every inch a king" was Henry Smith or would have been if 
 he could have been. But the members of Council were sovereigns 
 also, not only by right of election, but by right of descent from 
 the heroes of 1776. From the 10th of January, Lieut. -Gov., Robin 
 son became, under their sanction, the acting governor. It was by 
 him the act was signed authorizing the issue of treasury notes. 
 Governor Smith would, if he could have found no other reason, 
 have vetoed it from the mere principle of contrariety. 
 
TEE FISCAL HISTORY OF TEXAS. 49 
 
 CHAPTER VI. 
 
 PROCEEDINGS UNDER THE GOVERNMENT AD INTERIM, 1836. 
 
 Movements of Santa Anna His capture by the Texans David G. Burnett, Presi 
 dent ad interim Gloomy condition of affairs as set forth in his message to the 
 first Congress Small cost of the war to Sept. 1836 Small revenue of Provisional 
 Government Loans of Messrs. Erwin, Triplett, and their associates. 
 
 WHILE Governor Smith and the Council were contending for 
 prerogatives, the Mexicans were preparing to reinvade the country. 
 On the 12th of February, 1836, Santa Anna reached the Rio 
 Grande at the head of a powerful army, and swept rapidly along, 
 marking his course with the most horrible massacres, recapturing 
 from the Texans, in less than two months time, a country larger 
 than all England, and spreading devastation in every direction. 
 
 Fortunately for the people in this emergency, political power 
 passed from the hands of the Provisional Government, and its con 
 tending factions, into the hands of a Convention, which assembled 
 on the 1st of March at the town of Washington, on the Brazos. In 
 this, the darkest period of their history, the Texans made (March 
 2) a declaration of independence, adopted a constitution (March 
 17) as an independent republic, and (March 16) established a govern 
 ment ad interim to act till the constitution could be brought into full 
 operation. 
 
 On the 21st of April, the battle of San Jacinto was fought. On 
 the next day, the Mexican President, Santa Anna, surrendered 
 himself a prisoner of war; and thus, in seven months after the com 
 mencement of hostilities, was achieved the independence of a govern 
 ment which claimed territorial limits more extensive than those of 
 our thirteen original States from Maine to Georgia included.* 
 
 * The area of the territory claimed by the Texan Government was 879,054 
 square miles. The Atlantic States, from Maine to Georgia, have, including Vermont, 
 a surface of 378,402 square miles; without Vermont, 268,290. The area of the 
 British Isles is 122,185. That of France, 202,125. That of Austria, 260,000. Texas 
 has, within her reduced limits, 274,366 square miles. 
 
 4 
 
50 THE FISCAL HISTORY OF TEXAS. 
 
 The government ad interim, appointed by the Convention, had 
 simply executive powers. David G. Burnett was made President, 
 and Baily Hardiman, Secretary of the Treasury. 
 
 Its fiscal doings are summed up in President Burnett s message 
 to the First Congress of the Republic (Oct. 4, 1836), and in the 
 accompanying report of the auditor and comptroller. 
 
 After mentioning that the movements of the enemy had, a few 
 days after its organization, compelled the government ad interim 
 to remove from Washington to Harrisburg, he says : 
 
 " At this gloomy period, the financial affairs of the country were in a 
 condition more deplorable than its military equipments. The Commis 
 sioners, Messrs. Austin, Archer, and Wharton, appointed by the late Provi 
 sional Government, had negotiated a loan for two hundred thousand dollars, 
 and another for fifty thousand, with sundry individuals in the city of New 
 Orleans. It was doubtless the best arrangement that could be made at that 
 period. Mr. Robert Triplett, a principal subscriber to each of the above 
 loans, presented himself to the government at Harrisburg. Twenty 
 thousand dollars had been paid on the first loan, and the whole of the second 
 was advanced. The ratification of these loans had been submitted to the 
 Convention, and by them was referred to the Executive Government. On 
 inspecting the terms of the loans, some of the conditions were considered 
 inadmissible. The exclusive right to an immediate location of the script 
 was a privilege which, it was believed, would cause infinite dissatisfaction 
 in the country, and be especially obnoxious to the volunteers of the army, 
 the nature of whose services would seem to preclude any right of priority 
 of location in others. For no species of public service is considered more 
 onerous or more entitled to recompense than that which is rendered on the 
 field of battle. Under these impressions, we proposed to Mr. Triplett 
 a modification of the loans, and agreed to reduce the price of the lands, or 
 rather to make a donation of thirty-two leagues of land, to be distributed pro 
 rata among the stockholders, in consideration of the relinquishment of the 
 right of priority of location, conceded to them by the original terms of the 
 contract. The modification was accepted by Mr. Triplett. for himself. He 
 was not vested with authority to bind his co-lenders, but he expressed an 
 opinion that they would also accede to it. From the first loan, the govern 
 ment confidently anticipated a fiscal aid of some importance in the then press 
 ing emergency, but as the sequel will disclose they were unhappily disap 
 pointed. Mr. Triplett, on his return to the United States, presented his 
 modified contract to his associate stockholders, and to our surprise they 
 unanimously voted against its reception, and declined advancing the resi 
 duum of the loan. 
 
 " Some disappointment resulted from this decision of the lenders, and the 
 government felt the inconvenience of an illusory anticipation. A new 
 proposition has been made to the lenders to adjust the amounts advanced on 
 the principles of the modified contract, but no definite answer has been had 
 to that overture. The presumption is that it will not be accepted, and that 
 
THE FISCAL HISTORY OF TEXAS. 51 
 
 the settlement of the whole transaction will devolve on Congress, for I have 
 long since determined to submit the whole matter to your consideration. 
 
 " The result of this negotiation afforded conclusive evidence of the im 
 practicability of anticipating the wants of the country by ordinary loans. 
 Some other course was necessary, and the government resolved to issue script 
 for land, considering the public domain as the most available and the least 
 objectionable source of public revenue. Accordingly, the agent appointed, 
 in New Orleans, Thomas Toby, Esq., a gentleman who had already made 
 considerable advances on the account of the government, and had mani 
 fested a warm sympathy in our behalf, was authorized. to issue script to 
 the amount of five hundred thousand acres of land, to be located on the 
 public domain of Texas, and to dispose of it at the established minimum 
 price of fifty cents per acre : he has subsequently been empowered to extend 
 his issues to one million of acres. * * * 
 
 " A number of patriotic citizens have voluntarily executed their bonds for 
 various sums, and tendered them to the government, with a view to relieve 
 the present exigencies of the country. These bonds, amounting in the 
 aggregate to one hundred and twenty thousand dollars, have been trans 
 mitted to the agents, Messrs. T. Toby & Brother, by the quartermaster- 
 general, and the hope is entertained that they will prove a present conve 
 nience. * * * 
 
 " The recent and much lamented decease of the Honorable Baily Ilardi- 
 man, whose devoted patriotism and inflexible integrity are well known, and 
 who has been with me through all the vicissitudes of the times, deprives 
 me of the pleasure of presenting you with a regular report from the Trea 
 sury Department. The principal intelligence in my power to convey, you 
 will find in the auditor s expost, herewith transmitted. * * * 
 
 " It will be recollected that the powers conferred on the government ad 
 interim were extraordinary j that they comprised the plenal attributes of 
 sovereignty, the legislative and judicial functions excepted. The circum 
 stances under which that government has been administered have been 
 equally extraordinary. 
 
 " Sometimes, when Texas was a moving mass of fugitives, they have been 
 without ( a local habitation/ and scattered to the cardinal points; again, 
 they have been on Galveston Island without a shelter and almost without 
 subsistence ; and never have they been in circumstances of comfort and 
 convenience suitable to the orderly conducting of the grave and moment 
 ous business committed to their charge. That errors should have been 
 committed under such circumstances will not surprise those who have an 
 honest consciousness of their own fallibilities. But that those extraor 
 dinary powers have not been perverted to any sinister purpose, to the 
 damage of the country, to personal aggrandizement, or to the creation or 
 advancement of a party, or to the success of a speculation, I assert with a 
 modest, but firm and assured confidence/ 
 
 The auditor and comptroller say, in their report 
 
 " The whole amount of claims audited and paid by treasury orders from 
 the 1st of January last, at which time our offices were established, up 
 to the 27th of September inclusive, is as follows : 
 
52 THE FISCAL HISTORY OF TEXAS. 
 
 Military claims, $225,154 20 
 
 Naval, 27,364 73 
 
 Civil, 8,587 92 
 
 Contingent, . . 6,427 84 
 
 Total, $267,534 69 
 
 " In cases where cash has been advanced and for supplies furnished by 
 merchants previous to the 1st of March last, the orders have been drawn 
 bearing an interest of eight per cent, per annum. The amount of orders of 
 this description is fifty-nine thousand four hundred and sixty-eight dollars 
 and forty-three cents. 
 
 " The account of Bryan & Hall, late agents of the government at 
 New Orleans, have been submitted to this office, and are now under con 
 sideration. The whole amount of their liabilities [claims] is seventy-seven 
 thousand four hundred and sixty-eight dollars and seventy-six cents, of 
 which the sum of fifty-three thousand four hundred and sixty-eight dol 
 lars and seventy-six cents was due previous to the 1st of September 
 instant/ 
 
 As this report brings up accounts to a date five months later 
 than the battle of San Jacinto, it shows at how little expense to 
 the government the independence of the country was achieved. 
 If it had been possible for the Texans to be hard-money men and 
 prompt-payment men, the expense would have been much less 
 than is above stated. 
 
 These claims were all paid by drafts on an empty treasury. 
 They were receivable for back dues on the public lands, but there 
 was little or no demand for them for this purpose, and they sank 
 much in value. 
 
 Something might have been derived from the duty on imports, 
 but the majority of the merchants so arranged their business as 
 to anticipate the operation of the act. McKinney and Williams 
 afterwards brought one or two vessels into port, but the Provisional 
 Government, taking into consideration the great aid these gentle 
 men had rendered to the cause, passed an ordinance (January 4, 
 1836) exempting these importations from duties, in order to place 
 them on a level with the other merchants. 
 
 In a subsequent report from the Treasury Department, there 
 is an allusion to a sum of about nine hundred and fifteen dollars 
 received for customs under the first customs act ; but whether is 
 thereby meant the first customs act under the Provisional Govern 
 ment or under the Republic, we cannot tell. 
 
 In the Report of the Secretary of the Treasury of April 18, 
 
THE FISCAL HISTORY OF TEXAS. 53 
 
 1837, it is stated that of the audited claims there had been 
 redeemed 
 
 " By J. Fletcher, Treasurer of the Provisional Government, 
 as per his account filed in this department, .... $664 08 
 
 " By B. Hardiman, Secretary of Treasury of government 
 ad interim, $80 00." 
 
 But in what manner these enormous amounts were redeemed, 
 we are left to conjecture. 
 
 The sixty-five thousand dollars borrowed at New Orleans was 
 the only efficient revenue the government ad interim possessed. 
 And be it remembered that the loan from Triplett and others, 
 and the loan from Erwin and others, were both honorably paid. 
 
 The exact amount of the Triplett loan was twenty thousand 
 and seventy dollars, which was liquidated by granting to the 
 parties forty thousand acres of land for the principal, with an 
 addition of one hundred and thirteen thousand three hundred 
 and fifty-seven acres by way of bonus. 
 
 The amount received from the Erwin loan was forty-five thou 
 sand eight hundred and twenty dollars, which, with interest added, 
 six thousand one hundred and seventy dollars and forty-four cents, 
 was liquidated by a grant of land of one hundred and three 
 thousand three hundred and eighty- one acres, with eighteen thou 
 sand two hundred and eight acres additional by way of bonus. A 
 balance of about five thousand dollars which remained due was 
 paid in money to the representatives of this firm in February, 
 1852. 
 
54 THE FISCAL HISTORY OF TEXAS. 
 
 CHAPTER VII. 
 
 PROCEEDINGS UNDER THE REPUBLIC. FIRST SESSION OF FIRST 
 CONGRESS : OCTOBER 3 TO DECEMBER, 1836. 
 
 Gen. Houston installed as President Deplorable condition of the navy Contribu 
 tions of Gen. Thos. J. Green Acts relating to the military establishment High 
 salaries of officers on the civil list New tariff, and sale of Galveston town-plot 
 " A public debt a public blessing" Unsuccessful effort to negotiate a loan of 
 twenty thousand dollars Act to establish a general land-office Questions whether 
 foreign volunteers should be allowed to sell their land-certificates to aliens, and 
 whether aliens should be allowed to hold lands in Texas Recognition of decree 
 for establishing the Agricultural and Commercial Bank Act to incorporate the 
 Texas Railroad, Navigation, and Banking Company Proceedings under this act. 
 
 THE first Congress commenced its first session, at the town of 
 Columbia, on the 3d of October, 1836 ; and on the 22d, Gen. 
 Samuel Houston, who had been duly elected by the people, was 
 formally installed as President of the Republic. 
 
 On the 26th, Mr. Fisher, chairman of the Committee on Naval 
 Affairs, made a report, showing the deplorable condition of the 
 navy : 
 
 " Your Committee on Naval Affairs, to whom was referred the report of 
 the acting Secretary of the Navy, and a resolution calling for an increase of 
 the same, have instructed me to submit the following report, and the bill 
 accompanying it, from the report of the acting Secretary of the Navy. 
 
 " That arm of the national defence appears to be in a most deplorable 
 and crippled condition. The Brutus and Invincible are both in New York, 
 in a situation which prevents their services from being immediately avail 
 able ; and the * Liberty is detained in New Orleans. Thus, while momen 
 tarily in expectation of a blockade from the enemy, our whole line of sea- 
 coast is defended by but one national vessel, the Independence/ mounting 
 seven guns, and four small privateers, each pursuing its own prey, and not 
 immediately subject to the orders of government. While our navy remains 
 in this condition, it is in the power of the enemy, at his pleasure, to cut off 
 our supplies, and seize upon our seaports. It appears to your committee 
 that the error which has produced the present bad condition of our navy has 
 been radical, and coexistent with its first formation. In order to raise a naval 
 force sufficient to co-operate with that of the enemy, the government was 
 forced to purchase such vessels as could most easily be procured. These were 
 vessels either originally unfit for the purpose intended, or worn out in the 
 
THE FISCAL HISTORY OF TEXAS. 55 
 
 merchant service. The consequence has heen that these vessels demanded 
 daily repairs, and were seldom in a situation for actual service. So far, in 
 our struggle with Mexico, our navy has proved adequate to the protection 
 of our sea-coast, and to the annoyance of the enemy. But the navy of the 
 enemy has lately been increased by the addition of several vessels of the 
 most splendid description ; it therefore becomes imperiously necessary that 
 our navy should be increased in the same ratio. 
 
 " Your committee, therefore, suggest the immediate building or purchase 
 of the following description of vessels : 
 
 " One sloop-of-war, 600 tons, mounting 24 guns ; 
 
 probable cost, ... . $60,000 
 
 " One steam-vessel, mounting 10 guns, . . . 45,000 
 "Two schooners, 200 tons, mounting 11 guns, . 30,000 
 
 $135,000" 
 
 On a subsequent page of the Journal, we find it recorded that 
 Gen. Thos. J. Green " had voluntarily sold and sacrificed some, 
 and mortgaged other of his property in the United States (to the 
 amount in all of $20,333 04), for the purpose of procuring men, 
 munitions, provisions, &c., for our army, and also to release two of 
 our national vessels, then in New Orleans, under arrest for debt, 
 and upon a charge of piracy. 
 
 The bill reported for the increase of the navy was passed 
 (November 18), with an amendment providing that there should be 
 two steam-vessels, instead of one, and each capable of transporting 
 seven hundred and fifty men and provisions. 
 
 Besides this act, the first Congress, at its first session, passed 
 an act, December 20, to fix the military establishment of Texas 
 at one regiment of cavalry, one of artillery, and four regiments of 
 infantry, amounting, officers included, and including the corps of 
 engineers and ordnance, and the staff, to 3,587 men ; December 
 5, an act to protect the frontier, by raising a battalion of 280 
 mounted riflemen ; and, December 22, a joint resolution, " author 
 izing the President to receive forty thousand volunteers." 
 
 December 9, an act was passed to compensate the officers on the 
 civil list. The President s salary was fixed at ten thousand dol 
 lars a year ; that of each of the members of his cabinet at three 
 thousand five hundred ; and a long list of civil officers in propor 
 tion. A State government would have been content to allow its 
 chief magistrate a salary of one thousand, or fifteen hundred dol 
 lars ; but Texas was an independent republic, and had to support 
 its imperial dignity among the nations of the earth. Mr. Branch 
 
56 THE FISCAL HISTORY OF TEXAS. 
 
 Tanner Archer maintained that the President ought to have as 
 much salary as the President of the United States, and contended 
 for this with great zeal, for two or three days in succession. 
 
 That such precisians as ex-Governor Smith might have no cause 
 of complaint, an act was passed, December 15, appropriating 
 $150,000 to defray the expenses of the navy ; $700,000 for those 
 of the army ; and $150,000 for those of executive and civil de 
 partments in all, a round million. 
 
 " To raise a revenue by imposts," an act was passed, December 
 20, imposing ad valorem duties of various rates, from one to fifty 
 per cent., and a tonnage-duty of $1 25 per ton ; but it defeated 
 itself by one of its provisions making audited drafts on the treasury 
 receivable for such duties. 
 
 An act, relinquishing to Michael B. Menard and others a league 
 (4444 acres) and "labor" (i. e. a lot of 177 acres) on the east 
 end of Galveston Island (the town-plot of Galveston), was passed 
 December 9, on condition of their paying for it $50,000, in ap 
 proved acceptances on New Orleans. And acts and resolutions 
 were also passed authorizing land-script to the amount of 500,000 
 acres to be issued to Thomas Toby, of New Orleans, to be sold 
 by him at fifty cents an acre ; making David White, of Mobile, an 
 agent to sell script at the same rate, to the amount of $100,000 ; 
 and providing for the relief of Wm. Bryan, of New Orleans, by 
 granting him land-script, by the sale of which he might pay himself 
 what was due to him by the Republic. 
 
 But the chief dependence of the Congress of Texas was on loans 
 from abroad. True disciples, in this respect, of Alexander Hamil 
 ton, they, or at least a part of them, regarded a public debt as a 
 public blessing. This is evident from a report made by a select 
 committee, December 16, Mr. Chenoweth, chairman : 
 
 "At present, our indebtedness is small, and our liabilities almost entirely 
 to private individuals, whose claims, your committee are of opinion, may 
 properly be merged and cancelled by the creation of substantial loans. An 
 outstanding national debt may, in many respects, be looked upon as bene 
 ficial, by a community isolated and dependent as Texas, if the creditors, as 
 such, can afford us substantial patronage. And until we can stand immu 
 table among the nations of the earth, your committee would advise that 
 the pecuniary interests of our creditors will excite for us the sympathies 
 and protection of mankind." 
 
 A public debt was not an evil, but an inconvenience was felt in 
 
THE FISCAL HISTORY OF TEXAS. 57 
 
 its being due to the citizens of Texas, instead of "to foreigners," 
 i. e. the citizens of the United States. Therefore, leaving unre- 
 pealed the acts of the Provisional Government authorizing the 
 million loan, and the hundred thousand dollar loan, an act was 
 passed, November 18, " to authorize the President to negotiate 
 a loan or loans on the bonds of the government, not exceeding five 
 million dollars," at a rate of interest not exceeding ten per cent, 
 per annum ; and due provision was made that two commissioners 
 should proceed immediately to the United States, for the purpose 
 of negotiating said bonds, and subsequently to Europe, if that 
 should be necessary. To raise immediate means, another act 
 was passed, December 10, authorizing the President to borrow 
 twenty thousand dollars, and empowering him to stipulate " for 
 such an amount of interest" as he could best contract for ; that is, 
 empowering him to borrow at the rate of twenty or thirty per 
 cent., or more, if he could not borrow the money for less. 
 
 The act of most importance in its practical bearings, passed at 
 this session, was that to open the land-offices, or, as it was enti 
 tled, " An act to establish a General Land-Office for the Republic 
 of Texas." This, besides one general, established eleven district 
 offices, and provided 
 
 "That surveys should be made at the expense of those holding warrants, 
 but, when they held land-script/ at the expense of the government. That 
 grantees should pay, as a government fee, the price as fixed by the colo 
 nization laws of Coahuila and Texas in force at the time they emigrated to 
 this country. That no person should, by virtue of an improvement, have a 
 right to claim more than one league and < labor of land. That the land- 
 offices should open on the 1st of June, 1837, for all those citizens who 
 were in the country when independence was declared (March 2, 1836), 
 and for those who served a term as volunteers previous to that time, and 
 remain open six months for their exclusive benefit. That every free white 
 person, head of a family, who should arrive in the Republic from and after 
 January 1, 1837, should be entitled to 1280 acres of land, and every single 
 white free man 640 acres, to be increased to 1280 acres in case of his 
 marriage, but patents not to be granted till after they had been three years 
 resident." 
 
 As this bill gave land to almost everybody that was in the 
 country, and almost everybody that was to come into the country, 
 it served to diminish still more the value of soldiers certificates. 
 
 It was, however, of benefit to those who were on the spot, and 
 who had the means wherewith to purchase soldiers certificates 
 and settlers "head-rights. 
 
58 THE FISCAL HISTORY OF TEXAS. 
 
 At one time it seems to have been mooted whether the soldiers 
 should not be restricted to selling their certificates to actual resi 
 dents of Texas. Nay, the question, "Is it expedient to authorize 
 by law foreign volunteers to sell their bounty land to aliens?" was 
 formally referred to a select committee, which, through Mr. Baker, 
 its chairman, made a report, November 29, 1838, in which they 
 said 
 
 " Is it expedient to authorize by law foreign volunteers to sell their 
 bounty land to aliens? 7 The heart of every true friend of Texas must 
 answer, Yes; it is expedient; and justice and gratitude demand that they 
 should have the right to sell it to whomsoever and wheresoever they can. 
 That they should not be compelled to sell it alone to Texan speculators, 
 but that the defenders of Texan liberty should have all the rights and all 
 the benefits this government can confer/ 
 
 In a report extending through nine or ten pages, the committee 
 gave equally satisfactory answers to the questions 
 
 " Is it expedient to authorize by law those aliens who have aided Texas 
 in her struggle for independence, to hold lands in Texas, by paying a bonus 
 to the government for the same ?" 
 
 "Is it expedient to authorize by law the citizens of Texas to sell lands 
 to aliens, upon condition that the purchaser pay a bonus to the government 
 for the same?" 
 
 The answer to all these questions was, substantially, "Yes; it 
 will be best for the country, and best for the land-speculators we 
 have among ourselves." That so formal a report should have 
 been made on this subject is proof how rife the spirit of land- 
 speculation was in Texas at a time, indeed, when her independ 
 ence had been effected, but when it was not known that it could be 
 sustained. 
 
 The act to open the land-offices was vetoed by President Houston, 
 because it was 
 
 " Evidently impracticable, without opening a wide door for confusion, to 
 commence a new system of surveys and of granting lands, until some definite 
 rules or principles are established to ascertain what land is held by valid 
 titles and what is vacant." Because, it would be "doing a great injustice 
 to the army, and to those who are entitled to bounty land, to open the 
 land-offices until such rules are established, as to the selection and location 
 of bounty lands, as will place them on a just equality with others." And, 
 lastly, because the bill, " if published now, will only serve to distract the 
 public mind, and divert the public attention from the defence of the country 
 against the common enemy, and direct it almost exclusively to the location 
 of land-script, and to land-speculation." 
 
THE FISCAL HISTORY OF TEXAS. 59 
 
 "L etat ! cest MOI," said Louis XIV. " Je suis T etai." " The 
 State! that is me. I am the State." From some things we have 
 heard, we have been led to believe that, as Louis XIV. was " the 
 State," in the kingdom of France, so Samuel Houston was "the 
 State," in the Republic of Texas. But, when a question about land- 
 speculations arose, all his power and influence was a mere nullity. 
 On the 22d of December, both House and Senate passed the bill, 
 by constitutional majorities, and it became a law in defiance of the 
 President. 
 
 At the period of which we are now speaking, the last quarter 
 of 1836, paper-money banking had reached its culminating point 
 in our Federal Union. Men who had made the subject their 
 especial study saw that an explosion must occur. But the Congress 
 of the United States was blind to the evils about to ensue, and so 
 was the Congress of Texas. 
 
 On the 30th of April, 1835, nearly six months before the com 
 mencement of hostilities, the State of Coahuila and Texas passed 
 a decree, making Samuel M. AYilliams, of the firm of McKinney and 
 Williams, the empresario that is, the contractor, or, more literally, 
 the undertaker to establish a bank in the Department of Brazos, 
 to be called the " Commercial and Agricultural Bank." The said 
 bank was to have a capital not exceeding one million dollars, 
 divided into shares of one hundred dollars each. As soon as three 
 hundred thousand dollars were subscribed, a meeting was to be 
 called, and directors chosen. The bank was to continue for twenty 
 years, and to have the privilege of establishing branches anywhere 
 and everywhere. It might receive eight per cent, per annum, on 
 loans not exceeding six months, and ten per cent, on loans exceed 
 ing that time ; and only the capital of the bank was to be responsi 
 ble for the notes it issued. It was a most liberal charter through 
 out, and especially as it provided that the subscribers should 
 adequately secure the value of their shares with real estate in 
 the Republic." Or, if there was anything illiberal in it, it was 
 contained in a single clause, which provided that, " as soon as one 
 hundred thousand dollars, at least, have entered the vaults of the 
 bank, it may commence operations; a commissioner, to be appointed 
 by the executive, previously intervening, who shall, furthermore, 
 examine every year the state of the concerns of the association." 
 
 Construed according to the common principles of bank interpre- 
 
60 THE FISCAL HISTORY OF TEXAS. 
 
 tation, we do not know that even this clause can be considered as 
 illiberal, for it does not say "one hundred thousand dollars in 
 specie;" and, whatever the word "dollars" may mean in Coahuila, 
 it means, in Texas and the United States, whatever people choose 
 to make it mean. 
 
 By an act passed December 10, 1836, "for the relief of 
 McKinney and Williams," the President was required to appoint 
 a commissioner " for the purpose contemplated in the tenth article 
 of the charter of the Bank of Agriculture and Commerce, granted 
 to Samuel M. Williams by the Legislature of the State of Coa 
 huila and Texas, in April, 1835, in order that the parties may 
 exercise and enjoy their privileges under said act." 
 
 That the Congress of Texas looked upon this as only the com 
 mencement of a system, is evident from the next section, which 
 authorized and empowered the Secretary of the Treasury "to 
 negotiate a loan, from any bank or banks that may be established 
 in this Republic, of sufficient amount for the payment of all just 
 claims held by McKinney and Williams against this government." 
 
 If there is any doubt on this subject in the mind of the reader, 
 it will be removed when we inform him that only six days after 
 wards, or on the 16th of December, an act was passed " to incor 
 porate the Texas Railroad, Navigation, and Banking Company," 
 with a capital stock of five millions, to be increased, if desirable, to 
 ten millions, and with the right of connecting the waters of the 
 Rio Grande and the Sabine by means of internal navigation, toge 
 ther with the privilege of making branch canals and branch rail 
 roads in every direction. 
 
 It was the day of magnificent schemes; but admiration ought not 
 to be withheld from this, especially when it is considered that, at 
 this very moment, when a line of artificial navigation of five hun 
 dred miles was projected, the Texans had not the means of defend 
 ing their coast from the insults of a single Mexican sloop-of-war. 
 
 In every respect but two, the charter was of the most liberal 
 description. It provided that the bank should not go into opera 
 tion until it had " a specie capital of one million dollars paid in," 
 and that the charter should be forfeited unless a bonus of twenty- 
 five thousand dollars should be paid in gold and silver, within eight 
 een months of the date of the act. 
 
 The necessary amount of stock, five millions, was subscribed by 
 
THE FISCAL HISTORY OF TEXAS. 61 
 
 eight individuals and firms; and, within the period prescribed by 
 the charter, the bonus was tendered in Texas treasury notes, which 
 by law were then receivable for all public dues. The Treasurer 
 refused to receive them, but gave a written acknowledgment that 
 the tender had been made. And, if it were not for the provision 
 requiring a "million dollars to be paid in specie before the bank 
 can commence operations," the charter might be worth looking 
 after by Northern speculators. 
 
 Even as it was, some people made money out of the scheme. 
 None of them, as we have learned from one of the number, paid 
 anything in ; but one of them sold out his interest to a gentleman 
 of New York for thirty thousand dollars, and received his pay in 
 store goods. The successful salesman then bought out the interest 
 of another of the subscribers for ten thousand dollars. And an 
 other one of the gentlemen concerned disposed of his interest for 
 three leagues of land, which he has since sold at two dollars and a 
 half an acre. Thus this ten million scheme enabled three of the 
 parties to realize a net profit of about sixty thousand dollars. 
 
 The rest of the subscribers retain their original shares to this 
 day. 
 
 Of the operations of the Commercial and Agricultural Bank, we 
 shall have occasion to speak hereafter. 
 
62 THE FISCAL HISTORY OF TEXAS. 
 
 CHAPTER VIII. 
 
 SECOND SESSION OF THE FIRST CONGRESS : MAY 1 TO JUNE, 1837. 
 
 Pecuniary destitution of the Government of the Republic Recognition of its inde 
 pendence by the United States Statement by President Houston of the insuffi 
 ciency of the navy Governor Smith made Secretary of the Treasury Proceedings 
 of the agencies at Mobile and New Orleans The Secretary of the Treasury re 
 ports a plan for raising a revenue, and funding the outstanding debt Acts passed 
 accordingly Government liabilities worth only fifteen cents in the dollar Projects 
 for additional banks Deplorable condition of the treasury First effective act for 
 the issue of treasury notes. 
 
 THE first Congress met, by adjournment, on the 1st of May, 
 1837, at the town of Houston, about eighty miles inland, by the 
 post-route, from Galveston. Its loan acts had produced nothing. 
 Its customs act had produced nothing. And its acts for the sale of 
 land-script had produced little or nothing. 
 
 The "land-dues" were the only branch of the revenue that was 
 at all productive. Mr. Gail Borden, who has already figured 
 largely in our history on account of the fifty-eight dollars and thirty 
 cents he paid into the treasury of the Consultation, made himself 
 still more illustrious in this year by paying into the treasury of the 
 Republic the sum of $7,346 37. It is true that this amount was 
 in " land-script," and, therefore, not available as efficient revenue. 
 But Mr. Gail Borden paid over what he had received. 
 
 Yet there was cause for pride and exultation. The independ 
 ence of Texas had been acknowledged by the Government of the 
 United States. " We now," said the President, " occupy the proud 
 attitude of a sovereign and independent republic, which will impose 
 upon us the obligation of evincing to the world that we are worthy 
 to be free. This only will be accomplished by wise legislation, the 
 maintenance of our integrity, and the faithful and just redemption 
 of our plighted faith wherever it has been pledged." 
 
 When the President went to announce this and other matters to 
 Congress, he was received with a pomp and ceremony which may 
 cause the reader to fear that the Texans had, by living under 
 
THE FISCAL HISTORY OF TEXAS. 63 
 
 Mexican rule, lost something of their republican simplicity. Our 
 extract is from the House Journal, of May 5, 1837 : 
 
 "The Senate then entered the hall, preceded by their sergeant-at-arms; 
 the President pro tern, took his seat on the right hand of the Speaker, and 
 presided jointly with him. 
 
 " The Senators were provided with seats in front of the chair, and the 
 officers of the two Houses associated in their several duties at their respective 
 stations. 
 
 "At twelve o clock, His Excellency, the President, entered the hall, accom 
 panied by the heads of the several departments, and other officers of the 
 government, and also by Joseph Tucker Crawford, Esq., His Britannic 
 Majesty s Consul, at Tampico, and Commissioner from the British Govern 
 ment to this Republic, and preceded by the joint committee of the two Houses. 
 The President was received by the members of the two Houses standing un 
 covered, and was conducted to a seat between the President pro tern, of the 
 Senate, and the Speaker of the House. 
 
 " The heads of the departments, the British commissioner, and the other 
 attendants of His Excellency, were accommodated with seats on the right 
 hand of the chair. 
 
 " The members having resumed their seats, after a short pause, His Ex 
 cellency rose, and read the following communication : 
 
 [Here follows a communication, which fills eight pages of the printed 
 Journal.] 
 
 "His Excellency, having concluded, retired from the hall, conducted and 
 accompanied as on his entrance." 
 
 In this communication, the President gave, substantially, such a 
 view of the finances as is contained in the initial paragraph of this 
 chapter, renewed his objections to opening the land-offices, and, 
 speaking of the subject of maritime defence, said: 
 
 "The insufficiency of our navy must be a subject of serious considera 
 tion. When the constitutional government assumed its functions, the armed 
 vessels, Brutus and Invincible, were in the port of New York, and remained 
 there until a few weeks past, when they returned, but without either crews 
 or provisions for a cruise. 
 
 " The f Independence/ having not more than two weeks provisions, was 
 taken to New Orleans some months since, where she has been detained, 
 and has not yet been reported to this government for service. 
 
 " At an early day, a confidential officer was dispatched to the United 
 States, for the purpose of purchasing such vessels as would enable us to keep 
 the command of the Gulf from our enemy. He has reported to the proper 
 department, and his arrival is daily expected with one or more fine vessels, 
 in preparation to defend our commerce, and make reprisals on the enemy. 
 
 " Our commerce has suffered to some extent, and a small portion of our 
 supplies for the army has been captured, and taken into Mexican ports." 
 
 Before the close of the session, the "Independence" was captured 
 by the enemy, and the navy reduced to the "Brutus" and the 
 " Invincible." 
 
64 THE FISCAL HISTORY OF TEXAS. 
 
 The reader s old friend and acquaintance, ex-Governor Henry 
 Smith, was now Secretary of the Treasury, and he, in anticipation 
 of the meeting of Congress, had, on the 18th of April, presented 
 a report to the President. It was made up chiefly of complaints 
 of the Toby agency at New Orleans, and the White agency at 
 Mobile. The former would render no account of its transactions 
 to the department, and dishonored all the drafts drawn upon it. 
 Mr. Thomas Toby had, moreover, " pursued the unwarrantable 
 course of selling the script at one, two, and three years credit." 
 
 Mr. David White gave no better satisfaction. In addition to 
 land-script, commercial acceptances for fifty thousand dollars, being 
 the amount that had been paid in for the purchase of the town- 
 plot of Galveston, had been put into his hands. " Many drafts 
 have been drawn on this agency, and but few paid. If any por 
 tion of the fifty thousand dollar acceptances have been paid, it is 
 unknown to this department ; and of the few which have been 
 paid, it is believed they were generally paid in land-script, for 
 which the agent claims his commission of 7J per cent." 
 
 We suspect that, if the agents had had an opportunity, they too 
 would have had complaints to make. The simple truth was, that 
 they were appointed to sell what, in time of peace, had little com 
 mercial value even in Texas, and what in time of war had hardly 
 any. 
 
 So "wrathful was the President that he ordered that no further 
 sales should be made by these agents, and that they should pass 
 over to a special agent, appointed for the purpose, such land-script 
 as remained in their possession. 
 
 The whole amount of audited claims, from January 1, 1836, to 
 April 18, 1837, was stated by the auditor at $604,985 43, of which 
 only $1,569 34 had been redeemed by receiving the evidence of 
 them in payment of public dues. 
 
 In conformity with a resolution passed at the first session, the 
 Secretary of the Treasury made another report, on the 12th of 
 May, containing a plan of revenue and finance. In this, he sug 
 gested a new tariff, which, he supposed, would yield two hundred 
 thousand dollars per annum : Direct taxes on lands, and all other 
 property, which, at one-half per cent, ad valorem, would yield one 
 hundred and twenty-five thousand dollars. And besides these, 
 
THE FISCAL HISTORY OF TEXAS. 65 
 
 license taxes on wholesale and retail dealers, taverns, public shows, 
 and billiard-tables, the produce of which would probably amount 
 to ten thousand dollars. Add to these, forty thousand dollars for 
 " present supposed dues on granted lands, and the Republic would 
 have an annual revenue of three hundred and seventy-five thou 
 sand dollars." 
 
 With these projects of taxation, Governor Smith combined a 
 plan for funding, which consisted in issuing certificates of stock, 
 redeemable in not less than five, nor more than ten years, and 
 bearing an interest of ten per cent., the said certificates to be 
 issued in exchange for audited drafts and other outstanding evi 
 dences of the public debt. 
 
 Speaking on this point, the Governor says : 
 
 " It appears clear to me, under the present depreciated state of the go 
 vernment liabilities, that, if this plan be adopted, the public creditors will 
 soon feel relief, and the claims against the government, in the form of audit 
 or s warrants, now possessing but a nominal value, say fifteen cents in the 
 dollar, would soon approach their par value. If the banking institutions 
 of the country should go into operation, as contemplated, this stock, then 
 secured, would be deemed good security for bank accommodations, and, I 
 have no doubt, would soon gain a similar credit in the United States, and 
 the public credit, if not entirely restored, would become greatly assisted and 
 benefited/ 
 
 Here we find Governor Smith suggesting that Texan bonds should 
 be made a foundation for Texan banks. But whether he therein 
 anticipated or borrowed the wisdom of the founders of the New 
 York free banking system, must be left to the decision of the 
 reader. 
 
 An act for funding the public debt was passed June 7 ; and acts 
 to create a revenue by import duties and direct taxes were passed 
 June 12. 
 
 Thus far all was according to the recommendations of the Se 
 cretary of the Treasury. But on the 9th, only two days after the 
 passage of the funding act, and three days before the passage of 
 the acts imposing import duties and direct taxes, another act was 
 passed authorizing the issue of promissory notes of government, to 
 the amount of five hundred thousand dollars, and making them 
 receivable for all public dues. This was not according to Governor 
 Smith s recommendation, and gave rise to serious difficulties be 
 tween him and the Congress. 
 5 
 
66 THE FISCAL HISTORY OF TEXAS. 
 
 June 12, an act was passed supplementary to the act to establish 
 a general land-office. By one section of this, it was provided that 
 the opening of the land-offices should be further postponed till the 
 1st of October ; and by another it was enacted 
 
 " That, after the first day of October next, no individual arriving in the 
 country shall be entitled to land as an emigrant ; and from this time for 
 ward no more bounty land shall be given as an inducement to any one to 
 enter into service in the army of Texas." 
 
 It was quite time that some provision like this should be adopted ; 
 for, if lands should be given to every emigrant, it would be diffi 
 cult for those who had bought up soldiers certificates and old 
 settlers " head-rights" to find purchasers. 
 
 President Houston vetoed this bill ; but, like that to which it 
 was a supplement, it was passed in defiance of him. 
 
 It was thought that the Commercial and Agricultural Bank, and 
 the Texas Railroad, Navigation, and Banking Company, with their 
 capitals (that were to be) of six to eleven millions, would not afford 
 sufficient banking facilities to a population of somewhere between 
 twenty and fifty thousand. Therefore, projects were brought for 
 ward for the incorporation of a " Joint-Stock Company for the 
 Erection of a Hotel and Bath-house at Yelasco, with Banking Pri 
 vileges ;" for another of like kind at Houston ; for the incorpora 
 tion of the " Internal Improvement and Banking Company of 
 Texas;" for the incorporation of the "Red River and Aransaso 
 Bay, Railroad, Navigation, and Banking Company," embracing a 
 scheme hardly less magnificent than that of the " Texas Railroad, 
 Navigation, and Banking Company;" and, finally, for establishing 
 a bank on the faith of the government. 
 
 All these projects were favorably received. But, before the 
 necessary laws could be passed, news was received of the grand 
 explosion of the banks in the United States, and they were suf 
 fered to die a natural death. 
 
 The fact that, at the commencement of this session, audited 
 drafts, the only Texan "promises to pay" which were then afloat, 
 were worth but fifteen cents in the dollar, must have convinced 
 the reader that the finances of Texas were in a deplorable con 
 dition. If he supposes there was any improvement before the 
 Congress adjourned, the following message from the President will 
 dispel his illusion : 
 
THE FISCAL HISTORY OF TEXAS. 67 
 
 " EXECUTIVE DEPARTMENT, CITY OF HOUSTON, June 6, 1837. 
 " Gentlemen of the Senate and House of Representatives : 
 
 " I cannot forbear calling your attention to the condition of the subsist 
 ence and quartermaster s department of this government. The inclosed 
 document will exhibit the amount of liabilities that must be immediately 
 met, or the credit of the government will be entirely destroyed. 
 
 " I would have laid the subject before your honorable body at an earlier 
 day, had it been in my power to have acquired the information desirable. 
 Without the interposition of Congress, the situation of the country must be 
 truly deplorable. 
 
 u The government was unable, upon its own credit, to obtain the supplies 
 absolutely necessary to the emergencies of the army. The Executive has 
 been compelled to give his individual obligation for supplies for the army, 
 indorsed by some of the honorable members of your body. This was done 
 at a time when a part of the army was in an actual state of mutiny, from 
 want of every kind of provisions. Galveston Island would have been de 
 serted, had not this course been pursued. 
 
 "Since the commencement of the constitutional government, no public 
 officer has received any salary. Their personal expenses are great, from the 
 fact of their having to pay an exorbitant price for board. Their individual 
 means are quite exhausted. They have tendered me resignations from time 
 to time, induced by their actual necessities, intending to pursue some other 
 course that they might obtain the means of subsistence. The Executive, 
 since he has come into office, has received into the treasury and disbursed 
 only five hundred dollars for provisions for the troops. Under these circum 
 stances, your honorable body must be aware of the absolute necessity of 
 some provision being made to sustain the country and the aid which it is 
 in your power to give is most sincerely and earnestly invoked. 
 
 "SAMUEL HOUSTON." 
 
 The message was referred to the Committee of Ways and Means, 
 and on the next day that committee reported a bill for the issue 
 of five hundred thousand dollars in promissory notes; but the 
 whole of these, it was provided, should be issued and paid out 
 alone for, and on account of, the expenses of the civil department 
 of the government, except one hundred thousand dollars for the 
 purchase of horses and munitions to be used by the rangers and 
 mounted gun-men in a war against the Indians. 
 
68 THE FISCAL HISTORY OF TEXAS. 
 
 CHAPTEE IX. 
 
 " CALLED SESSION" OF THE SECOND CONGRESS: SEPTEMBER 25 TO 
 NOVEMBER 4, 1837. 
 
 The opening of the land-offices postponed Differences of opinion of the Secretary 
 of the Treasury and Congress on the subject of treasury notes Reasons for not 
 issuing land-script to the soldiers Low price of land-script at New Orleans Act 
 for augmenting the navy. 
 
 NOVEMBER 6th was the time appointed by law for the Second 
 Congress to assemble ; but the President, by proclamation, called 
 them together on the 25th of September. In his opening message, 
 he gave, as his reasons, that preparations were making to run the 
 boundary-line between the United States and Texas, and that this 
 might conflict with the law of the last session for opening the land- 
 offices 
 
 (l Inasmuch as some of the districts would necessarily fall within that 
 section of country over which the United States have, for some years, ex 
 ercised civil jurisdiction; but over which, there is no doubt, the Govern 
 ment of Texas, so soon as the limits of each country are defined, will be 
 manifestly entitled to the civil, as well as the political, jurisdiction/ 
 
 Without any unnecessary delay, a joint resolution was adopted 
 "to suspend the operations of the land-offices until the further 
 action of Congress." Thus, a measure which was to have been 
 consummated on the 1st of June, 1837, and which was afterwards 
 deferred to the 1st of October, was now indefinitely postponed, 
 greatly to the satisfaction of President Houston, and greatly to 
 the chagrin of some of his opponents. 
 
 The act, passed at the last session for funding the public debt, 
 had not been carried into effect ; and neither had that for the 
 issue of promissory notes. For this, the Secretary of the Trea 
 sury was called to account. He replied, October 13th, that the 
 two laws were incompatible; and that the act of June 9th, requir 
 ing promissory notes to be issued, appeared to be superseded in 
 its chief provision by an act of subsequent date, or of June 12th, 
 
THE FISCAL HISTORY OF TEXAS. 69 
 
 for imposing duties on imports, which last act required that all 
 such duties should be paid "in gold and silver, or such current 
 bank-notes as the government might direct." If the duties were 
 received in treasury notes, as directed by the act of June 9th, it 
 would be folly to fund the outstanding audited drafts, inasmuch as 
 the government could then comply with its promise to pay interest 
 only by giving to the fundholder other paper promises. There 
 fore, he had waited for the further action of the Congress. 
 
 Governor Smith s plan was a very plausible one. It rested, in 
 fact, on sound principles, but on principles which could not be 
 carried out in the existing condition of things in Texas. 
 
 In a long report, the Secretary of the Treasury explained his 
 views ; but his reasons were not satisfactory to the lawgivers of 
 the Republic. They were resolved that a government paper- 
 money should be issued in the form of promissory notes, or trea 
 sury bills. But here a new difficulty arose. The President was, 
 by law, required to subscribe the bills, and it would be a work of 
 great labor to sign so many. How could he do it? He was still 
 suffering under a wound, received at the battle of San Jacinto, and 
 was otherwise indisposed. Either compassionating the condition 
 of the President, or else resolved that their favorite measure 
 should not be defeated by any pretext, however plausible, Congress 
 passed a joint resolution, October 23d, " authorizing William G. 
 Cooke to sign the name of the President to the promissory notes 
 of the government," in the preamble to which due prominence was 
 given " to the disabled situation of His Excellency s right arm from 
 a former wound, aggravated by his present sickness." It was 
 added that " the necessary and pressing wants of the country re 
 quire that the issue of such notes should immediately commence." 
 
 The Secretary of War was also called to account for not having 
 issued land- warrants to the soldiers, as had been ordered ; and the 
 President answered for him : 
 
 "It (the law containing the order) was not thought to be imperative as 
 to its immediate execution. Had the Executive approved its immediate 
 execution, or the Secretary of War performed it, nothing appeared more 
 ruinous to the country. Our army was numerous; it was destitute of 
 clothing; it was without ten days provisions; it had not five hundred effi 
 cient arms; it was wofully defective in ammunition (and, I regret to say, 
 that the country is without any at this time) : we had to look abroad for 
 our supplies : general discontent prevailed in the army. 
 
 "Our only reliance, for the remedy of these evils, was upon the script 
 
70 THE FISCAL HISTORY OF TEXAS. 
 
 which had been sent to agents of the government in the United States, to 
 be disposed of. Unless that scheme should prove successful, the army must 
 remain destitute, which would soon have led to anarchy and its dissolution. 
 
 "Under the directions of the government ad interim, the acting pay 
 master-general had issued upwards of thirty thousand acres of land-certifi 
 cates for discharged soldiers. They immediately sailed for New Orleans ; 
 and, on their arrival there, finding themselves destitute of means, they 
 found persons there always ready to purchase at a great sacrifice. It was 
 sold at twenty cents per acre, and under that price. Speculators soon 
 availed themselves of these facts. 
 
 " When the script of the government was brought into market at fifty 
 cents per acre, there were always persons who had purchased the soldiers 
 certificates for a mere nominal amount, who were prepared to speculate upon 
 it at a price from twenty-five to thirty cents per acre, alleging that it ema 
 nated from the government, and that it was equally as good as the script 
 sent there by the government. This, at once, depreciated the script of the 
 government, and rendered it impossible to vend it for cash, or to purchase 
 supplies for the army, without paying from one to two hundred per cent, 
 advance for them." 
 
 This reasoning did not convince the Texan Congress. They, 
 in defiance of the President s veto, passed a joint resolution to re 
 quire the Secretary of War to issue land-warrants to the soldiers. 
 If they did this with a view of buying them up themselves, at a 
 low price, the journals do not disclose the fact. 
 
 At this session, an act was passed for augmenting the navy. It 
 authorized 
 
 "The buying or building, arming and equipping of one ship or brig, 
 of about five hundred tons burden, to mount eighteen guns; two barks or 
 brigs, about three hundred tons burden, mounting twelve guns each; and 
 three schooners, about one hundred and thirty tons burden, mounting five 
 or seven guns each/ It was further enacted that the sum of two hun 
 dred and eighty thousand dollars is hereby appropriated for the purpose 
 aforesaid, and that the public faith is solemnly pledged for its payment/ ;J 
 
 Under this act sundry vessels were purchased, of which we shall 
 have occasion to speak hereafter. 
 
THE FISCAL HISTORY OF TEXAS. 71 
 
 CHAPTER X. 
 
 FIRST REGULAR SESSION OF SECOND CONGRESS: NOVEMBER 6 TO 
 DECEMBER, 1837. 
 
 Issues of treasury notes commenced November 1, 1837 New difficulties between 
 the Secretary of the Treasury and Congress Want of money and want of credit 
 "Boundless revenue" expected from the opening of the land-offices The navy 
 almost extinct Moderate amount of public expenses up to November, 1837 A 
 new tariff Authority for the issue of more treasury notes Distinction between 
 original holders and assignees of Texan securities The agent sent to the United 
 States to sell land-script recalled Unreasonable expectations of the Texan 
 Government in relation to its public lands New act for opening the land-offices. 
 
 ONLY one day elapsed between the close of the " called" and 
 the commencement of the regular session, and that was a Sunday. 
 
 The Secretary of the Treasury was again called to account. 
 The issue of treasury notes commenced on or about the 1st of 
 November, but on the 5th he addressed a letter to the collectors 
 of customs, forbidding them to take such notes in payment of 
 duties ; and, on the 13th, he, by order of the President, addressed 
 another letter directing them to receive the said notes as cash. 
 
 In his report to Congress on this subject, the Secretary says : 
 
 " In issuing the inhibitory order, I conscientiously believe I was right, 
 and acting in the lawful discharge of my duty. And, in issuing the coun 
 termand which immediately followed, I also considered I was right, as it 
 was ordered by my superior, who assumed the responsibility." 
 
 In a good many respects, the Government of Texas appears to 
 have been imperial rather than republican. And if Henry Smith, 
 when in one position, knew how to command, he here gave evi 
 dence that, when placed in another, he knew how to obey. 
 
 Again was the Secretary of the Treasury called to account. He 
 had done nothing towards funding the floating debt. Why had 
 he neglected this important duty ? 
 
 He replied: 
 
 " In two previous communications to your House, I have adverted to 
 the substantial reasons which have induced me to delay its execution, in 
 
72 THE FISCAL HISTORY OF TEXAS. 
 
 terms, as I conceived, too plain to be misunderstood. Ever willing, how 
 ever, to account for any seeming neglect of official duty on my part, I give 
 the following as the last, though not the least reason, why that law has 
 been delayed in its execution : Two different bills have been sent up to 
 New Orleans for suitable and necessary stationery to be used for that and 
 other public purposes, neither of which, however, have been filled, for rea 
 sons which it is easy to imagine." 
 
 A plain-spoken man was Henry Smith ; but here he resorts to 
 a euphuism. It was too much even for him to say that the 
 government had neither cash nor credit wherewith to purchase 
 pen, ink, and paper. 
 
 On the 21st, the President, having been before prevented by 
 sickness, delivered his message. 
 
 In it he said : 
 
 " The finances of our country, since the commencement of the revolution 
 up to this time, have been in a more embarrassed situation, doubtless, than 
 any other nation ever experienced. Since the commencement of the pre 
 sent administration, during the first year, there was at the disposition of 
 the Executive, or in the treasury, but five hundred dollars in cash. The 
 several amounts that had been appropriated for specific or general purposes 
 depended on the sale of script, and iliat, by acts of Congress, was placed in 
 the hands of foreign agents, who were irresponsible to the Executive. * * 
 This imaginary and unfortunate expedient is now at end, and has left the 
 government in a situation to afford the most ample redemption of all her 
 pledges and responsibilities. 
 
 " A boundless revenue to the country will accrue from the opening of 
 the land-offices, and so soon as that can take place consistently with the 
 positive provisions of the constitution, and regulated by such enactments as 
 will guard the public interest against fraud and imposition, it will meet the 
 desire of the Executive, and promote the public tranquillity." 
 
 As will be seen hereafter, this " boundless revenue" was all an 
 illusion, and even less was derived from the opening of the land- 
 offices than from the sale of land-script. 
 
 " Owing," he continued, " to the financial derangements of the United 
 States, from which our currency was almost entirely derived, and where, it 
 was hoped, that this country could obtain a negotiation for five millions of 
 dollars, our expectations have not been realized. By the last advices from 
 our agents of the loan, they had not succeeded, but regarded the prospect 
 of success greater than had been at any previous time." 
 
 Here was another illusion of the Texans, even greater and more 
 permanent than that founded on the sale of land-script, or that 
 resting on the opening of the land-offices. 
 
 Of the treasury note system, the President gave a qualified ap- 
 
THE FISCAL HISTORY OF TEXAS. 73 
 
 proval : provided the issues were not of a greater amount than 
 " would meet the actual necessities of a circulating medium. 
 The report of the Secretary of the Navy was very gloomy : 
 
 " While the country has been gradually rising from the effects of the 
 revolution, our navy has become almost extinct. The embarrassed situa 
 tion of our financial affairs has heretofore rendered it impossible to make 
 the necessary appropriations for keeping it up ] and we now have but one 
 small vessel afloat to guard a coast of more than six hundred miles in 
 length. While our navy is in this shattered condition, and entirely unable 
 to afford the necessary protection to our commerce, the Mexicans have found 
 means to make such additions to their own naval strength as will enable 
 them to hold an entire control of the Gulf." 
 
 On the 30th of November, the Secretary of the Treasury made 
 a report ; from one of the documents appended to which, we learn 
 that the amount of claims audited up to 17th of November was 
 
 Military ..... $903,720 85 
 
 Civil . . . . . 142,902 59 
 
 Naval ..... 56,850 65 
 
 Contingent .... 23,334 35 
 
 Total .... $1,126,808 44 
 
 " From which should be deducted drafts taken in for public dues, &c., 
 $34,824 79, leaving outstanding $1,090,984 45." 
 
 Here we find that even two years after the commencement of 
 the war, the public debt, so far as ascertained, was but little more 
 than a million ; not because the government had any objection to 
 running in debt to a greater amount, but because few would trust 
 it, except such as could not well avoid so doing. 
 
 Six months having elapsed since the passage (June 12) of the 
 last act for raising a revenue by a duty on imports, it was now 
 (December 18) deemed high time to pass another, and accord 
 ingly another was passed, giving a new list of free articles, and 
 modifying the ad valorem rates on some of the articles that re 
 mained dutiable. Another act was passed to give efficiency to 
 the law licensing billiard-tables, retailers of liquor, &c. 
 
 So good a purpose did the treasury notes appear to answer, 
 that an act was passed (December 14) authorizing an increase of 
 the issues in the amount of $150,000, and the invidious distinc 
 tion in the act of June 9, in which it was provided that treasury 
 notes should be issued only to defray the expenses of the civil 
 department, and those of the gun-men and mounted rangers was 
 
74 THE FISCAL HISTORY OF TEXAS. 
 
 done away with. A liberal appropriation of them was now made 
 for the pay of the officers of the army and navy. But it was 
 provided that any soldier or sailor, who should present his drafts 
 to the Treasurer, to be exchanged for treasury notes, should take 
 an oath " that said draft or drafts had originally been issued to 
 him, that he had not sold them, alienated, or pledged them to any 
 person, and that he was then the bonafide and sole owner of it or 
 them." 
 
 This making of a distinction between the original holders of 
 public obligations, and those into whose hands they might pass, was 
 a cardinal principle of Texan policy. But it only injured those 
 it was professedly intended to serve. The more the restrictions 
 that are imposed on the passage of public obligations from hand 
 to hand, the more is their value diminished. By this law, the 
 soldier or sailor, who was at the seat of government, could ex 
 change his drafts for treasury notes, which were receivable for all 
 public dues; while he that was at a distance was obliged to sell 
 his drafts for what they would bring, and as they were receivable 
 only for land-dues and direct taxes, they were of less value than 
 treasury notes. 
 
 Texan regulations in regard to the different evidences of public 
 debt were so various, and changed so often, that it seems as if it 
 must have been necessary for a man to fee a lawyer to ascertain 
 the exact value of the different securities he held in his hands. 
 
 By way of giving a little variety to the currency, a resolution 
 was passed (Dec. 14th) authorizing the Treasurer to issue " change 
 notes" of the denominations of one, two, and three dollars, in ex 
 change for notes of larger denominations. On the same day, an 
 act was passed " to prevent the issuing of individual printed or 
 lithographed notes;" and the train of currency measures for the 
 session was completed by another act passed on the same day, 
 and entitled "An act to Sustain the Currency of the Country." 
 This declared that "nothing but gold and silver, or promissory 
 notes of this government, should be received in payment of duties 
 on goods imported, nor shall any bank-notes be received in pay 
 ment of any dues to the Government of Texas. 
 
 This left audited drafts receivable for dues on lands, and direct 
 taxes, but they w r ere in a form so ill adapted to circulation that 
 but few of them found their way into Eastern Texas, the best- 
 
THE FISCAL HISTORY OF TEXAS. 75 
 
 settled and wealthiest portion of the country, and where alone the 
 people had much ability to pay taxes; and as these people had 
 not audited drafts on hand, they, as a general rule, paid no taxes 
 at all. 
 
 To the soldiers, this Congress was very liberal, so far as grants 
 of land were concerned. As there was much difficulty in recon 
 ciling the various conflicting laws, and as the allowance did not 
 bear an equal proportion, in many cases, to the services rendered, 
 an act was passed, Dec. 4th, granting to all those who had served 
 in the army three months, three hundred and twenty acres ; to 
 those who had served six months, six hundred and forty ; to those 
 who had served nine months, nine hundred and sixty; and to 
 those who had served twelve months or upwards, twelve hundred 
 and eighty. By an act of Dec. 21st, a bounty of six hundred and 
 forty acres was bestowed on each man who had been in the battle 
 of San Jacinto. And by another, passed Dec. 18th, a league of 
 land was bestowed on each and every person who had been "per 
 manently disabled by loss of eye, arm, or limb, or such other 
 bodily injury as would incapacitate him for bodily labor, by 
 wounds received in the service of Texas." 
 
 The agent who had been sent to itinerate in the United States 
 to sell land-script, Mr. J. K. Allen, having been as unsuccessful as 
 the local agents at New Orleans and Mobile, an act was passed, 
 Dec. 14th, peremptorily recalling him, and requiring him, within 
 four months from January 1st, to surrender to the Secretary of 
 the Treasury all the land-script in his possession, or else be con 
 sidered guilty of a high misdemeanor. 
 
 There is something exceedingly amusing in the wrath of the 
 Texan authorities towards those who were appointed to sell their 
 land-script. They sent men abroad to sell that which had little 
 or no value at home. That they might make these sales, they 
 sent them into the United States a country, the people of which 
 had, in one or two years, bought as much wild land from their own 
 government as they could bring into cultivation in ten or twenty 
 years. Had the effort been made in the height of the banking 
 infatuation, some success might have crowned it, for men could 
 then have been found who would have bought lands in Patagonia, 
 if any there had been offered for sale. But when the Texan land- 
 agents made their appearance in the market, everything was top- 
 
76 THE FISCAL HISTOKY OF TEXAS. 
 
 pling, and everything soon tumbled over. Then the most fertile 
 lands could, in many places, be bought "for a mere song." Yet, 
 when there was no sale for lands in a country in which there was 
 a well-established government, and in which an orderly state of 
 society prevailed, the Texan authorities attempted to sell land in 
 a country which was then little better than a military common 
 wealth, which was still contending for its independence, and in 
 but few parts of which was good order established. They looked 
 upon their land-script as " a cash article," charged their agents 
 with it as if it had been so much money, and then drew upon them 
 for such amounts as their necessities required. 
 
 Speaking of the agency at Mobile, Henry Smith, Secretary of 
 the Treasury, said, in his report of April 18th, 1837 : 
 
 "All the drafts made on that agency were drawn contingently, and 
 agreeably to the principles of commercial transactions, not liable to protest, 
 unless specially made so by the act of the agent. Why that agency has 
 caused so many drafts to be protested, contrary to their tenor, and contrary 
 to special and positive instruction, is as unaccountable to this department 
 as it is injurious to the faith and credit of the government. And, inasmuch 
 as the agencies spoken of have not only cramped our energies and created 
 distrust at home, but paralyzed and ruined our credit abroad, I deem it 
 high time that the government should institute an investigation into their 
 conduct, and withdraw their misplaced confidence. Notwithstanding these 
 agencies must have greatly over half a million of government means in 
 their hands, counting the land-script only at the minimum price, still these 
 means, instead of being made available to the government, seem to be tied 
 up in speculation, and entirely beyond their control." 
 
 Equal plainness of speech did Henry Smith use in speaking of 
 the Toby Agency at New Orleans, and Samuel Houston, Presi 
 dent of the Republic, in his message of Nov. 21st, after saying of 
 them what we have already quoted (page 72), added something 
 about their " having given no security so as to insure accounta 
 bility, and furthermore [were] placed beyond the jurisdiction of 
 ourselves" i. e. "irresponsible to the Executive." 
 
 What summary punishment President Houston would have in 
 flicted, if he had had these agents within his jurisdiction, must be 
 left to conjecture. But the most severe penalties would not have 
 enabled them to sell the land-script. The wonder is, not that they 
 sold so little, but that they sold any. The probability is that, 
 when they did sell, it was not for money, but for articles needful 
 to the army and navy of Texas ; and if they got in this way ten 
 
THE FISCAL HISTORY OF TEXAS. 77 
 
 cents an acre (specie value), they got the full value of the com 
 modity in a foreign country. 
 
 The grand act of the session was, after all, " the act to reduce 
 into one act, and to amend the several acts relating to the estab 
 lishment of a general land-office." It filled more than fourteen 
 pages ; and provided for the opening of the land-offices for first- 
 class claimants that is, for old settlers and soldiers on the first 
 Thursday of February, 1838, and for others in six months after 
 wards. 
 
 President Houston, as usual, vetoed the bill, and the Congress, 
 as usual in measures that promised to afford opportunities for land- 
 speculation, passed it on the 14th of December, in defiance of his 
 veto : the Senate unanimously, and the House by a vote of 26 to 2. 
 
 CHAPTER XI. 
 
 ADJOURNED SESSION OF SECOND CONGRESS: APRIL 9, 1838, TO MAY 
 
 24, 1838. 
 
 Treasury notes at par Reasons for this New issues authorized The loan act 
 modified Increase of public expenditures. 
 
 WHEN the adjourned session of the Second Congress com 
 menced, treasury notes had been about six months in circula 
 tion. For a time they were at par with specie, or nearly at par. 
 This may surprise the reader. Audited drafts, which were as 
 much pledges of the faith of the government as were treasury 
 notes, had been afloat for months. They were receivable for dues 
 on the public lands, for direct taxes, and for a time for customs. 
 Yet so far were they from becoming a currency, that they did not 
 even become a regular vendible commodity. They were not 
 quoted in the prices current as flour, bacon, and cotton were 
 quoted. In May, 1837, when Governor Smith proposed to fund 
 them, they " possessed but a nominal value, say fifteen cents in 
 the dollar." By the 1st of November, the amount of these out 
 standing audited drafts was increased to about a million, a measure 
 which we may be sure did not tend to raise their market value. 
 
78 THE FISCAL HISTORY OF TEXAS. 
 
 Yet the government then resolved to add another half million to 
 the public debt, and treasury notes, the evidences of this new debt, 
 were for a time of equal or nearly equal value with silver ! 
 For this several reasons may be assigned: 
 
 1. The treasury notes were for round sums, and for amounts 
 which made them convenient for circulation, namely, from one 
 dollar to one hundred dollars. Audited drafts were for whatever 
 the claim of the public creditor might amount to; frequently for 
 large sums, and generally for odd numbers of dollars and cents. 
 To pass them from hand to hand required a calculation which 
 they who had them to pay or receive did not find it always easy 
 to make. 
 
 2. These treasury notes were in the form of bank-notes, a form 
 of money with which most of the people of Texas had been familiar 
 from infancy ; and, indeed, the only form of money with which 
 some of them were much conversant. 
 
 3. They bore a rate of interest which was easily calculated, and 
 a rate (ten per cent.) which was sufficient to cause them to be 
 hoarded by such as had faith in their ultimate redemption. Some 
 of the audited drafts bore interest, but the rate of them was only 
 eight per cent. 
 
 4. Texas was at this time flooded with the notes of the banks of 
 the South- Western States, many of which were at ruinous rates of 
 depreciation ; and which rates were, moreover, always fluctuating. 
 The want of some medium that would regulate prices was much 
 felt. One kind of irredeemable paper is much to be preferred to 
 many kinds. 
 
 5. About this time the laws for raising a revenue from customs 
 began to be effective. In the quarter ending September 30, the 
 gross amount that had accrued was about sixty thousand dollars, 
 which was at the rate of two hundred and forty thousand dollars 
 a year. This increase of revenue would have sustained the value 
 of audited drafts if they had been still receivable for duties on 
 imports; but by one of those frequent changes of public tenders 
 which disgrace the fiscal history of Texas, they were no longer so 
 receivable. The whole revenue from customs was applied to 
 sustain the credit of treasury notes. 
 
 6. A market was found for these treasury notes in the United 
 States. An American is very careful how he parts with his silver 
 
THE FISCAL HISTORY OF TEXAS. 79 
 
 dollars or his gold eagles, especially if the bonds offered in ex 
 change be in such large amounts as one thousand dollars. But 
 reduce the denominations of the public securities to one hundred 
 dollars or less, and at the same time afford him an opportunity of 
 making what he regards as a good sale for his commodities, and 
 the temptation is too strong for him to resist it. By issuing notes 
 of as low a denomination as one dollar, the Texan Government 
 afforded to all down to the very negroes in the New Orleans 
 markets opportunities for speculating in Texan securities. In 
 this indirect way, the Government of Texas obtained supplies for 
 the army and navy, and the merchants of Texas replenished their 
 warehouses. 
 
 Admirable would this system have been if it could only have 
 been sustained. But it contained in itself the principles of its 
 own destruction. The notes soon began to depreciate ; and even 
 after the depreciation was as great as fifty per cent, at New 
 Orleans,* a bill was reported authorizing an additional issue of 
 one hundred and fifty thousand. 
 
 This bill, which was modestly entitled " an Act to Define and 
 Limit the Issue of Promissory Notes," was passed in the House 
 by a vote of twenty-four to seven, and in the Senate, where the 
 amount was increased to one million, without a formal division. 
 
 The President refused to sign it, and gave his reasons, on the 
 12th of May, in a message which filled six pages. In it he says : 
 
 "When the (treasury note) currency was projected, both the govern 
 ment and the country were without resources. National existence, and 
 freedom, and imperishable glory had been achieved, but the struggle had 
 left us destitute and naked. There were no banks! there was no money! 
 our lands could not be sold, and the public credit was of doubtful cha 
 racter ! 
 
 " To avoid the absolute dissolution of the government, it became neces 
 sary to resort to some expedient that might furnish temporary relief. 
 This could be only effected by creating a currency that should command 
 some degree of credit abroad. 
 
 "It was hoped and believed, that if a small issue of government paper 
 was made with specific means of redemption pointed out, which appeared 
 to be ample and well guaranteed, and the government should evince a pru 
 dent and discreet judgment in its management, it would command such 
 articles in the market of the United States as were indispensable to the 
 country. 
 
 "The result has justified the expectation." 
 
 * According to General Hunt, the notes passed at this time at eighty-five to sixty- 
 five cents in the dollar in Texas. 
 
80 THE FISCAL HISTORY OF TEXAS. 
 
 Here we find that it was calculated from the beginning that the 
 means of the citizens of the United States would be drawn from 
 them through the instrumentality of these treasury notes. 
 
 u The government will never be able, by all the issues it can make, to 
 satisfy the demands of private speculation and interest. The vast issue of 
 all the banks in the United States ; in their most extended condition, failed 
 to attain this object. * * * 
 
 " There has not probably been in circulation at any time more than a 
 half million of dollars. The present bill requires the Secretary of the 
 Treasury to increase the issue to a million. No time or discretion is 
 allowed to that officer. The circulation of the country is to be doubled in 
 as little time as is required to issue the paper." 
 
 A bill was then reported "to authorize the President to reissue 
 the promissory notes of the government." After having been 
 bandied about for some time between the House and the Senate, 
 it was finally, May 18, approved by the President. 
 
 It authorized and required him " to have reissued, and continue 
 to have reissued" the said promissory notes as they returned into 
 the treasury, until all the appropriations made by government 
 should be satisfied ; and he was authorized to increase the issues to 
 an amount not exceeding one million dollars, if in his opinion the 
 situation of the Republic should be such as to require it. The bill 
 further appropriated one hundred and fifty thousand dollars in 
 promissory notes for the payment of civil list claims, two hundred 
 thousand for military claims, and one hundred thousand for naval 
 claims. But it required all those who presented military and 
 naval claims to take an oath that they were the original holders 
 thereof. Thus absurdly did the law draw a line of distinction 
 between different classes of public claimants. 
 
 A bill was also passed, May 16, " authorizing the payment of 
 the interest of the funded debt" in other evidences of debt, i. e. 
 in treasury notes. And another, May 24, opening the land- 
 offices, from and after the first Thursday of August, 1838, to 
 holders of land- script. Also an act, May 15, to raise a corps of 
 cavalry two hundred and eighty strong, and appropriating fifty 
 thousand dollars for their use ; thus completing the appropriation 
 of the additional five hundred thousand dollars the President was 
 authorized to issue. 
 
 All the efforts to borrow money under the five million act having 
 proved ineffective, another was passed this session, May 16, modi 
 fying some of its provisions. 
 
THE FISCAL HISTORY OF TEXAS. 81 
 
 By one section power was given to the commissioners " to sell the bonds 
 for the notes of any bank or banks whose paper shall be at par with the 
 best bank paper in the city of New York or Philadelphia ; and further, to 
 stipulate that the notes of such bank or banks, purchasing such bonds to 
 the amount of $100,000, should be received in payment of all public dues, 
 so long as said bank or banks should, in the judgment of the Government 
 of Texas, be of good character, and worthy of confidence." 
 
 The reader will see the bearing of this, when he calls to mind the 
 fact that the banks of Philadelphia had not then resumed specie 
 payments. 
 
 By another section, it was made " the duty of the commissioners 
 to contract with the Bank of the United States of Pennsylvania 
 (if practicable), if not, with the Manhattan Bank of New York, or 
 the Union Bank of Louisiana, to act as fiscal agent of the Re 
 public of Texas." 
 
 The Secretary of the Treasury, Mr. Smith, sent the project of 
 this law to the House, requested that it might be adopted without 
 amendment or alteration, and appears to have been therein grati 
 fied. 
 
 The Secretary further informed the House that the engraved 
 notes had arrived, and would be substituted for the printed notes, 
 which had thus far, from necessity, been exclusively used. 
 
 Col. J. K. Allen, the itinerant agent for vending land script 
 in the United States, appeared at the treasury within the time 
 stipulated by law, and thus escaped the severe penalties with which 
 he was threatened in case of disobedience. 
 
 The First Auditor made a report, in which he stated that, from 
 the 18th of November, 1837, to the 13th of April, 1838, he had 
 audited military claims to the amount of $586,988 97. From 
 this, it appears that, in five months, the audited claims for a single 
 branch of the service, were equal to one half of the amount audited 
 in the two previous years for all branches of the service, and these 
 the years of most active hostility. But we need not dwell on this 
 point. The reader knows that issues of government paper-money 
 always increase government expenditures. 
 
 6 
 
82 THE FISCAL HISTORY OF TEXAS. 
 
 CHAPTER XII. 
 
 THIRD CONGRESS I FROM NOVEMBER 5 TO DECEMBER 11, 1838. 
 
 Fraudulent land claims The navy totally destroyed Extensive entries of lands 
 Income and expenses Sanguine expectations of revenue Imports and exports 
 Plan for creating a creditor interest in the United States friendly to Texas. 
 
 THE third Congress assembled at Houston November 5, 1838. 
 The Secretary of War stated, in his report, that 2,990,000 acres 
 of bounty land had been issued up to the 15th of October : 
 
 " The numerous and varied claims for land due to discharged soldiers, 
 has occupied almost exclusively the attention of the department, and the 
 adoption of some rules for its guidance has met with much recrimination ; 
 but unquestionably has resulted in the correction of frauds attempted on 
 the government. In consequence of the defect in the laws regulating 
 bounty lands, the soldier has, in many instances, claimed the amount twice, 
 say for six months, or two terms of service ; that is, if enlisted for a definite 
 period, he obtains his discharge and receives his land, and by re-enlisting 
 for another period, claims the same amount again." 
 
 From the report of the Secretary of the Navy, it appeared that 
 this branch of the national defence had been totally destroyed ; 
 one of the vessels composing it " being wrecked in coming into 
 port, and the other destroyed by the October gale of 1837." 
 " The officers and men attached to the navy were disbanded, 
 agreeably to your Excellency s order, retaining the number speci 
 fied." Speaking of prize-money, the Secretary says : " The sailors 
 of this Republic have received that boon in but one instance ; the 
 portion of each not amounting to more than seven dollars and 
 seventy-six cents." 
 
 The Commissioner- General of the Land-Office reported that the 
 number of certificates issued by the several boards of land com 
 missioners, and recorded up to November 1, was 10,890, amounting 
 to 26,242,199 acres. According to this statement, the land entries 
 that had been made in the nine months that had elapsed since the 
 opening of the land-offices, covered an area larger than the whole 
 State of Ohio. These entries did, indeed, include many of the 
 
THE FISCAL HISTORY OF TEXAS. 83 
 
 grants of the old settlers, but it must still be admitted to be a 
 pretty extensive land business for a Republic that had then, ac 
 cording to computation, a population of no more than fifty thousand 
 to sixty thousand souls. 
 
 On the 3d of November, the Secretary of the Treasury, Henry 
 Smith, made his report. 
 
 After speaking of the agents for the sale of land script, of whom 
 he had nothing particularly good to say, he mentioned that the 
 whole amount of issues of land script was 2,193,000 acres, of which 
 870,400 had been returned by the agents, and 60,800 funded, 
 "leaving 1,260,800 acres to the credit of this account." 
 
 The total amount of audited claims, not for the year, but from 
 the beginning of the government, up to September 30, 1838, he 
 stated, was : 
 
 Civil list, $326,959 68 
 
 Contingent, .... , , . 170,58979 
 
 Naval, 187,169 42 
 
 Military, ... . 1,426,895 81 
 
 Total, $2,061,614 70 
 
 The customs that had accrued (besides those for one quarter at 
 Matagorda), amounted, up to September 30, to $335,955 83 ; 
 leaving, after deducting $57,821 27 for expenses of collection, a 
 net revenue of $278,134 56. This, it should be remembered, was 
 not for the year, but for a period of about fifteen months, counting 
 from the time in which the custom-house had been brought into 
 successful operation. 
 
 On paper, the finances of Texas began to appear to flourish; 
 but he who knew that all these dollars were mere treasury note 
 dollars, depreciated many per cent, below par, was the victim of 
 no illusion. 
 
 In relation to the public debt, he remarked that military script 
 to the amount of $396,800, and land script to the amount of $30,400, 
 making, together, $427,200, had been funded in ten per cent, 
 stocks. . 
 
 Of the direct taxes, the Secretary could give no satisfactory ac 
 count ; but, said he, " the probable amount, however, will not, in 
 my opinion, fall short of $500,000 for the year 1837-1838." 
 
 The land dues, it was admitted, had not proved as lucrative as 
 
84 THE FISCAL HISTORY OF TEXAS. 
 
 had been hoped for, only a very trifling amount having been re 
 ceived since the opening of the land-offices, but it was confidently 
 expected that this one branch of the revenue would yield, in a 
 short time, $237,200. 
 
 The treasurer, in his report, presented a very respectable-looking 
 sheet ; total receipts, $1,023,071 48 ; total disbursements, $825,- 
 699 14. But the receipts, when analyzed, were found to consist 
 of $875,739 53 from the Secretary of the Treasury in treasury 
 notes ; some $8,000 or $9,000 from other public officers ; only 
 $133,649 98 from customs ; $1,500 from sales of lot on Galveston 
 Island ; $3,195 54 from prize-money ; and from land-dues and 
 direct taxes, nothing. It is unnecessary, we presume, to remind 
 the reader that what revenue was received, was in the government s 
 own paper. 
 
 Appended to this report, we have an abstract, showing the 
 amount of imports and exports, up to September 30, 1838 : 
 
 " Total amount of goods imported, . . $1,740,376 87 
 " " " exported, . . 183,323 00 
 
 " Balance of trade against the Republic, . 1,557,053 87" 
 
 Balance of trade against the Republic ! The Texans had been 
 carrying on a most profitable trade. They had been exporting 
 their land script and their treasury notes, and receiving in ex 
 change for them, from " aliens," i. e. citizens of the United States, 
 the necessaries and comforts of life, and the munitions of war. If 
 Texas could only have made this trade a permanent one, she would 
 have been under no necessity of cultivating either her cotton fields, 
 or her sugar lands. 
 
 On the 13th, a resolution was adopted requesting the Secretary 
 of the Treasury to give his views on the propriety of increasing 
 the issues of promissory notes ; on the effects which the abolition 
 of the tariff would have on the credit of the currency ; and on 
 other financial topics. 
 
 On the 29th, the Secretary made a long reply, in which he 
 began with complaining that the Texan Congress had not received 
 his suggestions with that deferential respect which the British 
 Parliament is accustomed to pay to the suggestions of the Chan 
 cellor of the Exchequer. 
 
 "As the head of the Treasury Department, I have ever considered it my 
 
THE FISCAL HISTORY OF TEXAS. 85 
 
 duty to devise and recommend the best ways and means to create a com 
 petent revenue for the support of the government, and in a manner which 
 would, in my opinion, be the least burdensome, and as such the least ob 
 jectionable to the governed. In assuming this position, though the Congress 
 have not thought proper to pass any law defining the duties of my depart 
 ment, yet, by implication and analogy, I am bound to arrive at that conclu 
 sion. It is a matter well understood that our civil institutions are based 
 on the same principles as those of the United States of the north, who have, 
 in a great measure, copied after Great Britain, their ancestors, which is 
 going far enough back for my present purposes. By reference to the laws 
 and statistics of England, it will be found the Minister of Finance is re 
 quired to lay before Parliament the state of the funds in exact detail, and to 
 suggest such measures as he may deem necessary concerning them; and 
 should they object to any of his views, they must refer the necessary amend 
 ments again to him, in order to have his views on the amendments, for the 
 purpose of preventing any injurious clashing of laws and acts with some other 
 branch of the finance. In consequence of the strict adherence to this con 
 cert of action, notwithstanding the immense and apparently overwhelming 
 debt of that nation, by strictly and carefully maintaining the rights of indi 
 viduals sacred, the stocks of Great Britain are constantly at or above par. 
 [A mistake.] This courtesy has, however, not been heretofore extended to 
 me, nor have I, with all my exertions, been able to succeed, except partially, 
 in any project which I have introduced to Congress." 
 
 Mr. Smith then reproaches the Congress for having thwarted 
 his favorite plan for funding the outstanding audited drafts. After 
 this he denounces the treasury note issues, not because he had any 
 objections to such kind of medium, either in the abstract or the 
 concrete, for he was not a hard-money man, but because these notes 
 being receivable for all public dues, left him without gold and silver 
 to pay the interest on the funded debt, and because they had been 
 issued in such a way as to make an invidious distinction between 
 the public creditors. In the existing state of things he thought 
 that the best that could be done was to fund all the outstanding 
 claims of every description, including the treasury notes bearing 
 interest, and issue others bearing no interest. 
 
 " The stock created as above recited would float off to the United States, 
 and even to Europe, and fall into the hands of bankers and capitalists, thereby 
 increasing a foreign interest in our favor; for it is with governments as with 
 individuals, and I presume it is a matter well understood in banking trans 
 actions, that banking institutions will not permit a firm or an individual to 
 fail who has become largely indebted to them, so long as it is possible to 
 sustain them, or at least till they can be thrown off on some other institu 
 tion ; for the ties of interest are as a threefold cord, and not easily broken/ 
 
 From this, it is evident that Mr. Smith had in his composition 
 a spice of " the wisdom that is of this world," and the result affords 
 
86 THE FISCAL HISTORY OF TEXAS. 
 
 an additional confirmation that " the children of this world are 
 in their generation wiser than the children of light." Just as 
 he predicted, the stock floated off to the United States, and an 
 interest was thereby created which yielded important aid to the 
 Texans in their favorite measure of annexation, and aid not less 
 important when the question arose about the settlement of the 
 boundary line between Texas and New Mexico. By these measures, 
 taken together, the value of Texan lands has been increased many 
 fold ; and neither of these measures could have been carried at the 
 time and in the manner in which they were carried, if there had 
 not been persons in the United States who had a deep interest in 
 Texan securities. 
 
 Mr. Smith objected to an abolition of the tariff, and even to any 
 immediate modification of it. " All laws calculated to alter or 
 modify the tariff should not go into effective operation for at least 
 one year after the date of their passage, by which time the people, 
 both at home and abroad, would be prepared to meet them, without 
 sustaining any very serious loss or damage." 
 
 He then proceeded to cipher out a revenue for the Texan govern 
 ment, to wit : 
 
 1837. Old land dues . . $300,000 
 New land dues . . . 312,659 
 
 Direct taxes . . . 185,506 798,165 
 
 1838. Direct taxes . . . 200,000 
 
 Revenue from imports . 335,955 535,955 
 
 1839. Direct taxes . . . 250,000 
 
 Import duties . . . 400,000 650,000 
 
 Making a snug little revenue for the three years of $1,984,120; 
 and so neatly did he arrange his figure work as to persuade himself 
 that, on the 30th of September, 1839, there would be a balance in 
 the treasury of $6,372 34, after redeeming all the promissory notes 
 then in circulation. "Most of the foregoing estimates are made 
 from correct data, and the balance is by no means overrated." 
 
 On the 16th of November, 1838, an act was passed requiring 
 the President to issue one hundred thousand dollars, in the promis 
 sory notes already authorized for the defence of the frontier, and 
 to quell the insurrection then existing among the Indians and Mexi 
 cans in the Nacogdoches Department ; and this was the last fiscal 
 act of any importance signed by Samuel Houston, during his first 
 presidential term. 
 
THE FISCAL HISTORY OF TEXAS. 
 
 >^^nP^|^ 
 
 87 
 
 CHA 
 
 R XIII 
 
 THIRD CONGRESS: FROM DECEMBER 10, 1838, TO JAN. 26, 1839. 
 
 President Lamar s views of exchequer bills and treasury notes He recommends a 
 national bank, founded on the credit and resources of the Government of Texas 
 Government banking the worst form of banking Refusal to make treasury 
 notes a legal tender for private debts Authority given to raise additional troops 
 The steam-vessel "Zavalla" purchased A contract for the purchase of other ves 
 sels of war recognized by law Stock books again opened for funding the floating 
 debt Act to establish a sinking fund Officers of government required to re 
 ceive their dues in treasury notes. 
 
 MIRABEAU B. LAMAR, who succeeded General Houston as Pre 
 sident, sent to the two Houses, December 24, a message which 
 filled more than twenty-eight pages; about eleven of these were 
 devoted to banking, and its kindred topics. 
 
 " The exchequer bills of England," said the new President, " the 
 assignats of France, and the treasury bills of the United States, 
 furnish memorable examples of the inability of the most powerful 
 and opulent governments to establish a good practical circulating 
 medium on their own credit alone, without the facilities of prompt 
 redemption." He then denounced corporate banks "as having 
 been productive of more evil than good, and as having exerted a 
 pernicious influence on society." After this followed plaudits of 
 the United States Bank, such as none but the most prejudiced 
 partisan could utter, and an excuse for which, on the part of Mr. 
 Lamar, is to be found only in his ignorance of the history of that 
 institution. So complete was this, that he supposed that the bank 
 was established " at the commencement of the last war between 
 the United States and Great Britain," when the fact was, that it 
 did not commence operations till three years after the close of 
 the war. 4 , 
 
 President Lamar then gave his own plan, which was that of a 
 national bank, founded exclusively on the credit and resources of 
 the government, and the control of which should be exclusively 
 
88 THE FISCAL HISTORY OF TEXAS. 
 
 in the government; the directors to be elected by joint bal 
 lot of the two Houses, and the president and cashier to be ap 
 pointed by the President of the Republic, by and with the advice 
 and consent of the Senate. This bank was to be, at one and the 
 same time, a fiscal agent for government, an exchange regulator 
 for those who had exchanges to make, an office of deposit for those 
 who had surplus cash on hand, a loan office for planters, a bank of 
 discount for merchants, and a paper money manufactory for the 
 benefit of all together. " The bank would, of course, be extended 
 by branches established at every convenient and suitable part of 
 the Republic." 
 
 As the Republic of Texas had already converted itself into a 
 bank of issue, by emitting promissory notes, one would think that 
 this might have satisfied President Lamar ; but it did not. His 
 views are explained in the following extract : 
 
 " An admixture of private interests would embarrass its operations, with 
 out bringing equivalent advantages to the institution. Such a bank, in 
 corporated for a suitable term of years, founded on a specific hypothecation 
 of a competent portion of the public domain, which should be immediately 
 appropriated to that purpose, with the additional guarantee of the plighted 
 faith of the nation, and an adequate deposit of specie in its vaults, would, 
 it is confidently believed, confer many eminent and continued blessings 
 upon the country. It would furnish an immediate and complete remedy 
 for the existing pecuniary difficulties, which result entirely from the insuf 
 ficiency and depreciation of our present circulating medium. A well di 
 gested project of such an institution, when fully propounded to, and under 
 stood by the people, cannot fail to propitiate a very general approbation, 
 and to enlist the national pride of a large majority of our fellow-citizens. 
 And an institution having all the elements of usefulness and prosperity in 
 itself, and sustained by the confidence and affections of an enlightened peo 
 ple, can scarcely be supposed capable of degenerating into an instrument of 
 fraud or of oppression, or failing to realize the benefits expected from it. 
 The triple security it would offer to its creditors, is of the highest character, 
 and of the most indubitable responsibility; for it is an approved maxim, 
 that real estate affords the best possible guarantee for the ultimate payment 
 of a debt. The pledge of a nation s faith will give peculiar solemnity and 
 increased confidence to its obligations, and a competent deposit of specie will 
 always be present, or presently attainable, to answer the contingent and occa 
 sional demands for that article. It is indeed true that real estate is not suffi 
 ciently commutable or transitive to answer the ordinary and daily purposes of 
 commerce and exchange. These can be accomplished only by specie itself, or 
 by that active and undoubted credit, of which a known and sufficient deposit 
 of the metals, or something equivalent to them, is the proper basis. It is be 
 lieved that the proposed bank would be amply furnished with that equiva 
 lent, and to all necessary extent with the actual deposit itself. It is evi 
 dent that a bank so constituted, the exclusive property of a stable and popu- 
 
THE FISCAL HISTORY OF TEXAS. 89 
 
 lar government, and combining the three guarantees of land, specie, and 
 the public faith, would not require to retain in its vaults as large a propor 
 tion of the dormant capital as is acknowledged to be indispensable to the 
 safe conduct of a private institution." 
 
 In supposing land to be a proper basis for banking operations, 
 President Lamar had been anticipated by John Law, the author of 
 the Mississippi Scheme, and by the distinguished founders of the 
 New York Free Banking system. They, too, found that " real 
 estate was not sufficiently commutable or transitive to answer the 
 ordinary and daily purposes of commerce and exchange;" and, 
 therefore, proposed that people should be allowed to coin their 
 broad acres into pieces of paper. Two of the three articles that 
 formed President Lamar s "triple security," namely, the public 
 faith and the public lands, having been already pretty well used 
 up by the Republic of Texas, as a bank of issue, and a bank for 
 borrowing, it is to be regretted that he did not state where the 
 third, that is, "the adequate deposit of specie," was to come from. 
 Equally is it to be regretted that he did not distinctly explain 
 what he meant by the " something equivalent" which was to serve 
 as so admirable a substitute for the specie itself. Everything 
 that can be bought and sold is the equivalent of specie. Old fur 
 niture and old clothing are included in this category, as any one 
 may prove who will make trial with the Jew brokers in Chatham 
 street, New York ; and so, also, are corn-husks, and cotton seed. 
 But the probability is, that President Lamar did not mean any 
 of these, or anything else possessing intrinsic value. Neither did 
 he mean Texan securities, either public or private. But, taking 
 into view the measures that were then in train to bring about a 
 close connection between the Republic and the Pennsylvania Bank 
 of the United States, we are led to the conclusion, that " that 
 equivalent with which the proposed bank would be amply furnish 
 ed," was to consist of that " active and undoubted credit" which 
 the Bank of the United States was, on all occasions, so ready to 
 supply. 
 
 Towards the close of his communication, Mr. Lamar made some 
 observations which it may not be amiss to quote. 
 
 " The control of the circulating medium of a country is as necessary to 
 its salutary administration, as is that of any other department of its inte 
 rests. If banking powers be valuable in promoting an equal and safe cir 
 culation, then it is obvious that it belongs to the government to direct and 
 
90 THE FISCAL HISTORY OF TEXAS. 
 
 superintend the distribution and exercise of these powers. It is a portion, 
 and one of peculiar interest too, of the sovereign authority, and to surren 
 der it into the hands of a few private, and, in a political sense, irresponsible 
 individuals, would be as repugnant to the true spirit of our institutions, as 
 to subject the management of the war and navy departments to such par 
 tial and unpledged hands. Private corporations, or private individuals, 
 may have interests diverse and incompatible with the nation s, and have as 
 little right to be made the fiduciary agents of the government. If it be 
 proper to extend franchise to one class of our fellow-citizens, comprehend 
 ing generally but few in number, why may they not be claimed by all; 
 and why throw impediments in the way of a man participating in them. 
 If a few men may become bankers, and throw their equivocal and preca 
 rious paper currency on the community, why not let every man be a 
 banker, and abandon your circulating medium to the illimitable cupidity of 
 private speculation. The planter, the mechanic, and the laborer, are as 
 much entitled to the immunities and privileges of the government, as the 
 speculator or the money-dealer. Let all rights be equal. Let all trades 
 be free. The Constitution has so ordained it, and so let us carry it into 
 practice. The fostering hand of legislation should be extended to all classes 
 of society. 
 
 " Each individual of a patriotic people cherishes, supports, and defends 
 the government, and none have an exclusive claim to reward or privileges 
 in the exercise of their industry. If banking be profitable, let that profit 
 enure to the government. If the people must pay an interest for the use 
 of money to facilitate their legitimate operations, let them bestow their 
 sacrifices, not upon the mercenary, but where it will promote the public 
 welfare, and in process of time revert to their own advantage/ 
 
 Truths misunderstood or misapplied may do much harm. 
 
 The regulation of money is one of the attributes of sovereignty ; 
 but this is sufficiently provided for in the Federal Constitution, 
 wherein it is declared that Congress shall have power to coin 
 money, regulate the weight and value thereof, and adequately 
 punish counterfeiters. This is all the regulation metallic money 
 requires, and we should have none other. 
 
 The State governments have the power to establish banks of 
 deposit, discount, and exchange ; but they have no constitutional 
 authority to establish banks of issue, inasmuch as the Constitu 
 tion of the United States expressly forbids them to issue " bills of 
 credit," and what they have not power to do themselves they have 
 not power to delegate to others. 
 
 The business of banking, properly so called, that is, the busi 
 ness of receiving deposits, making discounts, and dealing in 
 exchanges, should be thrown open to all, individuals and copart 
 nerships, and on precisely the same principle that the business of 
 brewing is thrown open to all. No more privileges should be 
 
THE FISCAL HISTORY OF TEXAS. 91 
 
 bestowed or restrictions imposed on bankers than are bestowed or 
 imposed on bakers, brewers, or butchers. But no individual, 
 copartnership, corporation, or government should be suffe red to 
 issue paper money. 
 
 From corporate banking, we have suffered more in the United 
 States than from all other causes of evil put together, and yet 
 there is one evil that is worse than even corporate paper-money 
 banking. 
 
 It is government banking as proposed by General Lamar. 
 
 Where corporate banking prevails, there is a power above it the 
 government by which, occasionally, at least, its excesses may be 
 checked. But substitute for this government paper-money bank 
 ing, and we have the evil without any checks. 
 
 The money power and political power will then be in the same 
 hands. The demagogues who now control the elections will then 
 control the money market also ; and woe to the people who are 
 subject to this double despotism. 
 
 Excesses in issue it would be impossible to avoid, because those 
 who have the management of public affairs would no longer have 
 those checks on expenditure which the necessity of raising revenue 
 by taxation or by negotiating loans, now imposes. Before the 
 people could well understand the operation of the system, they 
 would find the nation deeply involved in debt which they would 
 have to pay by new taxation. They would, moreover, be exposed 
 to all the evils of an uncertain currency ; less fluctuating, perhaps, 
 than corporate bank currency, but its constant tendency would 
 be to depreciation, and the honest fulfilment of contracts would be 
 almost impossible. 
 
 The present modes of bribery and corruption might then be all 
 safely dispensed with, because all that would then be necessary 
 would be to give a man a douceur in the form of a loan from the 
 government bank, with an understanding that it was not to be 
 repaid till convenient. 
 
 Let the Whigs suppose such a bank under the management of 
 the Democrats, and let the Democrats suppose it to be under the 
 control of the Whigs, and each party will come to a just conclu 
 sion of the evils it would produce. 
 
 Some people delight to speak of the constitutional treasury 
 system as a government bank. If it be so, then everybody who 
 
92 THE FISCAL HISTORY OF TEXAS. 
 
 keeps his own money has a bank in his own pocket. This is an 
 application which may be made of the word, but it is an unusual 
 one ; and when it is used by opponents of the constitutional sys 
 tem seems intended to confound, in the minds of their hearers, 
 things that are different. So long as the government confines 
 itself to keeping its own money, and issues no drafts except such 
 as are, dollar for dollar, representatives of gold or silver actually 
 in deposit, its bank (if any will still call it by that name) will do 
 much good and no harm. But let it to these functions add issues 
 of notes resting on the same basis that bank issues now rest, and 
 to these let it add the receipt of private deposits, discount of 
 notes, and dealings in private exchanges, and it will be just such 
 a bank as President Lamar wished to establish, all the evils of 
 which no pen can portray. 
 
 A bill to incorporate the Bank of the Republic of Texas, 
 reported in conformity with the views of the President, was read 
 a second time, January 21, 1839, and then laid on the table by a 
 vote of sixteen to fourteen. 
 
 A committee, to whom the subject had been referred, reported 
 that a repeal of the duties on imports would be utterly destructive 
 of revenue and of credit. 
 
 A committee, to whom a bill had been referred "for a stay of 
 execution for a twelvemonth unless promissory notes were taken 
 in payment," reported that such a measure would be destructive 
 of credit and confidence, and a violation of the obligation of con 
 tracts. 
 
 In justice to the Texans, it must be said, that they never made 
 their government paper a legal tender in the payment? of private 
 debts. Neither did they (fond as a portion of them unfortunately 
 were of Lynch law), ever do violence to a man because he was 
 unwilling to receive their paper for more than its market value. 
 Hence their government paper-money did, in many respects, much 
 less evil than did "the continental money" of our revolutionary 
 Congress. 
 
 December 21, 1838, an act was passed exempting from direct 
 taxation^, for one year the inhabitants of certain counties infested 
 by the Mexicans and Indians. 
 
 It was ordered, by an act of the same day, that a regiment of 
 eight hundred and forty men be raised for the protection of the 
 
THE FISCAL HISTORY OF TEXAS. 93 
 
 northern and western frontier, and that three hundred thousand 
 dollars in treasury notes be appropriated to pay the expenses of 
 the same. Provision was made, December 29, for adding to 
 these eight companies of mounted volunteers, in all, four hundred 
 and seventy-two men ; and January 1 and 10, 1839, two com 
 panies of rangers, one hundred and twelve men; and again, Janu 
 ary 23, three companies of mounted volunteers, one hundred and 
 seventy-seven men. On the 24th of January an act was passed 
 appropriating one million dollars for the protection of the fron 
 tier and for military purposes in general. January 26, two more 
 companies of rangers (one hundred and twelve men) were ordered 
 to be raised. 
 
 The troubles which caused the raising of most of these forces do 
 not appear to have been of long duration, as, January 26, an act 
 was passed "to appoint commissioners to take charge of the pro 
 perty of those engaged in the late rebellion in the County of 
 Nacogdoches." 
 
 On the 4th of January an act was passed allowing to each head 
 of a family six hundred and forty acres, and to each single man 
 three hundred and twenty acres, who had arrived in the Republic 
 since the 1st of October, 1837, or who might arrive by the 1st 
 of January, 1840, with the intention of settling therein. To each 
 permanent resident citizen who had, or who might arrive at the 
 age of seventeen years, was also made a conditional grant of three 
 hundred and twenty acres of land. Appropriations of land were 
 also made for the benefit of those officers and soldiers whose families 
 were then in the country or might arrive by the 1st of January, 
 1840. 
 
 January 10, an act was passed sanctioning the contract, made 
 by certain agents of the Republic with Gen. James Hamilton, of 
 South Carolina, for the purchase of the steam-vessel " Charleston," 
 (afterwards the "Zavalla,") for the price of $120,000. 
 
 January 26, an act was passed, the preamble to which declared 
 that, whereas the agent of the Republic had made a contract for 
 the purchase of one ship, of eighteen^guns ; two brigs, of twelve 
 guns each ; and three schooners, of six guns each ; and, 
 
 "Whereas, It has become indispensably necessary, in order to repair 
 and keep in service the said vessels, as well for the protection of the 
 coasts and harbors of Texas, as for the protection of the commerce thereof, 
 
94 THE FISCAL HISTORY OF TEXAS. 
 
 that an appropriation be made : Be it enacted, That the sum of $250,000 
 in treasury notes, in the promissory notes of the government, be appro 
 priated for the naval service of the year 1839." 
 
 Most fortunate were the Texans in making these purchases, for, 
 as we have seen, their little navy had been totally destroyed. It 
 would be anticipating the course of our narrative if we should say 
 that neither the " Zavalla," nor any of the other vessels have, to this 
 day, been paid for. 
 
 January 19, an act was passed requiring the stock-books to be 
 again opened, and to remain open till the first of January, 1840, 
 for the purpose of funding the government liabilities. By one 
 section of this act, it was provided that no promissory note here 
 after issued or paid out should bear interest ; but the holders of 
 said notes should be allowed to fund them in the ten per cent, 
 stock of the government. 
 
 January 22, an act, supplementary to the five million loan act, 
 was passed, strengthening the pledges of faith and revenue, and 
 declaring that, as soon as the government should deem it expedient 
 to sell the public lands, $300,000 a year of the proceeds thereof 
 should be set aside as a sinking fund, for the ultimate redemption 
 of the five million loan. 
 
 On the same day, an act was passed authorizing the President 
 to issue bonds to an amount not exceeding one million, at eight per 
 cent, per annum. Except in relation to the rate of interest, the 
 terms and conditions were similar to those of the five million act 
 without the supplement. 
 
 January 23, all officers of government, district judges and the 
 chief justice excepted, were prohibited from demanding for the 
 dues or appurtenances of their office, or appointment other than 
 the promissory notes of the Republic. 
 
THE FISCAL HISTORY OF TEXAS. 95 
 
 CHAPTER XIV. 
 
 FROM THE CLOSE OF THE THIRD TO THE CLOSE OF THE FOURTH 
 CONGRESS: FEBRUARY, 1839, TO OCTOBER, 1840. 
 
 Loan from the Commercial and Railroad Bank of Vicksburg frustrated Encouraging 
 prospects of a loan in Europe Hopes of a large revenue from customs, and other 
 taxes Joy on hearing of a loan from the United States Bank Removal of seat 
 of government to Austin Extracts from President Lamar s message to fourth Con 
 gress Deficiency of revenue New revenue act Act to provide for more certain 
 operation of the sinking fund For issue of treasury bonds For funding the 
 floating debt in eight and ten per cent, stocks Low price of treasury notes, and 
 gloomy condition of affairs. 
 
 4 
 
 IT may have struck the reader as strange that the Texan Go 
 vernment, with all its loan acts, and all its different commissioners 
 in Europe and America, and all its pledges of faith, and land, and 
 revenues, and everything else it possessed, should have been able 
 to borrow, in a direct way, not even one hundred thousand dollars. 
 Prudent capitalists would, indeed, be very cautious about lending 
 to a revolutionary government. But there were many banks in 
 the United States in that day living by expedients, and it might 
 be supposed that they could not but be benefited by issuing their 
 notes in exchange for Texan securities. 
 
 Something like this was attempted in the spring of 1839, and 
 the only wonder with us is, that it was not attempted before. The 
 tale is thus told in the Houston Morning Star of April 10, 1839 : 
 
 " It appears that arrangements had been made with one of the agents of 
 the Commercial and Railroad Bank, at Vicksburg, Mississippi, to negotiate 
 a loan for eight hundred thousand dollars, for which he was to receive the 
 moderate compensation of fifty thousand dollars ! The president of the bank, 
 without consulting the directors, and even without the knowledge of the 
 cashier, agreed to make the loan, which, with a deduction of three hundred 
 thousand dollars of the funded debt of Texas, owned by the above-mentioned 
 agent, was to be paid over to our commissioner. To cap the climax, in a 
 day or two the bank suspended specie payment. Fortunately for us, Mr. 
 Bobbins, the cashier, put his veto upon the loan, and thus relieved our 
 country from being deluged with a quantity of shin-plasters, not worth, in 
 reality, half as much as our own currency." 
 
96 THE FISCAL HISTORY OF TEXAS. 
 
 But, if no loan could be obtained in Mississippi, it did not thence 
 follow that none could be negotiated in London. And, on the 9th, 
 the editor of the Morning Star announced that he had been favored 
 with the perusal of a letter from a gentleman of high standing, 
 who had recently visited Europe, in which was the following pas 
 sage : 
 
 " The loan of five millions can be easily obtained in London. I learn 
 that Gen. Hamilton is appointed commissioner with Mr. Burnley, to nego 
 tiate the same, at which I really rejoice. Gen. Hamilton is well known 
 and much respected in London. The house of Horseley, Palmer, & Co., 
 stands ready to take the loan." 
 
 Ten days afterwards, the editor gave a long article, in which he 
 expressed doubts if any great advantage would, after all, result from 
 the success of the commissioners : 
 
 " If Texas had no liabilities to meet, and no notes to redeem, the judi 
 cious application of five millions of dollars to the promotion of internal 
 improvements, might give an impetus to the zeal and energy of the inhabi 
 tants. * * But the notes have been bought up, and by 
 persons of the United States. This being the case, the money, instead of 
 remaining in the country, will find its way back again/ 
 
 The editor then complains of extravagance in public expendi 
 tures : 
 
 "We have an army of trifling extent, and have nearly as many staff 
 officers as they have in the United States. * * It is stretching 
 the truth but very little to say that we have an army and naval officer for 
 almost every soldier and seaman in the service/ 
 
 Soon after this, the Morning Star had a controversy with the 
 Houston Intelligencer about the public revenue for the year. The 
 Morning Star supposed the total would be $1,079,000 ; but the 
 Intelligencer put down the customs at $954,000, the direct taxes 
 at $564,000, the receipts for the sale of city lots at $1,000,000, 
 and swelled the whole revenue to $3,018,000. The Civilian 
 reduced the amount to $2,200,000. 
 
 A correspondent of the Star, in an article that appeared on the 
 8th of May, advised the people, in every section of the Republic, 
 to hold meetings and pass resolutions to receive nothing but gold 
 and silver, and treasury notes. This would drive the notes of the 
 banks of the States out of circulation, and treasury notes, which 
 would take their place, would thereby be raised in value. " The 
 faith of the Republic is pledged for their redemption, and time 
 
THE FISCAL HISTORY* OF TEXAS. 97 
 
 alone is requisite to allow the government to give dollar for dollar 
 in specie for its notes. They could be cancelled in two years by 
 a direct tax, but such a course is contrary to sound policy." 
 
 Here is more proof that running into debt, and keeping in debt, 
 was matter of principle with the Texans. 
 
 On the 24th of June, the Star said : 
 
 " Our promissory notes are now so much depreciated that they are almost- 
 worthless. Everything in the country is immensely high, and still the 
 government goes on recklessly throwing out its pictured bits of paper, re 
 gardless of the fact that every one they put out depreciates the value of the 
 rest. Were the expenditures necessary and beneficial, so much objection 
 could not be made ; but such is by no means the case/ 
 
 It was not long before the editor of the Star began to think 
 that a loan would not be so bad a thing after all ; at least this is 
 our inference from the leading article in his paper of July 11 : 
 
 " GOLDEN NEWS ! ! ! 
 
 " A letter was received in this city yesterday afternoon, brought by the 
 Emblem/ from Col. Barnard E. Bee, dated New Orleans, July 4, convey 
 ing to us the gratifying intelligence that General Hamilton had, before 
 leaving the United States for Europe, negotiated a loan for $500,000, under 
 the law authorizing one million to be raised, and that Lynch Hamilton, a 
 son of our commissioner, would be on, in the next boat from New Orleans, 
 with the money" 
 
 This joy did not seem soon to expire, for, on the 23d, the editor 
 exclaims 
 
 "Everybody is on the tiptoe of expectation for the report of the cannon 
 which shall announce the arrival of the steamboat from Columbia, because 
 $500,000 are expected. We assure the gentleman who may be so fortunate 
 as to be the bearer of the money, that he will be welcome as the flowers of 
 May." 
 
 But the money never came to Houston, and the cannon were 
 not fired. It was deposited in a bank in New Orleans, and con 
 sisted of United States Bank post-notes, to turn which into ready 
 means the government had to pay seven and a half per cent, 
 discount. The whole amount, moreover, was overrated. 
 
 The government now removed to the new city of Austin, at the 
 foot of the Cordilleras, and on the very borders of the Indian 
 hunting-grounds. The removal, at this moment, was an act of 
 folly, as it increased the expenditures of both the governors and 
 the governed ; but it afforded an opportunity of speculating on the 
 sale of lots in the new metropolis, and it invited speculations to 
 7 
 
98 THE FISCAL HISTORY OF TEXAS. 
 
 lands in the interior ; and these two motives combined were too 
 strong to be resisted. Some months afterwards, the Indians 
 stealthily entered the town, killed two men, and stole a number of 
 horses. Such was the spot selected for the assembly of the legis 
 lative and executive wisdom of all Texas. 
 
 Here the fourth Congress convened on Monday, November 11, 
 1839; and, on the 12th, President Lamar sent them a very long 
 message. 
 
 The passages which follow embrace the points of most interest 
 to the reader : 
 
 " Our foreign relations are daily assuming a more pleasing aspect, and 
 afford us at the present moment the strongest assurance that our national 
 character will ere long be recognized by the most important governments of 
 the earth." 
 
 " I regard the prospect of obtaining a loan of five millions of dollars, 
 authorized by an act of the last session, as cheering and satisfactory. The 
 commissioners appointed to negotiate that loan, after obtaining an advance 
 of $280,000 upon the eventual success, proceeded to Europe, with a view to 
 its final consummation; and I am assured by communications from one of 
 them, that nothing but the peculiarly embarrassed condition of the money 
 market in England, growing out of some recent and heavy exportations of 
 bullion to the Continent, has prevented a sale of our bonds before this 
 time; and upon terms which, it is believed, will secure to us in cash the 
 nominal amount, at least, for which they were issued. These embarrass 
 ments, however, were considered temporary in their nature, and are said to 
 be already yielding to a more healthful and settled state in the monetary 
 affairs of the country; and we may now look, with confidence, to an early 
 realization of the hopes which have been so long entertained in reference to 
 this subject, and upon the fulfilment of which so much of our national pros 
 perity depends. The $280,000 obtained by the commissioners have been 
 almost exclusively devoted to the purchasing of public arms and ammuni 
 tion, the enlistment of a regular force, and to the equipment of the navy 
 for efficient operations." 
 
 This was part of a loan of some $400,000 obtained from the 
 Pennsylvania Bank of the United States. 
 
 The new Secretary of the Treasury, Mr. James H. Starr, made 
 his report on the 3d of November. 
 
 The reader will recollect that the late Secretary had offered an 
 estimate, according to which there was to be a small balance in 
 the treasury on the 30th September, 1839. Alas for human 
 hopes ! the amount of outstanding liabilities was greatly in 
 creased. 
 
 Mr. Smith supposed that the income of the year from customs, 
 direct taxes, and other branches of revenue would be upwards 
 
THE FISCAL HISTORY OF TEXAS. 99 
 
 of a million; the editor of the Civilian, that they would be 
 $2,200,000 ; and the editor of the Intelligencer, that they would 
 be upwards of $3,000 000. 
 
 The total amount actually received into the treasury was 
 $302,166 90, and all that in the government s own inconvertible 
 paper ! 
 
 While the receipts fell short of, the expenditures greatly ex 
 ceeded Mr. Smith s estimate. He had forgotten to allow any 
 thing for military and naval expenses, and sundry other things 
 too numerous to mention. The expenditures amounted to $1,606,- 
 654 33, without counting new treasury notes issued in exchange 
 for old ones. 
 
 The public debt, which was, September 30, 1838, $1,887,526 32, 
 was now swelled to $3,102,083 35, without counting the million of 
 liabilities incurred for the purchase of vessels of war. 
 
 President Lamar, his Cabinet, and the Congress were not the 
 men to be frightened by such an exposition as this. They were too 
 brave for that ; and so they immediately set about passing new 
 revenue laws, one of which filled nineteen, and another, with its 
 supplements, twenty-one pages. 
 
 There is no use, however, in raising money, unless it be spent, 
 and the Texan Congress provided for this by several acts, one of 
 which, passed February 3d, and entitled an " Act making Appro 
 priations for the Support of the Government for the year 1840," 
 filled more than six closely printed pages. Either from prudential 
 or other considerations, the Congress did not state on the face of 
 the bill the whole amount appropriated. 
 
 " It is estimated/ said the Secretary, " that the receipts at the treasury 
 during the ensuing year, under the proposed system for collecting the re 
 venue, will be as follows, viz. : 
 
 From customs, . . . . $400,000 
 
 Taxes and land-dues, . . . 500,000 
 
 Sales of lots in the cities of Austin and Calhoun, 400,000 
 
 $1,300,000 
 
 Referring to this estimate, in a communication dated November 
 14, he remarked: 
 
 " Under the present system of the laws, however, owing to their great, 
 defects in prescribing the manner of assessing and collecting the direct tax, 
 and the inability of this department to compel the receivers of public 
 moneys to pay them into the treasury, it is believed that not one-fourth of 
 that sum would be realized to the government." 
 
100 THE FISCAL HISTORY OF TEXAS. 
 
 But the fourth Congress did not content itself simply with new 
 modes of raising revenue, and new modes of spending ; it also 
 devised new modes of borrowing. As some of our readers may 
 have still in possession some of the new-fashioned securities that 
 were uttered under its auspices, we must be more particular in 
 describing the laws which authorized them, than we have been in 
 relation to others passed this session. 
 
 January 14, an act was passed u to provide for the more cer- 
 -tain operation of the sinking fund to extinguish the five millions 
 loan." It filled sixteen sections. Omitting details which need 
 not be introduced here, its chief provisions were : 
 
 " 1st. In case it shall be deemed inexpedient to bring the public lands 
 into the market on or before January 1, 1842, or that, when so brought 
 forward, it should be deemed inexpedient to sell them, it is hereby de 
 clared to be then and after that period the duty of the Secretary of the 
 Treasury to provide from other sources the said three hundred thousand 
 dollars a year." 
 
 From what source the Secretary was to get the three hundred 
 thousand dollars a year, the bill did not mention. 
 The next important provision was : 
 
 " Should the market price of said bonds [in London, Paris, Amsterdam, 
 or wherever the said loan should be negotiated] reach fifty per cent, pre 
 mium beyond the par value of the same, the holders of said bonds shall be 
 required, on the application of said agents, to surrender and cancel the same 
 on the payment of said par value and said premium." 
 
 This was prudent foresight. Texan securities might rise in 
 foreign markets to $180, or perhaps to $200, for $100 paid. To 
 provide for such a contingency, the Congress reserved to itself the 
 privilege of buying them in, as soon as they should reach $150. 
 
 The 15th section we will give in full : 
 
 " Be it further enacted, That for the redemption of all loans negotiated by 
 the authority of the Republic of Texas, independently of the reservation of 
 the sinking fund, the proceeds of the public lands generally, its revenues 
 and public faith, are solemnly pledged." 
 
 Thus, in addition to the particular pledges for each loan, Texas 
 gave another for all together. 
 
 February 5, an act was passed " for creating funds for the sup 
 port of government for the year 1840." 
 
 Section 1 provided that blank forms of bonds for 100, 500, and 1000 
 dollars, should be prepared, bearing an interest of eight per cent, per 
 annum, payable half yearly in gold and silver. 
 
THE FISCAL HISTORY OF TEXAS. 101 
 
 Section 2 provided for the issue of these bonds to the amount of 
 $1,500,000. 
 
 Section 3 declared that these bonds should be received in payment of 
 customs and direct taxes. 
 
 Section 4 set apart the revenue from the license tax, and the tax on 
 personal property, as a fund for the payment of interest on these bonds. 
 
 Section 5 provided that the bonds should have coupons attached to 
 them. 
 
 These are what are known as Texas treasury bonds, and they 
 differed from the treasury notes of the first and second issues, 
 only in being of larger denominations. The second section pro 
 vided for their " issue as circumstances may require in payment 
 of appropriations, for the support of government for the year 
 1840." 
 
 These bonds soon sunk to twenty cents in the dollar. 
 
 February 1. An act was passed to authorize the commissioners of the 
 five million loan u to pledge a portion of the bonds, in order to enable them 
 to raise money by an advance on the bonds, which may be made on the 
 credit of eventual success in negotiating the loan." 
 
 On the same day that it passed the act for the issue of treasury 
 bonds, February 5, the Congress passed another " to provide 
 for the redemption of the promissory notes of the government now 
 in circulation, and for funding other liabilities of the govern 
 ment." 
 
 Section 1 required the Secretary of the Treasury to procure certificates 
 in blank, for sums of one hundred, five hundred, and one thousand dollars, 
 to be transferable by simple indorsement. 
 
 Section 2 provided that these certificates should be issued to the 
 holders of such of the promissory notes of the government as should pre 
 sent them to the stock commissioner before the first of July ensuing; and, 
 that the said certificates should bear an annual interest of ten per cent., 
 payable semi-annually in gold and silver. 
 
 Section 3 provided that the said certificates should be issued in ex 
 change for all other liabilities of the government which. may have been 
 properly and regularly audited. 
 
 Section 4 provided that for such promissory notes as should not be 
 presented for funding till after July 1, certificates should be issued bearing 
 only eight per cent, interest. 
 
 Thus, the government provided for its fiscal emergencies : first, 
 by making provision for funding, at eight and ten per cent, inte 
 rest, all such of its outstanding liabilities as bore no interest ; 
 and secondly, by authorizing the issue of a new batch of treasury 
 
102 THE FISCAL HISTORY OF TEXAS. 
 
 notes, of large denominations, to be called treasury bonds, and to 
 bear eight per cent, interest. 
 
 The fourth Congress adjourned on the 5th of February, and 
 did not hold a second session. 
 
 Lamar s administration did not give general satisfaction. 
 "Apart from politics, and as a private citizen," said the Austin 
 City Gazette, March 18, 1840, "we shall ever respect him for his 
 literary acquirements, his amiable disposition, and unassuming 
 manners ; but, as President of the Republic, we must, in common 
 with a large portion of our fellow-citizens, condemn many, very 
 many of his acts ; not that we blame the heart so much as the 
 easy disposition of the man. It is there that the mischief lies : 
 he allows others to think to act for him." 
 
 The following view of the state of public affairs, we extract 
 from a communication published in the Austin City Crazette, 
 October 21, 1840 : 
 
 " Texas promissory notes are worth about fifteen cents upon the dollar 
 there is little prospect of a loan the taxes are not promptly paid; and if 
 they were, would only return to the treasury, at par, that which was issued 
 for less than one-sixth of the amount. The continual issue of this sort of 
 currency can have but one tendency now, and that is, to depreciate it still 
 further. In this exigency, what are we to do ? All the officers of govern 
 ment, from high to low, have been required to receive its issues at par, in 
 payment of their salaries. This has not raised it : but it has impoverished 
 them; and now an ordinary day-laborer receives more of it per diem than 
 any civil officer under the establishment. 
 
 "We are at the lowest round of the ladder. Congress will soon convene, 
 and the pay of its members will not purchase their food. The members 
 cannot long live upon patriotism ; and many of them have nothing else but 
 that and their pay to live upon." 
 
THE FISCAL HISTORY OF TEXAS. 103 
 
 CHAPTER XV. 
 
 PROCEEDINGS UNDER THE FIFTH CONGRESS: NOVEMBER, 1840, TO 
 NOVEMBER, 1841. 
 
 Various devices for borrowing Remarks of the new Speaker of the House of Repre 
 sentatives Smallness of the revenues Great increase of the public debt Pro 
 ject of invading Mexico Repeal of act for funding treasury notes Retrenchment 
 of public expenses Annunciation that a loan had been negotiated in Europe 
 Effect of this news on the public mind, and on the price of Texan securities Mr. 
 Horseley Palmer, ex-Governor of the Bank of England, plans a national bank for 
 Texas, to be presided over by Mr. Jaudon, ex-cashier of the United States Bank 
 News of the negotiation of the loan confirmed Doubts subsequently arise Mr. 
 Bullock and his pigs Difficulties with M. de Saligny, the Minister of France to 
 Texas. 
 
 BEFORE we proceed further, we beg to solicit the reader s admi 
 ration for the various devices to which the Texan Government 
 had recourse, to meet the various tastes and fancies of those with 
 whom it had dealings, or wished to have dealings. 
 
 Did a man wish to lend money to it? He had the choice of four 
 loans : namely, the one hundred thousand dollar loan act, and the 
 million dollar loan act of the Provisional Government (both of 
 which remained unrepealed) ; and the million and the five million 
 loan acts of the Republic. 
 
 Was the Republic indebted to him? He received an audited 
 draft. This he might keep if he chose, or pay it in for land-dues. 
 Did not this satisfy him ? He could exchange his audited draft for 
 treasury notes, which were receivable for all public dues. Was 
 not this satisfactory ? Then he could receive in exchange for it 
 treasury bonds bearing eight per cent, interest. If he chose to 
 keep them, the interest would be constantly accumulating ; and if 
 he should have immediate use for them, they were receivable every 
 where in public payments. Did not even this satisfy him? Then 
 he could fund his draft in ten per cent, stock, the interest on which 
 was payable semiannually "in gold and silver/ 
 
104 THE FISCAL HISTORY OF TEXAS. 
 
 This was the state of affairs when the fifth Congress assembled 
 at Austin, on the 2d of November, 1840. 
 
 Mr. Kauffman, the Speaker of the House of Representatives, 
 made, in his opening address, the following remarks: 
 
 " But seven members of the last House have been deputed by the people 
 to join in the labors of this ! The destinies of Texas have been committed 
 to other, and, I earnestly trust, abler hands. What has produced this ex 
 traordinary revolution ? We cannot believe that our predecessors were dis 
 honest or incapable ; but we know that they failed to satisfy the expecta 
 tions of an anxious and confiding people. What was their error ? The 
 voice of the nation answers : They increased, instead of diminishing, the 
 national expenditures. Let us, then, gentlemen, with one accord, resolve 
 to avoid the rock on which they split." 
 
 In his message, President Lamar said: "The settlements have 
 been extended on various parts of the frontiers." But he did not 
 add that this was the cause of new difficulties with the Indians. 
 
 He regretted that it was not in his power to give satisfactory 
 information as to the operations of the loan commissioners. 
 They were trying the markets of France, England, and Holland, 
 with varying prospects of success. 
 
 He thought the complaints some made of the burden of taxation 
 were very unreasonable ; for, though the duties on imports were 
 nominally fifteen per cent., they amounted in reality to no more 
 than three per cent., inasmuch as they were paid in the depreciated 
 paper of the government. 
 
 The acting Secretary of the Treasury, Mr. William Sevey, in 
 his report of October 15, 1840, and in the supplement thereto, 
 gave no distinct account of the revenue for the year ; but stated 
 that the total revenue collected, from the organization of the 
 government up to September 30, 1840, was $903,052 01; or, in 
 cluding the amount in the hands of, and supposed to be in the 
 Lands of, collecting and receiving officers, $1,486,235 67. 
 
 The revenue officers of Texas took delight, from the very begin 
 ning, in deceiving themselves by the supposition that there were 
 large amounts of revenue on the way to the treasury. So well as 
 we can ascertain, from a collation of various documents, the actual 
 receipts into the treasury were, during the year ending Septem 
 ber 30, 1840, as follows rejecting repayments, promissory notes 
 received from the Secretary, and the proceeds of the loan from 
 the United States Bank : 
 
THE FISCAL HISTORY OF TEXAS. 105 
 
 Customs, . %* . . ,:. . .,,..:, $166,821 12 
 
 Land-dues, licenses, and direct taxes, . . 123,224 66 
 
 Austin lots, ,. 158,97481 
 
 Galveston lots, 9,822 71 
 
 Fines, . . . v ;; . . 25 00 
 
 Donations, . . ; ;; ?:: 51 56 
 
 $458,919 8G 
 
 This was but little more than one-third the amount Mr. Secretary 
 Starr had estimated, and this was received in government paper, 
 which, at twenty cents in the dollar, would be equal to only ninety- 
 two thousand dollars in specie. 
 
 The chief support of the government in this year was from the 
 proceeds of the loan from the United States Bank, on which drafts 
 were drawn to the amount of one hundred and fifty- eight thousand 
 four hundred and ninety-five dollars and ninety-eight cents. During 
 the whole of President Houston s first term, twenty-five thousand 
 dollars in par funds were all he could command. President Lamar 
 was highly favored in having in one year such funds to the amount 
 of nearly one hundred and sixty thousand dollars. 
 
 The audited drafts and certificates issued during this period are 
 admitted to have been two millions two hundred and fifty-eight 
 thousand one hundred and four dollars and sixty-two cents, or 
 nearly ten times as much as the gross revenue. 
 
 The acting Secretary made the public debt four millions eight 
 hundred and twenty-two thousand three hundred and eighteen 
 dollars and sixty-two cents; but if the audited drafts and treasury 
 notes which he supposed were in the hands of collecting officers be 
 added, it was five millions four hundred and eighty-five thousand 
 five hundred and two dollars and twenty-eight cents, without 
 counting the liabilities incurred for the purchase of and fitting out 
 of the navy. The increase of debt in one year exceeded two mil 
 lion three hundred thousand dollars. 
 
 "While things were in this position, the Mexicans threatened 
 another invasion of the country. But the Texans were not dis 
 heartened. Mr. Burnet, who was now, owing to the indisposition 
 of General Larnar, the acting President, said, in a message of 
 December 16 
 
 " Our overtures have been rejected. * * * Let us not forget that a 
 resort to the sword cancels all previous pledges, and opens the wa} to u 
 
106 THE FISCAL HISTORY OF TEXAS. 
 
 new adjustment. Texas proper is bounded by the Rio Grande. Texas, as 
 defined by the sword, may comprehend the Sierra del Madre. Let the 
 sword do its proper work." 
 
 A joint committee responded cordially to these sentiments on 
 the 18th of December ; and still more plainly on the 12th of Janu 
 ary, 1841. 
 
 "Your committee are fully aware that it is a fact well known and long 
 established that money is the sinews of war; without that, no force can 
 long be kept together in the field. That we have neither money at home 
 nor credit to any extent abroad is an undeniable fact, how humiliating 
 soever may be the acknowledgment. How, then, are we to sustain an 
 army in the field? Where are the means to come from? For defensive 
 measures, your committee know not for offensive measures, they answer, 
 from the coffers of the enemy, wrested from him with a strong hand. 
 
 " Your committee are of opinion that it would be much easier to sustain 
 an army beyond the Rio Grande than within our own territory ; that 
 there the war would be made to support the war; and the captures and 
 contributions, the proceeds of which, in accordance with the law of nations 
 and the usages of war, would come into the military chest, would, if well, 
 managed, defray all the expenses that could be incurred by an army in the 
 enemy s country." 
 
 Several changes were made in the revenue laws with the view of 
 increasing the income of government. And 
 
 February 4, an act was passed declaring that, from and after 
 its passage, so much of a certain act as provided "for the bonding 
 or funding of the promissory notes or liabilities of the government, 
 be repealed." This deprived the holders of " red backs" of even 
 a promise to pay interest on their demands. 
 
 At the close of the session, February 5, 1841, the Speaker 
 made an address to the House, in which were the following re 
 marks : 
 
 " We are a nation comparatively without means, and our legislation has 
 to be based upon a depreciated and depreciating credit. I believe, how 
 ever, I may safely say, that we have accomplished much for the perma 
 nence and prosperity of this country. The regular army has been virtu 
 ally disbanded; the navy has been laid up in ordinary; superfluous offices 
 have been abolished ; and our appropriation bill this year is not more than 
 one-third as large as that of the last." 
 
 Dark and gloomy, indeed, were prospects when the Congress 
 adjourned; but the horizon was soon to become bright, as will be 
 evident from the following extract from the Austin City Gazette 
 of April 21, 1841 : 
 
THE FISCAL HISTORY OF TEXAS. 107 
 
 "THE LOAN. 
 
 " PARIS, February 4, 1840. 
 
 " To the Editor of the New York Times and Star. 
 
 11 SIR : As the commissioners of loans of the Republic of Texas were 
 instructed by His Excellency, President Lamar, in the event of their effect 
 ing a negotiation of the loan for that Republic, to make a public announce 
 ment of the fact, that meritorious holders of the securities of the govern 
 ment, who may have aided the country in the hour of its necessity, may 
 not be the victims of the speculation of those acting under secret informa 
 tion, I will thank you to state in your paper that I have this day concluded 
 in this city a contract with the Bank of Messrs. J. Lafitte & Co. for the 
 Texan loan. * * * 
 
 "J. HAMILTON." 
 
 In a few days afterwards, April 28, the good news was confirmed. 
 
 "It is said the bonds have been taken by the house of Lafitte & Co. at 
 90 cents in the dollar. The French Government have guaranteed their 
 punctual redemption. The whole loan is negotiated." 
 
 The effect this produced will be evident from what was said by 
 a Texan, writing from New Orleans under date of April 10 : 
 
 " Our notes and bonds have now all sorts of prices. * * * I am 
 informed by pretty good authority that Captain Wright, of New York, has 
 had a letter from a broker in New York, offering him fifty cents for all in 
 hand from thirty to sixty thousand, and that he will not sell." 
 
 " The news of the negotiation of a loan for Texas," said the jV. 0. Bul 
 letin, "has a most beneficial effect. Texan securities have experienced a 
 sudden elevation in the market, and the process may be expected to go on 
 until they obtain to the par quotation." 
 
 Further particulars are given in the Austin City Grazette of 
 May 5 : 
 
 "Private letters from New Orleans of the 21st ult. quote Texas ten per 
 cent, bonds at forty cents; eight per cent, bonds at thirty-five; promis 
 sory notes at thirty ; and furthermore state that Texas money is in demand, 
 and looking up." 
 
 The same paper, of May 19, extracts from the Charleston Pa 
 triot of April 24 a long letter dated London, March 9. In this, 
 it is said that the loan had been negotiated on such terms that, if 
 the guarantee of the French Government were procured, the bonds, 
 to the amount of seven millions of dollars, would be brought out at 
 ninety-five ; but, if the guarantee could not be procured, at fifty- 
 five. Among other things, this writer says : 
 
 " It is, moreover, understood that Mr. John Horseley Palmer, the late 
 able head of the Bank of England (certainly one of the first practical finan- 
 
108 THE FISCAL HISTORY OF TEXAS. 
 
 ciers in Great Britain), is engaged in preparing for General Hamilton the 
 plan of a national bank for the Republic of Texas, which is to constitute 
 a reservoir to hold, save, and distribute through a sound circulation the 
 benefits of the loan as soon as it is realized. In case this bank is chartered, 
 which it unquestionably, will be by Texas, it is said, in circles which entitle 
 the report to no small credit, that General Hamilton is making offers to 
 Mr. Jaudon, the late able and distinguished agent of the Bank of the 
 United States in London, to go out to Texas in the autumn to take charge 
 of this financial organ of the Texan Government. Should Mr. Jaudon 
 accept this situation, the progress which Texas would make in five years 
 would transcend in value twenty years of successful military conquests in 
 Mexico. She cannot pay too high a salary for such a man, who unites to 
 great practical efficiency in business, accurate and comprehensive views of 
 finance, an admirable temper, and great firmness and decision of cha 
 racter. 
 
 When we presented to the reader the first fiscal report of the 
 Provisional Government of Texas, we told him to " despise not 
 the day of small things." By this time, we hope he is convinced 
 both of the wisdom of the apostolic injunction and of its special 
 applicability to the subject selected for his particular meditation. 
 Here we find the Government of Texas, less than six years having 
 elapsed, already in debt to the amount of six or seven millions; 
 proposing to run in debt to the amount of seven millions more ; 
 an ex-Governor of the Bank of England preparing a plan of a 
 national bank for the Republic ; and Mr. Jaudon, ex-cashier of the 
 Bank of the United States, preparing to remove to Texas, to perform 
 for that Republic all those functions which he and Mr. Biddle 
 together had performed for the United States. 
 
 Some time afterwards, unfavorable reports having been circu 
 lated, the following official notice was issued: 
 
 "TREASURY DEPARTMENT, CITY OF AUSTIN, June 29, 1841. 
 
 " To quiet all apprehension, and to remove the doubts that have been 
 created by recent newspaper publications, it is thought proper to give this 
 public and official notice to all whom it may concern, that official informa 
 tion has been received by the Executive of the positive sale of our bonds by 
 our loan commissioner at Paris; the proceeds of which will, it is con 
 fidently expected, be realized in the city of New York in the course of the 
 month of August next. 
 
 "JOHN G. CHALMERS, 
 
 Secretary of Treasury." 
 
 July 7, the editor says, 
 
 " The Loan. Dispatches were received by the Hon. Secretary of the 
 Treasury, on Monday last, from our loan commissioner, confirmatory of the 
 
THE FISCAL HISTORY OF TEXAS. 109 
 
 information published in our last. The loan is obtained, the contracts are 
 signed, and the specie will be forthcoming in due season. We have seen 
 the documents." 
 
 Various were the suggestions made in the Texan papers as to 
 the proper disposition of the money, and Alexander Hamilton s 
 Report on a National Bank was republished to aid the Texans in 
 coming to a proper conclusion. 
 
 July 14, the Austin City G-azette contained a letter from the 
 loan commissioner, General Hamilton, dated London, May 18, 
 a part of which we must quote : 
 
 " Since my last respects, I have completed my contract with J. Lafitte & 
 Co. for the Texan loan; in conformity to which, he issued the inclosed 
 prospectus and explanatory notice. After, in writing with M. Guizot, and 
 in verbal conference with the king and Minister of Finance, I had assured 
 myself, as I supposed, of the favorable disposition and protection of the 
 French Government for the negotiation of the loan in France. After, how 
 ever, the prospectus was issued, and I had left Paris, to superintend the 
 subscriptions in England, the Journal des Debats, the special organ of 
 the court, came out with a strong article against the loan, dissuading the 
 French citizens from going into it ] and in the Messager and Moniteur, 
 M. Humann, the Minister of Finance, by a sort of semi-official, took a simi 
 lar course." 
 
 Messrs. Lafitte & Co. then postponed opening the books for re 
 ceiving subscriptions. The residue of Gen. Hamilton s letter gives 
 the ground of his strong hope and expectation that this difficulty 
 would be adjusted. 
 
 In the success of the commissioner, the Texans did not lightly 
 abandon their hopes, as will appear from the following extract 
 from the Austin City G-azette of August 11 : 
 
 " Rumors having been rife about town, for the last few days, prejudicial 
 to the loan, we made all necessary inquiries at head-quarters respecting 
 their truth, and, as we expected, they prove to be without foundation. So 
 far from any unfavorable accounts having been received, the latest inform 
 ation from Hamilton is altogether of a favorable character. He states 
 that the difficulties between M. Lafitte and the Minister of Finance are 
 amicably adjusted. He adds, in a letter to the Hon. B. E. Bee: The 
 books will be opened with all the power and influence of the House (Lafitte 
 & Co.) on the 30th of June. M. Lafitte has resolved to carry matter* 
 through triumphantly. " 
 
 But while Gen. Hamilton was exerting all his financial and 
 diplomatic powers in Paris, there were proceedings going on at 
 Austin, of which he was not aware, and which were destined to 
 thwart all his movements. They appear to have commenced early 
 
110 THE FISCAL HISTORY OF TEXAS. 
 
 in the year ; but full revelation was not made of them till Septem 
 ber 1, when an account was given of them in the Austin City 
 G-azette, so much of which as is necessary we shall transcribe, as 
 we cannot trust ourselves to tell so important a story in our own 
 words. 
 
 After alluding to a statement in another paper, in which the 
 difficulties between the French minister to Texas and the high 
 officers of the Republic were attributed to "British intrigue," the 
 editor proceeds to say : 
 
 if The difficulties were in the first instance altogether of a private and 
 personal character between M. de Saligny and Mr. Bullock, and were la 
 mented by the friends of both parties; the difficulties were increased by 
 the killing of Mr. B/s pigs by one of M. de S/s servants, whereupon Mr. 
 B. assaulted the servant, and the minister made his complaint to the 
 government. The district attorney, under the instruction of the govern 
 ment, had Mr. Bullock arrested to answer for said assault, and the District 
 Court not being in session at the time, Mr. B. was bound in heavy recogni 
 zances to appear before said court to answer the charge. Thus that matter 
 stands until the next session of the court in November next. As might 
 naturally be expected, this occurrence still further embittered the feelings 
 of both parties to such an extent that, in April last, Mr. Bullock, who keeps 
 a public hotel in this city, meeting M. de Saligny on his premises, ordered 
 him off. M. de Saligny immediately made a second complaint, and in 
 sisted on the immediate punishment of Mr. Bullock; on this, Mr. B. was 
 again handed over to the judiciary, and bound over, as in the former case, 
 to answer the charge at the term of the District Court. A long and warm 
 discussion took place between the French minister and the Texan Secretary 
 of State, and the whole matter has been referred to the French Govern 
 ment. 
 
 * * * * * * # 
 
 " In conclusion, we would remark that M. de Saligny, who is brother-in- 
 law of M. Humann, the Minister of Finance of France, is expected at his 
 residence in this city, in the course of the present month, when, it is 
 hoped, everything will be amicably settled. * * * The connection thus 
 existing between M. de Saligny and a member of the French Cabinet ac 
 counts for all the obstacles thrown by that government in the way of 
 Messrs. Lafitte & Co. s fulfilment of their contract for the Texan loau." 
 
 The Texas Centinel, of May 6 a paper of politics opposite to 
 those of the Austin City G-azette says: 
 
 " We are authorized in saying that our government has sent on a re 
 quest to the French Government for the recall of M. de Saligny/ 7 
 
 On the 10th of June, the editor devotes more than a column to 
 the subject : 
 
 " Our columns will not permit us at present to enter into a full detail of 
 the ex-official conduct of this foreign functionary. * * Can that great 
 
THE FISCAL HISTORY OF TEXAS. Ill 
 
 and wise head (Louis Philippe) of one of the mightiest nations of the 
 earth look for an instant with approbation upon the conduct of M. Saligny, 
 in knowingly passing counterfeit money upon obscure and honest citizens 
 of this country in refusing to pay his tavern bills in wantonly destroy 
 ing the property of our citizens in smuggling into our country a large 
 amount of merchandise for commercial speculation, under the cloak of 
 his diplomatic privilege, as provisions?" &c. &c. 
 
 Mr. Bullock s pigs were the aggressors. The Texan editors, 
 with an amiable partiality for everything belonging to their own 
 country, conceal the fact; but we have been on the spot, and in 
 quired into the particulars. M. de Saligny had a number of 
 horses which were fed with corn. Mr. Bullock s pigs intruded 
 into the stables to pick up the corn the horses suffered to fall to 
 the ground. One of M. de Saligny s servants killed some of the 
 pigs. Mr. Bullock whipped the servant. This enraged M. de Sa 
 ligny; he influenced his brother-in-law, M. Humann, the Minister 
 of Finance at Paris, and Gen. Hamilton s loan was defeated. 
 
 We have had occasion to observe before that, however the 
 Texans might quarrel among themselves, they would always unite 
 against the common enemy, the Mexicans. So it was on this 
 occasion. All Texas stood by Mr. Bullock and his pigs. Hous- 
 tonites and Anti-Houstonites were of one accord. Nor will it be 
 too much to say that, as Rome was saved by the cackling of geese, 
 so Texas was saved by the squeaking of pigs. If the loan had 
 been obtained, it would have been used in establishing a national 
 bank, by which every dollar would have been made to look like 
 ten. The result would have been that the debt of Texas, instead 
 of being twelve millions, would have been twenty-five, thirty, per 
 haps forty millions. The most intelligent Texans agree in opinion 
 that this would have been the result. All honor, then, to Mr. 
 Bullock and his pigs; and this heretofore much despised animal 
 must be regarded hereafter as possessed of classic interest. If his 
 figure, carved in marble, should be placed over the entrance of the 
 treasury of Texas, it would serve as a memento to future ages of 
 his having been the salvation of the Republic, and teach Mr. 
 Branch Tanner Archer s " thousands and millions, born and un 
 born," that the humblest of agents may be instrumental in pro 
 ducing consequences of the utmost importance. 
 
112 THE FISCAL HISTORY OP TEXAS. 
 
 CHAPTER XVI. 
 
 PROCEEDINGS UNDER THE SIXTH CONGRESS : NOVEMBER, 1841. 
 
 Connection of events, great and small The loan defeated Increased confusion in 
 finances The Secretary of the Treasury suggests that all debts of the government 
 be funded in a stock bearing two and a half per cent, interest This the first 
 suggestion of scaling or repudiation in Texas Contrast of financial affairs at the 
 beginning and close of President Lamar s administration. 
 
 SIR WILLIAM MOLESWORTH, in a speech in Parliament, spoke 
 of the loss of an axe as the cause of one war between the Caffres 
 and the British in South Africa, and the stealing of a goat as the 
 cause of another. The present war raging in that region is said 
 to have had its origin in a cause as trivial as the stealing of a 
 hog. One chain connects together all events, both great and 
 small. But it is not always that we can trace the connection link 
 by link, as we can in the defeat of the Texas loan commissioner in 
 Paris, and the assault on Mr. Bullock s pigs at Austin. 
 
 Did the Texans anticipate this result ? We believe not. They 
 were very anxious to obtain the loan, and did not estimate properly 
 the effects of offending the French minister at Austin, and of 
 getting, through him, the ill-will of his brother-in-law, the Minister 
 of Finance at Paris. More conciliatory measures would, no doubt, 
 have been adopted, if they had properly appreciated the personal 
 influence of these two functionaries. But so far were they from 
 trying to conciliate M. de Saligny, that they, from the beginning, 
 put him at defiance. When Mr. Bullock was arrested, Mr. Chal 
 mers, the Secretary of the Treasury, went bail for his appearance, 
 thus identifying the Texan Government with the aggressive tavern- 
 keeper. The government, also, as we have seen, went so far as to 
 demand the recall of M. de Saligny, and yet it did not give up all 
 hopes of the loan. This is evident from the message which Presi 
 dent Lamar sent to the sixth Congress, soon after the commence 
 ment of its session at Austin, November 1, 1841, and in which he 
 
THE FISCAL HISTORY OF TEXAS. 113 
 
 expressed his regret " that no certain and positive intelligence 
 had yet been received from our loan commissioners in Europe." 
 
 Certainly something was desirable for the recuperation of the 
 finances of the Republic, for they were becoming most deplorable. 
 The disbursements for the year amounted to $1,176,288 72, as 
 stated in the report of the Secretary of the Treasury of October, 
 1841, while the receipts amounted to only $442,604 67. And as 
 both receipts and disbursements were (except $4,776 of the latter), 
 in the inconvertible paper of the government, the revenue was 
 of no avail either to the government or its creditors. 
 
 The debt was admitted to be $5,782,798 81, without counting 
 the naval debt, and a number of unliquidated claims. These latter 
 were becoming very embarrassing, as will be seen by the following 
 extracts from the report of the Secretary of the Treasury : 
 
 " The amount of floating, unliquidated debt cannot be ascertained ; there 
 was no appropriation to meet it, and the department was compelled, from 
 necessity, to refuse to issue auditor s certificates to satisfy such claims, 
 inasmuch as they were receivable for a great part of the public revenue, and 
 would, in all probability, have absorbed that part for which they were re 
 ceivable. A half million would be amply sufficient to cover all claims of 
 that description, which would swell the public debt to $7,300,000, including 
 the naval debt iu the total." 
 
 Here we find the public debt becoming so embarrassing that the 
 government was compelled to decline issuing the proper evidences 
 of the amount due to .the public claimants, and now, for the first 
 time, we find any reference in Texan documents to the subject of 
 scaling or repudiation. In this point of view, the following extracts 
 from the report of the Secretary of the Treasury become inte 
 resting: 
 
 " The question arises, what plan should be adopted to extinguish this 
 debt, and meet the current expenses of the government? The subject is 
 one of much difficulty and embarrassment, and involves so much conflict 
 between the rights of the creditors and the interests and necessities of the 
 government, that there is but little prospect of suggesting such a plan as 
 will meet the wishes or satisfy the expectations of all parties interested. To 
 repudiate the public debt altogether, as suggested by many, would justly 
 stigmatize us as a people in the eyes of all enlightened foreign nations. To 
 meet all engagements fully and promptly, is entirely out of our power. 
 Necessity compels, therefore, in some measure, to do violence to our sense 
 of justice, as well as to the rights of our creditors, in adopting a compromise 
 which shall guard their rights, as far as we can consistently with the suc 
 cessful administration of the government. While public faith, which should 
 be held sacred, if possible, at all times, would seern to require the payment 
 8 
 
114 THE FISCAL HISTORY OF TEXAS. 
 
 of our engagements to the uttermost farthing/ still, it should be borne 
 in -mind, that we have not received full consideration for our liabilities ; 
 and if, under the imperious circumstances of Our situation, we can only afford 
 a liberal reimbursement to our creditors of their investment, strict justice 
 will have been obtained/ 
 
 No such language as this was held as long ras it was possible to 
 borrow. Up to this date, the Government and the people of Texas 
 had always maintained, that what they promised to pay they in 
 tended to pay. They had never said, Though we promise to pay 
 one hundred cents on the dollar, we mean to pay only- fifty cents, 
 or thirty cents, or twenty cents, or as much as to ourselves may 
 seem just and equitable. If they had said so, they would never have 
 been able to borrow one dollar, or to give currency to their trea 
 sury notes. After they had, however, borrowed as much as they 
 possibly could, in every possible form after they had completely 
 exhausted their credit then first they began to speak of departing 
 from the letter of the contract. 
 
 There is little hope that the "right of creditors" will be much 
 respected when those rights come in collision with " the interests 
 and necessities" of government. The moment that a necessitous 
 government finds its credit so completely exhausted that it can 
 borrow no more, in that moment it has no interest in keeping 
 further terms with its creditors. To this condition of things was 
 the Government of Texas reduced at the close of President Lamar s 
 administration. 
 
 Still, it is interesting to see with what apparent reluctance ideas, 
 which involve a violation of natural justice, are at first promulgated ; 
 even by statesmen connected with the administration of necessi 
 tous governments. Mr. Secretary Chalmers, it will be. observed, 
 expresses his great regret that Texas could not fully comply with 
 her engagements. " Necessity compels, in some measure, to do 
 violence to our own sense of justice, as well as to the rights of our 
 creditors, in adopting a compromise." Then he makes an attempt 
 to palliate the injustice : " While public faith, which should be held 
 sacred, if possible, at all times, would seem to require the payment 
 of our engagements to the uttermost farthing, still, it should be 
 borne in mind that we have not received full consideration for our 
 liabilities." 
 
 Afterwards he goes a little further. He had commenced by 
 
THE FISCAL HISTORY OF TEXAS. 115 
 
 admitting that " public faith should be held sacred." Then he 
 adduced "necessity" as a reason for its violation. Then he pro 
 ceeds to palliate this violation by affirming that Texas had not 
 received as much as she had promised to pay. Finally, he per 
 suades himself that, if Texas cuts down the amount of her engage 
 ments one-quarter, or one-half, " strict justice will be obtained." 
 
 Thus it is with individuals, and thus it is with nations, whenever 
 they depart from the strict rule of right. Ideas of laxity in com 
 plying with engagements, at first received with reluctance, are 
 afterwards tolerated, and finally sanctioned as being all that strict 
 justice requires. The succession of ideas contained in this para 
 graph of Mr. Chalmers s report became afterwards the history of 
 the public mind in Texas. 
 
 He then proposed that the whole public debt should be merged 
 in one consolidated fund, payable in twenty years, and bearing an 
 interest of two and a half per cent, per annum. It would have 
 been well for the creditors if such a project could have been 
 carried into execution. But, as Texas had no revenue except her 
 own worthless paper, it was just as impossible for her to pay two 
 and a half per cent, as to pay ten per cent. All, therefore, that 
 Mr. Chalmers did, by his elaborate treatment of the subject, was 
 to prepare the public mind in Texas for practical repudiation. 
 
 But let not more blame be attached to this gentleman than he 
 deserves. All he proposed was to reduce the interest : he did not 
 suggest the scaling of the principal. The guilt of calling in ac 
 counts which had been regularly audited, and the negotiable ac 
 knowledgments of which had been many years in circulation, must 
 be ascribed to those who followed him. 
 
 Thus ended the unfortunate administration of President Lamar. 
 When he entered into office in November, 1838, the treasury notes, 
 and other obligations of the government, were at from sixty-five to 
 eighty-five cents in the dollar. When he left office in November, 
 1841, the same securities were worth no more than fifteen to 
 twenty cents. (See General Hunt s Address, pp. 4-6.) During 
 his three years of service, the public debt was increased, as nearly 
 as can be ascertained, from $1,887,526 32 to $7,300,000. This 
 was not owing to any increased necessity the Texans had for defend 
 ing themselves against the Mexicans. It was owing to the profusion 
 and extravagance with which everything was conducted under the 
 
116 THE FISCAL HISTORY OF TEXAS. 
 
 administration of this amiable but misguided man ; which extrava 
 gance and profusion were, in no small degree, fostered by the 
 hopes which were entertained of the negotiation of a loan in 
 Europe. 
 
 CHAPTER XVII. 
 
 PROCEEDINGS UNDER THE SIXTH CONGRESS, IN CONTINUATION : 
 NOVEMBER, 1841, TO NOVEMBER, 1842. 
 
 General Hunt s view of financial affairs at the commencement of President Houston s 
 second term Exchequer bills issued Treasury notes no longer received for cus 
 toms and direct taxes Extra session of sixth Congress Exchequer bills below 
 par Act making them receivable for public dues at only their market rates The 
 preliminaries for a loan of one million dollars entered into with Mr. Bourgeois. 
 
 WHILE the sixth Congress was in session (December, 1841), 
 General Samuel Houston entered upon his second term as Presi 
 dent of the Republic. Of the fiscal embarrassments he "had to 
 encounter, an adequate idea may be obtained from the preceding 
 chapter, taken in connection with the following extract from 
 General Memucan Hunt s Address: 
 
 "The small loan, obtained by the loan commissioner at Philadelphia, 
 had long been exhausted, and the issues of the government had very greatly 
 exceeded the means of payment from incomes of import duties and direct 
 taxation. Indeed, treasury notes were down to fifteen or twenty cents in 
 the dollar. This state of things forced the government to financial acts 
 neither creditable to the Republic nor agreeable to its citizens; but it 
 could not be avoided. Without some relief to the currency, the wheels of 
 government must have stopped. No officers, except the chief justice and 
 the district judges, all of whom, at the time, were creditors of the govern 
 ment, and some of them for considerable sums, received salaries sufficient to 
 support them. In this state of things, Congress passed a law, January 18, 
 1842, repealing the act of 19th January, 1839, requiring all officers (the 
 chief justice and judges excepted) to receive, as compensation, the trea 
 sury notes of the government, and passed what is familiarly known as the 
 1 Exchequer Bill on the 19th of January, 1842. 
 
 " The provisions of this law were, mainly, that, after the first day of Feb 
 ruary, 1842, it would not be lawful for any collector of the customs to re 
 ceive anything but gold or silver, or the ( exchequer bills of the govern 
 ment, in payment for imposts or duties; and that it was not lawful for 
 sheriffs, or collectors of direct and license tax, to receive anything in pay- 
 
THE FISCAL HISTORY OF TEXAS. 117 
 
 ment of taxes, except gold and silver, or the < exchequer bills of the govern 
 ment. President Houston was authorized to issue exchequer bills, payable 
 on demand, and receivable in payment of all public dues to an amount not 
 exceeding two hundred thousand dollars, and exchequer bills were to be 
 paid out for no other purpose than to carry out the objects of the general 
 appropriation act of Congress. A further provision authorized all land-dues 
 (except land-tax) and all payments for patents to be made, as heretofore, 
 receivable in the liabilities of the government. This law then adds that 
 all laws and parts of laws previously passed, authorizing the issue and re 
 issue of promissory notes, and their reception in payment of duties or taxes 
 thereafter to be assessed, be repealed/ 
 
 As this law made treasury notes no longer receivable (except 
 for arrears of duties and taxes), it deprived them of nearly all the 
 little value they had left. They fell from fifteen and twenty cents 
 in the dollar, which was their value at the close of Lamar s ad 
 ministration, to ten cents, to five, to four, to two cents in the 
 dollar. Finally, they sunk so low that no price at all could be 
 obtained for them in many parts of Texas. 
 
 One gentleman has told us that he gave fifteen dollars in trea 
 sury bills " for three glasses of brandy and water without sugar." 
 We have heard of one instance in which a fifty dollar treasury 
 note was used to light a cigar ; and perhaps some were applied to 
 still more ignoble purposes. 
 
 The issue of exchequer bills then commenced. These were, in 
 reality, only treasury notes under a new name. Like the u red 
 backs," they were promises to pay what the government had not 
 the ability to pay; and, like the same "red backs," they were re 
 ceivable for public dues. But as the Congress of Texas had, by 
 act of 1842, declared that treasury notes should no longer be re 
 ceived in payment of duties or taxes, no one could tell but the 
 Congress would, in 1843, pass a similar act in respect to exche 
 quer bills. It will, therefore, occasion no surprise to the reader, 
 when he is told that there was difficulty in giving currency to this 
 new emission. The merchants refused to receive them, except 
 when they could get nothing else ; and when they did receive 
 them, they paid them in immediately for customs. The conse 
 quence was that the exchequer bills sunk rapidly, in value, to 
 thirty-three cents, and before the end of the year, to even twenty- 
 five cents in the dollar. 
 
 This was not owing to the extent of the issues, for they were, 
 in reality, very moderate, there being seldom so many as fifty 
 
118 THE FISCAL HISTORY OF TEXAS. 
 
 thousand dollars in exchequer bills in circulation at one time. It 
 was owing to the bad fiscal management of the Texan Govern 
 ment, and its frequent violations of public faith, depriving it of all 
 confidence both at home and abroad. When the issue of the 
 * printed treasury notes" commenced, in the fall of 1837, though 
 they were less adequately secured, the government found it pos 
 sible to throw about half a million into circulation, and keep them 
 nearly on a par with specie, for a period of several months. Even 
 after the issues were swelled to nearly a million, by the addition 
 of engraved treasury notes, the depreciation was so gradual that, 
 by the end of the year, or in November, 1838, the notes were at 
 eighty cents in the dollar. But in 1842, the public, both at home 
 and abroad, had begun to regard Texan faith, in money matters, as 
 very like Punic faith, and a small emission of only forty thousand 
 had the effect of sinking their value to the extent already stated. 
 
 The fears that exchequer bills would run the same course as 
 treasury notes were soon realized. "An extra session of the 
 sixth Congress was convened by the President, June 27, 1842 ; 
 and on the 23d of July, a law was passed requiring the collectors 
 of customs, sheriffs, clerks, and postmasters, throughout the Re 
 public, to receive the exchequer bills only at the current rates at 
 which such bills were sold in the market." 
 
 Thus, in less than six months after the law was passed for the 
 issue of exchequer bills, was violated the pledge of faith that they 
 should be received, at their face value, in payment. We can 
 readily believe General Hunt, when he says : 
 
 "This act of Congress, and of President Houston, gave great dissatisfac 
 tion to many citizens of the Republic. It was looked upon as an act of bad 
 faith without justification, as the whole amount of exchequer bills which the 
 President was authorized to issue could not exceed two hundred thousand 
 dollars, all of which could have been cancelled for customs and direct taxes 
 in a year. 
 
 "Had the government, at the extra session of Congress, in 1842, increased 
 the rates of import duties to an amount double or treble what they were, 
 and the direct taxes in the same ratio, to pay the officers salaries, and other 
 expenditures, in currency, or exchequer bills worth par, it appears to me 
 it would have been better and more satisfactory than the repudiation of a 
 part of the amount for which the exchequer bills promised to be worth on 
 their face, and the consequent injury it did to the credit and reputation of 
 the Republic/ 7 
 
 So long as the exchequer bills were worth but thirty-three cents 
 in the dollar, the receipt of them in public payments at their full 
 
THE FISCAL HISTORY OF TEXAS. 119 
 
 value operated as a practical reduction of the burdens of the tax 
 payers. But the act, requiring that they should be received for 
 customs and other public dues, at their market rates, instead of 
 the amount expressed on their face, did not cause them to rise 
 greatly in value. To this fact President Houston bears testi 
 mony, in his message of December 1, 1842 : 
 
 " The exchequer bills being thus left dependent alone on import duties 
 for their redemption, no other demand existing for them, depreciated, and 
 at one time were worth in market but twenty-five cents in the dollar, 
 though the whole amount issued up to this time is only one hundred and 
 twenty-five thousand dollars, and the amount now in circulation cannot by 
 possibility exceed thirty thousand/ 
 
 He confirms this testimony in another message, dated January 
 7, 1843 : 
 
 " The Honorable House will also recall to their recollection the fact that 
 the money has been depreciated to a scale never above fifty cents, and for 
 a great part of the year was worth but thirty cents in the dollar." 
 
 . When the independence of Texas was unacknowledged, when 
 the enemy was at her door, when the issue of the struggle was 
 doubtful, but before she had violated her public faith, she could 
 issue treasury notes to the amount of half a million, and keep 
 them in circulation for months without any sensible depreciation. 
 She could even, as we have seen, increase the issue to a million, 
 and they would still be worth eighty cents on the dollar. But, in 
 four years after her independence had been achieved, and when 
 it was recognized by France, Britain, Holland, and the United 
 States, she could not keep in circulation, at one time, fifty thou 
 sand dollars in exchequer bills, without their depreciating to fifty, 
 thirty-three, and even twenty-five cents in the dollar. 
 
 Strange as it may seem, at this very time negotiations were 
 carried on for a new foreign loan, and with encouraging prospects 
 of success, as appears from the following passage in the report of 
 the Secretary of the Treasury, November 1, 1842 : 
 
 " On the 14th day of June last, a contract was signed in New Orleans, 
 between the Hon. Commission on the part of the government, and Mr. 
 Alexander Bourgeois (d Orivanne) for a loan to Texas of one million of 
 dollars; the first instalment, as per contract, to be paid within six months 
 from date of same. The powerful interest which Mr. Bourgeois can com 
 mand, and which will be exerted in favor of the loan, induces the belief 
 and expectation that the proceeds will soon be available to our govern 
 ment." 
 
120 THE FISCAL HISTORY OF TEXAS. 
 
 The loan was not effected; but for what reason is not stated. 
 But the sentiments avowed by Mr. Chalmers, as Secretary of the 
 Treasury, in his official report, ought of themselves to have de 
 feated all attempts to borrow. When the highest financial func 
 tionary of a government declares that such a government has a 
 right arbitrarily to modify its contracts, nobody ought to be willing 
 to lend to it. The French Government was very anxious to esta 
 blish close commercial, if not political connections with Texas. 
 In the prosecution of this object, it was even willing to overlook 
 the insult to its minister, M. de Saligny. But there would have 
 been gross impropriety in its guaranteeing a loan to a government 
 which avowed its intention of departing from the letter of the con 
 tract, whenever that contract, either expressly or by implication, 
 provided for the payment of a premium on the money borrowed. 
 
 CHAPTER XVIII. 
 
 PROCEEDINGS UNDER THE SEVENTH CONGRESS : NOVEMBER, 1842, 
 TO NOVEMBER, 1843. 
 
 Gloomy condition of public affairs .as depicted in President Houston s message 
 The removal of the archives of the Land-Office forcibly resisted Exchequer bills 
 . of small denominations issued. 
 
 THE seventh Congress convened at Washington, on the Brazos, 
 November 14th, 1842. On the first of December, President Hous 
 ton made an address to them in person, in which he gave the fol 
 lowing statement of the condition of public affairs : 
 
 " Since the commencement of legislation in Texas, as a separate and in 
 dependent power, we find the proceedings of Congress but too frequently 
 paralyzed by acts of selfishness and partiality. The public good has been 
 too often disregarded, and the national interests left out of view; and thus, 
 without establishing any general principle or system of legislation, tempo 
 rary expediency has been substituted for a due consideration of the national 
 good. Under this state of things, it is but too true that the nation has 
 been gradually declining. Instead of deriving facilities and advantages 
 from the lapse of time, its decline, since the year 1838, to its present point 
 of depression, has been more regular and more rapid than perhaps that of 
 any other country on the globe possessing the same natural ad vantages. " 
 
THE FISCAL HISTORY OF TEXAS. 121 
 
 Fiscal embarrassments are closely connected with, and in part 
 at least the causes of, national decline. The continued prosperity 
 of the United States has been owing, in no small degree, to the 
 easy condition (a few years only excepted) of the finances of the 
 Federal Government. If the Government of Mexico had only an 
 adequate revenue, it would be easy for it to restore order in its 
 different provinces. The rapid decline of the Texans as a nation 
 was owing chiefly, if not solely, to the wrong manner in which 
 their financial affairs were conducted. After the battle of San 
 Jacinto, they never had any serious conflict with the enemy. Their 
 troubles were of their own creating, and to be traced to their bad 
 management of the pecuniary concerns of the Republic. 
 
 The President then adverted to the low rate at which exchequer 
 bills had passed in the market, although but a very small amount 
 had been issued; after which he proceeded to speak of some acts 
 of insubordination, which will be best described in his own lan 
 guage: 
 
 " In the month of March last, during the incursion of the enemy, under 
 the provisions of the constitution, the President felt it his imperative duty 
 to order the removal of the archives and heads of department from the city 
 of Austin to a place of safety. * * * Resistance, however, has been 
 offered, and continued up to the present time. Acts of the most seditious 
 and unauthorized character have been perpetrated by persons styling them 
 selves the Active Committee. " 
 
 Of the proceedings of this committee, we have a further ac 
 count, in another address of the President, delivered on the 4th of 
 January, 1843: 
 
 . t " .When the last command was sent to Austin for the removal of the 
 archives, the Executive contemplated a sufficient force to have effected that 
 object. The circumstances attending this failure are reported to be that 
 the command, twenty in number, arrived at Austin on the 30th of Decem 
 ber, and on the same day placed in three wagons the boxes containing the 
 most important land-papers, furnished them by the Commissioner of the 
 General Land-Office. The mob of resistance increased in number from the 
 time that the object of the visit was known; and before the wagons left 
 the avenue, the arsenal was broken open, and the artillery, charged with 
 grape and canister, was brought lip and fired on the wagons and teams. 
 No damage, however, was done to them ; and only two shot are reported to 
 have entered the General Land-Office. The company who were authorized 
 to take the archives in charge continued their march until they arrived at 
 Kinney s, eleven miles from Austin, on their way to Caldwell on the Brazos. 
 They encamped at Kinney s for the remainder of the night, and in the 
 morning found that the malcontents had placed the artillery in advance of 
 
122 THE FISCAL HISTORY OF TEXAS. 
 
 them, and represented their numbers as ninet}Miine men. Those in charge 
 of the archives not having sufficient force, left them and returned to their 
 homes reporting that Capt. Joseph Daniel, attached to the General. Land- 
 Office, had been shot at several times, but had escaped, leaving his family 
 in Austin. What injury he sustained, is unknown. The malcontents also 
 declared to those employed in bringing away the archives that, on their 
 return to Austin, they would put the Commissioner of the General Land- 
 Office, Col. Thomas William Ward, to death; and further declared that, if 
 the President had been taken and given up to them, they would freely 
 have surrendered the archives. They are represented to have been in a 
 state of intoxication, and unreserved in their threats of violence against the 
 person and life of the chief magistrate of the country." 
 
 Acts of rebellion, which threatened the very existence of the 
 government, could add nothing to the value of Texan securities. 
 They had, however, with the exception of exchequer bills, sunk so 
 low already that it was not possible for them to sink much lower. 
 And with a view of sustaining the credit of these bills, an act was 
 passed, January 6, requiring the Secretary of the Treasury so to 
 pay them out as never to have, at any one time, more than fifty 
 thousand dollars in circulation. . Notwithstanding the restriction 
 on the amount, exchequer bills were, during the year, at various 
 stages of depreciation. 
 
 The original act had required the issue of notes of the denomi 
 nations of one hundred, fifty, twenty, ten, and five dollars. This 
 new act made it the duty of the Secretary of the Treasury " to 
 issue the bills in the denominations, one, two, three, five, ten, and 
 twenty dollars, issuing as many of the smaller .denominations as 
 practicable." 
 
 Exchequer bills were subsequently issued for seventy-five cents, 
 fifty cents, twenty-five cents, and twelve and a half cents. Every 
 effort was made to adapt them to the uses of the community ; yet the 
 whole amount issued up to December 4, 1843, was, as will be seen by 
 reference to Appendix J, only one hundred and thirty-seven thou 
 sand two hundred and eighty-one dollars and seventy-one cents. Of 
 this amount, never more than fifty thousand were in circulation at 
 one time. The amount was generally much less. The whole amount 
 in circulation, in the beginning of December, 1843, was, by estimate, 
 less than fourteen thousand dollars ; yet, in October of that year, 
 exchequer bills were, as will be seen by reference to Appendix J, 
 worth, in most parts of Texas, no more than sixty cents in a 
 dollar. 
 
THE FISCAL HISTORY OF TEXAS. 123 
 
 CHAPTER XIX. 
 
 PROCEEDINGS UNDER THE EIGHTH CONGRESS : 1843-44. 
 
 Repudiation denounced by President Houston The negotiation for a loan with 
 Mr. Bourgeois unsuccessful Commencement of hard-money policy Low rate 
 of exchequer bills Obje ctions to paper issues receivable for public dues. 
 
 THE eighth Congress assembled at Washington December 4, 
 1843. The President, in his message of December 12, gave a 
 gloomy view of affairs. Referring to a particular topic, he said : 
 
 " It may be as well to allude to a fact which has greatly prejudiced the 
 nation. The charge that we had repudiated our government liabilities has 
 been industriously urged, not only abroad but at home, as a cause of dis 
 trust and an accusation of bad faith. Other governments of high respect 
 ability have done so. Texas never has, and, I trust, never will." 
 
 Through nearly two pages the President proceeded in the same 
 strain. But so low was the credit of the Texan Government, 
 through repeated violations of. public faith, and through long- 
 continued financial mismanagement, that nothing could raise it. 
 
 On the 17th of January, 1844, it was announced that nothing 
 had been realized from the contract with Mr. Bourgeois. And, on 
 the 27th of the same month, means were even taken to prevent any 
 such negotiations in future, by enacting " that all laws authorizing 
 the President to negotiate a loan or loans, upon either the public 
 faith or the hypothecation of the public lands, be and the same 
 are hereby repealed." A previous Congress had annulled the 
 five million loan act : this abrogated the million. 
 
 January 17, an act was passed declaring that 
 
 " All bonds, obligations, or recognizances, hereafter made payable to the 
 Republic, or the President of the same, or any of the counties, shall be held 
 and deemed as payable and recoverable in gold and silver only : and all 
 fines, hereafter assessed or incurred, shall be paid in gold, or silver, or ex 
 chequer bills, any law to the contrary notwithstanding/ 
 
 Thus, as far as circumstances would admit, did Texas now adopt 
 a hard-money policy. 
 
 February 5, an act was passed declaring that, after the first of 
 
124 THE FISCAL HISTORY OF TEXAS. 
 
 March ensuing, no more exchequer bills should he issued until the 
 amount in circulation should be reduced to twenty thousand dol 
 lars; after which, that amount might be kept in circulation, but 
 no more. 
 
 If the reader will turn to Appendix J, he will find that, though 
 the issue of exchequer bills was reduced so low, yet in but few 
 parts of Texas, and at but few times, from January to July 31, 
 1844, were they at par. The most of the quotations are at sixty, 
 seventy, seventy-five, and eighty cents in the dollar ; and in one 
 month, at Galveston, the chief seat of commerce and customs, they 
 ranged from fifty to one hundred. 
 
 This may excite surprise, when it is considered that the net 
 revenue from customs, during the year ending July 31, 1844, was 
 nearly one hundred and seventy- eight thousand dollars. But it 
 should be recollected that, as they were receivable at the custom 
 house, not at the amount expressed on their face, but at the rate 
 they bore in the market, the merchants had no more interest in 
 paying them in than in paying in gold or silver. Hence it will be 
 seen that the payments "in par funds," by which, it is to be pre 
 sumed, is meant metallic money or its equivalent, nearly equalled 
 the payments in exchequer bills. 
 
 This fact, in connection with others, shows how difficult it is to 
 keep up the value of even a small amount of paper-money sup 
 ported solely by government revenue. It is not the annual, but 
 the monthly, and, in some circumstances, even the semi-monthly, 
 amount of revenue that determines the amount of such paper that 
 can be safely issued. 
 
 Our banks do, indeed, keep a large amount of notes in circula 
 tion, but it is only by redeeming the average amount, twelve times 
 or oftener in each year, that they maintain those notes on a par 
 with specie. Government must do likewise, if it uses a paper 
 currency intended to serve as a substitute for coin, especially if it 
 makes its issues in a country already saturated with bank paper. 
 All the amount of circulating notes which a government, with a 
 revenue of twenty-four millions a year, could safely issue, would 
 be two or three millions. It might, indeed, issue twenty or thirty 
 millions, and keep it in circulation for a time on a par with specie. 
 But such issues would, sooner or later, be sure to return upon it in 
 
THE FISCAL HISTORY OF TEXAS. 125 
 
 greater amounts than the monthly revenue could absorb, and then 
 the public credit would sustain serious injury. 
 
 It is to be hoped that these truths will be remembered by the 
 fiscal authorities of the United States the next time they are 
 tempted to issue treasury notes of small denominations intended 
 to circulate as money. But two or three millions of such paper 
 are all, as has been shown, that a government, with a revenue 
 of twenty-four millions, can safely issue. Now a two millions of 
 surplus revenue will pay the interest on forty millions of stock loans 
 at five per cent., and on thirty-three millions at six per cent. To so 
 much greater extent can government borrow, by means of the 
 funding system, than by resorting to issues of circulating paper. 
 
 The serious .embarrassments of the United States Government 
 in the war of 1812-14 were, in part, owing to disregard of these 
 principles. It issued treasury notes, and received them in payment 
 of public dues, whereby it left itself without the means of paying 
 interest on stock loans. 
 
 Such issues do, indeed, afford an easy way of relieving the im 
 mediate wants of a necessitous government ; but the very facility 
 with which ways and means can thus be raised is no small objection 
 to them. They often cause the postponement of those efficient 
 measures which ought to be at once adopted. 
 
 It must also be admitted that loans made, in the first instance, 
 by means of treasury notes, seem, in some respects, more eligible 
 than loans of gold and silver. By their means government bor 
 rows, from day to day, just such sums as it wants, and just where 
 it wants, and has no large amount of money lying dead on hand. 
 In this way, also, it avoids deranging the operations of the banks, 
 as may be done by large stock loans of gold and silver taking from 
 them, though temporarily, their specie basis. But all these ad 
 vantages may be secured, and the evils above spoken of be avoided, 
 by issuing notes, not receivable for duties, but bearing a moderate 
 rate of interest, and, if not paid by a certain day, fundable in a 
 stock loan, bearing a higher rate of interest. 
 
 Treasury notes, receivable for public dues, should never be used, 
 unless it be to relieve a temporary embarrassment, and when it is 
 reduced almost to a certainty that government will, in a few 
 months, have a surplus revenue sufficient to redeem them. 
 
126 THE FISCAL HISTORY OF TEXAS. 
 
 The difference of one or two per cent., which treasury notes, 
 receivable for public dues, would bring in the market over treasury 
 notes simply funddble, ought to be regarded as of little account, 
 so very important is it that government should always have a 
 revenue in something else than its own- paper. 
 
 CHAPTER XX. 
 
 . PROCEEDINGS UNDER THE NINTH CONGRESS : 1844-45. 
 
 The finances somewhat improved Contrast of expenditures in Lamar s and Hous 
 ton s second terms Idem of imports and exports Sound views of President 
 Jones The further issue prohibited of exchequer bills, and other paper intended 
 to pass as money The receipt of paper for public dues forbidden. 
 
 THE ninth Congress assembled at Washington December 2, 
 1844. In a message delivered to them, a few days afterwards, 
 December 7th, President Houston said : 
 
 " It is believed the receipts from the various sources of revenue will, at 
 least, equal the expenditure perhaps leave a small surplus in the treasury." 
 
 This state of affairs was very different from that of former years, 
 and shows what can be done by persevering economy. 
 
 In the three years of President Lamar s administration, from 
 December, 1838, to December, 1841, the public debt was swelled 
 from less than two millions to more than seven millions. 
 
 In the three years of President Houston s administration, from 
 December, 1841, to December, 1844, no additions appear to have 
 been made to the debt, except by increments of interest, and by 
 the bringing in of back accounts. 
 
 In the three years of President Lamar s administration, the 
 Treasurer s payments were, according to the best accounts that 
 can be gathered, as follows : 
 
 Year ending September 30, 1839, . . $1,504,173 58 
 " " 1840, . . 2,174,752 74 
 
 1841, . . . 1,176,288 72 
 
 $4,855,215 04 
 "" Average amount per annum, $1,618,405." 
 
THE FISCAL HISTORY OF TEXAS. 127 
 
 In the three years of President Houston s second term these 
 payments "were, besides $17,907 30 on account of the mail service 
 and collecting of taxes, as follows : 
 
 "Disbursed for appropriations of 1842, . . $198,05100 
 " 1843, . . 147,274 38 
 
 " " 1844, , . 147,850 32 
 
 $493,175 70 . 
 
 " Average amount per annum, including mail service, and collection of 
 taxes, $170,361." 
 
 This difference is owing, in part, only to differences in the cha 
 racter of the men who presided over the government. * President 
 Laimir, as a paper-money man, was profuse on principle. He 
 knew of no limit on expenditure but the limit of credit. Pre 
 sident Houston, as somewhat of a hard-money man, was more 
 inclined to economy. But if Houston had been Chief Magistrate 
 from- 1838-39 to 1841-42, he could have restricted but in part 
 the extravagant expenditures of these years. And if Lamar had 
 succeeded him, he would have been compelled, from the force of 
 circumstances (however contrary it might have been to his nature), 
 to be in some degree economical. 
 
 If it had been possible for the Texans to be hard-money and 
 prompt-payment men, they might have achieved their independ 
 ence, and defrayed all the expenses of the Republic, at a cost 
 of two hundred thousand dollars a year. This may seem a small 
 amount, but neither nations nor individuals know how little is 
 necessary to sustain them till necessity forces them to make the 
 experiment. The disbursements in the last term of President 
 Houston show that our estimate is within bounds. During Lamar s 
 administration, the Mexicans only threatened. During Houston s 
 second term, they made an incursion into the country. 
 
 But the Texans never became economical till constrained by 
 necessity. So long as there was any hope of negotiating a loan in 
 Europe, and so long as they could borrow from the citizens of the 
 United States, by new issues of treasury notes, their extravagant 
 expenditures were continued. 
 
 When they were reduced to such straits that they could borrow 
 no longer, except from themselves, and then only to a limited 
 amount, in anticipating the revenue by issues of exchequer bills, 
 then they became saving. 
 
128 THE FISCAL HISTORY OF TEXAS. 
 
 We have not the" means of instituting such a comparison of the 
 commerce of the country as is desirable, for we have not been able 
 to find any account of the imports and exports for part of the time ; 
 but the following items prove that its foreign commerce was much 
 greater-^ during part of Lamar s than during part of Houston s 
 second term: 
 
 Imports. Exports, 
 
 Year ending Sept. 1, 1839, $1,506,897 67 $274,518 09 
 
 " " 1840, 1,378,568 98 220,401 15 
 
 2,885,46665 494,91924 
 
 Average per annum, $1,442,733 32 J $247,459 62 
 
 Year ending July 31, 1843, $471,205 32 $415,768 75 
 
 " 1844, 686,50303 615,11934 
 
 1,157,708 35 1,030,888 09 
 
 Average per annum, $578,854 17 $506,444 04 
 
 These tables show how effective excess of paper currency is in 
 encouraging imports, and discouraging exports. The imports, in 
 two years of Lamar s administration, when treasury notes were 
 the circulating medium, were nearly six times as great as the ex 
 ports. On the contrary, in two years of Houston s second term, 
 when such notes were no longer current, the exports nearly 
 equalled the imports. 
 
 These tables show more. They show to what extent contribu 
 tions were levied on citizens of the United States, in Lamar s time, 
 by means of Texan promises to pay, for nine-tenths of the im 
 ports were from the United States, and were paid for, if paid at 
 all, in Texan treasury notes, and other evidences of Texan debts. 
 In these two years, the imports exceeded the exports in the aggre 
 gate sum of $2,390,547 41. All this was a levy on citizens of the 
 United States ; for Texan securities had no market in Europe. 
 
 Dr. Anson Jones, who succeeded Gen. Houston as President of 
 the Republic, delivered his inaugural address on the 9th of De 
 cember, 1844. Prominent points in it were: 
 
 "The maintenance of the public credit, and the preservation of the 
 national faith, both as it regards individuals and nations. 
 
THE FISCAL HISTORY OF TEXAS. 129 
 
 "The entire abolishment of paper-money issues by government, corpora 
 tions, or individuals, and the consequent introduction of an exclusive hard- 
 money currency." 
 
 In a message dated December 16, he expatiated somewhat at 
 length on these points: 
 
 "Circumspect as was the preceding administration in holding the reins 
 in the emission of exchequer money, it created a sort of illusion as to the 
 fiscal ability of government, which was made manifest in the extraordinary 
 amounts of private appropriations by the different sessions of Congress. 
 These appropriations, it is true, were in a great measure arrested, but only 
 by the exercise of that power vested in the Executive which is always used 
 with great reluctance. 
 
 " The urgent necessity which three years since required of the govern 
 ment a resort to the issue of exchequer bills, has now ceased to exist, and 
 the continuance of the system is no longer justified. 
 
 " The fallacy and the danger of a factitious paper currency have been 
 demonstrated by every civilized nation upon the earth, and Texas, having 
 once participated in this demonstration, should now, when she is able to do 
 so, abandon the experiment, and resort in time to what the experience of 
 the past has conclusively shown to be the only safe expedient for govern 
 ments a hard-money currency, as a circulating medium. As a commer 
 cial convenience, recourse may be had to a system of treasury drafts, drawn 
 against specie in actual deposit." 
 
 In conformity with this recommendation, an act was passed 
 February 3, 1845, repealing the law authorizing the issue of 
 exchequer bills, and forbidding the Secretary of the Treasury, or 
 any other officer of the government, to issue any bonds, notes, 
 bills, or other description of paper representing money, intended 
 for circulation, or to be received in payment of any class of reve 
 nue, and requiring the Secretary to cause to be destroyed all the 
 exchequer bills received at the treasury department. This law 
 further provided that, after the receipt of the whole amount of 
 exchequer bills in circulation, and such other paper liabilities of 
 the government as were in circulation, and were receivable by law 
 for dues to the government, nothing but gold and silver should be 
 received, except for land-patents, and other land-office dues, which 
 might, as before, be received in the liabilities of the government. 
 
 So much of this law as prohibited the receipt of Texas govern 
 ment paper in payment of public dues was a violation of the oft- 
 plighted faith of the Republic. But it put an end, for the present, 
 to the paper-money system of Texas. And at the request of Pre 
 sident Jones, we make a special record of the fact that his signa 
 ture was never affixed to a paper bill of credit. 
 
130 THE FISCAL HISTORY OF TEXAS. 
 
 CHAPTER XXI. 
 
 PROCEEDINGS UNDER THE NINTH CONGRESS, CONTINUED I 1845. 
 
 The Congress of the United States pass a resolution for annexing Texas to the 
 Union The people of Texas, in convention, assent to the terms, and adopt a 
 constitution for the State of Texas Provisions in relation to public debt and 
 government paper-money Extract from report of Commissioner of General Land- 
 Office Great extent of land held by individuals View of public lands as a 
 means of paying public debts. 
 
 BETTER times for Texas were at hand. On the 1st of March, 
 1845, the President of the United States approved of a joint reso 
 lution of the Senate and House of Representatives for annexing 
 Texas to the Union. In this resolution, it was, among other 
 things, declared that 
 
 " Said State * * * shall also retain all the vacant and unappropri 
 ated lands lying within its limits, to be applied to the payment of the debts 
 and liabilities of Texas, and the residue of said lands, after discharging said 
 debts and liabilities, to be disposed of as said State may direct ; but in no 
 event are said debts and liabilities to become a charge upon the Govern 
 ment of the United States." 
 
 Thus was provision sought to be made that Texas should retain 
 all her lands, and at the same time pay all her debts the said 
 lands to be set aside as a special fund for the payment of the 
 debts, and only the residue thereof, after the debts should be dis 
 charged, to be applied to such other purposes as the State might 
 direct. 
 
 June 16, 1845, an extra session of the ninth Congress was con 
 vened at Washington, on the Brazos, to take into consideration 
 the resolution of annexation. This body approved of the procla 
 mation of the President of Texas, of May 5, authorizing an elec 
 tion for delegates to meet in convention, July 4, 1845, for the 
 purpose of acquiescing in the annexation of Texas to the Union, 
 and adopting a constitution for the State. 
 
 On the 4th of July, 1845, the Convention met accordingly, in 
 the city of Austin, and in the name of the people of the Republic 
 
THE FISCAL HISTORY OF TEXAS. 131 
 
 of Texas, assented to the annexation of Texas to the United States, 
 on the condition and guarantees of the said joint resolution of the 
 Congress of the United States. In the ordinance then adopted, 
 the first paragraph, after reciting the joint resolution for annex 
 ing Texas to the United States, declares that 
 
 " In order to manifest the assent of the people of this Republic, as re 
 quired in the above-recited portions of the said resolution, we, the deputies 
 of the people of Texas, in convention assembled, in their name, and by their 
 authority, do ordain and declare that we assent to, and accept the pro 
 posals, conditions, and guarantees contained in the first and second sec 
 tions of the resolution of the Congress of the United States aforesaid." 
 
 Thus did the people of Texas, in convention assembled, acknow 
 ledge the obligation of the debts incurred by the government of 
 the Republic. Thus did they guarantee the United States against 
 all claims on account of said debts. And thus did they consent 
 that " all the vacant and unappropriated lands lying within the 
 limits of Texas should be applied to the payment of the debts and 
 liabilities of Texas;" and that only the residue of said lands, 
 after discharging such debts and liabilities, should be disposed of 
 as said State might direct. 
 
 Its view of the evils of "government paper-money and of public 
 debt, the Convention embodied in the following provisions of the 
 constitution: 
 
 "Art. VII. Sec. 8. And in no case shall the legislature have the power 
 to issue treasury warrants, treasury notes, or paper of any description in 
 tended to circulate as money. 
 
 " Art. VII. Sec. 33. The aggregate amount of debts hereafter con 
 tracted by the legislature shall never exceed the sum of one hundred thou 
 sand dollars, except in case of war, to repel invasions, or suppress insur 
 rections." 
 
 The provision to prohibit the issue of treasury notes and trea 
 sury warrants was adopted by a vote of forty-five yeas to thirteen 
 nays. 
 
 August 5, the Commissioner of the General Land-Office made a 
 report, a part of which it is proper to introduce here. Inasmuch as 
 the customs, the chief source of Texan revenue, were to be trans 
 ferred to the United States, little would remain but the public 
 lands wherewith to pay the debts incurred under the government 
 of the Republic. 
 
 "Superficial exteat of Texas, as comprised within the limits define 1 by 
 statute of first Texan Congress, page 133, 379,319 square miles: or, 
 254,284,160 acres. 
 
132 THE FISCAL HISTORY OF TEXAS. 
 
 " Total amount of land issued by the various boards of land commis 
 sioners, 43,543,970 acres. 
 
 " Total amount recommended from the above, as good and lawful claims, 
 by the committee appointed to detect fraudulent certificates, 19,212,206 
 acres. 
 
 "Total amount issued by Department of War as bounty and donation 
 claims, 6,300,000 acres. 
 
 " Total amount of land-script sold by the government of the late Re 
 public of Texas, 368,787 acres. 
 
 " Total amount of legal claims to land issued by the authorities of Texas, 
 25,880,993 acres. 
 
 " Total amount issued by various boards of land commissioners, and 
 supposed to be fraudulent, 24,331,764 acres. 
 
 "Total amount of land issued by the authorities of Mexico, a portion of 
 which is supposed to be invalid, 22,080,000 acres. 
 
 " Total amount of public domain subject to location and unsurveyed, 
 181,99 1,403 acres." 
 
 To enable tbe reader to form some idea of the quantities above 
 set forth, it is proper to state that the amount issued by the 
 Department of War as bounty and donation claims (six million 
 acres) was more than double the area of the State of Connecticut, 
 exceeded the territorial surface of either New Jersey or New 
 Hampshire, and was greater than that of Massachusetts and 
 Rhode Island put together. The total amount of issues by the 
 Mexican Government (twenty-two million acres) exceeded the 
 whole of New England, exclusive of Maine. The issues under 
 Texan boards of commissioners, supposed to be fraudulent (twenty- 
 four million acres), were nearly equal in extent to the State of 
 Ohio. The whole amount appropriated by both the Texan and 
 Mexican authorities (seventy-two million acres) exceeded what is 
 contained in the States of New York, New Jersey, Pennsylvania, 
 Maryland, and the District of Columbia. Texas, with a popula 
 tion of about one hundred thousand, had more land appropriated 
 for individual use than is to be found in the four central States 
 above mentioned, having an aggregate population of six millions 
 and a half. If nothing else will, this fact ought to convince the 
 reader of the magnificent scale on which land-speculations have 
 been carried on in Texas ; and in these land-speculations he will 
 find the key to all important events in Texan history. 
 
 But great as was the amount of land claimed by individual 
 owners, it was less than one-third of all the land in the country. 
 The amount of public domain still subject to location, and remain- 
 
THE FISCAL HISTORY OF TEXAS. 133 
 
 ing unsurveyed (one hundred and eighty-one million acres), was 
 equal in extent to the States of Virginia, North Carolina, South 
 Carolina, Georgia, Kentucky, and Tennessee. Compared with the 
 North-Western States, it greatly exceeded in extent Ohio, Indiana, 
 Michigan, Illinois, and Missouri. 
 
 August 27, a committee made report that 236,803 square miles 
 of the surface of Texas were appropriated, leaving 160,516 un 
 appropriated. Referring to sales of the public lands, as a means 
 of paying the public debt, and supposing the sales to be continued 
 for thirty-seven years, the committee say: 
 
 " If it can be sold at that time (1882) for $1 25 per acre, the public- 
 domain of Texas will be worth, in the year 1882, $128,462,400. 
 
 " If the accounts of traders and travellers are entitled to credit, one-half 
 of this country is suitable for the occupancy of the agriculturist. Deduct 
 ing, then, one-half for sterile wastes and mountain ranges, the present 
 worth of this fund, at 6 per cent., will not meet the public debt of Texas." 
 
 According to the report of the Commissioner of the General 
 Land-Office, " the amount of public land subject to location, and 
 unsurveyed," was 181,991,403. If to this be added "the amount 
 issued by various boards of land commissioners and supposed to 
 be fraudulent," 24,331,764 acres, the sum will be 206,323,167 
 acres; and some addition should be made from the " total amount 
 issued by the authorities of Mexico, 22,080,000 acres, a portion 
 of which was supposed to be invalid." Suppose one-half of these 
 invalid, and we have a grand total of 217,363,167 acres. 
 
 Such was the land-fund at the disposal of the government of 
 Texas, according to the report of the Commissioner of the Gene 
 ral Land-Office. But the committee of the Convention reduced 
 it to 102,780,240 acres. In so doing, they seem to have taken 
 into the account all the " head-rights" or settlers claims, and 
 soldiers rights, not yet "located," and also the enormous grants 
 made by the united State of Coahuila and Texas, which the in 
 dependent government of Texas had steadily refused to acknow 
 ledge. The commissioner gives the extent of land " subject to 
 location, and unsurveyed." The committee give the amount " un 
 appropriated." 
 
 Even this reduced amount is but little inferior to the territorial 
 surface of all our States on the seaboard, from Maine to Penn 
 sylvania inclusive. Yet the committee state that, supposing one- 
 half of these lands to be waste, the residue, 56,365,125 acres, 
 
134 THE FISCAL HISTORY OF TEXAS. 
 
 will not, by the year 1882, if sold at $1 25 an acre, discharge the 
 public debt of Texas, then less than twelve millions of dollars. 
 
 The committee may be right, supposing the debt to go on accu 
 mulating till the year 1882, at compound interest, at the rate of 
 6 per cent, per annum, and supposing no sales of land to be effected 
 till that year. But, supposing the sales to commence immediately, 
 and only enough to be sold in each year to pay the interest on the 
 debt, and reduce the principal a few hundred thousand dollars, 
 the whole would be liquidated in much less time than is stated in 
 the report by the committee. 
 
 But her lands were not all that Texas had pledged to her public 
 creditors. In addition thereto, she had pledged her custom 
 revenues, her direct taxes, her license taxes, and, what is more 
 than all, her public faith, which amounted to a pledge of every 
 thing she possessed, or might hereafter possess. If she trans 
 ferred any of these pledged revenues, the customs for example, to 
 a third party, she was bound, on principles of equity, to make good 
 the deficit from some other source. 
 
 Here we cannot help observing that the principles on which the 
 committee proceeded in estimating the public lands of Texas, as a 
 fund wherewith to pay her public debt, were very different from 
 those commonly adopted by American statesmen. They seem 
 generally to suppose that the lands are worth intrinsically $1 25 
 an acre ; but that, as they have cost nothing, or next to nothing, 
 they cannot be too lavish in giving them away. 
 
 The truth is, the public lands of the United States have never 
 repaid the original cost, including therein the sums paid the Indians, 
 the cost of the Indian wars they have occasioned, the cost of sur 
 veys and management, and interest on the whole. The richest 
 man in the world would have been ruined if he had held our pub 
 lic lands as a commercial speculation. 
 
 Even now the fee simple of all the public lands in the United 
 States is not worth more than fifty to one hundred millions, taking 
 into consideration the amount they annually yield and the expenses 
 of management. Yet they might, if properly guarded, have proved 
 a valuable resource to government, as a fund for borrowing on in 
 times of exigency. And Congress has no more right to give 
 them away than it has to give away the public ships, the public 
 buildings, or the money in the public treasury. 
 
THE FISCAL HISTORY OF TEXAS. 135 
 
 CHAPTER XXII. 
 
 GENERAL VIEW OF THE FISCAL POLICY OF TEXAS. 
 
 Comparison of powers of the Continental and of the Texan Congress Comparative 
 view of continental money and of Texan promissory notes The Texan promis 
 sory notes more eifective as governmental means, but yet productive of great 
 evil Illusion of the Texan authorities in regard to loans and lands Frequent 
 changes of revenue laws, and of public tenders Evils of government issues. 
 
 SOME time elapsed after the meeting of the Convention, before 
 the revenue and other laws of the United States were extended 
 over Texas, and we will take advantage of this quasi interregnum, 
 to state some facts, and make some reflections, which could not 
 before be introduced without breaking the thread of our narrative. 
 
 In many respects, the Texan Congress had more efficient powers 
 than were possessed by our Congress of 1776. The latter was a 
 mere consulting body, and, in so far as raising a revenue was con 
 cerned, it could do little more than make suggestions to the States, 
 which suggestions the States might attend to, or not, as they saw 
 fit. It had to depend on the action of the States to give currency 
 to its continental paper. It had power (or assumed power) to 
 borrow, but it had no power to raise money to pay what it bor 
 rowed, or even interest on the same. The Texan Congress united 
 in itself all the powers which both the Continental Congress and 
 our State revolutionary assemblies possessed. It was sovereign 
 and supreme. It depended on no other political power to carry 
 its measures into effect. The county, city, and town governments 
 were of its own creation, and directly subordinate to it. There 
 were great advantages, in a fiscal point of view, in this unity of 
 power. 
 
 The coincidences in the history of our own revolutionary paper 
 currency and that of Texas are many and striking, but the points 
 in which they differed are not unworthy of notice. 
 
 1. Our revolutionary paper-money emanated from various sources. 
 In addition to the issues of the Continental Congress, we had 
 
136 THE FISCAL HISTORY OF TEXAS. 
 
 those of all, or nearly all, the thirteen State governments. The 
 relative value of these was always changing, giving occasion for 
 great speculation, and causing great confusion in exchanges. The 
 Texan paper-money, though various in form, all emanated from 
 one source ; and thus had a uniformity which our revolutionary 
 paper-money did not possess. 
 
 2. The continental issues amounted, in all, to about three hun 
 dred and fifty-seven millions.. According to the Hon. Samuel 
 Breck, of Philadelphia, the burden this imposed on the people, 
 and, consequently, the advantage the Congress derived therefrom, 
 was equal to about fifteen millions in specie.* This is at the rate 
 of a little more than four and a half cents in the dollar. The 
 treasury notes of Texas never, according to the report of the 
 auditor and comptroller, netted less to the government than 
 twelve and a half cents in the dollar. For the whole of the first 
 issues, or " printed notes," par was received. From the com 
 mencement to the close, the government received, for all its securi 
 ties, on an average, fifty cents in the dollar. Thus, the revolu 
 tionary government of Texas did much better with its paper-money 
 than did our Continental Congress. 
 
 3. An effort was made to support the credit of our continental 
 currency by acts of compulsion. When it was but five months old, 
 on the llth of January, 1776, Congress, says an eye-witness, 
 resolved 
 
 " That whosoever should refuse to receive in payment continental bills 
 should be declared and treated as an enemy of the country, and be pre 
 cluded from intercourse with its inhabitants, i. e. outlawed. This ruinous 
 principle was continued in practice for five successive years, and appeared 
 in all shapes and forms, i. e. in tender-acts, in limitations of prices, in awful 
 and threatening declarations, in penal laws, with dreadful and ruinous pun 
 ishments, and in every other way that could be devised, and all executed 
 by a relentless severity by the highest authorities then in being, viz., by 
 Congress, by assemblies, and conventions of the States, and by committees 
 of inspection, whose powers in those days were nearly sovereign, and even 
 by military force." 
 t 
 
 Honor to whom honor is due. The Texans resorted to no such 
 
 means to sustain their paper-money. It never was made a legal 
 tender for debts due to individuals. An act was, indeed, passed 
 to require the officers of government to receive their fees in this 
 
 * See an article on this subject, by this gentleman, in Fisher s National Magazine 
 for June, 1845. As Mr. Breck thinks there was sound policy in making these 
 issues, he could have had no disposition to underrate the advantages thence derived. 
 
THE FISCAL HISTORY OF TEXAS. 137 
 
 paper-money ; but, if they thought this a hardship, they were at 
 liberty to resign. Fond as a portion of the Texans, unfortunately, 
 are, or at least were, of Lynch law, they never resorted to this 
 summary mode of proceeding to force any man to receive their 
 government paper for more than it was worth. The result was 
 that, when " red backs" were almost the exclusive circulating me 
 dium, specie was the standard of ultimate reference. If a man 
 bought an article on credit, for, say one hundred dollars, he gave 
 a note promising to pay one hundred dollars in silver, or so many 
 treasury notes as should, when the note fell due, be worth one 
 hundred dollars in silver. 
 
 From the superior moderation and the superior wisdom the 
 Texan Congress and the Texan people herein displayed over their 
 revolutionary grandsires of 1776, the reader will, perhaps, indulge 
 the hope that the race is improving that the hereditary taint, of 
 which we have elsewhere spoken, is becoming weaker. We shall 
 be happy if future events prove this hope to be well founded. 
 
 4. Texas treasury notes ceased to be a circulating medium after 
 they sunk to eight for one, that is, after eight dollars in paper 
 were worth but one in silver. " The depreciation of continental 
 money," says an author, whom we have already quoted, "never 
 stopped the circulation of it." 
 
 "As long as it retained any value, it passed quick enough; and would 
 purchase hard-money, or anything else, as readily as ever, when the exchange 
 was two hundred for one, and when every hope, or even idea of its being 
 ultimately redeemed at its nominal value, had entirely vanished." 
 
 In another place, he remarks: " Its circulation was never more 
 brisk than when it was five hundred for one." 
 
 5. The losses sustained by the successive depreciation and ulti 
 mate non-redemption of continental money fell exclusively on the 
 people of the old thirteen States. It never was exported. Great 
 part of the treasury notes of Texas were sent to the United States, 
 and much of the loss sustained by their successive depreciation 
 had to be borne by people not immediately interested in this revo 
 lutionary struggle. The great surplus of imports over exports, in 
 some years of Texan history, cannot be accounted for, except on 
 the supposition that Texan securities were exchanged in the 
 United States for arms, provisions, and other necessaries. In 
 this way supplies were obtained which were essential to the sue- 
 
138 THE FISCAL HISTORY OF TEXAS. 
 
 cess of the Texan revolution. As a fiscal machine, government 
 paper-money yielded more aid to the Texan than to our Conti 
 nental Congress. By its means, the Continental Congress made 
 levies on the American people alone ; while, by similar means, the 
 Texan Congress made levies on the people of what was then a 
 foreign country. 
 
 Still, it is matter of regret that these issues were ever made. 
 With how little expense the whole revolutionary struggle might 
 otherwise have been conducted, is proved by the small cost of 
 achieving Texan independence, and the small cost with which it 
 was sustained during the three years of General Houston s last 
 presidential term. We pretend not to say that a people, situated 
 as the Texans were, could have carried through the conflict with 
 out running into debt. All that could be expected in the way of 
 taxation, from so small a community, was revenue enough to defray 
 the expenses of their civil establishment, and that placed on the 
 most economic scale. To carry on such hostile operations as were 
 indispensable, it was necessary to borrow in some form or other. 
 But the Texans selected the very worst mode of borrowing. From 
 the very beginning their debt took a wrong form. 
 
 They began by issuing drafts on the treasury. This would all 
 have been well if there had been any money in the treasury. 
 But, as there was none, these drafts, on the principles of common 
 law and of common sense, became " set-offs" against sums due to 
 the treasury ; and, as they greatly exceeded in amount the sums 
 due for customs and other taxes, they prevented the government 
 from realizing even so much efficient revenue as was necessary to 
 defray the expenses of the civil establishment. 
 
 These drafts sunk in value to fifteen cents in the dollar. Then 
 recourse was had to the issue of treasury notes. But as these, 
 like the treasury drafts, were receivable for customs and other 
 taxes, they became, like them, " set-offs" against the amounts due 
 the treasury. 
 
 The result was that the Texan Government had no efficient 
 revenue, or none worth speaking of. All it did, by all its appara 
 tus of custom-house officers and tax-gatherers, was to redeem part 
 of its outstanding liabilities. .This would have been very well if 
 borrowing from day to day, or from month to month, could have 
 met all fiscal exigencies ; but in time of war governments require 
 
THE FISCAL HISTORY OF TEXAS. 139 
 
 something more than merely temporary loans to carry on opera 
 tions. 
 
 All that could reasonably have been expected from a govern 
 ment, under such circumstances as was that of Texas, was a fair 
 settlement with its creditors for supplies furnished and services 
 rendered, and giving them evidences of the same, bearing interest, 
 to be discharged immediately, in lands ; or, after the close of the 
 war, either in lands or in money, out of such revenue as might 
 then arise. It was folly to attempt to pay during the war any 
 debt that might be incurred in its prosecution out of any revenue 
 that could then be raised. 
 
 The extravagance with which everything was conducted was 
 owing partly to the facilities of running in debt which these 
 paper issues afforded ; partly to the character of the men at the 
 head of affairs, who knew nothing about economy in either private 
 life or public ; and partly to other causes. 
 
 "The large appropriations and issues of treasury notes under President 
 Lamar s administration were/ says General Hunt, " made in anticipation 
 of the sale of the five million of bonds which were authorized by one law, 
 and the one million authorized by another, and the sanguine assurances 
 from time to time of General Hamilton that he certainly expected to suc 
 ceed in the sale of the five million bonds which he and Mr. Burnley were 
 empowered to sell." 
 
 These sanguine expectations were common among the Texans, 
 but on what ground they rested it is difficult to imagine. A 
 government s ability to pay interest is the measure of its ability 
 to borrow ; and its ability to pay interest is determined by the 
 amount in which its ordinary revenue exceeds its ordinary ex 
 penses. The revenue of Texas fell far below what was necessary 
 for the support of even its civil establishment. To be sure, it had 
 lands, and a prospective ability to pay, after peace should be made 
 with Mexico ; but the experience of British capitalists in the Greek, 
 the Chilian, the Peruvian, the Mexican, and other foreign loans, 
 had taught them that it was not safe to rely on the prospective 
 ability of revolutionary governments. The American Congress of 
 1776 effected no loans abroad from private capitalists, or none but 
 such as were guaranteed by the governments of France, Spain, 
 or Holland, and even then to the amount of only $7,000,000 or 
 $8,000,000. If General Hamilton had at any time a prospect of 
 success, it was not because the moneyed men of Europe regarded 
 
140 THE FISCAL HISTORY OF TEXAS. 
 
 as adequate such security as Texas could offer, but because the 
 French Government was disposed to add thereto its guarantee, in 
 prosecution of its design of establishing close commercial and 
 political connection with the rising Republic. 
 
 The Texan Government effected, in a direct way, loans abroad 
 amounting in all to less than five hundred thousand dollars, viz. : 
 the Triplet loan of $20,070, negotiated at New Orleans January 
 11, 1836; the Erwin loan of $45,820, negotiated in the same city 
 and in the same year, January 16 ; some money lent by Samuel 
 Swartwout, and others, amounting in all to $7,970 43 ; and the 
 loan obtained from the United States Bank, the par value of which 
 is set down by the comptroller at $400,000. Instead of wondering 
 that the amount was so small, we should wonder that it was so large. 
 That the United States Bank lent so much, was not owing to its 
 riches, but to its poverty. It was at that time living by expedients, 
 and one of the chief of these was getting possession of State and 
 corporation stocks, and pledging them in Europe. The loan to 
 Texas was intended to aid General Hamilton s operation in Europe., 
 by showing that the rising Republic had some credit in America, 
 with an ultimate view of establishing, out of the five or seven million 
 dollars to be obtained from France, a national bank in Texas, 
 which, under Mr. Jaudon s management, should act as a tender to 
 the Pennsylvania Bank of the United States. The scheme was 
 well contrived ; but the fates determined it should not succeed. 
 And yet Texas reaped the benefit of it in a loan of four hundred 
 thousand dollars, which she could not otherwise have obtained. 
 
 Another illusion under which the Texans labored was as to the 
 efficiency of their public lands as a means of supporting public credit 
 and paying public debts. In a political point of view, wild lands 
 are of great importance. If England and France had at their doors 
 as extensive territories as have the United States, England and 
 France would be prosperous and happy in spite of their monarchical 
 institutions, their nobility systems, their church establishments, their 
 large armies, their expensive navies, their heavy public debts, and 
 all the accumulated corruptions of ages. In a politico-economic 
 point of view, also, is land of great importance. It is an essential 
 element of all wealth. Even if a man s business is polishing dia 
 monds, he must have land, at least enough to stand upon. But in 
 a commercial point of view, land is of little or no value, unless labor 
 
THE FISCAL HISTORY OF TEXAS. 141 
 
 has been bestowed upon it or near it. The experience of the United 
 States had shown that, even with the influx of emigrants from 
 Europe, from two to three million acres per year of the public lands 
 were all that was required on an average for purposes of cultiva 
 tion. The amount of sales never exceeded this except when, in 
 periods of bank inflation, speculation was directed to the public 
 domain. 
 
 The Texan Government bestowed its lands with so much profu 
 sion on soldiers and settlers as to supply all demands, not only for 
 cultivation but for speculation, for many years to come. It was, 
 therefore, unreasonable in the Texan Government to regard its public 
 lands as immediate means of great revenue, or as likely to afford 
 much aid in supporting public credit. Yet, such was the infatua 
 tion on this subject, that we find even Samuel Houston, two years 
 after the war commenced, speaking of the opening of the land- 
 offices as almost certain to produce " boundless revenue to the 
 Republic." 
 
 From this source, as well as from foreign loans, the Texans, after 
 all, derived more aid than they had any right to expect. The 
 sales of land were small, and the fees paid into the land-offices 
 were small. But the Triplet and the Erwin loans were both repaid 
 with lands ; and the much-abused agencies at Mobile and New 
 Orleans, if they did nothing else, helped to sustain the credit of 
 Texan paper by redeeming treasury notes with land-script. 
 
 One characteristic of the revolutionary legislation of Texas was 
 frequent changes in its revenue system. One scheme failing, an 
 other was tried. But even before opportunity was afforded to try 
 some of the schemes, others were substituted. In some instances, 
 a customs act had hardly time to reach the more distant sea 
 ports, before it would be made to give place to another. In the 
 ten years Texas existed as an independent Republic, it had no 
 less than seven distinct tariffs. 
 
 Almost as many changes were made in their plans of internal 
 revenue; and the statesmen of Texas seem to have wondered 
 that they all produced nothing, or next to nothing. But they 
 ought not to have wondered. The most experienced financier 
 would have found it difficult to collect a revenue of any amount 
 from a community so small as the Texans, scattered over a large 
 territory of one to every three or four square miles, and whose 
 
142 THE FISCAL HISTORY OF TEXAS. 
 
 industry was liable to frequent interruptions from alarms of incur 
 sions by the Mexicans and the Indians. Even to assess taxes, in 
 such a community, was an undertaking of no small difficulty. 
 Much more difficult was it to collect them. Even in some cases 
 where the taxes were assessed, it was found necessary to remit 
 the payment of them, in whole counties, owing to what they had 
 suifered from incursions of the enemy. 
 
 In most countries of Europe and in the United States, the col 
 lection of taxes goes on with the regularity of clock-work; but 
 this is the result of long years of laborious preparation. When 
 the Governments of Pennsylvania and of Maryland were com 
 pelled, owing to the breaking of the banks, to suspend the pay 
 ment of interest on their public debts, or pay only in inconvertible 
 paper, they found that new systems of internal revenue were neces 
 sary. But several years elapsed before they could bring their 
 new systems into successful operation, and thus re-establish their 
 credit. 
 
 Another marked feature in Texas revolutionary legislation was 
 frequent changes of the public tender. "Your father hath de 
 ceived me, and hath changed my wages ten times," said Jacob to 
 the sons of Laban. An equally strong complaint might have been 
 made by those who had dealings with the Texan Government. 
 These changes were so numerous that we cannot introduce them 
 into the text, and must refer the reader to the synopsis of them in 
 Appendix M. 
 
 All these changes of tender, changes in revenue laws, and all 
 the other particulars that have been pointed out in the fiscal sys 
 tem of Texas, were, it may be said, necessary, as growing out of 
 the state of the times, the people, and the country. In one sense 
 of the word, whatever occurs is necessary, that is, it is the neces 
 sary effect of some pre-existing cause. Whenever there is vice or 
 ignorance, there will be folly. The last is the necessary conse 
 quence of the two first. We pretend not to say that other men 
 would have done better than did those who had the control of 
 affairs in Texas. Nine men in ten would perhaps have done quite 
 as bad, and some worse. But what we affirm is that, under a 
 sound financial system (supposing it possible to have adopted it), 
 Texas might have come out of the contest with only one-twelfth 
 part of the debt she is now under a moral obligation to discharge. 
 
THE FISCAL HISTORY OF TEXAS. 143 
 
 If such a system had been adopted, there would have been eco 
 nomy in everything. No debts would then have been incurred 
 except for services and supplies indispensably necessary ; for then, 
 only in cases where they were indispensably necessary, would the 
 people of Texas have furnished the required supplies and services. 
 There would not then have been one officer for every ordinary sea 
 man in the Texan navy, and one officer for every soldier in the 
 Texan army. The wild-goose expedition to Santa Fe would never 
 have been undertaken, and that to Meir would have perished in 
 the brains of its projector. A conciliatory policy towards the 
 Indians would have been adopted, and they would have been made 
 friends instead of enemies. Let the people be made to feel imme 
 diately but a part of the burden which public expenditure imposes, 
 and that expenditure will be brought within moderate limits. But 
 let the weight of this burden be postponed, or let its nature be con 
 cealed from them by the issue of paper intended to pass as money, 
 and there will be no limit to the folly and extravagance of their 
 rulers, except such as is imposed by the depreciation of the paper. 
 
 Issues of paper intended to pass as money, and to which cur 
 rency is given by making them receivable for public dues, afford 
 so easy a way of relieving immediate embarrassments, that ma 
 nagers of fiscal concerns are under frequent temptations to resort 
 to them. But such temporary relief must, unless circumstances 
 are peculiar, increase subsequent embarrassments. 
 
 When a government issues small notes , intended to pass as 
 money, and makes them receivable for public dues, it takes the last 
 step downwards in public credit. It has then no efficient revenue. 
 All it then does by means of its collectors of customs, and its col 
 lectors of taxes, is to redeem part of its floating debt ; and this 
 very act of redemption renders necessary the creation of a new 
 floating debt of equal amount with that redeemed. 
 
 Such a government can no longer negotiate a stock loan with 
 advantage, for it has no longer a revenue in specie wherewith to 
 pay the interest. 
 
 . Nations who wish to borrow may learn wisdom from the British 
 Government. It has run in debt to the amount of four thousand 
 million dollars. It borrows on exchequer bills, or treasury notes, 
 as well as stocks ; but it always takes care that its exchequer bills 
 shall be for considerable amounts, and that they shall bear such a 
 
144 THE FISCAL HISTORY OF TEXAS. 
 
 
 
 rate of interest as will leave no inducement to the merchants to 
 pay them in for duties. It always has a revenue in something 
 distinct from its own paper, and thus has the means of supporting 
 its credit. 
 
 The only safe mode for the United States Government to bor 
 row is by means of stock loans of gold and silver, and treasury 
 notes of such denominations (never less than fifty dollars) as will 
 prevent their becoming a common circulating medium, and bearing 
 such a rate of interest as will make them eligible investments. If 
 these treasury notes are, in the aggregate, of any large amount, 
 provision should be made to exchange them for stocks of long date, 
 rather than attempt to redeem them by receiving them in payment 
 of customs and other dues. 
 
 For want of strict attention to these principles, the United States 
 Government was, in the war with Mexico, though that lasted but 
 a short time, and though it pressed but lightly on the real resources 
 of the country, brought into temporary though not serious embar 
 rassment. Owing to a rise in the rate of commercial interest, the 
 merchants found it to their advantage to pay in treasury notes, 
 rather than gold or silver. The result was that, in some of the 
 most important treasury offices, the amount of gold and silver was 
 so reduced as but slightly to exceed the outstanding drafts against 
 them. It was with difficulty that the daily expenditures were kept 
 down to a level with the daily receipts. At one time there was 
 even a talk of paying the salaries of the clerks in the departments 
 with treasury notes. Fortunately, this state of things was but of 
 short continuance. If it had lasted any time, it would have inju 
 riously affected the price of United States securities in the market, 
 and would have had an equally injurious effect on the negotiation 
 of permanent loans, had any at that time been necessary. 
 
 The British Government seldom has afloat less than seventy-five 
 million dollars in exchequer bills, and the amount frequently rises 
 to one hundred and fifty millions ; but when it finds the rate of 
 commercial interest rising, it raises the rate of interest on its ex 
 chequer bills. It thus prevents their being paid in for public dues, 
 and thus escapes those embarrassments to which the United States 
 Government has from time to time been subject. 
 
THE FISCAL HISTORY OF TEXAS. 145 
 
 CHAPTER XXIII. 
 
 PROCEEDINGS UNDER THE FIRST LEGISLATURE OF THE STATE OF 
 TEXAS: 1845-46. 
 
 Improved condition of fiscal affairs State constitution adopted Government of 
 the State ad interim Immediate benefits of annexation First meeting of the 
 Legislature Reports to the House and Senate in favor of ceding the public lands 
 to the United States, as a means of paying the public debt Scaling of the debt 
 recommended Its injustice Instances in which the Governments of England and 
 the United States have engaged to pay more than they received Texas borrowed 
 on good terms, all circumstances considered Men who have bought Texan 
 securities might have done better by other investments. 
 
 BY the time annexation was effected, Texas may, in one sense, 
 be said to have worked through her pecuniary difficulties. She 
 had, indeed, a heavy public debt hanging over her ; but, as she had 
 for the three preceding years given over all attempts to pay either 
 principal or interest, it caused her no immediate perplexity. 
 
 For the three years ending September 30, 1844, her expendi 
 tures were $511,083, equal to $170,361 a year. The amount was 
 small; but, small as it was, it exceeded the aggregate of the receipts, 
 in these three years, in the sum of $44,398 58. 
 
 In the fourteen months intervening between November 1, 1844, 
 and January 1, 1846, her receipts amounted to $321,432 43, and 
 then, for the first time in her history, did the revenue of Texas exceed 
 her expenditure. The surplus was, indeed, not large, but any sur 
 plus was remarkable. 
 
 That she had such surplus was owing to her retaining the cus 
 tom-house revenues till October 1, 1845, or for three months after 
 her Convention had accepted the terms of annexation offered by 
 the United States. 
 
 This Convention, as has been stated in a previous chapter, 
 assented, on the 4th of July, 1845, to the term of annexation. 
 They also adopted a constitution for the State of Texas, which 
 was submitted to and approved by the people on the second Mon 
 day in October, 1845. But the new State Government did not 
 10 
 
146 THE FISCAL HISTORY OF TEXAS. 
 
 fairly commence till February, 1846, when the first Legislature 
 assembled. 
 
 There was thus, for several months, a kind of government ad 
 interim, and this was favorable to Texas, as, though protected in 
 that time by the United States forces, she still derived a revenue 
 from her import duties. This advantage did not cease with the 
 year, as the arrears of the customs yielded her a net revenue of 
 fifty-one thousand two hundred and six dollars and thirteen cents, 
 between the 19th of February, 1846, and the 31st of December, 
 1847, and some small sums in subsequent years. The precise 
 time when the United States Customs acts took effect in Texas 
 is yet to be decided by the United States courts. 
 
 The benefits of annexation were felt immediately in increased 
 immigration, and in the expenditures made by the United States 
 Government for purposes of defence. The war with Mexico was, 
 in a pecuniary point of view, of great advantage to Texas. Her 
 citizens could not, indeed, supply any large amount of provisions 
 to the army or the navy, but the transportation of troops and 
 stores was to them great gain. 
 
 The first Legislature met at Austin February 16, 1846, and the 
 subject of the public debt early engaged its attention. A report 
 by a select committee appears to have been made March 1, though 
 it was not read till April 1. A part of this we shall extract: 
 
 " The committee to whom was referred the resolution of the House to 
 inquire into the expediency of ceding the public lands to the United States, 
 for a just equivalent, for the purpose of providing means for the discharge 
 of the public debt, and to inquire into the propriety of classifying and 
 defining the debt, and of organizing a board to ascertain and adjudicate 
 upon the same, having considered each proposition, present the following 
 report : 
 
 rt lt is now more than ten years since Texas achieved and established her 
 independence by a successful revolution. When she was driven into that 
 revolution by the oppression of the Mexican Government, her population 
 was extremely small, scattered over a widely extended territory, with little 
 wealth, few sources of taxation, and, as a consequence, but ill able to pro 
 cure the means to support a government, and sustain the military operations 
 which the defence of the country demanded. The military service of the 
 country diverting so large a proportion of the population from the industrial 
 avocations of life, rendered it impossible for the government to draw any 
 adequate revenues from its own population. In this state of things, many 
 of the ardent friends of Texan independence, at home and abroad, stepped 
 forward and advanced their money for the relief of the urgent wants of the 
 country, at a time when doubt hung over the result of the contest. 
 
THE FISCAL HISTORY OF TEXAS. 147 
 
 "Texas came triumphantly out of the struggle, with less loss of blood 
 and treasure than has ever attended a revolution of as much magnitude in 
 the annals of history; but yet it has entailed upon her a considerable debt, 
 which is strongly recommended to our sense of justice and honor for the 
 earliest practicable payment. Your committee are confident the people of 
 Texas feel keenly the weight of this obligation, and are anxious to meet it, 
 although most revolutionary governments have been singularly disregardful 
 of debts contracted under similar circumstances. Unfortunately, how 
 ever, for Texas, owing to the peculiar condition of her past public affairs, 
 her population has not increased with the rapidity which might have been 
 anticipated from the salubrity of her climate and the fertility of her soil. 
 Her resources and ability for raising revenue from direct taxation cannot, 
 for many years to come, exceed the urgent and indispensable wants of her 
 domestic administration. Nor can it be denied that annexation, however 
 important and advantageous to this country in other respects, has, by de 
 stroying the revenue arising from the customs, taken from us a growing 
 source of revenue, which might, in a short time, have afforded efficient means 
 of providing for the public creditors. However strong, therefore, may be 
 the desire of the country to provide for its creditors, it has no ability of 
 doing so except through the means of the public lands. They can be made 
 available for that purpose only by ceding them to the Government of the 
 United States, in such a manner as to realize the money, or cash securities, 
 or by making them the bases of land-script, to be located and surveyed by 
 the public creditor at his own expense. For many reasons, the committee 
 think the former course will prove the most advantageous both for the Go 
 vernment of the United States and the people of Texas." 
 
 The committee then state that Texas has not even the means of 
 surveying these lands, the cost of which would be $500,000, and 
 give a variety of reasons, political and pecuniary, to show that it 
 would be to the advantage of the Federal Government to purchase 
 them. But if the United States should not purchase them, they 
 recommend that the public creditors 
 
 " Should be called upon to exchange their securities and evidences of 
 debt for land-script, as the only means which the State would have to pay 
 her public debt. And although such a measure would fall far short of the 
 wish of Texas to protect her creditors, and would doubtless occasion much 
 injustice and suffering in many instances, yet she would appeal to the civil 
 ized world, that she had performed all in her power to redeem her public 
 engagements, and maintain her national faith." 
 
 ***>K**^* 
 
 "Texas does not ask the United States to assume her public debt. She 
 proposes, it is true, with the proceeds of such sale, honestly and faithfully 
 to pay the debt, and pledges herself to that effect; but the two propositions 
 are independent and distinct. Over the last, neither the agency nor control 
 of the United States is invoked. Texas will determine what her debt is, 
 and to whom it is due, and the proceeds of the land with which she pays 
 it is the property of Texas, and not of the United States, and must pass to 
 the treasury of the former, if no creditor should appear. . 
 
148 THE FISCAL HISTORY OF TEXAS. 
 
 Thus far, no sentiment was uttered but such as must be approved 
 by the reader. The debt was honorably admitted to be due, and 
 every disposition evinced to pay it, so far as it was possible for 
 Texas to accomplish this object with such means as she possessed, 
 or could procure by means of a sale of her lands to the United 
 States. But the residue of the report shows that the public mind 
 in Texas had by this time become familiarized with the idea of 
 repudiation, first brought forward by Mr. Secretary Chalmers, 
 under the form of scaling the interest : 
 
 "2. The ascertainment and classification of the public debt. The fact 
 that the debt was contracted during a revolutionary struggle constitutes no 
 reason, in the opinion of the committee, why we should not pay it in honesty 
 and good faith. They, nevertheless, think that she should be bound to 
 return to the public creditors only what, according to just average, they 
 paid for her securities, with the rate of interest stipulated in the bond, or 
 other evidence of debt ; they have endeavored to place the scheme of classi 
 fication on the broad basis of paying back with interest to every man every 
 dollar advanced to her service or invested in the faith of her securities. 
 They have made as near an approximation to truth and justice as so com 
 plicated a subject was susceptible of; but that there may occur some cases 
 of individual hardship in carrying out any method of classification, they can 
 not doubt." 
 
 Here it appears that the committee proposed that Texas should 
 pay, not what she had promised to pay, but what she had, accord 
 ing to their estimate, actually received. It was a pity this was 
 not understood at first, for then she would have received nothing. 
 No man would have given fifty cents, twenty, or even ten cents in 
 the dollar for her paper if he had clearly understood that, after 
 waiting an indefinite time, and with great uncertainty, he should 
 ultimately receive no more than he gave. If Texas meant, when 
 she issued her treasury notes and other obligations, to pay no more 
 than one-half, one-fourth, or one-fifth of their face value, she ought 
 to have said so. Then nobody would have lent to her. 
 
 What is called "interest" is made up of two distinct items, 
 "rent or usage," and "insurance." Just in proportion as the 
 risk of non-payment increases, does the rate of insurance rise. 
 This shows itself, in the case of negotiable securities, in the ratio 
 which the price offered bears to their face value. As Texas con 
 tinued to issue her promises to pay, they fell in value, because 
 every addition she made to her outstanding obligations diminished 
 the chances of ultimate repayment. Hence her securities fell 
 
THE FISCAL HISTORY OF TEXAS. 149 
 
 from par to fifty cents on the dollar, to thirty cents, to twenty 
 cents, to sixteen cents. 
 
 With just as much reason might a merchant, having insured a 
 ship at sea in a stormy time, and on a dangerous coast, afterwards 
 refuse to pay the insurance when the ship is brought safely into 
 port, as Texas now refuse to pay the insurance she engaged to give 
 to those who, in an " exceedingly dark and gloomy period," risked 
 their all in her securities. 
 
 Admit the principle which Texas has adopted, and it strikes a 
 blow at the very foundation of public credit. No government 
 could then borrow except under the most favorable circumstances, 
 for it is only under such circumstances that governments receive 
 as much as they promise to give. 
 
 The rate of commercial interest is sometimes one or two per 
 cent, a month. Then a certificate of public stock for $100 is 
 worth as an investment for immediate income no more than $25 or 
 $50. If public stocks bring more in such times, it is because they 
 are regarded as permanent investments which will yield a fixed 
 income when the rate of commercial interest falls. 
 
 In addition to fluctuations in the value of public securities 
 caused by fluctuations in the rate of commercial interest, there 
 are others caused by changes in the prospective necessity of 
 governments to borrow, and their prospective ability to pay what 
 they owe. All these causes combined cause public securities to 
 vary in price just as sugar and coffee vary. They are, in fact, 
 merchandise subject to like laws of supply and demand with other 
 merchandise. If, then, when, from one or more of those causes, 
 these securities are low in the market, a government is under the 
 necessity of issuing more, it must expect to receive for them less 
 than it promises to give. 
 
 The histories of all civilized countries afford abundant illustra 
 tions of these truths. 
 
 According to Dr. Hamilton, the author of An Inquiry into the 
 Public Debt of Great Britain, the British Government, between 
 the beginning of 1793 and the close of 1812, issued certificates 
 to the amount of 573,781,887 pounds sterling, for which it re 
 ceived only 384,616,705 pounds. For every bond of 1000 pounds, 
 it received only about 670. In other words, it issued stock to 
 the amount of about $2,865,000,000, and received in return the 
 
150 THE FISCAL HISTORY OF TEXAS. 
 
 equivalent of only $1,945,000,000. The difference in the value 
 it received and that it promised to give was $945,000,000 more 
 than seventy-four times as much as the gross debt of Texas. 
 
 For stocks of the amount of 259,215,875 pounds sterling 
 (included in the total above given), it received only 158,658,000 
 pounds, being at the rate of 611 pounds for every certificate for 
 1000 pounds. 
 
 In the year 1798, the same government borrowed 15,000,000 
 pounds sterling, for which it had to issue stocks to the amount of 
 30,000,000. In other words, it received but fifty cents in the dol 
 lar on the amount of its certificates. 
 
 A still stronger case than this occurred in the year 1797, when 
 the British Government negotiated a loan for which it had to issue 
 226 pounds 10 shillings in stock for every 100 pounds it received; 
 that is, it got but forty-four cents and a fraction for every dollar 
 expressed on the face of its obligations. 
 
 In the year 1813, the same government negotiated a loan for 
 nearly $200,000,000, for which it got apparently about fifty-six 
 cents in the dollar ; but, as the whole amount was received in bank 
 paper, then at a depreciation of about twenty-five per cent., " the 
 actual par value which was realized" was less than forty-four cents 
 in the dollar. 
 
 If the principles adopted by Texas are correct, the British 
 Government would, especially when we take into consideration the 
 fact that many of its loans were negotiated in depreciated bank 
 currency, be justifiable in repudiating two-thirds of its debt. 
 
 In the year 1813, the United States Government borrowed about 
 fifteen million dollars, for twelve millions of which stock was issued 
 at the rate of one hundred and twenty-five dollars for every one 
 hundred paid in. As much of this loan was received in depreciated 
 paper, the Treasury Department did not realize more than seven 
 hundred dollars, perhaps not more than six hundred dollars, for 
 every one thousand dollar certificate. 
 
 In the last annual report which Mr. Walker made, as Secretary 
 of the Treasury, is the following passage: 
 
 " By the report of the Committee of Ways and Means, of the House of 
 Representatives of Congress, of the 30th of April, 1830, it appears that of 
 the loans of the war of 1812, for eighty millions of stocks and treasury 
 notes, the government obtained but thirty-four inillions ; leaving a loss of 
 forty-six millions on its transactions." 
 
THE FISCAL HISTORY OF TEXAS. 151 
 
 According to this statement, the American Government realized 
 but forty-two cents and a half in the dollar on its bonds and trea 
 sury notes. On Texan principles, it would have been justifiable in 
 repudiating more than one-half of its debts; but it acknowledged 
 no such principles, and paid to the uttermost farthing what it 
 owed. 
 
 Agreeably to the report of the auditorial board of Texas, that 
 republic realized fifty-five cents, less a fraction, in the dollar, on 
 the whole amount of its debts. It thus did much better than did 
 either the British Government in the wars of the French Revolu 
 tion, or the United States Government in the war of 1812-14. 
 
 The truth is that Texas did much better than she had any right 
 to expect, and much better than she could possibly have done if 
 her creditors had had the remotest suspicion that their claims were 
 ultimately to be scaled down on the arbitrary principles she has 
 adopted. When the interest on public securities is not punctually 
 paid, they always decline in value. The British and the American 
 Governments were always punctual in the payment of interests ; 
 but the Texan Government never paid a dollar of interest except 
 in the way of other promises to pay. 
 
 All the causes we have mentioned as depressing the price of 
 stocks operated with combined influence on Texan securities. The 
 rate of commercial interest was high in Texas, and also in the 
 United States. The prospective demand of the Texan Government 
 for more money was great. Its prospective ability to pay was 
 small. Under these circumstances, he who gave sixteen cents in 
 the dollar for her securities gave more than they were worth, and 
 this is proved by the fact that they fell soon afterwards to ten, five, 
 and even two cents in the dollar. 
 
 Other proof may be given that he who received them from the 
 government at sixteen cents in the dollar did not make a very pro 
 fitable investment, even supposing the notes to be ultimately paid 
 in full, but supposing that payment deferred for fifteen years. 
 The commercial rate of interest in Texas was then very high, not 
 less than twelve per cent. Commercial profits could not then have 
 been less than twenty per cent. The gain which a merchant makes 
 in one year is an addition to his capital in the next. He thus, if 
 successful, increases his wealth in the ratio of compound interest. 
 
 Now, one hundred dollars invested in trade, at this rate of profit, 
 
152 THE FISCAL HISTORY OF TEXAS. 
 
 would, in fifteen years, amount to $1,719 48, while one hundred 
 dollars invested in treasury notes, bearing ten per cent, interest, 
 and supposing them bought at sixteen cents in the dollar, would, 
 in fifteen years, amount to only $1,562 50. But at the time we 
 are speaking of, the rate of interest in Texas was much nearer two 
 or three per cent, a month than twelve per cent, per annum ; and 
 the profits of trade were correspondingly high. Many a man might, 
 by investing his money in merchandise, have made as much in two 
 or three years as by investing in treasury notes at sixteen cents 
 in the dollar in fifteen years, even if these notes should be paid in 
 full. 
 
 Many a man, by investing his money in lands in Texas, might 
 have made more money than by investing them in treasury notes. 
 Lands could then be bought in Texas at ten and fifteen cents which 
 have since sold at five and ten dollars per acre. In this way a 
 hundred dollars invested in lands might have been made to pro 
 duce from $3,300 to $10,000. 
 
 Certain it is that many men in the United States have, out of 
 very small capitals, made in the last fifteen years very large for 
 tunes. But whether those who were so unfortunate as to make 
 investments in Texan securities would have lost or gained by in 
 vestments in other ways, is not the question. The question is, 
 whether Texas has a right to violate her contracts simply because 
 she did not receive two or three, or four or five times as much for 
 her notes and bonds as anybody would then have given. We main 
 tain that she has not. Her securities were sold in the open market. 
 She got full value for them. She got for them far more than any 
 cautious man ought to have been willing to give. And she is bound 
 to pay the full amount she promised to pay, for it was through the 
 most solemn promises to pay the full amount, and through them 
 only, that she got what she actually received. 
 
 Instances of repudiation have occurred both in Europe and 
 America ; but never on the ground assumed by Texas. Former 
 instances of repudiation have been, because the debts were con 
 tracted in violation of law or constitution ; because gross frauds 
 were perpetrated in the negotiation of loans ; or because the go 
 vernment was not able to meet its obligations. But Texas makes 
 none of these pleas. She repudiates simply because her commodi 
 ties, her promises to pay, did not, when she oifered them for sale 
 
THE FISCAL HISTORY OF TEXAS. 153 
 
 in open market, bring from two to five times as much as they were 
 worth. 
 
 On the 24th of March, a committee of the Senate made a report 
 in favor of selling the public lands to the United States. It was 
 similar in tenor to that read to the House : 
 
 " They deem it is now the most important object to be consummated by 
 the State of Texas, the adjustment and payment of the debt contracted by 
 and under the Government of the Republic of Texas ; a measure necessary 
 for the redemption of plighted faith, from which no people should feel 
 themselves relieved by change of government, and necessary in order that 
 justice may be administered to those holding claims against the Republic 
 of Texas ; many of whom have rendered timely and essential services at an 
 important crisis/ 
 
 All this is very good. But in what, in the opinion of the com 
 mittee, " the administration of justice consisted," and what was 
 necessary for " the redemption of plighted faith, from which no 
 people should be released," will be seen in that which follows : 
 
 " Nevertheless, your committee are clearly of opinion that there should 
 be a legislative classification of all debts against the Republic of Texas ; 
 and to each should be awarded such relief and payment as is due, according 
 to the merits of each creditor for your committee cannot consent that the 
 parties who have advanced cash and important services to Texas shall be 
 placed on equal footing with those who hold the liabilities of the Republic 
 of Texas, for which they have paid not more than twenty cents in the 
 dollar, and for which Texas received perhaps a less amount, as it is noto 
 rious and universally admitted that a great portion of the liabilities now in 
 circulation were issued and paid out at about sixteen cents in the dollar." 
 
 The committee reported u An act to Classify the Liabilities of 
 the Republic of Texas," in which a distinction was made between 
 original holders of claims and others. And another, entitled 
 " An act for the Discharge of the Public Debt of the Republic of 
 Texas," on the scaling principle supported by the House com 
 mittee. 
 
 This was not the first time in the legislation of Texas that an 
 attempt was made to draw a distinction between original holders 
 of claims and those to whom they might be transferred. The 
 reasons for such a distinction may, at first glance, seem plausible, 
 but they are, in reality, contrary to all the sound principles of 
 finance, and also of natural justice. The obligation to pay a debt 
 is not in the least diminished by the evidence thereof changing 
 owners. If a note or a bond issued by an individual, a bank, or 
 a government, passes through five hundred hands, not one cent of 
 
154 THE FISCAL HISTORY OF TEXAS. 
 
 the amount for which it has been given is thereby discharged. 
 The obligation to pay the full amount is as complete when it is in 
 the hands of the last holder as when it was in the hands of the 
 first. 
 
 Negotiable securities owe much of their value to the facility 
 with which they can be transferred. Few men would be willing 
 to receive treasury notes, if it should be made a condition that 
 they should be receivable for public dues, or payable in full to 
 those only to whom they were originally issued. Still fewer would 
 be willing to purchase stocks having many years to run, if it were 
 made a condition that a deduction should be made from the annual 
 interest, and ultimately from the principal, if the demand were 
 made by any other than the original holder. But men are now 
 willing to purchase both treasury notes and stocks, because they 
 know that, when it is no longer convenient to hold them as invest 
 ments, they can transfer their claim to others at its full value, what 
 ever that value may be in the market. 
 
 If an individual, a bank, or a government, does, by refusal or 
 delay to pay interest or principal as agreed on, make it necessary 
 for the original or any other holder of a note or a bond to dispose 
 of it to a disadvantage, he has a claim, in equity, for damages 
 against the defaulting individual, bank, or government. On these 
 principles, an immense number of suits might be brought against 
 Texas, if it were possible to sue a sovereign State. But if all these 
 damages should be paid in full, that would not in the least diminish 
 the obligation to pay the original debt. Those who got the evi 
 dences at second or third hand paid for them what was then their 
 full value. 
 
 To their transferable nature, the Texan securities owed much of 
 the little value they at times possessed. And many an original 
 claimant derived more advantage from parting with them, even at 
 less than he gave for them, than he would have derived from hold 
 ing them. A government security for one hundred dollars, bear 
 ing no interest (and such were the Texan "red backs"), and not 
 paid till sixteen years after date, is, in a country where interest is 
 at the rate of twelve per cent., worth, money in hand, but a frac 
 tion more than sixteen cents in a dollar. 
 
 But mere figures will not show all the disadvantages that the 
 original claimants under the Texan. Government would have sus- 
 
THE FISCAL HISTORY OF TEXAS. 155 
 
 tained, if they could not have disposed of their evidences of govern 
 ment debt even, in some instances, for much less than they cost 
 them. The neglect to pay a single note when it is due may break 
 up what might otherwise be a long train of profitable mercantile 
 operations. The inability to procure a few farming implements 
 may cause hundreds of acres to lie desolate which otherwise might 
 have been successfully cultivated. Nay, many of the original hold 
 ers of claims might have seen their families starving before them, 
 if they could not have disposed of those claims to second and third 
 parties. 
 
 The merchants of Texas received the evidences of public debt 
 from the original holders, and disposed of them in the United 
 States. This enabled them to replenish their stock of goods, and 
 thus grant supplies to the planters and farmers. Through all the 
 first years of their revolutionary struggle, the Texans were fed and 
 clothed by means of transfers of the evidences of the public debt 
 from the hands of the original holders. Regarded in this point 
 of view, as a merchant of Houston once remarked to us, no coun 
 try ever derived more advantage from its public debt than did 
 Texas. 
 
 But, we repeat it, whether this advantage was great or small 
 is not properly the question. The question is, whether Texas 
 shall pay in full the debts she over and over solemnly promised to 
 pay debts which she never talked of scaling till her credit was 
 sunk so low that she could borrow no more. We contend that she 
 is morally bound to pay to the uttermost farthing what she con 
 tracted to pay, no matter in whose hands the evidences of the 
 debt are now found, and that, if she will not pay, she must share 
 the disgrace that properly attaches to individuals, corporations, 
 and governments that can pay their debts, and will not. 
 
156 THE FISCAL HISTORY OF TEXAS. 
 
 CHAPTER XXIV. 
 
 PROCEEDINGS UNDER THE SECOND LEGISLATURE: 1847-48. 
 
 The scaling policy sustained The fact that the debt is due to persons abroad 
 urged as one reason why it should not be paid in full Act " to pro vide for ascer 
 taining the debt of the late Republic of Texas" Creditors ordered to bring in 
 their claims to be scaled. 
 
 THE first Legislature of the State of Texas took the stand that 
 a distinction should be made between original holders and as 
 signees of the evidences of public debt, and that the gross amount 
 should be scaled down one-half. The second Legislature, which 
 assembled at Austin December 13, 1847, maintained the same 
 stand. 
 
 On the 29th of December, the Governor, George T. Wood, sent 
 in a message, in which he recommended a sale of public land to 
 the United States, and the payment of the public debt by scaling, 
 as had been urged by the committees of the previous legislature. 
 
 " As to our means of payment, our large and valuable public domain is 
 the only ready resource we have. 
 
 " Our debt must be paid. The honor of the State must stand without 
 blemish. We can never expect to attain a high and permanent prosperity 
 until it is done; and the consummation of a purpose so noble calls for united 
 and energetic action." 
 
 Scaling a debt, however, as recommended by Governor Wood, 
 is not paying it. It is at best but compromising it. Necessity 
 may induce creditors to accept terms by which they forego one- 
 half of their claims ; but if any State forces such a compromise on 
 its creditors, "its honor cannot stand without blemish." 
 
 Texas, it may be admitted, has power, as a sovereign State, to 
 determine, in the first instance, the amount of her debt, and to 
 whom it is due ; but she has no moral right to do wrong. As there 
 is no Supreme Court before which her acts can be brought for 
 adjudication, her creditors have no legal appeal from even her 
 most unrighteous decision. In the exercise of her sovereignty, 
 she can repudiate the whole of her debt as readily as one-half of 
 
THE FISCAL HISTORY OF TEXAS. 157 
 
 it. Her political power in the premises is not disputed. But if 
 she thus violates all the principles of natural justice and the laws 
 of nations, she cannot expect her " honor to stand without 
 blemish." 
 
 Her creditors will have a right to complain, although their op 
 pressor may be a sovereign State, As one of her great men said, 
 in an early period of her history, " Nations, as well as individuals, 
 are amenable for their acts to the general opinion of mankind;" 
 and Texas will sensibly feel this, if she persists in the violation of 
 her plighted faith. 
 
 January 24th, 1848, a special committee made a report, in 
 which they said: 
 
 " It is, in their opinion, impossible to adopt any rule for the graduation 
 of the liabilities of the late Republic, without doing a seeming injustice to 
 a few individuals. * * * From these considerations, your committee 
 have discarded the idea of even attempting to do all justice in a pecuniary 
 way." 
 
 From this, it appears that the Texan authorities, from the very 
 moment in which they began to apply their scaling principles, 
 found it impossible to do even what they esteemed "justice to all," 
 and when the report of the auditor and comptroller comes under 
 review, it will be found that it is impossible on such principles to 
 do justice to any. 
 
 " Your committee are fully of opinion that, of the audited evidences of 
 indebtedness, not one-hundredth part are now in the hands of those to whom 
 they were originally paid out by the government, but have been in circula 
 tion throughout the State ; and further, that it is probable that nine-tenths 
 of its liabilities have found their way out of the State, and have been in 
 circulation in other States, subject to the caprice of brokers and others, 
 whose profession is to take advantage of the necessities and misfortunes of 
 individuals, as well as nations, at various rates of discount. Your commit 
 tee are therefore clearly of opinion that to graduate our liabilities, under 
 these circumstances, will violate no principles of moral rectitude, but on 
 the contrary is dictated by the soundest principles of justice, as well to the 
 citizens of the country as to the creditor." 
 
 The reader will recollect that, as long as there was any necessity 
 for Texas to borrow, the fact that great part of the debt was held 
 in other States was regarded as an advantage ; but now, when the 
 time comes for payment, it is conceived it will " violate no prin 
 ciple of moral rectitude" to cut down the debt one-half, inasmuch 
 as u nine-tenths of the liabilities have found their way out of the 
 State" ! 
 
158 THE FISCAL HISTORY OF TEXAS. 
 
 The vulgar prejudice against stock and exchange brokers is, 
 moreover, here embodied in a legislative report. It may be that 
 some of them " take advantage of the necessities and misfortunes 
 of individuals;" but if so, they in this only resemble some who are 
 engaged in other branches of business. If there were no regular 
 dealers in stocks, foreign bank-notes, and other negotiable secur 
 ities, the fluctuations in the prices of these articles would be much 
 greater than they are at present. The brokers in the United 
 States did much more to prevent than to cause fluctuations in the 
 price of " red backs" and other Texan vendibles. 
 
 " There is another difference between your committee and the comptrol 
 ler, and that is in regard to interest on the promissory notes that were not 
 intended to draw interest when they were issued. Your committee cannot 
 consent to allow interest on these notes, as the holders or receivers had no 
 right to, and consequently could not have expected interest on them. They 
 were issued under the provisions of a law which expressly stated that they 
 should not draw interest." 
 
 But they were not paid when they fell due, and, therefore, 
 according to mercantile usage, interest on them commenced on the 
 very day on which they were dishonored. They were, moreover, 
 issued under a pledge that they should be received in payment of 
 customs. In violation of its public faith, the Texan Government 
 afterwards refused to receive them, and thus deprived these notes 
 of much of the value they originally possessed. If Texas means 
 to do justice to her creditors, she must allow interest on her "red 
 backs." 
 
 In conformity with the principles expressed in the documents 
 from which we have made quotations, an act was passed " to pro 
 vide for ascertaining the debt of the late Republic of Texas." 
 This divided the debt into three classes, including, in the first 
 class, all claims which had been " audited or otherwise ascer 
 tained" at the time the law was passed; in the second class, 
 " claims sufficiently authenticated to admit them to audit ;" and, 
 in the third class, claims which were known to exist, but which 
 were not then " sufficiently authenticated to authorize their being 
 audited under the laws of the late Republic." This law is of so 
 much importance that we must give it at length. 
 
 " SECTION 1. Be it enacted by the Legislature of the Stale of Texas, 
 That the auditor and comptroller of public accounts, as soon as practicable 
 after the passage of this act, shall cause six months notice to be given, 
 
THE FISCAL HISTORY OF TEXAS. 159 
 
 by publication in some newspaper published weekly in the city of Austin, 
 New Orleans, Washington City, and New York, requiring all persons hav 
 ing any claim or demand for money against the late Republic of Texas, to 
 present the same to the auditor and comptroller of public accounts on or 
 before the second Monday in November, 1849; and all claims that shall not 
 be presented on or before that time shall be postponed. 
 
 " SECTION 2. Be it further enacted, That it shall be the duty of the 
 auditor and comptroller jointly to receipt, under their seals of office, for 
 all claims presented to them, setting forth the par value thereof, at the 
 time the same accrued or were issued ; the name of the person to whom 
 the debt accrued, the date and amount thereof. The auditor and comp 
 troller shall each keep a correct list, in books kept for that purpose, sepa 
 rately. First, the audited or ascertained claims, such as stock bonds, trea 
 sury notes, military script, or any other audited or ascertained claim. 
 Second, all claims with sufficient evidence and vouchers to authorize them 
 to audit, under the late Republic of Texas. Thirdly, such claims as are 
 not sufficiently authenticated by vouchers. It is hereby made the duty of 
 the auditor and comptroller to report to the next session of the Legislature 
 for its action. 
 
 "SECTION 3. Be it further enacted, That it shall be the duty of the 
 comptroller and auditor jointly to report to the next biennial session of the 
 Legislature, for final adjustment, the whole amount and character of the 
 public debt ascertained, according to the provisions of this act, together with 
 such suggestions concerning the same as they may deem just and proper \ 
 and they shall likewise report, semi-annually, from the first of May, 1848, 
 to the Governor, the amount and character of claims presented and filed in 
 their office; and it shall be the duty of the Governor to cause a synopsis of 
 the report to be printed in some newspaper at the seat of government in the 
 State. 
 
 " SECTION 4. Be it further enacted, That it shall be the duty of the 
 auditor and comptroller of public accounts to classify all claims presented 
 under the provisions of this act, reducing the same to the actual par value 
 which may have been realized by the late Republic, and may report such 
 further classification as they may deem best calculated to preserve the rights 
 of the State, and to do equity to the holders of the claims : and the classi 
 fication and rate of payment recommended by the auditor and comptroller 
 shall be subject to the revision, amendment, and ratification of the next 
 Legislature : and that this act take effect from and after its passage." 
 
 "Approved March 20, 1848." 
 
 Thus did Texas compel, or try to compel, her creditors to bring 
 in their claims to be scaled down to one-half, one-fourth, or one- 
 fifth of their original amount. Far different was the conduct of 
 the United States Government when, in 1791, it passed a law to 
 fund the revolutionary debt. So far was it from using compulsion, 
 that it expressly enacted that such of its creditors as were not f 
 willing to accept the terms offered should be paid the same rate 
 of interest as those that did accept. 
 
160 THE FISCAL HISTORY OF TEXAS. 
 
 An attempt has been made to justify this proceeding of Texas, 
 under the plea that a sovereign State has " a right to define its 
 debts." This cannot be either disputed or denied. But the debts 
 of Texas were sufficiently " defined in the laws under which they 
 were incurred, and the acknowledgments issued to the creditors. 
 Nothing can possibly be more "definite" than Texas s promise to 
 pay dollars as expressed in her treasury notes, bonds, certificates 
 of stock, and audited paper. In some cases, she " defined" the 
 same debt as many as three times. She first passed the debts 
 through regular audit, and granted drafts or certificates acknow 
 ledging the amount due to each creditor. Then she redeemed 
 those drafts by giving in lieu of them treasury notes of the same 
 amount. Then, in order to get these floating liabilities out of the 
 hands of the holders, she funded them at par. Thus she, in three 
 different forms, at three different times, acknowledged the amount 
 due, which was, we think, " defining" them with sufficient exact 
 ness for all practical purposes. After this, to call in these evi 
 dences of debt, and scale them down to a small part of their ori 
 ginal amount, and then sustain this proceeding under the pretext 
 that Texas has " a right to define her debt" "by her municipal 
 regulations" is to be very delicate in the use of language. The 
 true name of the thing is "repudiation," and they who support 
 the principle ought not to be ashamed of the word. 
 
THE FISCAL HISTORY OF TEXAS. 161 
 
 CHAPTER XXV. 
 
 PROCEEDINGS UNDER THE THIRD LEGISLATURE : 1849-50. 
 
 Governor Wood recommends that land be given to the public creditors Reasons 
 why Texas had no longer a deep interest in sustaining her credit Hardships 
 endured by civil officers, by soldiers, and others Distinction between their cases 
 and that of contract creditors Auditor and comptroller make a report scaling 
 down the claims of creditors to half their original amount Time prolonged in 
 which audited claims might be scaled without being "barred" Audited claims 
 made exchangeable for land-script at fifty cents an acre Act declaring that all 
 liabilities of the Republic shall cease to bear interest after July 1, 1850. 
 
 THE third Legislature met at Austin November 5, 1849, and on 
 the next day Governor Wood sent them a message, some passages 
 of which will be interesting to the reader : 
 
 " The subject of our public debt is one of great importance, and in our 
 situation so difficult as to forbid the hope that any action which may be 
 taken upon the subject will be satisfactory to all parties, unless the United 
 States should purchase a portion of our domain. 
 
 " Our only resource for the payment of the debt is our public lands. 
 
 fl A large portion of our public domain lies remote from, and is incon 
 veniently situated with reference to, the present settled and organized 
 portion of our State, and of consequence is rendered of far less value and 
 importance to the State than it is intrinsically worth. This territory would 
 seem to be of great value and importance to the United States, viewed with 
 reference to the purposes which it would serve that government in her 
 settling her Indians, and in acquiring a complete jurisdiction over all her 
 Indian relations, now rendered so difficult and complicated, by the fact that 
 she has no jurisdiction over the soil. If, therefore, the United States 
 Government should be disposed to purchase this territory for a fair consider 
 ation, I should conceive it to be the interest of the State so to dispose of it. 
 
 " The State has no disposition to evade the payment of her debt, and 
 would sacrifice much rather than that history should record such a reproach 
 against her. Nevertheless, it is not to be expected, nor is it our duty to 
 sacrifice too much to this end. The only fund to which reasonable men 
 ever looked for the payment of this debt was her public lands. To have ex 
 pected twenty thousand tax-payers to discharge it from taxation on their 
 own industry and wealth was an absurdity too gross to have been ever enter 
 tained. 
 
 11 It is conceived that, if Texas makes proper provision by which the 
 holders of her debt can convert it into land at fair rates, the State will not 
 11 
 
162 THE FISCAL HISTORY OF TEXAS. 
 
 have failed in furnishing to the world the highest evidence of her disposition 
 to pay it." 
 
 Let it be that " the only fund to which reasonable men [in Texas] 
 ever looked for the payment of this debt was her public lands," 
 such of her creditors as resided without the bounds of the Republic 
 could not be supposed to be equally knowing. The Texan Go 
 vernment promised to pay them money, and they had a right to 
 expect what was promised.. Whether the money was procured by 
 sale of lands, or by taxation, was to them matter of indifference. 
 The calculations of the Texan Secretaries of the Treasury of the 
 overflowing revenue that was to be, were well adapted to bolster 
 up their hopes, and so were the expectations so confidently enter 
 tained that a loan would be negotiated in Europe. It was natural 
 to expect that a part of this money would be applied to redeeming 
 a portion of the floating debt, and paying the interest on the 
 funded. Even supposing the whole five millions used in founding 
 a national bank, as the said bank would have operated exclusively 
 on national funds, and been closely connected with the national 
 government, it could hardly have failed to have a favorable in 
 fluence, for a time at least, on the price of the public securities of 
 the Republic. 
 
 " The State," says Governor Wood, " has no disposition to evade 
 the payment of her debt." 
 
 By this he meant paying just such an amount, and in just such 
 form as the State might prescribe. 
 
 "And," he continued, " the State would sacrifice much rather 
 than that history should record such a reproach against her. Never 
 theless, it is not to be expected, nor is it our duty to sacrifice too 
 much to this end." 
 
 The "sacrifice" contemplated, if sacrifice it could be called, was 
 a very small one. If we are correctly informed, when the scaling 
 system was projected, it was intended to pay the public creditors 
 the reduced amount of their claims in lands at two dollars an acre, 
 when at that very time land-script was selling in the streets of 
 Austin at fifteen cents an acre. Had this scheme been carried 
 out, the owner of eight per cent, bonds would, after finding his 
 claim reduced to twenty cents in the dollar by the scaling process, 
 have next found himself paid, not in money, but in a commodity 
 worth not one-sixth the price at which he would have been com- 
 
THE FISCAL HISTORY OF TEXAS. 163 
 
 pelled to receive it. The owner of a bond for one hundred dollars 
 would then have been paid, not one hundred dollars in gold or sil 
 ver, but land-script for fifty acres of the market value of seven 
 dollars and fifty cents. 
 
 It may seem strange that a government which was always pro 
 fessing a desire honorably to fulfil its engagements should ever 
 have entertained such a project; but for the state of feeling which 
 then prevailed, various reasons may be given : 
 
 1. As Texas was no longer an independent Republic, she no 
 longer had a deep interest in sustaining her credit. If she had 
 remained an independent Republic, the inability to negotiate a loan 
 might, in some crises, have endangered her national existence. As 
 a member of the American Union, ability to borrow was no longer 
 necessary, though it might sometimes be convenient. The Federal 
 Government was bound to protect her against foreign foes, and 
 against attacks from the Indians. One of the Secretaries of the 
 Treasury, under the Republic, had made a proposition to scale 
 down, not the principal, but the interest. But it was not acted 
 upon by the Congress. No measures of this kind were ever taken 
 by the Government of the Republic. But in the very first Legisla 
 ture of the State, the scaling principle was adopted, and it has been 
 adhered to to this day. 
 
 2. At this time, the debtor interest was completely predominant 
 in Texas. Nine-tenths of the public liabilities, as was declared in 
 one of the legislative reports, were held beyond the bounds of the 
 State. Few, comparatively speaking, had a personal interest in 
 seeing these debts paid. Many had a personal interest in prevent 
 ing their being paid, as then they would have been compelled to 
 contribute their portion in the form of taxes. There was nobody to 
 plead the cause of the public creditors, as it ought to have been 
 pleaded, before either the Legislature or the people. He would 
 have been a bold man who had dared to stand up in defence of 
 their rights. If a candidate for public honors, he would, in an 
 election, have been beaten ten to one by his competitor. 
 
 3. The longer a debt remains unpaid, the weaker becomes the 
 sense of the moral obligation it imposes. A young widow will, in 
 the first burst of grief for her departed lord, order a costly monu 
 ment. If the stonecutter presents his bill in due season, he will 
 be paid. If he delays presenting it, he will be paid, or not paid, 
 
164 THE FISCAL HISTORY OF TEXAS. 
 
 according to circumstances. A clerk in the Treasury Department 
 was once summoned before the Secretary for not having discharged 
 certain personal liabilities. "What did you say to the Secretary ?" 
 asked a fellow-clerk. "I told him," replied the other, "that I 
 had no notion of bothering myself about those old debts." " That 
 is right," continued his friend; "you stick to that. Why should 
 you trouble yourself about your old debts ? It is quite enough that 
 you pay your new ones." 
 
 Independence of Mexico was fully achieved. Why should the 
 Texans concern themselves as to who paid for it ? If an old debt is 
 a very heavy one, such as it seems impossible, or almost impossible, 
 to pay, the less does it afflict the debtor, be that debtor an indi 
 vidual or a government. This was the precise case of the Texans. 
 At no time had they had the ability to pay, in money, one-tenth 
 part of what they owed. For years they had given over all at 
 tempts to pay, even in the indirect way of receiving their public 
 securities for customs and direct taxes. To ask them to pay their 
 public debt, according to contract, was, in their judgment, very 
 much like asking a man to pay a debt which had long been "barred 
 by the statute of limitations." 
 
 4. The creditors, both within the bounds of Texas and without 
 it, were so disheartened by the repeated violations of faith they 
 had experienced, that they seem to have made no vigorous efforts 
 in defence of their rights. Many of them appear to have been 
 willing to accept of almost anything by way of satisfaction of their 
 claims, even land-script, at two dollars an acre, when the market 
 value of the same was only fifteen cents an acre. 
 
 5. The chief reason, however, why public opinion took the direc 
 tion that the debt should be paid only in part was the notion that 
 all that morality, justice, and religion required was that the State 
 should give as much as she had received ; and that the obligation 
 to pay a debt diminished if the evidence of it had passed from the 
 original claimant. These notions took very firm possession of the 
 public mind in Texas, and they are, to this day, the chief obstacles 
 her creditors have to contend with. 
 
 "I was," said one gentleman, "a custom-house officer. My 
 salary was five dollars a day. I was paid in treasury notes. On 
 one occasion, I parted with such notes, of the face value of fifteen 
 dollars, for three cents on the dollar. Do you think that I will 
 
THE FISCAL HISTOKY OF TEXAS. 165 
 
 ever consent that the man in whose hands these notes may now 
 be found shall be paid fifteen dollars in full, when I received but 
 forty-five cents?" 
 
 The case of this gentleman, it must be admitted, is a hard one ; 
 and so is that of multitudes of others of the civil officers of Texas. 
 But the State made an express stipulation with them that, they 
 should receive their pay in treasury notes. In paying them in 
 this kind of paper, the State fulfilled its contract with them to the 
 letter. The treasury note itself was not a contract to pay them 
 especially, but any one into whose hands the notes might pass. If 
 they disposed of this contract to another for a small consideration, 
 they have no right to complain. It was their own fault, or, it may 
 be, their misfortune ; but, whether it was through fault or misfor 
 tune that they parted with it, that does not in the least affect the 
 validity of the claim. The man who bought a treasury note at 
 three cents on a dollar took on himself the risk of ultimate pay 
 ment, a risk which the original holder was not willing to undergo. 
 If, fifteen years afterwards, Texas has the ability to pay the note, 
 she ought to pay it, no matter in whose hands it may be, for such 
 is the contract. 
 
 Some of the speculators in Morus Multicaulis used to calculate 
 their losses, not by the amount of money they had actually sunk, 
 but by what they might have gained if they had sold their buds 
 and roots when the price was highest. The original holders of 
 Texan securities, who now oppose their payment, act on similar 
 principles. But they do not carry their principles far enough. If 
 they will take up the New York Price-Current, and calculate what 
 they might have gained by buying certain stocks when they were 
 at the lowest price, and selling them when they were at the high 
 est, they will discover that they have lost millions. 
 
 It is a most unreasonable thing in a man to be uttering his 
 lamentations because he sold his cotton in one year at six cents 
 a pound, when, if he had kept it only a few months, he might 
 have got ten cents; or to bewail his misfortune in having parted 
 with his flour at five dollars a barrel, when a year or two after 
 wards it rose to ten. So it is most unreasonable in the original 
 claimants against Texas to be regretting having parted with their 
 evidences of debt; and most unjust in them now to prevent pay- 
 
166 THE FISCAL HISTORY OF TEXAS. 
 
 ment being made to those who bought those evidences -when the 
 debts were regarded as desperate. 
 
 When the Legislature at Austin was discussing the propriety of 
 paying the public creditors, an old soldier made a speech outside 
 of the capitol, which electrified his audience. We regret that we 
 cannot give this speech verbatim. The substance of it was that 
 coming, on one occasion, to Austin, he parted with all the treasury 
 notes and other Texan securities he had received in pay of a long 
 term of military duty, in exchange for a little coffee, a little sugar, 
 and a calico gown for his wife and that a " scant pattern." At 
 that moment a cry was raised by a woman that her child had 
 been carried off by the Indians. He had still remaining his "head- 
 right," or claim as a settler to a league of land. On the impulse 
 of the moment, he gave his "head-right" to a bystander in ex 
 change for a Spanish pony. He pursued the Indians, and reco 
 vered the child. But he could no longer enumerate Texan securi 
 ties among his possessions. He concluded by saying that nothing 
 the Legislature could do by way of paying the public debt would 
 afford any relief to the old soldiers, as they had long since dis 
 posed of the evidence of their claims. 
 
 Not only the old soldiers and the civil officers, but all the inha 
 bitants of Texas have cause to complain of the losses they have 
 suffered from the folly of their revolutionary leaders, in conducting 
 the finances of the Republic on wrong principles, in removing the 
 seat of the government to the foot of the Cordilleras, and in pro 
 voking conflicts with the Indians for the purpose of extending the 
 area of land-speculations. But the Texan Government never 
 made a contract that it would refund to such of its population 
 as would follow it into the interior the additional price they 
 would have to pay for sugar, coffee, and other supplies, or the cost 
 of recovering such of their children as might be stolen by the 
 Indians. Neither did it contract to make good to the original 
 claimants the difference between the prices at which they received 
 evidences of the public debt, and the prices at which they might 
 part with them. 
 
 The case of the civil officers, old soldiers, and other inhabitants 
 of Texas is one of great hardship. That of the holders of the 
 notes, bonds, and other obligations of the Republic is one of posi 
 tive injustice. The latter are statute creditors. Regular con- 
 
THE FISCAL HISTORY OF TEXAS. 167 
 
 tracts have been entered into with them, and these must be ful 
 filled to the letter: otherwise Texas will infringe that provision of 
 the United States Constitution which declares that 
 
 " No State shall pass any law impairing the obligation of contracts." 
 
 If Texas has no political power to pass laws impairing the obli 
 gation of private contracts, she has no moral right to pass laws 
 impairing the obligation of her own contracts. 
 
 If she persists in her present course, she will also violate the 
 important principle, contained in the 16th Article of the Declara 
 tion of Rights, which formed part of her constitution as an inde 
 pendent Republic : 
 
 " No retrospective, or ex post facto law, or law impairing the obligation 
 of contracts, shall be made." 
 
 She will also violate the principles of that provision of her State 
 constitution which declares that 
 
 " No bill of attainder, ex post facto law, retroactive law, or any law 
 impairing the obligations of contracts, shall be made." 
 
 The contract debts of Texas stand against her in full, broad 
 daylight, supported by every principle of law, human and divine. 
 But political leaders in Texas had to address men situated like the 
 custom-house officer and the old soldier whose stories we have 
 given, and they had no difficulty in persuading them that paying 
 one-half, one-fourth, or one-fifth as much as the contract called 
 for was all that was required by justice, morality, and religion. If 
 these old custom-house officers, old soldiers, and others had retained 
 their original claims, they would have seen the matter in a very dif 
 ferent light. And if the political leaders had been as deeply inte 
 rested in Texan stocks as they were in Texan lands, their oratory 
 would have been of a diiferent complexion. 
 
 If an impartial observer should suppose the case to have been 
 simply that of " the Land-Speculators versus the Stock-Specu 
 lators," he would not err greatly. And when informed that the 
 land-speculating interest was to the stock-speculating interest as 
 one hundred to one, in both numbers and influence, he will have 
 no difficulty in discovering why the scaling system was adopted. 
 
 In conformity with the requisitions of the scaling act, the audi 
 tor and comptroller made a report, December 27, 1849, from 
 which it appeared that the creditors had, under the threat of for- 
 
168 THE FISCAL HISTORY OF TEXAS. 
 
 feiture which had been held out to them, brought in their claims 
 to the amount of about $7,000,000, and that these had been scaled 
 down to about $3,000,000. The Governor, P. H. Bell, accom 
 panied this report with a message (Jan. 1, 1850), in which he 
 stated that there was " a very large amount of outstanding lia 
 bilities not presented for audit, and justice would seem to demand 
 that the holders of these liabilities should not be excluded from 
 the benefits intended to be conferred by the passage of the act of 
 20th March, 1848." 
 
 In conformity with this recommendation, an act was passed, 
 February 8, 1850, extending the time for presenting claims to the 
 first Monday in September, 1851, and declaring that all claims 
 not presented at that time should be "barred." 
 
 On the llth of February, 1850, an act was passed by which 
 certificates of audited claims were made exchangeable for land- 
 script at the rate of fifty cents an acre. This was offering the 
 creditors much better terms than, we have been informed, it was 
 intended to offer them, when the scaling system was first pro 
 jected. 
 
 The same act contained a proviso 
 
 " That all liabilities of the late Republic of Texas, whether the same 
 have or have not been presented to the auditor and comptroller under the 
 provisions of the act" of March 20, 1848, "shall cease to draw interest 
 from and after the first day of July, 1850." 
 
 This was an arbitrary measure. A government that is prepared 
 to pay the principal of a treasury note or other obligation which 
 has arrived at maturity has a right to say that interest thereon 
 shall cease. But a government that has suffered its notes and 
 bonds to be dishonored has no right to say interest on them shall 
 cease till that day on which it is prepared to pay the principal in 
 full. 
 
THE FISCAL HISTORY OF TEXAS. 169 
 
 CHAPTER XXVI. 
 
 PROCEEDINGS AT FIRST SESSION OF THE THIRTY-FIRST CONGRESS OF 
 THE UNITED STATES: 1849-50. 
 
 Few, if any, of the creditors embrace the offer of land in payment of their claims 
 Reasons for this Difficulties about land-titles Change in the prospects of 
 Texas Motion of Mr. Benton in the United States Senate Motion of Mr. Clay 
 Extract from Mr. Clay s speech Motion of Mr. Pearce, of Maryland Extracts 
 from Mr. Pearce s speech Passage of the "Boundary Bill," or bill for drawing 
 the line between Texas and New Mexico, and for paying the creditors of Texas. 
 
 WE have noted the fact that the Legislature had, at its last ses 
 sion, passed an act authorizing the holders of audited claims to 
 exchange them for land-script at fifty cents an acre. Nothing 
 better can be hoped for from an insolvent debtor, when he cannot 
 pay in money, than to pay in kind, as well as he can ; and it re 
 mains for the creditor to determine whether he will accept such 
 offer, or wait for such better terms as the chapter of accidents may 
 afford. Few, if any, of the creditors of Texas accepted this offer. 
 The average value of all the lands in the State, subject to taxation, 
 was, in the year 1850, according to the comptroller s report, 
 sixty-six cents an acre. If the seated lands, with all the improve 
 ments on them, were worth only sixty-six cents an acre, fifty cents 
 was a high price for lands in a state of nature. The creditor, 
 after getting possession of the script, would have had to pay cer 
 tain office-fees before he could get legal possession of the land. 
 He might, indeed, retain his script ; but if he retained it too long, 
 all the best tracts might be taken up. 
 
 To most of the creditors of Texas, this offer was not very tempt 
 ing. The greater part of them resided at a great distance. From 
 New York to Austin, by the post-route, is twenty-five hundred 
 miles. Experience had shown that land-speculations, carried on 
 by non-residents, are very seldom profitable. Everything must 
 then be intrusted to agents, and the commission which can be 
 allowed them is seldom such as to interest them deeply in the 
 business. 
 
170 THE FISCAL HISTORY OF TEXAS. 
 
 After taxes on land have been paid regularly for years, the 
 whole may be forfeited by a simple oversight of the owner or the 
 agent, or it may be by some accident to the mail preventing the 
 arrival of a remittance in due season. In addition to this, as is 
 well known, the land of non-residents is a fair object of plunder to 
 all who live near it. 
 
 For United States land-script, there is a demand in the Northern 
 cities, because there is a constant flood of emigrants from New 
 England and the Middle States to the North- Western States. But 
 though New England and the Middle States will furnish to Texas 
 their full quotas of mechanical skill and mercantile capital, few 
 farmers from New England or Pennsylvania will migrate to that 
 distant region. Besides this, the script was a poor investment for 
 speculation, as Texas had, in satisfaction of soldiers and settlers 
 claims, and in other ways, issued so many patents as to supply all 
 the land wanted for cultivation for many years to come. 
 
 The public lands of the United States are regularly divided into 
 sections of six hundred and forty acres, and these again into half 
 and quarter sections and eighths. There is no dispute here about 
 metes and bounds, and the title which a patent confers is incon 
 trovertible. It is different in Texas, as is evident from the follow 
 ing passages in Governor Bell s message of November 3, 1851 : 
 
 " There is nothing which so much retards the growth and prosperity of 
 a country as the unsettled condition of its land-titles. This is an evil from 
 which our State has greatly suffered, and though it has been partially re 
 moved by time and the adjudication of our courts, still it is a serious obsta 
 cle to her rapid advance in prosperity. Whilst I do not pretend to be 
 conversant with the intricate system of our land-laws, or to be able to de 
 vise any general plan for the quieting of land-titles, I will venture to sug 
 gest one enactment, at least, which, if made by the Legislature, would, in my 
 opinion, be attended with the most beneficial results. 
 
 " Under the law as it now exists, locations may be made upon any lands 
 claimed to be held by prior grants, and the parties holding by or under 
 such prior grants may be forced into court to defend the validity of their 
 titles. 
 
 " The only restriction known to me, upon this right of location, is that 
 imposed by the act of February 5, 1850, which prevents them from being 
 made upon lands previously titled or surveyed within the limits of the 
 colonies of Austin, De Witt, and De Leon. These locations are usually 
 made, and suits instituted upon them for some supposed defects in the prior 
 grant or title, and if the locator fails to defeat the same, he can lift his cer 
 tificate, make new locations upon other lands, and test the validity of the 
 title under which they are held. This system of location may be carried to 
 an indefinite extent, and the evils resulting from it are so obvious that I 
 
THE FISCAL HISTORY OF TEXAS. 171 
 
 deem it unnecessary to mention them. The right of a person holding a 
 genuine and valid certificate to locate the same upon any of the vacant and 
 unappropriated domain belonging to the State, will not be denied by me; 
 but this right of location, when extended to lands claimed to be owned by 
 private individuals, should, in my judgment, be restricted, and guarded from 
 abuse by legislative enactment. 
 
 "It is our duty as well as our policy to discourage litigation. This object 
 will certainly be effected, to some extent, by restricting the facilities, now 
 afforded to those who make locations upon titled lands, of contesting such 
 titles. I respectfully suggest, therefore, for the consideration of the legis 
 lature, the propriety of passing a law which will prevent certificates, here 
 after located upon lands which the records of the county show had been 
 previously deeded or titled, from being removed or located elsewhere, in 
 case such locations were not sustained by the judgment of a competent 
 court; and I further suggest that the law should compel the locator, in 
 such cases, within six or twelve months after making his locations, to bring 
 suit upon the same against those claiming the lands under a previous grant, 
 in order that the question of title may be settled in a reasonable time. 
 
 " It seems to me that those who seek to set aside prior titles for imagined 
 defects in the same should run some risk as well as those whose titles they 
 contest. It would check litigation by making locators cautious, and pre 
 vent much of that wild spirit of speculation which is at war with the true 
 interests of the country." 
 
 Such a condition of things as this is very embarrassing to non 
 resident landholders. Those who are on the spot can better con 
 tend with such difficulties. They can manage their business with 
 out the intervention of agents. When immigrants arrive, they can 
 deal with them directly. They have thus great advantages over 
 non-residents. Yet few, if any, of the creditors residing within 
 the State, embraced the offer of land-script in payment of their 
 dues. 
 
 But a change was soon to take place in the circumstances of the 
 Texan Government. It had long been desirous of making a sale 
 of a portion of its domain to the United States. There was now 
 a fair prospect of this object being accomplished. 
 
 On the 16th of January, 1850, Mr. Benton submitted to the 
 United States Senate a bill, providing, among other things, that, 
 if Texas would cede to the United States a certain portion of 
 territory, arid relinquish all claim on the United States "for liabil 
 ity of the debts of Texas," &c., the United States would pay to 
 Texas the sum of fifteen million dollars in .five per cent, stocks, 
 redeemable fourteen years after date. 
 
 Mr. Benton supported this bill in a speech marked with his usual 
 ability. 
 
172 THE FISCAL HISTORY OF TEXAS. 
 
 On the 29th of the same month, the subject was submitted to 
 the Senate in a different form by Mr. Clay, as one of the " Com 
 promise Measures;" a particular class of measures intended to 
 satisfy both the North and the South, embracing the admission of 
 California, the establishing of the boundary line between Texas and 
 Mexico, the abolition of the slave trade in the District of Columbia, 
 and the Fugitive Slave Act. 
 
 The fourth resolution was as follows : 
 
 Resolved, That it be proposed to the State of Texas that the United 
 States will provide for the payment of all that portion of the legitimate and 
 bona fide public debt of that State, contracted prior to its annexation to the 
 United States, and for which the duties on foreign imports were pledged 
 by the said State to its creditors, not exceeding the sum of $ in con 
 sideration of the said duties so pledged having been no longer applicable 
 to that object after the said annexation, but having thenceforward become 
 payable to the United States; and upon the condition, also, that the said 
 State of Texas shall, by some solemn and authentic act of her Legislature, 
 or of a convention, relinquish to the United States any claim which it has 
 to any part of New Mexico." 
 
 In support of this resolution, Mr. Clay made the following re 
 marks : 
 
 "It proposes that the Government of the United States will provide for 
 the payment of all that portion of the debt of Texas for which the duties 
 received upon imports from foreign countries were pledged by Texas at a 
 time when she had authority to make pledges. How much it will amount 
 to I have endeavored to ascertain, but all the means requisite to the attain 
 ment of the sum have not been received, and it is not very essential at this 
 time, because it is the principle, and not the amount, that is most worthy of 
 consideration. Now, sir, the ground on which I base this liability on the 
 part of the United States to pay a portion of the debt of Texas is not new 
 to me. It is one which I have again and again announced to be an opinion 
 entertained by me. I think it is founded upon principles of eternal truth 
 and justice. Texas, being an independent power, recognized as such by 
 all the great powers of the earth, invited loans to be made to her to enable 
 her to prosecute the then existing war between her and Mexico. She told 
 those whom she invited to make these loans that, l if you make them, the 
 duties on foreign imports shall be sacredly pledged for the reimbursement 
 of the loans/ The loans were made. The money was received, and ex 
 pended in the establishment of her liberty and her independence. After 
 this, she annexed herself to the United States, who thenceforward acquired 
 the right to the identical pledge which she had made to the public creditor 
 to satisfy the loan of money which he had advanced to her. The United 
 States became the owner of that pledge, and the recipient of all the duties 
 payable in the ports of Texas. 
 
 "Now, sir, I do say that, in my humble judgment, if there be honor, 
 or justice, or truth among men, we do owe to the creditors who thus ad 
 vanced their money upon that pledge the reimbursement of the money, at 
 
THE FISCAL HISTORY OF TEXAS. 173 
 
 all events to the extent that the pledged fund would have reimbursed it if 
 it had never been appropriated by us to our use. We must recollect, sir, in 
 relation to that pledge, and to the loan made in virtue and on the faith of it, 
 there were three parties bound : the United States, Texas, and the creditor 
 of Texas, who had advanced his money on the faith of a solemn pledge 
 made by Texas. 
 
 " Texas and the United States might do what they thought proper; but 
 in justice they could do nothing to deprive the creditor of a full reliance 
 upon the pledge, upon the faith of which he had advanced his money. Sir, 
 it is impossible now to ascertain how much would have been received from 
 that source of revenue by the State of Texas if she had remained inde 
 pendent. It would be most unjust to go there now, and examine at Gralveston 
 and her other ports to ascertain how much she now receives by her foreign 
 imports ; because, by being incorporated into this Union, all her supplies, 
 which formerly were received from foreign countries, and subject, many of 
 them at least, to import duties, are now received by the coasting trade, in 
 stead of being received from other countries, as they would have been if she 
 had remained independent. Considering the extent of her territory, and 
 the rapid manner in which her population is increasing, and is likely to in 
 crease, it is probable that, in the course of a few years, there might have 
 been such an amount received at the various ports of Texas, she remaining 
 independent, as would have been adequate to the extinction of the debt to 
 which I have referred. 
 
 " But, sir, it is not merely in the discharge of what I consider to be a 
 valid and legitimate obligation resting upon the United States to discharge 
 the specified duty ; it is not upon that condition alone that this payment is 
 proposed to be made; it is also upon the further condition that Texas shall 
 relinquish to the United States any claim that she has to any portion of 
 New Mexico. Now, sir, although I believe she has not a valid title to any 
 portion of New Mexico, she has a claim ; and for the sake of that general 
 quiet and harmony for the sake of that accommodation which ought to be 
 as much the object of legislation as it is of individuals in their transactions 
 in private life, we may do now what an individual in analogous circum 
 stances might do, give something for the relinquishment of a claim, although 
 it should not be well founded, for the sake of peace. It is, therefore, pro 
 posed and this resolution does propose that we shall pay the amount of 
 the debt contracted by Texas prior to its annexation to the United States, 
 in consideration of our reception of the duties applicable to the extinction 
 of that debt; and that Texas shall, also, in consideration of a sum to be 
 advanced, relinquish any claim which she has to any portion of New 
 Mexico." 
 
 Mr. Clay omitted to mention that, in the articles of annexation 
 (for so may the joint resolution be called), Texas gave a guarantee 
 that the United States should not be responsible for her debts. 
 
 lt In no event are said debts and liabilities to become a charge upon the 
 Government of the United States." 
 
 It was, moreover, expressly stipulated that all the public lands 
 
174 THE FISCAL HISTORY OF TEXAS. 
 
 in Texas should be applied to the payment of her debts, and to no 
 other purpose, till the whole should be extinguished. 
 
 " Said State shall retain all the vacant and unappropriated lands lying 
 within her limits, to be applied to the payment of the debts and other lia 
 bilities of said Republic of Texas; and the residue of said lands, after dis 
 charging said debts and liabilities, to be disposed of as said State may direct." 
 
 But Texas had, from inability, failed to make good her guaran 
 tee to the United States that in no event should said debts and 
 liabilities become a charge upon them. Then commenced the re 
 sponsibility of the United States, not to Texas, but the creditors 
 of Texas. The import duties of Texas, which had been pledged 
 to them, had been transferred to the United States. They peti 
 tioned Congress for redress, and it was plain that certain responsi 
 bilities, to guard against which express stipulation had been made 
 in the articles of annexation, must come against the United States, 
 unless Texas had increased means to discharge them. These in 
 creased means could be obtained only by a sale of the public lands, 
 and, except the United States, no purchaser was to be found. 
 
 It is unnecessary to trace this business through the various 
 forms which it assumed in the House and the Senate. The bill for 
 passing all the Compromise Measures together, broke down; and 
 it was resolved to try to pass them separately. 
 
 On the 5th of August, nearly seven months after Mr. Benton 
 had brought the subject before the Senate, Mr. Pearce, of Mary 
 land, proposed what has since been known as the " Boundary Bill." 
 It contained some of the provisions of Mr. Benton s bill, with 
 others intended to make it acceptable to the parties concerned. 
 
 In his introductory speech, Mr. Pearce, after showing what 
 amount of land would be ceded by Texas, if the bill were passed, 
 and the advantages that would be derived therefrom, proceeded as 
 follows : 
 
 " But, sir, there is another consideration, and it is one to which I have 
 been exceedingly unwilling to give my assent, but to which, nevertheless, 
 I have been unable to refuse it. The Senate are aware that the State [the 
 Republic] of Texas has incurred, since her independence, a considerable 
 debt. They know, also, that she has issued bonds to her creditors, in some of 
 which the revenues from her customs are specially pledged for the payment 
 of principal and interest. Upon the annexation of Texas to the United 
 States, her right to levy duties upon imports was surrendered to the Govern 
 ment of the United States; so that source of revenue became extinct, or 
 fell into the possession of the United States. The revenue derivable from 
 thus source is not at present large, but it is likely to become very large and 
 
THE FISCAL HISTORY OF TEXAS. 175 
 
 valuable in future. I understand, from authorities on which I can rely, 
 that the trade of Texas at this time amounts to five millions of dollars a 
 year, and that in the city of Houston alone seven hundred and fifty thou 
 sand dollars worth of dutiable goods are consumed annually. We know 
 tha^ the population is increasing with considerable rapidity, and in the 
 course of a few years will swell to such an amount as would enable the State, 
 if still in the possession of the revenue derived from the duty on imports, 
 to defray the interest on the bonds, and finally to extinguish them by a 
 full payment. True, Texas reserved to herself her public lands; but it is 
 also true that they are at present a very inadequate source of revenue, and 
 likely to continue so for some time. When a State pledges her revenue, 
 it is with an understanding that the current expenses of the government 
 shall be deducted, because if not, the government, unsupported by fiscal 
 means, could not exist; anarchy would ensue, and the responsibility and 
 obligations to the creditors would become absolutely valueless. But, sir, 
 those creditors to whom the revenues of Texas were pledged for the pay 
 ment of their bonds must undoubtedly have relied upon that source of 
 revenue; they must have looked, not to the present productiveness of these 
 Texan sources of income, but to their future productiveness; and, although 
 they had no legal right to compel Texas to appropriate the revenue derived 
 from that source to the payment of the bonds, and are utterly powerless to 
 compel the United States, yet the very fact that they are powerless, that 
 they rest entirely upon moral force for the performance of these obligations, 
 gives them a higher claim to the equity and consideration of the Congress 
 of the United States. I will not liken it to the case of a mortgage, because 
 I do not suppose the operations of the government can be likened to a mort 
 gage, being things different in their natures; but, so far as there is any 
 analogy at all, it is undoubtedly in favor of the case which I now present. 
 The creditors of Texas had a moral claim, at all events, upon the duties 
 on imports into Texas. These duties have been taken by the United 
 States, under the terms of annexation ; and, although there was a special 
 stipulation in the joint resolution of annexation that these creditors should 
 not claim of the United States Government the payment of these duties, 
 yet it may well be doubted whether that agreement between the United 
 States and Texas can release the United States from its moral obligations 
 to the creditors, or whether, as these duties have been specifically pledged 
 by Texas for the payment of these bonds, it is not the duty of the United 
 States, at all events, to make some compensation to these creditors. Well, 
 sir, this being the case, I think I am perfectly safe in saying that the Con 
 gress of the United States need never expect to get rid of the claims of these 
 creditors of Texas until they are paid. Considering the vast extent of 
 Texas, the large population which must soon fill her settlements, that her 
 productive capacity will soon be quadrupled, and that her ability to con 
 sume will keep pace with increasing production, we must see that no incon 
 siderable tribute to our treasury will flow from the customs duties on Texan 
 commerce. It is not a sufficient answer to say that without annexation 
 Texas would have had no security, and therefore no increase of commerce, 
 for we know that her independence would have been acknowledged by 
 Mexico, on the condition of eternal separation from the United States; and 
 that if this scheme, guaranteed by England and France, had gone into ope 
 ration, she would soon have gathered strength and grown in prosperity. 
 
176 THE FISCAL HISTORY OF TEXAS. 
 
 Besides, sir, I remember that, when we were opposing annexation, one promi 
 nent objection was that we should come under obligations to pay part of 
 her debt. One of her bonds was exhibited in the Senate, and we were told 
 to mark the pledge and heed the liability which would devolve on us. All 
 these are considerations which have weighed with me in determining the 
 amount of ten millions allowed in the bill. 
 
 "I have been furnished with a statement from the office of the auditor 
 and comptroller of Texas, which gives the names of the holders of all Texan 
 bonds for which the revenue from import duties was specially pledged, and 
 the amounts of principal and interest respectively due to each, calculated 
 up to some time in 1848. The aggregate amount is $4,045,027 14 ; 
 which, by this time, as the interest is at the rate of ten per cent, per 
 annum, must be about four millions and a half. If, to this sum, which 
 equity strongly calls on us to allow, we add a liberal amount for the terri 
 tory which Texas undoubtedly cedes, and allow also for the territory which 
 she claims, and which some think she is justly entitled to, though I with 
 others differ as to that, you will have reached the aggregate amount of the 
 ten millions which is proposed to be paid in the bill. I am aware that this 
 will be considered extravagant, especially after the expensive war in which 
 we have been engaged, and more especially when we consider the fifteen 
 millions to be paid for the cession, as many think, and as I think, of part 
 of this very territory ; still, taking all these considerations together, I think 
 a fair case is made out, in which every Senator could justify himself to his 
 conscience for allowing the sum proposed." 
 
 Mr. Pearce then dilated on the advantages which would arise 
 in settling the boundary line between New Mexico and Texas in 
 restoring peace and harmony to the country, after which he pro 
 ceeded as follows : 
 
 " There is another subject to which I must ask the attention of the 
 Senate for a few moments, and that is, the proviso attached to the last 
 clause of the bill. It has been proposed by some that the United States 
 should reserve to itself the right of distributing the money we may vote to 
 Texas among her creditors ; but I have put no such provision as that into 
 the bill, and for several reasons. In the first place, I do not wish the 
 United States to become a commissioner in bankruptcy for Texas ; and, in 
 the second, I do not wish to place Texas in the condition of appearing to 
 be obliged to be placed in the hands of a commissioner of bankruptcy. It 
 seems to me that, while it would have been impolitic in us to undertake 
 that which we have not the means of doing properly, Texas can, with safety 
 to her creditors and honor to herself, make this distribution. It would also 
 be an indignity to the State of Texas. Sir, one of the highest affronts that 
 could be offered to an honest man would be to say, when he has ample 
 means to discharge his debts, that you suspect his honor, and will not trust 
 him with the money devoted to this purpose. It is quite as offensive, un 
 doubtedly, to a State, to suppose that she will be faithless and fraudulent 
 in*a settlement with her creditors. I am not willing to make such an im 
 putation on Texas, to suspect in the least her honor, or the honor of her 
 Legislature. I am willing to submit the matter to her decision, and to let 
 her settle with her creditors with the means which we have provided her. 
 
THE FISCAL HISTORY OF TEXAS. 177 
 
 But I admit, at the same time, that it is right to guard the treasury of the 
 United States from the contingencies which may flow from this measure, if 
 Texas should not adopt this course, or if Texas were to settle with her 
 creditors, not in full, but upon a reduction of their claims for principal and 
 interest due them, even with their assent. It is possible that, at some 
 future time, these creditors, even after having consented to take seventy-five 
 cents in the dollar, if that can be supposed, may come back on the Govern 
 ment of the United States, and demand the full amount. I propose to 
 guard against that, and for that purpose I have introduced the last proviso 
 in the bill. It provides that, of the ten millions of five per cent, stock to 
 be issued after the State of Texas shall have assented to these terms, and 
 signified her assent in proper form to the Government of the United States, 
 we shall retain five millions until such a time as a full release shall be filed, 
 in the treasury of the United States, by the creditors holding those bonds 
 for which the duties on the customs are pledged. The arrangement ren 
 dered necessary by this proviso may easily be effected by these creditors 
 and Texas. On the presentation of these claims (and I believe they all 
 have been presented under the act of the Legislature of 1848, which called 
 upon the creditors to exhibit their claims), the amount of which is furnished 
 in the statement I referred to, not long ago, to the treasury of Texas, it is 
 perfectly competent for Texas to give them orders for stock on the treasury 
 of the United States, for the amount to which they may be entitled, by any 
 arrangement which may be agreed upon between them. And these orders, 
 being filed in the treasury, will be ample security to the United States, and 
 protect us from the possible demands to which I have referred. The neces 
 sary details can be prescribed by the authority of the Treasury Department." 
 
 The remarks of Mr. Pearce, taken in connection with those of 
 Mr. Clay, give a very clear view of the relations subsisting between 
 the Government of the United States and the creditors of Texas. 
 
 In the House of Representatives, on the 10th of August, Mr. 
 Moore, of Pennsylvania, made a speech, in which he said : 
 
 " And here let me also say that, while I may, perhaps, be willing to vote 
 for a reasonable sum to Texas in the settlement of this question, not one 
 dollar of it would I vote as a remuneration for the territory which she thus 
 claims ; but because I feel that, having annexed that State to this Union, 
 and taken all her means of revenue, we are, in a measure, at least equitably, 
 if not legally, responsible for the debts due from her at that tiine ; and for 
 the liquidation of which debts these revenues were pledged/ 
 
 Such, judging from the published reports of the debates, was 
 the general feeling in Congress. If a direct vote could have been 
 taken on the claim set up by Texas to the eastern half of New 
 Mexico, and that claim could have been presented divested of all 
 other considerations, very few members would have sustained it. 
 But, in the excited state of the public mind, a direct vote on this 
 question was very judiciously avoided, by including in the bill a 
 portion of territory to which Texas had an undoubted right. But, 
 12 
 
178 THE FISCAL HISTORY OF TEXAS. 
 
 if Texas had remained without the Union, Congress never would 
 have settled with her on these terms. By conquest and by pur 
 chase, the United States came into possession of all the rights in 
 New Mexico which Mexico had previously enjoyed. In settling 
 the boundaries of that province with a foreign power, Congress 
 would never have given five million dollars, nor one million dollars, 
 nor one million cents, for the relinquishment of such a claim as 
 Texas asserted. But settling the business with Texas, she having 
 come into the Union, was a family matter ; and family considera 
 tions alone led to the adjustment finally agreed upon. 
 
 As little disposed would Congress have been to give five million 
 dollars, or one million dollars, or even one dollar, for the land 
 which was undoubtedly Texas s, but for the sake of enabling 
 Texas to pay her debts, and thereby release the United States 
 from all responsibilities to the old creditors of Texas. 
 
 August 9th, the bill was ordered to be engrossed for a third 
 reading by a vote of 27 ayes to 24 noes, and was afterwards, on 
 the same day, passed by a vote of 30 to 20. 
 
 It was then sent to the House, where it was, September 4, 
 ordered to be engrossed for a third reading by a vote of 108 to 
 98, and passed on the same day by a vote of 108 to 97. 
 
 We thus find that, notwithstanding the many influences that 
 were brought to bear in its favor, it was by no great majority that 
 the bill passed the two Houses. 
 
THE FISCAL HISTORY OF TEXAS. 179 
 
 CHAPTER XXVII. 
 
 PROCEEDINGS OF THE LEGISLATURE OF TEXAS AT ITS SPECIAL SES 
 SION, NOVEMBER, 1850, AND AT ITS REGULAR SESSION, NOVEMBER, 
 1851. 
 
 The conditions of the " Boundary Bill" formally accepted Proud position of Texas 
 Different constructions of some provisions of the "Boundary Bill" Extracts 
 from Governor Bell s message, with remarks on the same Bill reported " to require 
 the creditors to sign releases to the United States" The money received applied 
 to other objects than to the payment of the debts for which the United States 
 were liable. 
 
 THE "Boundary Act" was signed by the President on the 7th of 
 September. A special session of the Legislature of Texas was 
 held at Austin, and, on the 25th of November, a law was passed 
 accepting the propositions made by the United States. 
 
 This law, after reciting the provisions of the act of Congress, 
 enacts and declares as follows : 
 
 " Therefore, first : Be it enacted ~by the Legislature of the State of Texas, 
 That the State of Texas hereby agrees to and accepts said propositions ; 
 and it is hereby declared that the State shall be bound by the terms there 
 of, according to their true import and meaning. 
 
 " Second : That the Governor of this State be, and he is hereby re 
 quested to cause a copy of this act, authenticated under the seal of the 
 State, to be furnished to the President of the United States, by mail, as 
 early as practicable ; and also a copy thereof, certified in like manner, to 
 be transmitted to each of the Senators and Representatives of Texas in Con 
 gress, and that this act take effect from and after its passage." 
 
 In communicating this intelligence to the Senate, President 
 Fillmore said : 
 
 " From the common sources of public information, it would appear that 
 a very remarkable degree of unanimity prevailed, not only in the Legisla 
 ture, but among the people of Texas, in respect to the agreement of the 
 State to that which had been proposed in Congress." 
 
 Texas now stood in a proud position. She had succeeded in the 
 object she had so long had in view; a sale to Congress of land 
 which was of no use to her as a State. As General Houston after- 
 
180 THE FISCAL HISTORY OF TEXAS. 
 
 wards said, in an address to the people of Galveston, "it was the 
 best sale ever made of land of a worthless quality, and a disputa 
 ble title." Texas was now rich. She had the means of paying 
 her creditors in full. Whether Texas, in the days of her riches, 
 repudiated the scaling system she had adopted in the days of her 
 poverty, will be seen as we proceed. 
 
 It was not long before the authorities of Texas and those of the 
 United States disagreed as to the amount of debts which the re 
 served five millions in bonds were intended to cover. The acting 
 Attorney-General of Texas maintained that the only debts of the 
 Republic for which duties on imports had been "specially pledged," 
 were those where, in the laws authorizing such debts, said duties 
 were expressly mentioned by name, distinctively from all others. 
 There had been no such pledge, he averred, except in regard to 
 the interest which had accrued on " the consolidated fund" issued 
 under the act of the Texan Congress, approved January 7, 1837. 
 This amounted to a fraction over six hundred thousand dollars. 
 And he contended that, as soon as the claimants had signed releases 
 to this amount, the United States were bound to surrender to Texas 
 the residue of the five millions. The Texan authorities, generally, 
 concurred in these views. 
 
 On the other hand, the authorities of the United States main 
 tained that the genus could not be pledged without pledging all 
 the species it included, and that, therefore, whenever the Republic 
 of Texas had made a special pledge of her revenues, she had made 
 a special pledge of the duties on imports as a part of these reve 
 nues. Thus, instead of pledging her customs for debts of the 
 amount of only six hundred thousand dollars, as asserted by her 
 acting Attorney-General, Texas had pledged them for debts 
 amounting to at least six millions, probably eight, perhaps even 
 more, at the unsealed rates. To determine the exact amount, 
 more particular information was requisite in regard to certain 
 branches of the debt. 
 
 Very soon after the " Boundary Act" was passed, the Texan dele 
 gation in Congress addressed a letter to the Secretary of the Trea 
 sury, in which they supported the construction given to the law by 
 the acting Attorney-General of their State, thus maintaining that 
 only six hundred thousand dollars of the debts of Texas were 
 covered by the pledge of the duties on imports. This was a very 
 
THE FISCAL HISTORY OF TEXAS. 181 
 
 different view of the subject from that given by Mr. Pearce when 
 he introduced the " Boundary Bill." He then said 
 
 " T have been furnished with a statement from the office of the auditor 
 and comptroller of Texas, which gives the names of the holders of all 
 Texan bonds for which the revenue from import duties was specially pledged ; 
 and the amount of principal and interest respectively due to each, calculated 
 up to some time in 1848. The aggregate amount is $4,045,027 14, which, 
 by this time, as the interest is at the rate of ten per cent, per annum, must 
 be about four millions and a half." 
 
 This statement does not appear to have been controverted by 
 the Texan members either in the Senate or the House, and with 
 this understanding of the amount of debt for which the customs 
 were pledged, Congress ordered the five millions in bonds to be 
 retained till the creditors should sign releases to the United States. 
 
 The views of the Federal authorities are clearly set forth in the 
 report of the Secretary of the Treasury, Mr. Corwin, to the Pre 
 sident. We give it at length in Appendix T, as it will not admit 
 of abridgment. 
 
 The views of the authorities of Texas will be seen in the follow 
 ing extracts from a message which Governor Bell sent to the 
 Legislature of that State, November 10, 1851. 
 
 " The Republic of Texas having executed her bonds and other evidences 
 of debt in an exceedingly dark and gloomy period of her history, it became 
 necessary to issue them for nominal amounts, bearing no sort of proportion 
 to the amount actually received; and to pledge her resources, arising 
 mainly, at that time, from her revenues, for their redemption." 
 
 In this respect, the history of Texas is like that of other govern 
 ments. Alexander Hamilton, in his report as Secretary of the 
 Treasury, with his plan for supporting public credit, says: " When 
 the credit of a country is in any degree questionable, it never fails 
 to give an extravagant premium, in one shape or another, upon all 
 the loans it has occasion to make." Every person who knows 
 anything about debt and credit knows it necessarily must be so. 
 But this is the first time, we believe, in the world s history, when 
 the necessity a government is under, "in an exceedingly dark and 
 gloomy period," of making large promises, is used as a reason for 
 not fulfilling those promises in time of prosperity. 
 
 But, the Governor continues : 
 
 "These securities, generally speaking, were concentrated at very low 
 rates, in the hands of moneyed speculators, who had contributed nothing to 
 the achievement of her independence, or to the relief of her actual necessi 
 ties in the administration of the government at the time they were issued." 
 
182 THE FISCAL HISTORY OF TEXAS. 
 
 Admit all this to be so, and it does not in the least diminish the 
 obligation of the government of Texas to pay its debts. The evi 
 dences of debt it issued owed great part of their value to their 
 transferability. The original claimants transferred the whole of 
 their rights to others. If they got but little for them, that was 
 their misfortune. And if they were then worth but little, the fault 
 was in the mismanagement and extravagance of the government 
 of Texas. It is well, indeed, for a government to reduce the mar 
 ket value of its own securities by its own folly, and then give this 
 as a reason w r hy they should not be redeemed according to 
 contract. 
 
 " This consideration, well understood and appreciated, induced an in 
 quiry in respect to the mode of redeeming these securities; as no one could 
 entertain the opinion, for a moment, that the government was under any 
 obligation, either in justice or in morality, to redeem them by paying the 
 amount expressed on their face; and that inquiry resulted in the passage 
 of the act of the State Legislature of March 20th, 1848, u to provide for 
 ascertaining the debt of the late Republic of Texas," which act required 
 the auditor and comptroller of the State to reduce all claims presented for 
 liquidation to the actual par value which was realized by the Republic at 
 the time of their issue. The evident meaning and contemplation of that 
 act was, that the holders of the claims should be paid in accordance with 
 the amount thus ascertained by the auditorial board, subject to the revision 
 of the Legislature; and the amounts so ascertained were considered as all 
 that was actually due from the State to her several creditors. That the 
 Legislature had the right to pass this law, there can be no question, and 
 that the individuals holding the bonds or other evidences of debt against 
 the late Republic, were bound by it, there can be as little." 
 
 No one who knows Governor Bell will doubt his disposition to 
 do what he believes to be right; and his entertaining such notions 
 is only evidence of the extent to which, in some circumstances, an 
 honest man s judgment may be perverted. There was a case of 
 debtor and creditor. The creditor was absent, and his cause was 
 feebly pleaded, if pleaded at all. The debtor was the sole judge, 
 pleaded his own cause fully, and, as might have been expected, 
 gave judgment in his own favor. 
 
 This was the precise case of Texas and her creditors. And 
 from the one-sided view her citizens took from the beginning, and 
 from their entertaining it uninterruptedly for several years in suc 
 cession, they at length came to the conclusion that their decision 
 was incontrovertible. A State may heap pledge upon pledge 
 pledge its public lands, its direct taxes, its license taxes, its cus- 
 
THE FISCAL HISTORY OF TEXAS. 183 
 
 toms, and, lastly, its public faith, and thus everything it possesses, 
 or may hereafter possess. But if it makes these pledges " in an 
 exceedingly dark and gloomy period of its history, no one can 
 entertain the opinion for a moment" that it is bound by them in 
 periods of prosperity. Such a government is under "no obliga 
 tion, either in justice or morality, to redeem its securities by pay 
 ing the amount expressed on their face." It may enter into con 
 tracts each as binding as if the great seal of the Republic had been 
 attached to it, and it may cut down those contracts to one-half, 
 one-third, or even the fifth of the original amount. As the debtor 
 party is a sovereign State, there can be no question that it has a 
 right to do this ; and there is as little question that the creditor 
 party, consisting of mere individuals, are bound by it ! 
 
 Governor Bell seemed, however, to have his doubts whether this 
 view of the case would be as satisfactory to the authorities of the 
 United States as it was to himself and the great body of his con 
 stituents. 
 
 " It occurred to me, therefore, after a careful examination of the proviso, 
 that difficulties and embarrassments would be produced in the settlement 
 of our outstanding liabilities, unless the Secretary of the Treasury should 
 give such a construction of the law on the subject as would enable the State 
 of Texas to define who were the creditors therein referred to, and also to 
 ascertain the amount of the liabilities of the State, which this reserved five 
 millions of dollars was intended to cover. By the phraseology of the act, 
 the decision of the question as to who were the creditors of the State, hold 
 ing claims on which duties for imports ( were specially pledged ; and the 
 amount of these claims, was referred directly to the Secretary of the Trea 
 sury of the United States; and as he could have no means of ascertaining 
 these facts, except such as were derived from the State, through her proper 
 officers, I deemed it my duty to dispatch an officer to the city of Washing 
 ton, charged with instructions to ascertain what course he intended to pur 
 sue in reference to this matter." 
 
 Governor Bell was unquestionably right in supposing that diffi 
 culties and embarrassments would ensue, if Texas persisted in her 
 scaling system. The possibility of this was mentioned by Mr. 
 Pearce as one of the reasons for retaining bonds to the amount of 
 five millions in the United States Treasury. His language was : 
 
 " I am not willing to make any such imputation on Texas, to suspect in 
 the least her honor, or the honor of her Legislature. I am willing to sub 
 mit the matter to her decision, and let her settle with her creditors with the 
 means which we have provided for. But I admit, at the same time, that it 
 is right to guard the Treasury of the United States from the contingencies 
 which may flow from this measure, if Texas should not adopt this course, 
 
184 THE FISCAL HISTORY OF TEXAS. 
 
 or if Texas were to settle with her creditors not in full, but upon a reduction 
 of their claims for principal and interest due to them, even with their assent. 
 It is possible that, at some future time, these creditors, even after having 
 consented to take seventy-five cents in the dollar, if that can be supposed, 
 may come back on the Government of the United States and demand the 
 full amount. I propose to guard against that, and FOR THAT PURPOSE I 
 have introduced the last proviso in the bill." 
 
 Some of the Texans have expressed great indignation because 
 the United States authorities will not give up the five millions ; 
 thereby, as they conceive, keeping them out of their rights. They 
 may here see the reason of it. Scaling debts is not paying them. 
 Unless Texas makes full satisfaction to a certain class of her 
 creditors, they, according to the laws of nations and the principles 
 of equity, become creditors of the United States. The United 
 States are not willing to pay the same debts twice, and therefore 
 holds on to the bonds, to the amount of five millions, till all the 
 releases shall be signed. 
 
 A little further on, the Governor makes the following remarks: 
 
 " By adverting to the letter of the Secretary of the Treasury, under date 
 of February 12, 1851, it will be perceived that he has decided not to issue 
 to the State, under any circumstances, stock for any portion of the retained 
 five millions of dollars, until all the creditors holding obligations, for the 
 payment of which duties on imports were specially pledged, shall have re 
 linquished to the United States their claims, notwithstanding it may be 
 ascertained prior to such relinquishment that a very inconsiderable part of 
 that five millions will be required to cover those claims ] and that he has 
 reserved to himself the right of deciding, from data to be furnished by the 
 State, the amount of the claims now outstanding, for which duties on im 
 ports were specially pledged, and also the individuals entitled to receive 
 these amounts." 
 
 The Secretary of the Treasury takes a very different view of 
 the case. His inquiries have led him to believe that the customs 
 of Texas were pledged for all the debts contained in Schedules A, 
 B, D, and part of E, viz. : 
 
 Original claims. Reduced amount. 
 
 "Schedule A, . . . $1,651,59002 $1,164,482 
 
 B, . . . 2,582,902 70 1,651,200 
 
 " D, . . . 1,472,918 90 294,581 
 
 Part of E, . . 509,000 00 289,000 
 
 $6,216,411 62 $3,399,263 
 And it may be 
 
 Residue of E, . . . 2,077,54600 517,386 
 
 And part of F, . . . 2,181,94500 2,177,181" 
 
THE FISCAL HISTORY OF TEXAS. 185 
 
 There seems, therefore, little probability that only a " very 
 inconsiderable part of that five millions will be wanted to cover 
 those claims." 
 
 " From the opinions of the acting Attorney-General of the State, under 
 date of September 8, 1850, it would seem that the payment of a very small 
 portion of the public debt now outstanding was secured by a special 
 pledge of import duties, probably not exceeding six hundred thousand 
 dollars ; and yet, according to the decision of the Secretary of the Treasury, 
 the whole five millions must be retained in the treasury of the United 
 States until every individual creditor owning any part of that six hundred 
 thousand dollars, however small, shall have filed his relinquishmeut to the 
 United States in the Treasury Department at Washington." 
 
 The acting Attorney-General- of Texas was counsel for a party 
 that had an interest in causing as little as possible to be paid to 
 its creditors, that thereby as much as possible might be paid to 
 itself, and he endeavored to do the best he could for his client. 
 Hence his ingenious interpretation that, when a State made a 
 special pledge of the whole of its revenues, that was not a special 
 pledge of all its parts. But, admitting his construction to be cor 
 rect, as but few of the claimants of the single class he supposes 
 are alone entitled to the benefit of this provision of the act have 
 signed the releases, the Secretary of the Treasury has no authority 
 to surrender the bonds. 
 
 "A decision which would lead to such consequences cannot be in ac 
 cordance with the spirit and intention of the compact between the Federal 
 Government and Texas, although it may be within the strict letter of the 
 law; and it has occurred to me that some further action by the General 
 Congress is necessary to place this subject in its proper light; and it will be 
 proper for the State Legislature to indicate, by resolution or otherwise, as it 
 may deem best, what that action may be." 
 
 This provision of the law is too clear to admit of dispute, and 
 the spirit of it is in exact accordance with the letter. It was voted 
 for by all the delegates of Texas in Congress. It was fully and 
 freely assented to by the Legislature of Texas in its act of Novem 
 ber 25, 1850. It forms part of the compact between the United 
 States and Texas, as set forth in the "Boundary Bill," and it 
 ought not to be changed without a sufficient reason. 
 
 " If the decision of the Secretary of the Treasury remains unchanged 
 (and we have no reason to expect a change in it, without an alteration of 
 the law), the State may be kept for an indefinite, probably an interminable, 
 period out of nearly one-half of the pecuniary consideration for which she 
 relinquished a large portion of her territory; and this result may be pro- 
 
186 THE FISCAL HISTORY OF TEXAS. 
 
 duced by some obstinate and perverse creditor who, holding an amount not 
 sufficient in importance to embarrass his own operations, may, by this means, 
 seek to embarrass the interests of all others, by withholding a relinquish- 
 ment of his claim to the United States." 
 
 Nothing like this has occurred, nor is it likely to occur. If it 
 should, Congress will, no doubt, interfere. 
 
 <( This difficulty may, perhaps, be obviated in the following manner : If 
 the General Congress will so modify the act of September 9, 1850, as to 
 authorize the Secretary of the Treasury to issue stock to the State of Texas 
 for the whole amount of the retained five millions, upon the State, through 
 her proper officers, filing at the Treasury Department a release and full ex 
 oneration of the Federal Government from all liability for any portion of 
 the public debt of Texas, growing out of the transfer, by the act of annexa 
 tion, of the resources arising from duties on imports, all difficulty would at 
 once be removed, and the public debt could, without further delay, be placed 
 in a train of proper adjustment, through the agency of our own officers, by 
 whom it must be ultimately settled." 
 
 The liability of the United States is not to Texas, but to the 
 creditors of Texas. Any release signed by the authorities of Texas 
 would amount to nothing. Besides this, Texas, in the articles of 
 annexation, entered into an engagement that "in no event should" 
 these very debts " become a charge against the United States." 
 As she has failed to fulfil this engagement, it is hardly to be ex 
 pected that the United States will enter into another with her in 
 relation to the same subject. 
 
 11 To such a modification of the law, the Executive cannot perceive that 
 any well-founded objection could be urged. The obligation to pay these 
 debts rests entirely upon the State; and although the creditors, at the 
 time they were incurred, may have had a view to the supposed and proba 
 ble resources of the Republic for their payment, still they did not anticipate 
 that those resources were to be applied by any other than the government 
 with whom the contracts were made, and with whom necessarily remained 
 the right to modify or change them, as it might deem best. Had the 
 government, after these contracts were made, deemed that the interests of 
 the citizens, or prosperity of the country, required her to reduce her duties 
 on imports to a mere nominal amount, or to have taken them off altogether, 
 and thrown her ports open to the free commerce of the world, no one would 
 have questioned for a moment her right to have done so ; and her creditors 
 would have had no just cause of complaint of such an act, because they 
 made their contract with the full knowledge that such a right existed, and 
 would, to some extent at least, be exercised. Indeed, it was exercised every 
 year, in the various modifications of the tariff laws of the late Republic; 
 and, in 1842, upon the adoption of what was known as the Exchequer Sys 
 tem, they underwent an almost radical change (a change which reduced 
 the duties laid upon imports from a very large to a comparatively small 
 amount); and yet no one then asserted that this change in the amount of 
 
THE FISCAL HISTORY OF TEXAS. 187 
 
 duties to be collected was a violation of the previous contract entered into 
 with these creditors." 
 
 A sovereign State may do a great many bad things : and Texas 
 is not the only State that affords examples of this truth. Should 
 a State, however, after borrowing money on the pledge of a par 
 ticular branch of revenue, afterwards abolish that revenue, it 
 would be bound, by regard to public honor and public faith, to 
 make good the deficit from some other source. Mere variations 
 may be made in the amount of taxes levied, and the manner of 
 levying them, without any breach of faith. Such variations occur 
 in all governments, and if they were more frequent in Texas than 
 elsewhere, it was owing to the unsettled condition of her affairs 
 during the whole period of her revolutionary history. The change 
 made by the Exchequer System made only a nominal reduction in 
 the revenue from imports. The specie value exceeded that of the 
 revenue in the years in which treasury notes were received. 
 
 " The transfer by Texas of a portion of her sovereignty to the United 
 States, and by which her right to collect duties on imports was given up, 
 in its consequences was nothing more than would have resulted from a 
 repeal of her own laws imposing such duties; and the Federal Government, 
 by receiving that transfer, incurred no other obligation, in respect to the 
 debts of Texas, than an equitable one to give the State such an equivalent 
 for the loss of her revenues arising from import duties as would enable her 
 to carry out her contracts with her creditors as effectually as she might 
 have done had her revenues from imports not been surrendered; but that 
 government incurred no other obligation whatever to the creditor individu 
 ally; and the assumption of such an obligation was a gratuitous act, by 
 which the State of Texas ought not, in any sense, to be bound. The debt 
 is one which Texas owes, and which Texas has to pay; and no power can 
 rightfully interpose between her and her creditors, and dictate the manner 
 of its settlement." 
 
 The United States do not interpose between Texas and her 
 creditors. Each and every one of them is at liberty to accept the 
 composition Texas offers. But, then, in addition to the release he 
 signs to Texas, he must sign a release to the United States, if the 
 revenue from imports was pledged for the payment of his claims, 
 or the United States will not give up the bonds. From the other 
 creditors the United States require no such release. 
 
 The United States do not interfere between Texas and those 
 to whom Texas is indebted. And it is very unreasonable in Texas 
 to expect the United States to aid and abet her in the design she 
 has of forcing a compromise on her creditors. In that case, the 
 
188 THE FISCAL HISTORY OF TEXAS. 
 
 disgrace of a shameful act of repudiation, which now attaches to 
 Texas exclusively, would be shared by the whole Union. 
 
 Texas had no " equitable claim for an equivalent for the loss of 
 her revenues arising from import duties." When she was admitted 
 into the Union, she was admitted to a participation in all the 
 benefits which its original members enjoyed, and surrendered no 
 more than others surrendered. Nay, she was admitted to more 
 than equal benefits, for she was suffered to retain her wild lands, 
 while the United States had to take charge of the wild Indians 
 upon them. The expenditures of the United States in Texas, and 
 for the benefit of Texas, have, in the seven years since annexation, 
 exceeded the gross amount of the debt of the late Republic. 
 
 Different is the relation of the United States to the creditors of 
 Texas. It is true, " the debt is one which Texas owes," and which 
 Texas ought to pay. But Texas once could not, and now will not 
 pay ; and here, according to the laws, of nations and the principles 
 of equity, commences the obligation of the United States, as Texas 
 transferred, and the United States received, a branch of revenue, 
 which was pledged to its full value to the old creditors of Texas. 
 
 u I therefore recommend to the honorable Legislature that our Senators 
 in Congress be instructed, and our representatives requested, to use all 
 proper exertions to procure such a modification of the fifth article of the 
 second section of the act of September 9, 1850, as will authorize and re 
 quire the Secretary of the Treasury to issue to the State all the stock con 
 templated by the fourth article of the said act, upon her filing such releases 
 to the United States as may be deemed necessary to exonerate the Federal 
 Government from any liability for any portion or all the debt of Texas." 
 
 8trange things happen in the political world, but it would be 
 very strange if such an act should be passed, as it would make 
 the United States liable for debts to the amount of millions, for 
 which they have already appropriated millions, nominally for the 
 purchase of worthless lands, but really for the payment of these 
 very debts. 
 
 " I recommend this course because it is the best which my mind suggests 
 to relieve this subject from all difficulty ; but, as it is possible that Congress 
 may not concur in the propriety of making this modification, we should, in 
 such a contingency, prepare ourselves in the bast way we can to meet it. I 
 trust I have shown the necessity of placing this matter upon a different 
 footing from that on which it now stands, if we expect to close it within any 
 reasonable period, or in any manner which would be at all satisfactory to 
 the State. Indeed, the difficulties which must be overcome in its adjust 
 ment, so long as it remains in its present condition, are so obvious that it 
 
THE FISCAL HISTORY OF TEXAS. 189 
 
 requires no argument to prove that immediate steps should be taken to 
 obviate them. I therefore further recommend to the honorable Legislature 
 that a law be passed, at its present session, limiting the time within which 
 the creditors of the State, holding the class of claims referred to, shall tile 
 their releases to the United States ; declaring that, in default of their doing 
 so within the prescribed time, the claims shall forever be barred." 
 
 Texas had already passed laws to compel her creditors to bring 
 in their accounts to have them scaled down to one-half, one-fourth, 
 or one-fifth of what was due to them, under the penalty of forfeit 
 ing the whole. Here is a suggestion that these same creditors, 
 already scaled by force, shall by more force be compelled to sign 
 releases to the United States, or have their claims barred forever ! 
 
 The Governor did not stand alone in these views, for, even be 
 fore he sent in his message, a bill was introduced into the Senate 
 of Texas " to require the creditors to sign release^ to the United 
 States." 
 
 "It has further occurred to me, as the President has decided, that the 
 revenues from imports were specially pledged (in contemplation of the 
 Boundary Act ) for an amount of our public debt, almost equal (if it has 
 all been filed) to the reserved stock, that it might be advisable to appropriate 
 the stock so withheld to the payment of that portion of the debt for which 
 imports were pledged, and which would, consequently, come under this de 
 cision of the President; said stock to be issued to the creditors holding these 
 pledges as soon as the United States will so amend the act of the General 
 Congress as to give Texas control of the same." 
 
 There is no necessity for any new act. The moment the cre 
 ditors, either voluntarily or by compulsion, sign the releases to the 
 United States, Texas will get control of the bonds. 
 
 " I also recommend that a sufficient amount of the five millions of stock 
 within the present control of the State be appropriated to the payment of 
 that class of debts not covered by a pledge of import duties, under the de 
 cision of the President. This character of the indebtedness amounts to 
 $985,422, and has been denominated the second class. It is due mainly 
 to our own citizens for personal services rendered." 
 
 In this respect, it differs not from the evidences of the debts 
 held by citizens of other States. They were all incurred, either 
 directly or indirectly, for such services and supplies. But drawing 
 a line of distinction between creditors residing within and without 
 the bounds of the State appears to be a fixed principle of Texan 
 policy. 
 
 " From the report of the comptroller, it is evident that the whole ten 
 millions of dollars will not be required to discharge the outstanding liabili- 
 
190 THE FISCAL HISTORY OF TEXAS. 
 
 ties of the State, according to the scale which has been adopted for ascer 
 taining the actual amount of those liabilities, and from which I can see no 
 just reason to depart; and it will, therefore, become a subject of interesting 
 inquiry to you, as to the best mode of disposing of the surplus." 
 
 The Governor then recommends that the surplus be applied to 
 fostering general education and internal improvements. 
 
 Again, we say, Governor Bell must not be held personally respon 
 sible for the false doctrines embodied in his message. In uttering 
 them, he was the mouth-piece of the community he represented, or 
 rather of the active politicians with whom he was most closely con 
 nected. He entertained these sentiments in common with them. 
 But who can breathe an infected atmosphere and escape un 
 harmed ? 
 
 He was wrong throughout, because he viewed everything from 
 a wrong standpoint. The evident expectation of Congress was 
 that the five millions passed over unconditionally to Texas would 
 be applied by her to the payment of these debts, for which, in a 
 certain sense, the United States are regarded as responsible. How 
 else could the releases be obtained, the filing of which, in the Trea 
 sury Department of the United States, was an indispensable pre 
 requisite to the payment of the second five millions, according to 
 the terms of the compact ? No one could suppose that the creditors 
 of Texas, holding securities for which the revenues of the Republic 
 had been pledged, and which they, from the day of annexation, 
 had contended had been virtually assumed by the United States, 
 would file their releases unless they were paid. It is, therefore, 
 obvious that the unconditional issue of the first five millions was 
 intended to enable Texas to satisfy this class of creditors and ob 
 tain their releases, so that she could receive the second five millions, 
 according to the terms of the act to which she had given her full 
 and free assent. 
 
 Instead, however, of applying these five millions as they ought 
 to have been applied, Texas applied part of the money to the pay 
 ment of debts for which the United States are in no way liable, 
 and another part to the payment of her State expenses ! It was 
 apparently only because some of the members of the Legislature 
 favored railroads, and some the clearing out of rivers, that all that 
 remained of the five millions was not appropriated to works of in 
 ternal improvement. 
 
THE FISCAL HISTORY OF TEXAS. 191 
 
 By this strange proceeding, Texas has rendered it difficult, if not 
 impossible, to comply with her own part of the compact, and thus 
 greatly increased the perplexities of the question. 
 
 CHAPTER XXVIII. 
 
 PROCEEDINGS OF THE FOURTH LEGISLATURE, CONTINUED. 
 
 Report of the auditor and comptroller scaling down the public debt Extracts from 
 and remarks on the same Treasury notes Ten per cent, consolidated fund of 
 1837 Eight and ten per cent, funded debt of 1846 Treasury bonds Loan 
 from Bank of the United States Debt due for steamship Zavalla Debts to 
 Dawson, Schott, and Whitney Difficulties in applying the scaling principle The 
 cases of assignees in some instances of greater hardship than those of original 
 claimants Injustice of stopping interest after July, 1850 Act confirming the 
 award of the auditor and comptroller Governor Bell vetoes the act, but it passes 
 by a large majority. 
 
 Two days after the Governor had sent in his message, the auditor 
 and comptroller made a report, which, as it was the basis of the 
 subsequent action of the Legislature, we have inserted at length in 
 Appendix U. Inasmuch as the classification of the debts therein 
 contained was finally adopted, a particular examination of this 
 report becomes necessary. 
 
 After giving a table containing the original amounts of the debts, 
 and the rates at which they had been scaled, the auditor and comp 
 troller make some remarks on each class. 
 
 Speaking of the treasury notes, they say that for the first issue 
 (the printed notes) the government had received par, and they had 
 accordingly rated them at par. They then add: 
 
 "To the engraved interest notes we have assigned an average value of 
 fifty cents on the dollar. These notes were issued under the provisions of 
 the same act that the printed bills were, and took their place ; about the 
 time of the first issue of these notes (the spring of 1838), this species 
 of the government paper commenced depreciating in value, so that, when the 
 act of 19th of January, 1839, prohibiting their further issue, went into ope 
 ration, they were worth but about forty cents on the dollar." 
 
 Here we find that about the time this issue commenced, treasury 
 notes began to depreciate. Hence the State got, for the first batch 
 
192 THE FISCAL HISTORY OF TEXAS. 
 
 of this issue, par, or nearly par ; for the next batch ninety cents 
 in the dollar; for the next eighty, and so on till they fell to forty. 
 The Republic received for these notes as many different values as 
 there are between forty cents and ninety, or forty cents and a hun 
 dred. Yet the man who gave ninety cents in value for the notes 
 is to receive no more than he who gave forty. Veritably, this is 
 not equitable adjustment, even on Texan principles of equity. The 
 State has professed a willingness to give back as much as she re 
 ceived. According to her own confession, she received in value 
 for some of the engraved interest notes ninety cents in the dollar, 
 and now she proposes to pay the holders of them only fifty cents. 
 
 "To the treasury notes not bearing interest, generally known as red 
 backs/ we have assigned an average value of twenty-five cents on the dollar. 
 These notes superseded the engraved interest notes above referred to, and 
 the first issue of them was made during the spring of 1839, when they 
 were worth about thirty-seven and a half cents in the dollar. They continued 
 depreciating; so that, in 1841, the government was compelled to pay them 
 out at from twelve to fifteen cents on the dollar. The value which we have 
 given them is conceived to be equitable, as an average, both to the govern 
 ment and the holder." 
 
 Here is averaging again. John Smith gave the government the 
 equivalent of thirty-seven cents and a half in the dollar, his 
 brother Thomas gave twenty-five cents, and his cousin Samuel 
 gave only twelve cents and a half. John gave three times as much 
 as Samuel, and Samuel gave only half as much as Thomas. But 
 thirty-three and one-third per cent, is deducted from John, while 
 fifty per cent, is added to Samuel, in order that both may be placed 
 on an equality with Thomas. As the amount of these " red backs" 
 was nearly two millions, it is plain that individuals must here be 
 wronged in the amount of thousands of dollars, even on Texan 
 principles of dispensing justice. 
 
 But this is not all. 
 
 " It is impossible to ascertain, from the date of the issue of these bills, 
 as shown on the face, what they were worth when last paid out. For in 
 stance, a bill issued in 1839, at say thirty-seven cents and a half in the dol 
 lar, and after having been returned to the treasury in the collection of 
 revenue, may have been reissued, the year following, at twenty-five cents in 
 the dollar, and so on; and, in 1841, when it may have been last paid out, 
 at one-eighth of its ostensible value." 
 
 This is an admission, by the auditor and comptroller, that 
 they could not carry out the principle they had adopted. Even 
 
THE FISCAL HISTORY OF TEXAS. 193 
 
 the doctrine of averages failed them. The truth is that the Legisla 
 ture imposed a task on them which neither they nor any other men 
 could perform. Neither auditors, nor comptrollers, nor courts of 
 law, nor courts of chancery can effect an equitable adjustment of 
 debts contracted in a fluctuating currency, and the evidences of 
 which pass from hand to hand by simple transfer. Unless, in such 
 cases, evidence of what a State has promised to pay is regarded 
 as evidence of what a State ought to pay, everything is thrown 
 into uncertainty. 
 
 The like difficulties, it will be found, attended the scaling of the 
 " consolidated funded debt of 7th June, 1837." 
 
 " The stock known by this title was issued under the provisions of an 
 act of Congress, approved June 7, 1837, and, could it be analyzed, would 
 be subject to the greatest variety of equivalent rates. We found it impos 
 sible to refer, in each instance, to the original record, to ascertain at what 
 rate each claim had been audited for which stock was issued. Even had, 
 or could we have done so, we would have failed to a great extent in acquir 
 ing this information, for the reason that the government, for a long time, 
 would not acknowledge any discount on her paper; and the result was that 
 accounts were made out, augmented in amount, so as to make good the 
 deficit in the value of the currency. Hence, the only practicable mode 
 which suggested itself was to make an average, which we accordingly did, 
 and assigned to it a value of seventy cents in the dollar. It is believed that 
 this average is about what the government received in the main, and will, 
 with a few exceptions (which will hereafter be alluded to), fully remunerate 
 the present holders, as it is now generally in the hands of third parties, who, 
 in most instances, acquired it at much less value from the original investor 
 than that now assigned it." 
 
 In this place, it is acknowledged that it was impossible to ascer 
 tain either what value the original claimants had parted with, or 
 what the government had received. The rates were various, and 
 may have been from twenty-five cents up to ninety. But one ave 
 rage is struck for all. It is the case of the treasury notes over again. 
 
 A new principle of "equitable adjustment" is now, however,, 
 introduced. Before, it was what the government had received ; now, 
 it is what the "present holders" have paid. Admit this as a rule 
 of settlement in regard to public securities generally, and what 
 will be the consequence ? Public stocks are not unfrequently 
 above par. Then, if what a holder of public securities has given 
 for them is to determine what a State is to pay for them when the 
 time comes for redeeming them, the State must, in addition to the 
 original amount of principal, pay five to twenty per cent, premium. 
 13 
 
194 THE FISCAL HISTORY OF TEXAS. 
 
 We pass on to the " eight and ten per cent, funded debt of 
 the 5th February, 1840." 
 
 " We have assigned to this class of securities an average value of thirty 
 cents on the dollar. This stock was issued under the authority of an act 
 of Congress, approved February 5th, 1840, and was created for the purpose 
 of withdrawing and lessening the amount of revenue currency then in cir 
 culation, with a view of enhancing the value of the residue. The induce 
 ment held out to the creditors to surrender a revenue currency, and to take 
 one which could not be used in that way, was the promise of the govern 
 ment to pay the stipulated interest seim-annually in specie; which, it is well 
 known, she was unable to do. The value attached to this stock may act 
 onerously on some holders, but it will fully remunerate a large majority. 
 It icould be much more difficult in this fund than in any other to ascertain 
 the exact value the government received for the investments in it, as it is 
 composed of interest notes, l red backs/ and audited paper." 
 
 Here let us stop, and drop a tear of pity on the hard fate of the 
 original holders of this stock. We have no sympathy to spare just 
 now for the innocent purchasers at second hand. They must weep 
 for themselves. 
 
 But behold the hard fate of the original claimants. They had 
 Texan securities with which they might, according to law, have 
 paid their taxes. They parted with these in exchange for others 
 not so available, because the Republic wished " to lessen the 
 amount of revenue currency." "The inducement held out to 
 them to surrender this revenue currency, and take one which could 
 not be used in that way, was the promise of the government to 
 pay the stipulated interest semi-annually in specie." 
 
 Does the government fulfil its promise ? No, not for one single 
 half year. 
 
 What then does it do ? Why, after a lapse of some eight or 
 ten years, it passes a law declaring that these public creditors 
 shall be paid only thirty per cent, of their claims ! By the fund 
 ing law of 1840, these claims are fully and freely admitted to the 
 amount of $778,280 ; by the scaling law of 1848, they are reduced 
 to $233,484 ! 
 
 How much better it would have been for many of these claim 
 ants if they had held on to their original evidences of the public 
 debt, and not been seduced into a surrender of them by the pro 
 mise of the government to pay the stipulated interest semi-annually 
 in gold and silver. Among the amounts thus surrendered were 
 treasury notes of the first and second issue, and audited drafts and 
 
THE FISCAL HISTORY OF TEXAS. 195 
 
 audited paper of equal value. If they had held on to the first 
 issues till the scaling system was adopted, they would have obtain 
 ed par for them. If they had held on to the second issues, they 
 would have received fifty cents. But, having been induced by 
 the fair promises of the government to surrender them, they now 
 get but thirty cents ! 
 
 The "eight percent, treasury bonds" must next engage our 
 attention. 
 
 " Twenty cents in the dollar is the average equivalent value assigned 
 this class of the government paper. These bonds were issued to supersede, 
 to some extent, and take the place of treasury notes. There is less danger 
 of individual hardship growing out of the assignment of an average equiva 
 lent value to these bonds than that of any other of the government securi 
 ties; they were seldom ever issued at more than twenty-five cents in the 
 dollar, and rarely less than fifteen cents in the dollar. The value assigned 
 them is deemed equitable." 
 
 Equitable, indeed ! Twenty per cent, is deducted from one 
 class of claimants, and thirty per cent, given to another. The 
 man who invested the value of one hundred specie dollars in trea~ 
 sury bonds, when their market price was twenty-five cents in the 
 dollar, is now to receive but eighty dollars; while he who invested 
 the same amount in the same bonds when they were at fifteen cents, 
 is to receive one hundred and thirty-three dollars. And in this 
 way $766,800 of public debt is " equitably adjusted" down to 
 $153,360! 
 
 " There is less danger," say the auditor and comptroller, "of 
 individual hardship growing out of an average equivalent value to 
 these bonds than that of any other of the government securities." 
 Perhaps so. But hardship is one thing, injustice is another. It 
 may be a hard thing to compel a poor man to pay his debts ; but 
 it is not unjust. There may be no hardship in depriving a rich 
 man of half his dues ; but it would be very unjust. It is the duty 
 of legislative bodies to make just laws, and of auditorial boards to 
 make equal awards to rich and poor when the Legislature will let 
 them. 
 
 But we do not think the case of the holders of these treasury 
 bonds quite as free from hardship as has been represented. The 
 government issued these bonds, and they gave services and sup 
 plies in exchange for them. The government promised that these 
 bonds should be receivable for all public dues, and in about two 
 
196 THE FISCAL HISTORY OF TEXAS. 
 
 years it revoked its promise. The government made a special 
 pledge of the revenue arising from the license-tax and the tax on 
 personal property for the payment of interest on these bonds, 
 and afterwards applied the revenue to other purposes. The 
 government, to induce people to part with their substance in ex 
 change for these bonds, promised to pay them, semi-annually, 
 eight per cent, interest in gold and silver. It has never in one 
 half year fulfilled its promise. Finally, after keeping these claim 
 ants out of their just dues for twelve years, the government re 
 solves to pay them only one-fifth as much as it had contracted to 
 pay. If this had been understood when the issue of the bonds 
 commenced, their value in the market would have been reduced 
 four-fifths, so that, instead of twenty-five cents, only five cents in 
 the dollar would have been given for them, and instead of five 
 cents, only one. Such would then have been the value of a Texas 
 promissory dollar, as Texas now interprets her promises. 
 
 " Audited paper," continues the auditor and comptroller, "when 
 issued at par, has been allowed accordingly ; when less than par, 
 a corresponding deduction has been made ; the records and vouch 
 ers showing the rate at which it was audited." 
 
 This proceeding was on correct principles. There were two 
 currencies in Texas, and as bills were sometimes made out in the 
 one, and sometimes in the other, it was necessary to make an equa 
 tion of them. Here are four men, each of whom furnishes one 
 hundred beeves to the army. The first makes out his bill in specie, 
 and charges five dollars a head. The remaining three make their 
 charges in paper currency, designing in each instance to charge 
 the equivalent of specie; but, as the paper currency is subject to 
 successive depreciation, their charges are respectively $750, 
 $1000, and $1500. Without an equation of currencies, justice 
 could not be done to the State and to them also. 
 
 The auditor and comptroller then proceed to speak of some 
 special debts of the Republic. 
 
 u ln the first class are included the bonds issued to the Bank of the 
 United States for a loan of $400,000, obtained from that institution in the 
 year 1839; also, the claim of James Holford and associates for the purchase 
 of the steamer Zavalla. A value corresponding to what the government 
 actually received has been assigned to each." 
 
 The value the government actually received ! But what was 
 
THE FISCAL HISTORY OF TEXAS. 197 
 
 the value it engaged to give? Waiving the case of the United 
 States Bank, we may remark that it is not at all likely that the 
 owners of the steamboat "Zavalla" would have parted with value in 
 hand, certain and immediate, without the expectation, or at least 
 the promise made to them, of receiving greater value in time, espe 
 cially in a case in which the prospect of payment was so very re 
 mote and dependent on so many contingencies. The debtor is not 
 the sole judge of the value he receives. The creditor, also, must 
 be allowed some say in such matters. The steamboat "Zavalla" was 
 worth to the Republic of Texas all she engaged to pay for it. 
 Else, why did she engage to pay that for it ? What Texas pro 
 mised to pay the former owners of the "Zavalla" is what she owes 
 them. 
 
 Next come the debts of Messrs. Dawson, Schott, and Whitney. 
 
 " Since our last report, Messrs. James Schott and E. D. Whitney have 
 filed their claims, composed of one of the bonds issued to Frederick Dawson, 
 of Baltimore, in payment for the navy. These gentlemen, although not 
 known in the contract, are acknowledged by Mr. Dawson to have been 
 equally interested in that transaction ; and the readiness manifested in aid 
 ing the cause of Texas, by undertaking and carrying out a contract requir 
 ing a large pecuniary outlay, at a time when the public credit was at an 
 exceedingly low stage, procured for the contractors the commendation of 
 the late Republic/ 
 
 All this is very well. But resolutions of thanks will not pay for 
 vessels of war. These commendations were, no doubt, very de 
 lectable to Messrs. Schott, Whitney, and Dawson; but, as these 
 gentlemen are not pure spiritualities, they cannot live on commen 
 dations. What of a more substantial nature does Texas propose 
 to allow them ? Listen. 
 
 " In assigning to this claim fifty cents on the dollar, as the value re 
 ceived by the government, we have been governed by the law making the 
 appropriation, and the contract entered into by the agent of the govern 
 ment and Mr. Dawson. This contract, subsequently recognized by legisla 
 tive enactment (a copy of which accompanies), stipulates the price of the 
 vessel at $280,000, to secure the payment for which, two bonds of the Re 
 public, for $280,000 each, were deposited with the President of the Girard 
 Bank at Philadelphia, with the understanding that they could be redeemed 
 at the end of twelve months by the payment of the $280,000, and ten per 
 cent, interest on the two bonds; otherwise, the said bonds to become the 
 property of Mr. Dawson. The government was unable to make the pay 
 ment at the time specified; and the president of the bank, according to in 
 structions, delivered the bonds, amounting to $560,000, to Mr. Dawson." 
 
 Here is a contract as solemn as contract could be, ratified by 
 
198 THE FISCAL HISTORY OF TEXAS. 
 
 legislative enactment. "The government was unable to meet the 
 payment at the time specified," and then, after thirteen years 
 delay, the contract is further violated by reducing the claim to 
 fifty cents on the dollar ! 
 
 But this, say the Texans, is all the value our government re 
 ceived. That, we reply, is not so certain. Value is not something 
 fixed, absolute, and immutable. It is always relative, and varies 
 with circumstances. Ships of war were of great value to Texas 
 then : they would be of no value to her now. The commissioners 
 of Texas were, for a long time, hawking about Texas bonds, their 
 only marketable commodity. It was offered for sale in open 
 market ; Messrs. Dawson, Schott, and Whitney gave for this 
 merchandise full value. They gave more than anybody else was 
 willing to give more than they themselves would have been 
 willing to give if they could have foreseen the length of time they 
 were to be kept out of their just dues. 
 
 If these gentlemen should now be paid in full, it would be no 
 compensation for the injury done them. He is not a very success 
 ful merchant who cannot double his capital in twelve or thirteen 
 years. Dawson, Schott, and Whitney, but for their connections 
 with Texas, might have trebled their fortunes ; perhaps quadrupled 
 them, perhaps not. But, whether loss or gain would have attended 
 their exertions, one thing is certain, that, according to contract, 
 Texas owes Dawson, Schott, and Whitney $560,000, and interest. 
 
 Two of these claimants, Messrs. Schott and Whitney, in a letter 
 to the Governor of Texas, dated October 9, 1851, make the follow 
 ing statement : 
 
 " By the contract concluded on the part of the Republic of Texas, by 
 Mr. Samuel M. Williams, with Mr. Dawson, then acting also for us, two 
 prices were fixed for the construction and equipment of the vessels required 
 for the service of the government one a cash price of three hundred and 
 thirty-six thousand dollars, and the other a credit price of five hundred and 
 sixty thousand dollars. 
 
 "The difference between these two prices was occasioned, not only by the 
 uncertainty of the continued political existence of the Republic, but also by 
 the consideration of the great embarrassment which the advance of so large 
 a sum of money might occasion to the business of the contractors. The 
 Republic selected the latter price, and we received, in payment for our part 
 of the work, the bond for two hundred and eighty thousand dollars above 
 mentioned. * * * * The choice which the Republic made of the 
 credit price, and her failure to pay at the maturity of the bonds, compelled 
 us to sacrifice all our available means at a ruinous discount exhausted our 
 
THE FISCAL HISTORY OF TEXAS. 199 
 
 private fortunes and entirely destroyed the very profitable business then in 
 our hands. There can be no l instance of hardship/ it seems to us, greater 
 than to be compelled to lose, for the benefit of others, mercantile credit and 
 position ; and to support through life a weight of indebtedness incurred from 
 a generous confidence in the honor and success of a rising State. Such is 
 our position; and if the Legislature of Texas should restrict the payment of 
 our claim to what was once fixed as the cash price, the amount, at this late 
 day, will be insufficient to satisfy the debts which we still owe on her ac 
 count/ 
 
 Such have been the calamities of two of the creditors of Texas; 
 and hundreds of others have been made to suffer in the same way, 
 though not many in as large an amount. It is a mistake to sup 
 pose that the great body of the present holders of Texan securi 
 ties got them at very low rates. The writer of a letter, now before 
 us, states 
 
 " The interests of creditors have been somewhat prejudiced by the pre 
 vailing error that the present holders of the eight or nine millions of claims 
 hold them at a low cost. Those conversant with the position of this debt 
 know that it is held by the present holders at a cost of fully seven millions 
 of dollars. It is true that Texan securities have seen a very low mark ; but 
 a large portion of the claims are held by those to whom they were ori 
 ginally issued, while the vast majority of those that were sold and resold are 
 now lodged in hands of purchasers whose confidence in a sacred promise 
 and pledge had led them to bid correspondingly high." 
 
 The remarks made in relation to the case of Dawson, Schott, 
 and Whitney apply to the case of Mr. Holford, for, as the auditor 
 and comptroller correctly say, " The terms of contract between 
 the government and James Holford and associates, for the pur 
 chase of the steamer Zavalla, are similar to those entered into 
 with Mr. Dawson." Setting aside such positive contracts as these 
 is an action far more becoming a despotism than a republic. 
 
 The next paragraph shows that the auditor and comptroller met 
 with other embarrassments in applying the principles which the 
 Legislature had laid down for their guidance. 
 
 " In the average value assigned to the consolidated fund of June 7, 1837, 
 there came to our knowledge a few cases of hardship where the government 
 had received full consideration for the original obligation which had been 
 converted into this fund, and yet owned by the original investor. Had we 
 departed from the rate we had assigned to this or any other character of 
 liability, in any one instance, no matter how justifiable, others not possess 
 ing the same merit would have claimed it, and the consequence would have 
 been that but few claimants would have been satisfied with any other clas 
 sification than that of par. For this reason, we determined, in all instances, 
 to adhere to the rate affixed to each class, and report such cases of hardship 
 
200 THE FISCAL HISTORY OF TEXAS. 
 
 ^as might arise to the Legislature, in order that such relief may be awarded 
 in the premises as appears to be just. We, therefore, accompany this report 
 with a statement marked l C/ of such cases, and hope the same will receive 
 your favorable consideration/ 
 
 In this place is again brought forward the favorite Texan notion 
 that more justice is due to the original holder of a public obliga 
 tion than to him to whom it may have been transferred. Nothing 
 can be more erroneous. If a bank-note passes through five thou 
 sand hands, the obligation of the bank to pay the full amount to the 
 last holder is just as strong as it was to pay it to the first. The like 
 is true in regard to treasury notes, certificates of stocks, and other 
 evidences of public debt. And there may, sometimes, be greater 
 hardship in refusing payment to the last holder than to the first. 
 If a man dies, and his treasury notes and other securities pass to 
 his wife and children, they are no longer in first hands. Waiving 
 cases of this kind, there are others equally worthy of considera 
 tion. The receipt of public securities from their original holders 
 is not always matter of choice. Their creditors may be compelled 
 to take them in payment of debts long due, because they can get 
 nothing else. It is very hard, then, in the State to mulct these 
 second and third hand holders of one-half of their dues, because 
 they were under the necessity of receiving from their debtors go 
 vernment paper instead of money, when that very necessity was 
 created by the State in putting off its own creditors with paper 
 instead of money. 
 
 The creditors of a State living within the bounds of the State, 
 though they may be directly injured by the receipt of government 
 paper, may receive some compensation in the improved state of 
 public affairs consequent on a successful revolution. This is the 
 case of the creditors of Texas resident in Texas. Their political, 
 civil, and religious rights are now secure. Their lands have in 
 creased in value, in some instances many fold. In this way, they 
 may have been amply compensated for all their losses through "red 
 backs," and the various other paper devices to which their govern 
 ment resorted in order to get from them their property and their 
 services. Very different, however, is the case of those creditors 
 who reside in other States. Their lands have not been increased 
 in value by the annexation of Texas to the Union ; and their 
 political, civil, and religious rights are no more secure than they 
 were before the Texan revolution commenced. 
 
THE FISCAL HISTORY OF TEXAS. 201 
 
 If the public securities of Texas had not passed into the hands 
 of the residents of Louisiana, Arkansas, Georgia, and other States, 
 that revolution could never have been brought to a successful issue. 
 As it was, the original claimants passed them over to the Texan 
 merchants ; these sent them to the United States, and exchanged 
 them for merchandise. In this way, Texas obtained her supplies 
 of arms, clothing, and provisions. It was this, and this alone, 
 that saved the Republic. But, now that the Republic is saved, 
 this is to be made a reason for depriving those who were the 
 indirect instruments of its salvation of from one-fourth to four- 
 fifths of their dues. 
 
 Who in Texas was able to hold on to such an immense amount 
 of securities as the Republic issued ? Who would have received 
 them at all if it had been a condition that he must hold them till 
 the Republic might be able to redeem them, perhaps in five years, 
 perhaps in ten, perhaps never? What soldier would have received 
 the treasury notes in pay for services, or what farmer would have 
 received them in pay for provisions, if he had not known that he 
 could pass them off to the merchant ? And what merchant in 
 Texas would have been willing to receive them if he had not sup 
 posed the whole claim thus conveyed to him might be transferred 
 by him without diminution to whomsoever he chose? Whatever 
 value Texan securities may have had, whether little or great, they 
 owed that value quite as much to the action of those who got them 
 at second or third hand as to the action of the original claimants. 
 And unless Texas redeems those securities in full, no matter in 
 whose hands they may now be found, she will not give back the 
 value she has received. 
 
 We pass next to the subject of interest : 
 
 " On the liabilities stipulated to bear interest, we have calculated it from 
 the date of the last payment to the 1st of July, 1850, in accordance with 
 an act approved February 11, 1850, except the interest treasury notes, on 
 which we have allowed interest to the 1st of January, 1841, as all holders 
 of this character of notes were required to fund them by that time, and 
 the appropriation for the further payment of interest on said notes was 
 cancelled." 
 
 Yes, but cancelling an appropriation is not paying a debt. The 
 Legislature could not in justice require, all it could do was to invite, 
 the holders of treasury notes to fund them on a certain day. If 
 any of them chose not to accept the invitation, that did not, in the 
 
202 THE FISCAL HISTORY OF TEXAS. 
 
 least, lessen the obligation of the Republic to pay what it had pro 
 mised. Interest on a debt is due till the principal is paid. No 
 government that issues obligations bearing interest has any right 
 to cease paying interest till it offers to its creditors the full amount 
 of said obligations. 
 
 Equally arbitrary and inequitable is that provision of the law of 
 February 11, 1850, which declares that "all liabilities of the late 
 Republic of Texas shall cease to bear interest from and after the 
 1st day of July, 1850." Just as much right would the Legislature 
 have had to say that they should not bear interest after the 1st 
 day of July, 1840. A retrospective act of this character would have 
 been quite as just as a prospective one. Not till two years after 
 wards, or February, 1852, did Texas even commence paying her 
 debts at the scaled rates ; and till she pays all her debts in full, in 
 terest will, on principles of equity, be continually accruing thereon. 
 
 It is unnecessary to give any further analysis of the report of 
 the auditor and comptroller. They are estimable men and able 
 officers ; but the Legislature devolved on them a task which neither 
 they nor any one else could perform. 
 
 It might be supposed that such a report as this would induce 
 the Legislature to pause in its career ; but it did not. The report 
 itself (though that was not the object of its authors) contained the 
 most indubitable evidence that it was impossible to carry out the 
 principles that had been adopted: namely, that of giving to each 
 claimant the value the government had, according to its own esti 
 mate, received for the claim he held. But the Legislature did not 
 see this; or if it did, it did not care for it. It passed the law 
 following : 
 
 "An act confirming the action of the auditor &nd comptroller, under 
 the provisions of an act of the Legislature to provide for ascertaining the 
 debt of the late Republic of Texas, approved March 20, J 848, and the act 
 supplementary thereto, approved February 8, 1850. 
 
 " SECTION 1. Be it enacted by the Legislature of the State of Texas, That 
 the rate of payment and classification assigned to each class of debt of the 
 late Republic, by the auditor and comptroller, under the provisions of an 
 act entitled An act for Ascertaining the Debt of the late Republic of 
 Texas/ approved March 20, 1848, and the act supplementary thereto, ap 
 proved February 8, 1850, as reported by said officers in their report to the 
 Legislature of date the 12th of November, 1851, is hereby recognized and 
 adopted by the State of Texas ; and the value assigned to each class of lia 
 bilities by said officers in their report aforesaid is what the State of Texas 
 recognizes as due to the respective claimants." 
 
THE FISCAL HISTORY OF TEXAS. 203 
 
 The bill was sent to the Governor the 23d of January, and on 
 the 29th he returned it with a message, in which he said 
 
 " I have, both in my official capacity, and as a private citizen, expressed 
 my approbation of, and concurrence in the general basis upon which the 
 auditor and comptroller have classified the public debt of Texas, and the 
 value assigned to them ; but there is no general rule without its exception ; 
 and with those officers, I do think that there are cases of individual hard 
 ship to which an application of the general basis, upon which they felt 
 themselves constrained to act, does not render justice." 
 
 The Governor then mentions the cases referred to in statement 
 "C" of the auditor s report, and, conceiving that they are not pro 
 perly provided for in the bill, refuses to sign it. Towards the 
 close of his message, he says 
 
 " It is my anxious wish to see the State of Texas, at this time attracting 
 universal attention, assume a position in reference to her debt which will 
 not only command the admiration of her sister States and of foreign powers, 
 but save her also from any just charge of repudiation. So far as it lies in 
 my power, I desire every creditor of Texas to have what in justice and 
 equity is due to him. Such, too, I believe, is the sentiment of the people 
 at large, and of the Legislature." 
 
 The bill was passed in opposition to Gov. Bell s veto: in the 
 Senate by a vote of 29 to 5 ; in the House by a vote of 47 to 12. 
 
 CHAPTER XXIX. 
 
 PROCEEDINGS OF FOURTH LEGISLATURE, CONTINUED: 1851- 52. 
 
 Act passed for the liquidation of the public debt Debt payable and debt sus 
 pended Effects of this act in dividing the creditors into two parties, and throw 
 ing the odium of non-payment on the United States The money received from the 
 United States applied to pay the current expenses of the State Government. 
 
 THE Legislature did not confine itself to an act giving a legal 
 sanction to the awards of the auditor and comptroller. It made 
 provision for an agent to proceed to the city of Washington to 
 receive the bonds to the amount of five millions, about which there 
 was no controversy, and the interest that had accrued on the same. 
 And on the 31st of Jan., 1852, it passed a law entitled "An act 
 
204 
 
 THE FISCAL HISTORY OF TEXAS. 
 
 providing for the Liquidation and Payment of the Debt of the late 
 Republic of Texas." 
 
 In Appendix S, this law will be found at length; but it is so 
 intricate in its provisions, that many will find it difficult to under 
 stand. We shall therefore state that the effect of it was to divide 
 the whole of the acknowledged audited debt of Texas into two 
 classes, debt payable, and debt suspended. 
 
 The debt which was made payable immediately after the passage 
 of the act embraced the following items : 
 
 Original amount. 
 
 Ten per cent, funded debt cre 
 ated by act of Feb. 5, 1840 
 
 Eight per cent, funded debt 
 created by act of February 
 5, 1840 
 
 Audited paper issued under va 
 rious enactments .... 74,441 26 
 
 26,129 87 
 
 Scaling rate. Scaled amount. 
 
 $754,000 00 30 cts. $226,200 00 
 
 24,280 00 
 
 30 
 
 Miscellaneous liabilities 
 
 Amount filed and receipted for 
 as second class debts . . 
 
 Ditto, third class, since recog 
 nized as second class . . 
 
 Amount audited by special acts 
 
 various 
 1 00 
 
 7,284 00 
 
 69,451 12 
 26,129 87 
 
 748,899 89 various 679,222 50 
 
 16,467 95 
 34,023 55 
 
 00 
 00 
 
 16,467 95 
 34,023 55 
 
 $1,678,242 52 1,058,778 99 
 
 For the payment of these debts, and the interest thereon, bonds 
 to the amount of two million dollars were appropriated. 
 
 The reader will observe that, with the exception of the eight 
 and ten per cent, funded stocks, the evidences of these debts were 
 in such a form as to be likely not to find a general market beyond 
 the limits of the State. Thus, the debt made payable was the 
 " domestic debt" of Texas. He will also observe that this domes 
 tic debt was subject to a very small scaling, when compared with 
 the "foreign debt," i. e., the debt the evidences of which are held 
 principally by the citizens of other parts of the Union. 
 
 Having still on hand bonds to the amount of three million dol 
 lars, the Legislature might have gone further in its payments; but 
 it was not disposed so to do. It made the payment of the whole 
 of its treasury notes, and of the residue of its stock and funded 
 debt, dependent on the future action of the United States. These 
 debts were not to be paid till the bonds reserved in the treasury 
 of the United States should be paid over to Texas, or such por- 
 
THE FISCAL HISTORY OF TEXAS. 205 
 
 tions thereof as might equal in amount the claims for which the 
 creditors might sign the required releases. 
 
 We have seen that a bill had been brought before the Legislature 
 to compel the creditor to sign releases to the United States. But 
 this was abandoned as too bold a measure, and what was, no doubt, 
 regarded by its authors as a master-stroke of policy, adopted in its 
 stead. This would throw the odium of non-payment on the United 
 States, and cause the creditors of Texas to make common cause 
 with her in getting the bonds out of the federal treasury. The 
 five millions already received, with the interest accrued thereon, 
 would, indeed, pay the whole of the "filed" debt, as scaled by the 
 auditor and comptroller ; but two millions would satisfy the domestic 
 creditors. The remaining three millions might be applied to pur 
 poses of internal improvement; and the "foreign" creditors wait 
 till the United States could be forced or persuaded to modify the 
 obnoxious provision which denied to Texas the absolute and uncon 
 ditional control of the remaining bonds. 
 
 The scheme was cunningly contrived, and not the less so in 
 being embodied in an act so involute and convolute that probably 
 many who voted for it did not see its true bearing. 
 
 The effect intended has, in part at least, been produced. Some 
 of the people of Texas are loud in their complaints " about the in 
 justice of the United States in withholding from the State the bonds 
 which are her own property, thereby preventing Texas from paying 
 her creditors;" when the truth is that already more than enough 
 bonds have been passed over to Texas to pay all her debts, both 
 domestic and foreign, according to her " plan of settlement." The 
 whole amount which Texas has to pay, according to the award of 
 her auditor and comptroller, is, interest included, only $4,807,764 
 37. Supposing the bonds to bring on an average only four per 
 cent, premium, they are worth $5,200,000. To this add interest 
 for one year $250,000, and the total is $5,450,000, being nearly 
 $650,000 more than Texas is willing to pay. 
 
 In the other object they had in view, the framers of this bill 
 have also partially succeeded. A portion of the creditors finding 
 that Texas, though she had ample means in hand, would not pay 
 them even the scaled amount of these debts, have united their 
 efforts with those of the Texas politicians to induce the United 
 
206 THE FISCAL HISTORY OF TEXAS. 
 
 States to give up the reserved bonds, or so many of them at least 
 as will cover the amount of their scaled claims. 
 
 A statement follows of the various items of debt, the payment 
 of which has been suspended by the complicate action of Texas : 
 
 Original amount. Scaling rate. Scaled amount. 
 
 Ten per cent, consolidated fund, 
 
 created by act of 7th June, 
 
 1837 ....... $632,52680 70 cts. $442,768 76 
 
 Ten per cent, consolidated fund, 
 
 created by act of 7th June, 
 
 1887, issued under an act for 
 
 the relief of Swartwout and 
 
 others 7,970 43 1 00 7,970 43 
 
 Eight per cent, treasury bonds, 
 
 created by act of 5th Febru 
 ary, 1840 766,800 00 20 153,360 00 
 
 Ten per cent, treasury notes is 
 sued under act of 9th June, 
 
 first issue 41,630 00 1 00 41,630 00 
 
 Ten per cent, treasury notes is 
 sued under act of 9th June, 
 
 second issue 331,371 00 50 165,685 50 
 
 Treasury notes, without interest, 
 
 issued under act of 19th 
 
 Jan. 1839, third issue . . 1,828,192 00 25 457,048 00 
 
 Ten per cent, bonds issued by 
 
 commissioners to negotiate a 
 
 loan for $5,000,000, viz. : 
 
 For loan obtained from Bank 
 
 of United States . . . 457,380 00 400,000 00 
 
 For purchase of steamer 
 
 "Zavalla" 195,907 00 50 90,014 84 
 
 For purchase of naval vessels 
 under contract with F. 
 Dawson, now owned by 
 James Schott and E. D. 
 Whitney 280,000 00 50 140,000 00 
 
 Total of debt suspended . . $4,541,777 23 $1,898,477 53 
 
 In addition to this act, the Legislature passed two others, one 
 appropriating $123,220 33 for the payment of other portions of 
 the second class debt, and another appropriating some forty or 
 fifty thousand dollars to cover third class debts, which had not 
 been formally decided on when the auditor and comptroller made 
 their reports. 
 
 It also passed a law authorizing a sale to the amount of a mil 
 lion of the bonds, and another appropriating so much of the money 
 
THE FISCAL HISTORY OF TEXAS. 207 
 
 received from the United States as might be necessary to the pay 
 ment of the current expenses of the State Government for two 
 years to come. 
 
 Just before the Legislature adjourned, Mr. Shaw, the comp 
 troller, who had been sent to Washington City as agent of the 
 Texan Government, arrived at Austin with the bonds to the amount 
 of five millions, and the interest that had accrued thereon, to the 
 amount of $250,000, in gold. The members received their pay 
 out of this gold, and went rejoicing to their homes. 
 
 The treasurer then commenced making payments in gold ; but 
 as his coffer soon gave signs of exhaustion, he began (with the 
 sanction of the other high officers of State) to pay the public 
 creditors in United States bonds at three per cent, premium. 
 
 A sale of bonds to the amount of upwards of $800,000 was 
 afterwards effected at a premium as high, in some cases, as five 
 per cent., and thus Texas realized an additional profit. 
 
 CHAPTER XXX. 
 
 PROCEEDINGS OF THE THIRTY-SECOND CONGRESS OF THE UNITED 
 STATES : FIRST SESSION, 1851-52. 
 
 Diversified action of the creditors Report to United States Senate by Mr. Pearce, 
 of Maryland Motion by Mr. Mason, of Virginia Remarks of Messrs. Houston, 
 Pearce, Butler, Pratt, and others Present condition of the creditors of Texas 
 Distinction between debts of the Republic and debts of the State. 
 
 THE action of the Legislature of Texas had, as has already been 
 observed, the effect of dividing the creditors into two parties. 
 Part of them applied to the Congress of the United States for pay 
 ment of the amounts due to them. Another part petitioned the 
 same Congress to surrender the bonds to Texas in proportion as 
 releases to the United States should be filed at the Treasury De 
 partment. 
 
 The Finance Committee of the Senate, to whom these petitions 
 were referred, after duly considering the same, made report, 
 through Mr. Pearce, of Maryland, on the 17th of August, 1852. 
 
208 THE FISCAL HISTORY OF TEXAS. 
 
 In this report, the committee, after showing in what manner 
 and to what extent the United States had become responsible to 
 the creditors of Texas, recommend the passage of a bill for issue 
 of stock of the United States to the amount of eight millions and 
 a third, bearing an interest of three per cent, per annum the said 
 stock to be paid to the creditors on their giving receipts in full and 
 assignments of their evidences of debt, which may be held by the 
 United States as a set-off to the claims of Texas to the five millions 
 reserved under the act of September, 1850. This report is so 
 important that we have inserted it at length in Appendix V. 
 
 When the report was laid before the Senate, no remarks were 
 made except by Mr. Hunter, of Virginia, one of the members of 
 the committee. He said he was in a minority as respected the bill, 
 but that pressing duties at that juncture would not permit him to 
 draw up a counter report. 
 
 Nine days afterwards, or on the 26th of August, when the 
 general Appropriation Bill was under discussion, Mr. Mason, of 
 Virginia, proposed an amendment to it, the purport of which was 
 that the Secretary of the Treasury should release to Texas the 
 reserved bonds in proportion as the creditors of Texas should file 
 releases to the United States. 
 
 Mr. Mason, in supporting this amendment, said : 
 
 (l I am told, and I have no doubt correctly, that the State of Texas, be 
 fore the passage of the act, passed a law determining in what proportion 
 she would pay that debt; in other words, that it should be scaled at pre 
 scribed rates. I have not felt myself at liberty to enter into the consider 
 ation of the subject how Texas proposes to pay the debt. Whatever my 
 opinions may be, they are not to be expressed here. She is to determine 
 for herself, upon her own ideas of propriety, what to do with her creditors. 
 I have nothing to do with that subject. My object alone is to say that I 
 do not believe the interests of the United States, which I am here to repre 
 sent, will be affected by authorizing the stock to be issued as fast as the 
 releases come in; and that is the whole object of the amendment." 
 
 Messrs. Gwin of California, Clemens of Alabama, and Bright 
 of Indiana, opposed the discussion of the amendment on the 
 ground of want of time. Mr. Clemens said : 
 
 f( My State is one of the creditors of Texas. We are willing to trust 
 Texas. We believe that Texas will pay us : at all events we are willing to 
 trust her." 
 
 Mr. Houston, of Texas, supported the motion of Mr. Mason, 
 
THE FISCAL HISTORY OF TEXAS. 209 
 
 and expressed his regret that the subject had not sooner been 
 submitted to the Senate. He added : 
 
 " If the Senate were to act upon it, and to adopt the measure now pro 
 posed, I believe it would not only benefit the creditors of Texas, but it would 
 attain all the ends of justice that they can ever expect, or that Texas, can 
 ever accord to them, which will, I think, be complete. Whether they will 
 act upon it or not, Texas will take care of herself, and her creditors, too, if 
 she can." 
 
 The debate was continued by Mr. Pearce of Maryland. He said : 
 
 " Mr. President, if the State of Texas and her creditors were the only 
 parties concerned, I should not be inclined to offer the least opposition to the 
 amendment of the Senator from Virginia. But the Senate must all know 
 that the United States are concerned, directly concerned; that it was the 
 supposed liability of the United States which induced us to make that pro 
 vision in the bill of 1850, by which five of the ten millions of stock, which 
 the bill proposed to grant to Texas, were reserved and retained in the Trea 
 sury, until releases should be filed by the creditors of Texas, of a certain 
 class. That class of creditors, as the Senate will remember, were those who 
 held bonds for which the revenues of Texas, arising from imports, had been 
 pledged. It had been alleged here that the United States were liable for 
 the bonds for which these revenues were so pledged. Even during the dis 
 cussion of the annexation of Texas, I well recollect that the honorable 
 Senator from Massachusetts (Mr. Davis), in the course of a speech which he 
 made on that occasion, produced one of the revenue bonds of Texas, held 
 it up, showed it to the Senate of the United States, and urged it as an 
 argument against annexation that we should be inevitably obliged, at some 
 future day, to pay that class of debts, at all events. That was one of the 
 considerations which induced the Congress of the United States to agree to 
 give to Texas, by the bill of 1850, the large sum of $10,000,000. It was 
 held that the United States were liable at all events, such was the opinion 
 of a great many persons, and probably of a majority of Congress because, 
 if the United States, upon the annexation of Texas, took possession of the 
 funds which were pledged by that Republic to one class of her creditors, 
 they must take those funds cum onere ; they could not be diverted from the 
 purpose to which they had been pledged by the Government of Texas; and 
 when they were received into the treasury of the United States, the United 
 States having so diverted them became liable, at least in some degree, to 
 the parties to whom those bonds were pledged. 
 
 " Well, sir, that being the case, the United States, having that view, re 
 served the five millions, and declared that they should not be paid over to 
 Texas until the creditors filed their releases. It is manifest, when we come 
 to consider this proposition, that we are considering that which does not con 
 cern Texas and her creditors alone, but which concerns the Treasury of the 
 United States. Texas has passed a law proposing the liquidation of her 
 debt, and has classed her creditors variously. 
 
 " I have not yet ascertained the exact amount of those claims for which 
 her revenues from customs were specially pledged by that name, or gene 
 rally as revenues, or as being made receivable in payment of public dues. 
 The Secretary of the Treasury, in the opinion which he has filed on this 
 14 
 
210 THE FISCAL HISTORY OF TEXAS. 
 
 case, has stated that he supposes that the class of claims which came under 
 that description are not to be confined to those claims for which the reve 
 nues from customs were pledged on the face of the bonds, but that other 
 classes, also, are equally pledged, though in a different form. For example, 
 some of these obligations of Texas are made receivable for all public dues. 
 If they are receivable for all public dues, they are receivable in payment 
 of duties on imports; and if so, duties on imports may be considered as 
 pledged for their payment. Texas, by the act of their Congress, though it 
 does not appear on the face of many of her obligations, pledged all her 
 revenues for the payment of those obligations prior to January, 1840. Of 
 course, a pledge of revenue from all sources included a pledge of revenue 
 from customs just as effectually as if that source of revenue was specially 
 named ; since otherwise a general pledge of the revenues would be a pledge 
 of no particular item of revenue at all. These are classes of which we 
 were not aware at the time we passed the act of 1850. These classes 
 amount to a much larger sum than the five millions reserved, and hence it 
 is that the United States become interested ; for these different classes of 
 claimants amounting to more than five millions, it follows that, if we allow 
 these claims to be admitted by payment to one portion of the creditors, still 
 we would remain liable to another portion, and so we should not escape 
 that which it was our purpose to avoid when we made the reservation. 
 
 " Texas has scaled her debts ; that is, she proposes to liquidate them by 
 paying some creditors the par value, as we call it, or the ostensible value, 
 as they call it at the treasury of Texas ; others she proposes to pay at the 
 rate of seventy cents on the dollar; another class at fifty cents; and an 
 other, I think, at twenty cents on the dollar. With regard to some of 
 these claims, Texas alleges that she received only so much as she is now 
 willing to pay; that those who took her obligations bought them under par, 
 or advanced less than their nominal amount. Then again, in regard to 
 some classes, it is impossible to ascertain what the different creditors have 
 advanced on those bonds, some having given more, and others less. These 
 Texas has averaged. This proceeding is not satisfactory to those who have 
 been scaled at the low rate ; and they, naturally enough, are disposed to 
 hold, not Texas only, but the United States liable for the whole amount of 
 what is due upon the face of the bonds. They say, and it is very difficult 
 to deny it, that, at the period when they took those obligations, the affairs 
 of Texas were in a very critical, if not almost desperate state ; that the 
 reduced rates at which they paid for their bonds was but fair, when you con 
 sider the risk they run; and they say that they are entitled to all, now that 
 Texas has got out of her difficulties, and especially as the United States 
 have in some measure acknowledged their liability for them. And then, 
 as it has not been the practice of the Government of the United States to 
 scale her debts, to refuse to pay her liabilities in full, it is difficult for us to 
 say that we will sanction any proceeding by which payment for one portion 
 of these debts, at one rate, should be paid at the treasury at a rate which 
 will leave a remainder of the five millions insufficient to pay the other 
 creditors at the same rate. 
 
 " I wish to say that I trust these remarks will not be considered offensive 
 to Texas. It is impossible to avoid speaking of the effect of the scaling 
 act; but neither in the report of the Committee on Finance, nor in any re 
 marks which I may make, is there any desire to cast any reproach upon 
 
THE FISCAL HISTORY OF TEXAS. 211 
 
 that State. On the contrary, I have endeavored to avoid any expression 
 which might justly cause irritation. 
 
 " I suppose that, if you adopt this proposition of the Senator from Vir 
 ginia, the consequences would be, that something like $1,800,000 would 
 be paid out of the treasury of the United States in favor of the claimants, 
 scaled at the high rate, and they most probably would be satisfied; but those 
 scaled at the low rates would be utterly dissatisfied ; and they would here 
 after be calling on the treasury, and calling until, at last, I have no doubt, 
 we should yield to their demands, and exhaust, not only the whole amount 
 of the $5,000,000 left, after the $1,800,000 were paid, but even $6,000,000 
 or $7,000,000, to which, with the accumulated interest, in the course of a 
 few years, the remainder of the debt would amount. If we adopt this 
 amendment, the amount remaining of the $5,000,000 will not more than 
 one-half satisfy these demands. 
 
 " Now, will the United States, under these circumstances, give their 
 sanction to a proposition, by which one class of creditors, having quite an 
 equal claim upon them as the other class, shall be paid at the treasury out 
 of this reserved fund, at the larger rate at which their claims were scaled, 
 and leave the others to receive the reduced rate at which they were scaled, 
 or wait an indefinite series of years, besieging us all the time for the full 
 rate which they say they have the right to demand, and which, according 
 to our usage, we have not a right to deny ? If we are not prepared to say 
 that we will discriminate between the classes who have equal claims against 
 the United States, we must reject this amendment. 
 
 " The Committee on Finance have, through me, submitted a proposi 
 tion which, we believe, will be satisfactory to all the creditors of Texas. 
 That proposition is to appropriate $8,333,000 in bonds, bearing an interest 
 of 3 per cent., to be divided equally among all the claimants, according to 
 their claims. I do not propose now to vindicate that bill, but I shall be 
 prepared to do so whenever it comes up properly. We hope that it will 
 prove satisfactory to Texas, as we are sure it will be to the creditors. But 
 while that is pending, it seems to me that we can scarcely, without entering 
 into its consideration, undertake to dispose favorably of this proposition of 
 the Senator from Virginia. I will not pursue the debate further. I have 
 stated these considerations in order to show the difficulties in the way of 
 the adoption of the proposition of the Senator from Virginia." 
 
 Mr. Hunter, of Virginia, preferred the amendment offered by 
 Mr. Mason to the report of the Finance Committee, but he did not 
 wish the general appropriation bill encumbered by any provision 
 relating to the debt of Texas. 
 
 Mr. Houston said : 
 
 "Without the reservation having been made in the law of 1850, 1 never 
 should have supposed, for one moment, that the United States were liable 
 for any portion of the debt of Texas. Nor do I believe that by any but an 
 open declaration of theirs can they even assume the responsibility of her 
 debts. Texas has not repudiated any of her liabilities. She has 
 
 arranged that by her municipal regulations. She had a right to do that. 
 
212 THE FISCAL HISTORY OF TEXAS. 
 
 * She is competent to regulate her own matters, and she will re 
 serve that power, let the United States take what action they please." 
 
 Mr. Bayard, of Delaware, said he should vote against the amend 
 ment, because there was no time to discuss the principles involved 
 in it, and the relative importance of the two propositions this and 
 the one reported by the Finance Committee. 
 
 The debate was continued by Mr. Butler, of South Carolina, 
 and Mr. Pratt, of Maryland, whose words we must give verbatim. 
 
 "Mr. BUTLER. Mr. President, I have not now time to say what I would 
 wish to say upon this subject, but I will say one thing pretty decidedly 
 that I think Texas ought to be the administrator of her own affairs; and 
 when the United States undertook to supervise and correct her, and assume 
 for Texas a responsibility which she is not disposed to assume for herself, 
 it is the climax of Federal assumption. 
 
 "Sir, some gentlemen say there is not time to consider this subject; 
 others say if there were time it ought not to be considered one way or the 
 other; but I choose to say that there is time enough to consider this in any 
 point of view in which I believe the subject ought to be considered; and 
 that is, to allow those who may be willing to receive their money according 
 to the scale of Texas, to come in, file their releases, and receive their money. 
 What objection is there to that? That is the object of the amendment of 
 my honorable friend from Virginia. 
 
 "There is now an injunction upon that; and upon what ground? That 
 by delaying this subject, and managing, perhaps, upon a very high con 
 sideration of political morality no speculation, of course; I suppose spe 
 culation has nothing to do with this subject the Federal Government is to 
 rebuke Texas by saying to her : You have not scaled your debt correctly, 
 and we will assume to honor a draft which you do not choose to pay, on the 
 ground that you have disgraced yourselves/ That is the amount of it. 
 We have said to Texas: * Say what you owe, and we will pay it; and to 
 save ourselves from any further liability hereafter, we will give you 
 $5,000,000 positively, and $5,000,000 on certain conditions, that your cre 
 ditors file releases. Well, all do not come in. Here are women and 
 children absolutely perishing because they have not liberty to come in and 
 take their money; and then, from a high morality political morality, of 
 course the United States tell Texas : You have disgraced yourselves by 
 the manner in which you have scaled your debts; we will save you from 
 disgrace by assuming the debt; we will accept the draft which you have 
 dishonored/ I do not stand here to be the guardian of the honor of Texas 
 not at all. But one thing is very certain ; and I leave the proposition to 
 the public to say whether there is more political morality or speculation 
 in it." 
 
 "Mr. PRATT. Mr. President, if I admitted the obligation supposed to 
 exist by the Senator from South Carolina (Mr. Butler), I should, of course, 
 agree with him in opinion; but I do not think the obligations of Texas have 
 anything to do with the question presented by this amendment. The sole 
 question for us to consider is whether the Government of the United States 
 is bound for all these debts. 
 
THE FISCAL HISTORY OF TEXAS. 213 
 
 " The Senator makes light of the proposition. I know him to be a good 
 lawyer, and I venture to say now that he cannot answer the argument which 
 so humble an individual as myself may make on the subject. 
 
 " Mr. President, I do not propose to say anything as to the honor of 
 Texan. The question here is whether the United States are liable for these 
 debts or not. If the United States be answerable for them, then it is the 
 honor of the United States, not the honor of Texas, that we are to consider. 
 Now, I assume, as a legal proposition which my honorable friend from South 
 Carolina cannot deny, that, whenever any one State becomes, by compact, 
 amalgamated with another, the State into which the sovereignty is merged 
 is liable for all the obligations of the government thus united with it. 
 
 " My constituents are deeply interested in this question. I do not intend 
 to say aught against Texas. I am speaking of the obligation of the United 
 States to pay my constituents the debt which I believe is now due from this 
 government to them. 
 
 " Texas was a sovereign State; the United States cannot deny that pro 
 position; it must be conceded by us, at least, that Texas was a sovereign 
 State. She has yielded that sovereignty to the United States. What, per 
 mit me to ask, was pledged for the payment of her debts? I differ here 
 somewhat from my honorable colleague. I say that the national faith of 
 Texas, her faith as an independent nation, was pledged. She has ceased to 
 exist as a nation. The United States now possess that former sovereignty 
 which was originally pledged by Texas for the payment of these debts. 
 Now, I say that it is a proposition of national law, running down from the 
 first elementary works to the latest writer on the subject, that, where that 
 case exists, where the sovereignty of one State has been merged in that 
 of another, the State into which it is merged is liable for all the obliga 
 tions of the other. I hold before me Rutherford s Institutes, who, speaking 
 of the effect of the union, by compact, of two States into one, says: 
 
 " i Since both States thus continue in this united body, and neither of 
 them ceases to exist, the rights and the obligations of both will remain, and 
 will become the rights and obligations of the united body that is, whatever 
 rights belonged to each State separately before they were united will after 
 wards be the rights of the collective State ; and the same obligations that 
 each State was under separately before, the collective State will be under 
 afterwards. 
 
 "You will find in all the elementary works this proposition broadly laid 
 down, and it is, I submit, a proposition right in itself. Texas was entitled 
 to enter into these obligations. She was a nation, existing in the eyes of 
 the civilized world as a nation, when she entered into these obligations." 
 
 "Mr. BAYARD. Allow me to ask the honorable Senator from Maryland 
 whether he argues that the entire nationality of Texas was all amalgamated 
 into the United States? Did her entire sovereignty pass to the United 
 States? I say the entire nationality of the nation amalgamated with an 
 other must be destroyed before the nation into which it is amalgamated is 
 liable for the debts of the other." 
 
 " Mr. PRATT. The Senator says that the entire nationality must be de 
 stroyed. Now, I say the entire nationality of Texas was destroyed. I do 
 not mean to say that she is not a State equal to any in this Union. I am 
 proud to consider her as a sister State, equal to any other State in the Union. 
 
214 THE FISCAL HISTORY OF TEXAS. 
 
 But I say that Texas has surrendered the entire nationality which was 
 pledged for the payment of these debts. 
 
 "The proposition of my honorable colleague is that the United States 
 are bound for that class of debts for which she had pledged her revenue 
 from imposts, and which were of course expressly ceded to this Union by 
 her becoming a member of it. No one can doubt that proposition. My 
 honorable friend from South Carolina says there is nothing in it; but he ad 
 duced no argument to show it." 
 
 " Mr. BUTLER. I had not time to do so." 
 
 " Mr. PRATT. Nor could you, if you had time; nor can any man living 
 refute the proposition, that, so far as the obligations of Texas were secured 
 by her revenues from imposts which have been surrendered to this Union, our 
 government, having taken those revenues, took them cum onere, and are 
 bound for the debts for which Texas pledged them. But I go further, and 
 I say that, in reference to all the debts of Texas for which the national faith 
 was pledged, we, having assumed the nationality which was pledged for 
 their payment, assumed the debt. 
 
 " My honorable friend from Delaware has asked me whether Texas sur 
 rendered her nationality her entire revenue, and ability to pay, which, as 
 a nation, she possessed antecedently to her annexation to this Union. Well, 
 I say that she has ceased to exist as a nation." 
 
 "Mr. BAYARD. She possesses a quasi sovereignty." 
 
 " Mr. PRATT. We have peculiar institutions. The sovereignty which 
 she possesses is a quasi sovereignty : but the sovereignty which she had 
 pledged for the payment of these debts was an absolute sovereignty, and 
 has been surrendered. She entered into these debts as a nation. As a na 
 tion she has ceased to exist; and she is now a member of this Union, pos 
 sessing, as my friend says, a quasi sovereignty; but not possessing the sove 
 reignty which was pledged for the payment of those debts. It is sufficient, 
 however, for the purpose of this argument, to show, what cannot be success 
 fully denied by any one, that the class of debts embraced by the amendment 
 were secured by an express pledge of revenues of Texas which have been 
 surrendered to the United States. In regard, therefore, to the class of debts 
 affected by the amendment under consideration, Texas has surrendered to 
 the United States the revenues which she had pledged for their payment; 
 and in regard to them, the Senators from South Carolina and Delaware must 
 admit that Texas has ceased to be sovereign; and by the admission neces 
 sarily inferred from their argument, we (the United States) are answerable 
 for them, the thing, the revenue, pledged by Texas for their payment, now 
 belonging to the United States, and she receiving the money arising from 
 it. This proposition, therefore, with due submission to the judgment of 
 others, I say, cannot be successfully denied with reference to that class of 
 debts intended to be embraced by this amendment, because, by assuming 
 the means which Texas pledged for their payment, the United States with 
 them necessarily assumed the payment of the debt for which those means 
 were pledged." 
 
 The Senate adjourned without taking a vote on the question; 
 and for the present the condition of the creditors of Texas is as 
 follows : 
 
THE FISCAL HISTORY OF TEXAS. 215 
 
 With claims on two governments, which claims are, to a certain 
 extent, recognized by both, they are paid by neither. 
 
 Texas, although she has abundant means, will not pay them so 
 much as one cent of even the scaled amount, because she wishes 
 them to unite with her in. forcing the United States to give up the 
 reserved bonds. 
 
 The United States will not pay them, because this would be in 
 reality exacting the amount from her twice. If she should make 
 an unconditional surrender of the bonds, or any surrender of them 
 whatever, except on the terms stipulated in the act of September, 
 1850, she would make herself liable to the creditors for the differ 
 ence between the scaled and the original amount of their claims. 
 
 One class of creditors join with Texas to wrest the reserved 
 bonds from the United States Government ; but they show by 
 their language and their conduct that, if the United States should 
 pay the others in full, they would expect to be paid in full also. 
 What they aim at, is, to be paid the scaled amount by Texas now, 
 and the residue by the United States some time hereafter. 
 
 What the result will be, we pretend not to augur. If the ques 
 tion could be kept clear of all others, there would be little difficulty 
 in effecting an adjustment. But this can hardly be hoped. Our 
 leaders of all parties are always on the look-out for something out 
 of which to make political capital. It was of very little importance 
 to the great body of the people of the United States where the 
 line was drawn between Texas and New Mexico. But the contro 
 versy on this question (if the speech-makers are to be believed) 
 brought into danger the very existence of the Union. The truth 
 is that various aspirants for public honors wanted something to 
 quarrel about, and if they could have found no better subject of 
 dispute, they would have quarrelled about a stick or a straw. Not 
 a few of them seem ready at any time " to bring the Union into 
 danger," so far at least as can be done by their speeches, in 
 order that they may afterwards have the honor of saving it by 
 other speeches. 
 
 Judging by past experience, there is little hope that this case 
 will be decided solely on its merits. Perhaps the doctrine of 
 " State Rights" will be invoked to bring it within the limits of the 
 political arena. If so, we protest against any such abuse of what 
 is, when properly understood, a most excellent doctrine. A State 
 
216 THE FISCAL HISTORY OF TEXAS. 
 
 has an undoubted power to contract debts, and pay them in whole 
 or in part, or not at all, just as she pleases; and the United 
 States have no power to interfere. So a State may, by what 
 General Houston is pleased to denominate "her municipal regu 
 lations," call in her evidences of public debt, and scale them down 
 to one-half of their original amount. She may call them in, in 
 this way, again and again, till finally she scales them down to 
 zero. " She has a right to do that." " She is quite competent 
 to regulate her own matters," and in this way " to take care of 
 herself, and her creditors too;" and the United States have neither 
 the ability nor the disposition to interfere with this " arrange 
 ment."* 
 
 * Far be it from us to doubt or deny the sovereign right of a sovereign State to 
 cheat its creditors. This is an attribute of sovereignty which the States have never 
 surrendered. On this pointjwe are of perfect accord with Mr. Mason and Mr. Hun 
 ter of Virginia, Mr. Butler of South Carolina, and General Houston of Texas. But 
 does the case of Texas fall strictly within the limits of the principles laid down in 
 our text ? The constitutional right of a State to repudiate its debts, either in 
 whole or in part, we freely admit. But the debts in question are not the debts of 
 the State of Texas, but the debts of the Republic of Texas. Some of the citizens of 
 Texas show that they have a very clear notion of the distinction, when they say 
 their State " is administering on the effects of a dead Republic." 
 
 The State has, indeed, assumed the debts of the Republic, for in her constitution 
 it is expressly said that " the ordinance passed by the Convention on the fourth of 
 July, assenting to the overtures for the annexation of Texas, shall be attached to 
 the constitution, and form part of the same." And in this ordinance (see Appendix 
 R) these debts are recognized, and a guarantee given that they should not come 
 against the United States. 
 
 Does such an assumption of the debts of the Republic by the State give the latter 
 the right "to arrange them" " by municipal regulations" as she might her own 
 proper debts? The debts were incurred by the Republic, and "defined" by the 
 Republic. As so "defined," they were assumed by the State, and now for the State 
 to attempt to "re-define" them seems to detract somewhat from the sovereignty of 
 the Republic. 
 
 It is evident that the Congress under which annexation was effected was aware 
 of the distinction between the debts of the Republic and the debts of the State of 
 Texas. They knew that, according to the laws of nations, all those debts for which 
 the transferred revenues had been pledged would, without some express stipulation 
 to the contrary, become a claim against the United States. They, therefore, made 
 it an indispensable condition that the State of Texas should assume the debts of the 
 Republic of Texas. 
 
 The question is a very different one from that which would be presented, if the 
 debts had been incurred by a State within the Union. And, perhaps, even as mat 
 ters now stand, the question is more curious than useful. The United States Go 
 vernment took the initiative in annexation, and by the very terms it proposed, 
 
THE FISCAL HISTORY OF TEXAS. 217 
 
 The United States leave Texas at liberty to make the best com 
 promise she can with her creditors. But the case of the United 
 States and the creditors of Texas is different from the case of the 
 United States and Texas, though the two cases are necessarily 
 connected. If Texas will not, or cannot pay the holders of the 
 evidences of her circulating debt, the United States are bound to 
 pay them. And, under these circumstances, the United States will 
 not surrender the bonds till the creditors shall sign the required 
 releases. It was to guard against such a contingency as has 
 occurred that the last proviso was introduced into the " Bound 
 ary Act ;" and, as Texas freely assented to this proviso, she has 
 no right now to object, even if it does present an obstacle to her 
 plan of coercing her creditors into a compromise. 
 
 CHAPTER XXXI. 
 
 TEXAN PLEDGES OF FAITH AND TEXAN BREACHES OF FAITH. 
 
 Solemn league and covenant of the Provisional Government Audited drafts Five 
 million loan act and supplement Act of June 7, 1837, for consolidating public 
 debt Treasury notes Act of 1837 authorizing receipt of audited drafts for direct 
 taxes Act of 1838 for payment of interest on the funded debt Treasury bonds 
 act Funding act of 1840 Act to repeal the act providing for the redemption of 
 promissory notes Act for the issue of exchequer bills Resolution of annexa 
 tion Scaling act of 1848 Act barring all claims not presented before September, 
 1850 Act stopping interest after July 1, 1850. 
 
 IT will be proper to give a summary view of Texan pledges of 
 faith and Texan breaches of faith, if it be only to show what go 
 vernments will promise, and what, in some instances, they will not 
 perform. 
 
 In the preamble to the plan of a Provisional Government, 
 adopted in November, 1835, the people of Texas do solemnly de 
 clare : 
 
 admitted, by implication, that it would be responsible for the debts, if they were 
 not paid by Texas. In the "Boundary Act," it fully and positively admits its re 
 sponsibility for all the debts for which the transferred revenues had been pledged. 
 
218 THE FISCAL HISTORY OF TEXAS. 
 
 " 6. That Texas is responsible for the expenses of her armies now in the 
 field. 
 
 " 7. That the public faith of Texas is pledged for the payment of any 
 debts contracted by her agents. 
 
 " These DECLARATIONS we solemnly avow to the world, and call GrOD 
 to witness their truth and sincerity ; and invoke defeat and disgrace upon 
 our heads should we prove guilty of duplicity." 
 
 This is a solemn league and covenant, as solemn as words could 
 make it. It has never been fulfilled. The expenses of the army- 
 then in the field were paid with audited drafts, many of which 
 were afterwards commuted for treasury notes, while many of those 
 treasury notes were subsequently exchanged for certificates of 
 stocks. These debts have been so mixed up with the other debts 
 of the Republic, that it is impossible to separate them. The only 
 way in which the Texans can fulfil this solemn league and cove 
 nant is by paying to every man what they have promised to pay. 
 
 December 20, 1836, an act was passed imposing duties on im 
 ports. By the fourth section of this act, it was declared 
 
 " That it shall be the duty of the several collectors to receive the orders 
 of the auditor upon the treasury of the Republic when offered by importers 
 in payment of duties at the time of importation/ 
 
 This was followed by an act, June 12, 1837, " to raise a revenue 
 by direct taxation," one provision of which was : 
 
 " That properly audited drafts on the treasury of the Republic shall be 
 received in payment of taxes imposed in this bill, except on billiard tables, 
 retailers of liquors, and nine-pin alleys, or games of that kind." 
 
 By these two acts, Texas gave to her audited drafts a greater 
 value than they would otherwise have possessed, and caused them 
 to pass into hands that otherwise would not have received them. 
 She thus entered into a contract with the holders of these drafts 
 to take them in payment of debts due to herself. By another act, 
 passed December 14, 1837, she violently set aside this contract, 
 declaring that such drafts should no longer be so received. She 
 made the holders thereof no compensation for the wrong done 
 them ; and as these debts have become so mixed up with other 
 debts subsequently incurred that they cannot be separated from 
 them, the only way for her to do justice to those who were thus 
 wronged is for her to discharge all her outstanding obligations 
 according to the letter of the contract. 
 
THE FISCAL HISTORY OF TEXAS. 219 
 
 June 7, 1837, was passed "an act to authorize the consolida 
 tion and funding of the public debt." 
 
 The preamble was in the words following : 
 
 "Whereas, it is deemed expedient to consolidate the public debt, by the 
 creation of a stock fund commensurate therewith, by issuing certificates of 
 stock in suitable and convenient shares : it is also deemed expedient, in 
 order that the public credit be sustained, and the public creditors be relieved 
 by the payment of fair interest on the government liabilities, that the same 
 be thus consolidated and placed in a tangible form, so that the interest may 
 be annually paid, and the debt secured to the public creditors until its final 
 redemption, &c. Therefore," &c. 
 
 This was a new pledge of faith to the public creditors, holding 
 out to them inducements to exchange the evidences of the public 
 debt they then held for others in a form more convenient to the 
 government. The first section provided that these certificates of 
 stock should bear an interest of ten per cent., payable semi-annu- 
 ally, and another section was in the words following : 
 
 "Be it further enacted, That the public faith is hereby pledged for the 
 redemption of said stock agreeably to the foregoing provisions ; and so much 
 of the public revenue, arising from imports and direct taxation, as may be 
 necessary to meet the annual interest of the funded debt, is hereby appro 
 priated and set apart for that special purpose." 
 
 These pledges have been violated: 
 
 1. In not applying the revenues from imports and direct taxa 
 tion to the payment of the interest on this funded debt ; but in 
 appropriating them to the current expenses of the government. 
 
 2. In arbitrarily declaring that interest on this funded debt 
 should cease on the 1st of July, 1850, on which day not one dol 
 lar of the principal had been paid. 
 
 3. In scaling down this debt to seventy cents in the dollar, which 
 is an express violation of the letter of the contract. 
 
 June 9, 1837, was passed " an act authorizing the issuing of 
 the promissory notes of the government," some of the provisions 
 of which were as follows: 
 
 " That the said notes shall be payable twelve months after date, and shall 
 draw an interest of ten per cent, per annum from date. 
 
 "That the said notes, at any time before or after maturity, shall be con 
 sidered as cash, and shall be received as cash for all dues owing or coming 
 to the government. 
 
 "That one-fourth of the proceeds arising from the sales of the lands 
 contemplated to be sold by an act of this Congress shall be paid into the 
 treasury, to be paid out only for the redemption of the promissory notes of 
 the government. 
 
220 THE FISCAL HISTORY OF TEXAS. 
 
 "That the President is authorized to sell five hundred thousand acres of 
 land-script, the proceeds of which shall be paid into the treasury, to be paid 
 out only for the redemption of these promissory notes of the government." 
 
 These pledges have been violated : 
 
 1. In not paying the notes with the interest thereon in twelve 
 months after date. 
 
 2. In arbitrarily declaring that the said notes should not, after 
 Feb. 1, 1842, be receivable in all payments to government, and 
 that at a time when their being so receivable gave them the little 
 value they then had left. 
 
 3. In not setting apart one-fourth of the proceeds of the sale 
 of the lands for the redemption of these notes, but in appropriat 
 ing them to the current expenses of the Republic. 
 
 4. In appropriating the proceeds of the land-script above men 
 tioned to the current expenses of the government, instead of apply 
 ing them to the redemption of these notes. 
 
 5. In arbitrarily declaring that such of these notes as remained 
 unfunded should, after January 1, 1841, cease to bear interest. 
 
 6. In scaling down these notes to fifty cents in the dollar. 
 May 16, 1838, was passed an " act to authorize the President 
 
 to negotiate a loan on the bonds of the government, not exceeding 
 five million dollars," one section of which was as follows : 
 
 "SECTION 7. Be it further enacted, That, for the punctual payment of 
 the interest and final redemption of said bonds, the public faith is hereby 
 solemnly pledged." 
 
 Such a pledge covers everything a government possesses, or may 
 hereafter acquire. 
 
 Comprehensive, however, as was this pledge, it was found impos 
 sible to borrow money under it, and a supplementary act was passed 
 January 22, 1839, some of the provisions of which we shall intro 
 duce at length. 
 
 " SECTION 4. Be it further enacted, That in case the said loan of five 
 million dollars, or any part thereof, should be negotiated by virtue of the 
 aforesaid act of May 16, 1838, in addition to the general pledge of the faith 
 and credit of the Republic, contained in said act, for the payment of the 
 interest and redemption of the principal of said loan, so much of the reve 
 nues of the Ptepublic as may be necessary shall be set apart and semi-annu- 
 ally remitted to the Bank of the United States, in Philadelphia, to meet 
 the semi-annual interest on any bond or bonds issued under said loan. And 
 as soon as the government shall deem it expedient to sell the said lands, 
 of the proceeds thereof three hundred thousand dollars shall be annually 
 
THE FISCAL HISTORY OF TEXAS. 221 
 
 appropriated and set apart, and invested in public securities or corporate 
 stock, to form a sinking fund for the ultimate redemption of the aforesaid 
 loan of five millions of dollars, which said appropriation shall be continued 
 annually to be made, until, with the interest accruing and accumulating on 
 the same, a sum shall be raised equal to the five million dollars, or any part 
 thereof which may have been negotiated." 
 
 These pledges were further strengthened by an act passed Janu 
 ary 14, 1840, entitled 
 
 " An act to provide for the more certain operations of the Sinking Fund 
 created by an act of Congress of the Republic of Texas, passed January 22, 
 1839, to extinguish the five million loan authorized to be raised under two 
 several acts of Congress of November 18, 1834, and 16th of May, 1838 ; 
 and such further loans as the Republic may cause to be negotiated, and for 
 other purposes." 
 
 The third section contains the following provisions : 
 
 " SECTION 3. Be it further enacted, That in case, from consideration of 
 public convenience or policy, it shall be deemed inexpedient to bring the 
 public lands into the market on or before the 1st of January, 1842, or that, 
 when so brought forward, it should be deemed inexpedient to sell them, it 
 is hereby declared to be then and after that period the duty of the Secretary 
 of the Treasury to provide from other sources of revenue, and to pay over 
 to the aforesaid Commissioners of the Sinking Fund, the full sum of three 
 hundred thousand dollars in the instalments before mentioned, or such sum 
 as, with the amount realized from sales of public lands, shall make up, at 
 the period stated, the sum of three hundred thousand dollars, to be remitted 
 to the agents aforesaid, or wherever the said loan may be effected." 
 
 Another section of this act is in the words following : 
 
 "SECTION 15. Be it further enacted. That for the redemption of all loans 
 negotiated by the authority of the Republic of Texas, independently of the 
 reservation of the Sinking Fund, the proceeds of the public lands generally, 
 its revenues and public faith, are solemnly pledged." 
 
 Under the pledges of faith, general and special, contained in 
 these acts, bonds were negotiated to the amount of $1,213,287 : 
 namely, $560,000 with F. Dawson and others, $457,380 with the 
 U. S. Bank of Pennsylvania, and $195,907 with J. Holford and 
 others. 
 
 These pledges of faith, general and special, have been violated 
 in the following particulars : 
 
 1. So much of the revenues of the Republic as was necessary 
 to meet the semi-annual interest on the bonds was not set apart 
 and semi-annually remitted to the United States Bank in Philadel 
 phia. The revenues were, on the contrary, used to defray the 
 general expenses of government. 
 
222 THE FISCAL HISTORY OF TEXAS. 
 
 2. The government did not deem it expedient to bring the pub 
 lic lands into the market on or before June 1st, 1842, and yet 
 the Secretary of the Treasury did not, from other resources, pay 
 over to the Commissioners of the Sinking Fund the full sum of 
 $300,000 annually. 
 
 3. In a subsequent year, the government did deem it expedient 
 to sell a portion of the public lands, and made a most excellent 
 sale to the amount of $10,000,000 ; and yet it did not appropriate 
 and set apart annually $300,000 of the proceeds thereof for the 
 redemption of these bonds, principal and interest. 
 
 4. These pledges have been further violated in scaling down the 
 debt to fifty cents on the dollar, in direct violation of the letter of 
 the contract. 
 
 5. They have also been violated in arbitrarily declaring that 
 interest on this debt should cease on the 1st of July, 1850, when 
 not one dollar of it had been paid. 
 
 February 5th, 1840, was passed " an act for creating funds for 
 the support of government for the year 1840." 
 
 SEC. 1. Bonds to be issued of the denomination of $100, $500, and 
 $1000, "bearing an interest of eight per centum per annum, payable in 
 gold and silver." 
 
 "SEC. 3. Be it further enacted, That the bonds before referred to shall 
 be at all times receivable by any collector of revenue, or at the Treasury 
 Department, in payment of any debt to the government, or any duties by 
 impost or direct taxation, for the amount value of such funds, and the in 
 terest which may have accrued thereon." 
 
 - " SEC. 4. Be it further enacted, That for the payment of the interest on 
 the bonds before referred to, the revenue accruing from license-tax, and the 
 tax on personal property, is hereby set apart for that purpose." 
 
 The pledges of faith herein given have been violated : 
 
 1. In not paying the interest on these bonds in gold and silver ; 
 no, not so much as for one half year. 
 
 2. In appropriating to other purposes the proceeds of the license- 
 tax and the tax on personal property, instead of applying them 
 exclusively to the payment of interest on these bonds. 
 
 3. In declaring that these bonds should not be receivable for 
 duties or taxes after February 1, 1842, by which they were de 
 prived of the little value that then remained to them. 
 
 4. In arbitrarily determining that not one cent of interest 
 should be paid after July 1st, 1850, though not one dollar of the 
 principal of these bonds had then been discharged. 
 
THE FISCAL HISTORY OF TEXAS. 223 
 
 5. In scaling down these bonds to twenty cents in the dollar. 
 
 February 5th, 1840, was passed " an act to provide for the re 
 demption of the promissory notes of the government now in circu 
 lation, and for funding other liabilities of the government." 
 
 SEC. 1 required blanks to be provided for sums of $100, $500, and 
 $1000, transferable by simple indorsement. 
 
 " SEC. 2. Be it further enacted, That all sums of the promissory notes 
 of this government in circulation, which shall be presented to the stock 
 commissioner prior to the first day of July next ensuing (if in sums to suit 
 the denominations of the certificates), shall be admitted for funding, and 
 certificates of stock, as before provided, shall be issued to the holder or 
 holders of such promissory notes for the amounts so presented ; which cer 
 tificates so issued shall bear on them an annual rate of interest of ten per 
 cent., payable semi-annually in gold or silver at the Treasury Department. 
 
 " SEC. 3. Be it further enacted, That all other liabilities of the govern 
 ment, which may have been properly and regularly audited, shall be admit 
 ted for funding, and certificates for the same shall be issued by the stock 
 commissioner, bearing the same rate of interest of ten per cent., and pay 
 able semi-aunually in gold or silver. 
 
 "SEC. 4. Be it farther enacted, That from and after the first day of July 
 next ensuing, the promissory notes of the government, which may be pre 
 sented for funding, shall only be entitled to receive from the stock com 
 missioners certificates of stock bearing a rate of interest of eight per cent, 
 per annum, interest payable semi-annually in gold and silver." 
 
 There was something arbitrary in requiring men who had notes 
 bearing an interest of ten per cent, to bring them in prior to the 
 1st of July, 1840, under penalty of having the interest on the 
 certificates, for which they were to be exchanged, reduced to eight 
 per cent. But, waiving this, the pledges of faith contained in 
 this act have been violated in the following particulars : 
 
 1. In not paying the interest, semi-annually, in gold and silver, 
 as promised, not even for one half year. 
 
 2. In arbitrarily declaring that interest on these certificates 
 should cease on the 1st of July, 1850. 
 
 3. In scaling down the face of these certificates to 30 cents in 
 the dollar. 
 
 Feb. 5, 1841, was passed " an act to repeal an act to provide 
 for the redemption of the promissory notes." 
 
 " That- from and after the passage of this act, so much of the above act 
 as relates to the bonding or funding of the promissory notes or liabilities of 
 the government be, and the same is hereby repealed." 
 
 This left the holders of "red backs" and of unfunded audited 
 paper, without even the promise of interest, though they were, in 
 
224 THE FISCAL HISTORY OF TEXAS. 
 
 justice, as much entitled to such promise as the other creditors of 
 government. 
 
 Jan. 19, 1842, was passed "an act to authorize the President 
 to issue exchequer bills, and to declare what shall be receivable in 
 payment of taxes and duties on imports." 
 
 " SEC. 1. Be it enacted by the Senate and House of Representatives of the 
 Republic of Texas in Congress assembled, That, from and after the first day 
 of February next, it shall not be lawful for any collector of customs of this 
 Republic to receive in payment of imposts or duties upon goods, wares, and 
 merchandise imported into this Republic, after the day above specified, any 
 thing but gold or silver, or the exchequer bills hereinafter authorized to be 
 issued. 
 
 "SEC. 2. Be it further enacted, That it shall not be lawful for the sheriff 
 and collectors of direct taxes, to be assessed for the year 1842, and all sub 
 sequent years, to receive anything in payment of such taxes except gold or 
 silver, or the exchequer bills authorized to be issued by the provisions of 
 this act. 
 
 ^sjs****** 
 
 "SEC. 9. Be it further enacted^ That all land-dues (except the land-tax) 
 and all payments for patents be made receivable, as heretofore, in the lia 
 bilities of the government. 
 
 "SEC. 10. Be it further enacted, That all laws heretofore passed, author 
 izing the issue and reissue of promissory notes, and their reception in pay 
 ment of duties or taxes hereafter to be assessed, be, and the same are hereby 
 repealed." 
 
 Necessity led to the passage of this act ; but that did not make 
 it the less a violation of public faith. The promissory notes had 
 been issued with a proviso that they were to be received in pay 
 ment of all dues to government. This provision, on principles 
 of equity, should have remained in force till all the notes were 
 redeemed. Depriving them of the quality which gave them their 
 chief value was a manifest injustice to the public creditors. 
 
 It was not long before the holders of exchequer bills received 
 much the same treatment that holders of treasury notes had ex 
 perienced. July 29, 1842, an act was passed " to regulate the 
 collection of import duties," two of the sections of which we shall 
 give in full: 
 
 " SECTION 1. Be it enacted, That the collectors of revenue are hereby re 
 quired, from and after the passage of this act, to receive the exchequer bills, 
 in the collection of impost and tonnage duties, only at the current rates at 
 which such bills are selling in the market. 
 
 " SECTION 4. Be it further enacted, That all sheriffs, clerks, and post 
 masters throughout the Republic are hereby authorized and required to 
 collect the direct and license-taxes and postages in accordance with the 
 provisions of this act/ 7 
 
THE FISCAL HISTORY OF TEXAS. 225 
 
 This was a violation of the act passed only six months before, 
 which, if it meant anything, meant that exchequer bills should be 
 received at their face value for public dues. 
 
 March 20, 1848, an act was passed " to provide for ascertaining 
 the debt of the late Republic of Texas." And February 9, 1852, 
 was passed " an act confirming the action of the auditor and 
 comptroller under the provisions of an act of the Legislature to 
 provide for ascertaining the debt of the late Republic of Texas, 
 approved March 20, 1818, and the act supplementary thereto, 
 approved February 8, 1850." 
 
 From beginning to end, these acts were violations of the public 
 faith, as they provide for the scaling of the debts, contrary to the 
 very face and tenor of the evidences of these debts. Every trea 
 sury note, every bond, every certificate of stock, every audited 
 draft she issued was a pledge of the public faith of Texas. Just 
 so many pledges of faith as she gave, just so many did she violate 
 when she scaled them down below the contract amount. 
 
 February 8, 1850, an act was passed extending the provisions 
 of the act of March 20, 1848, to the first Monday in September, 
 1850, and declaring that " all claims not presented by that time 
 shall be barred." 
 
 Texas has no right to bar the claims of such of her creditors as 
 may not choose to submit to her scaling system. On principles of 
 equity, these claims will remain in full force against her, though 
 a dozen legislatures should each in succession determine that they 
 should be barred. 
 
 February 11, 1850, was passed " an act to provide for the liqui 
 dation of the public debt of the late Republic of Texas." The 
 sixth section enacts 
 
 " That all liabilities of the late Republic of Texas, whether the same 
 have or have not been presented to the auditor and comptroller under the 
 provisions of the l act to provide for ascertaining the debts of the late 
 Republic of Texas, approved March 20, 1848/ shall cease to draw interest 
 from and after the first day of July, 1850." 
 
 If, of a debt matured, full payment is not made when demand 
 ed, interest is, on principles of equity, due on that debt till it 
 shall be paid in full. The debtor has no right to say to the cre 
 ditor, " I will not pay you, neither will I pay interest longer than 
 to me seems fit." 
 15 
 
226 THE FISCAL HISTORY OF TEXAS. 
 
 Therefore, notwithstanding this enactment, the debt of Texas 
 goes on accumulating at the rate of ten per cent, per annum, and 
 will go on thus accumulating till either she or Congress shall pay 
 in full the debts for which the revenues were pledged. 
 
 We pass next to the pledges of faith Texas has given in relation 
 to these debts in her compacts with the United States. 
 
 In the resolution of annexation, to which Texas gave her most 
 cordial assent, it was expressly provided that said State 
 
 " Shall also retain all the vacant and unappropriated lands lying within 
 its limits, to be applied to the payment of the debts and liabilities of Texas; 
 and the RESIDUE of said lands, after discharging said debts and liabilities, 
 to oe disposed of as said State may direct, but in NO EVENT are said liabili 
 ties to become a charge against the United States Government." 
 
 Here were two distinct pledges ; first, that the public lands of 
 Texas should be applied exclusively to the payment of the debts 
 of Texas, till the whole should be discharged ; secondly, that in 
 no event should these debts become a charge against the United 
 States. 
 
 Both these pledges have been violated. 
 
 Texas has appropriated her public lands for the promotion of 
 internal improvements and other objects just as freely as she could 
 have done had no such pledge been made. Every inch of her 
 public domain is mortgaged to her public creditors, and she has 
 no right to give or grant one acre, except for* the purpose of re 
 deeming this and other mortgages. 
 
 The second pledge has also been violated. Texas has suffered 
 her debts and liabilities to come against the Government of the 
 United States, and that, even after the United States had appro 
 priated ten million dollars for the express purpose of paying these 
 very debts. 
 
 The compact entered into between the United States and Texas, 
 in the "Boundary Act," has also been violated. 
 
 It is evident, from the terms of that act, that its intent was 
 that the five millions paid over unconditionally should be applied 
 to the redemption of those debts for which the United States were 
 considered liable. But Texas applies part of the money to the 
 redemption of her "domestic debt," for which the United States 
 were in no way responsible ; another part to the payment of 
 the expenses of her State Government ; and not one dollar to 
 
THE FISCAL HISTORY OF TEXAS. 227 
 
 the redemption of the debt for which the revenues had been 
 pledged ! 
 
 Admit, by way of argument, that Texas, as a sovereign State, 
 has a sovereign right to violate her contracts with her private 
 creditors, she has no right thus to violate her compacts with the 
 United States. 
 
 CHAPTER XXXII. 
 
 GENERAL VIEW OF CURRENCY IN TEXAS. 
 
 " Hammered dollars" the chief currency of Texas previous to the revolution Influx 
 of bank-notes from the United States in 1835-37 "Shin-plasters" Treasury 
 notes, first, second, and third issues Evil consequences thereof Exchequer 
 bills Gross amount of circulating paper Bank of Agriculture and Commerce 
 Texas Railroad, Navigation, and Banking Company Other bank projects Laws 
 of the Republic and the State, and constitutional provisions to prevent the issue 
 of circulating paper "Mills s money" A little paper-money panic in Texas 
 Good effects of the hard-money laws of Texas Efforts to change the constitution 
 so as to allow of paper-money banking. 
 
 THAT the reader may have a clear view of the changes in cur 
 rency that have taken place in Texas, it will be necessary to bring 
 together various facts scattered through different chapters, together 
 with others which could not before be conveniently introduced. 
 
 While Texas was a part of Mexico, the currency consisted of 
 gold and silver, with a sprinkling of the notes of various banks of 
 the United States. As the civilized population was small, amount 
 ing, in 1834, according to Mexican official statements, to no more 
 than twenty-one thousand, no large amount of currency of any 
 kind could have been required for the transactions of business. 
 Accordingly, we find Almonte declaring: " Money is very scarce 
 in Texas ; not one sale in ten is made for cash. Purchases are 
 made on credit, or by barter, which gives the country, in its trad 
 ing relations, the appearance of a fair." 
 
 An old Texan, however, assures us that it was only as compared 
 with Mexico that money was scarce. As compared with most 
 newly-settled countries, money was plenty in Texas. A great part 
 
228 THE FISCAL HISTORY OF TEXAS. 
 
 of the currency consisted of " hammered dollars," that is, of old 
 Spanish dollars, from which the royal effigy had been effaced by 
 the Mexicans, as a testimony of their indignation towards their 
 ancient rulers. This " hammered money" was the common currency, 
 but time-contracts were made in " eagle-money," by which were 
 meant new Mexican dollars, which were valued at one hundred 
 cents, while the " hammered dollars," though containing full as 
 much silver, were valued at only ninety cents. 
 
 At Brownsville, and other towns on the Rio Grande, there is 
 much of this " hammered money" still in use. But there a different 
 reason was given for the stamp s being defaced. It was done, we 
 were told, by the Mexicans, " in order to keep the money in the 
 country." If so, they act on much the same principle as some of 
 our own people who are now endeavoring to deteriorate the silver 
 coinage. Their object is to keep our silver money in the country 
 by diminishing the quantity of pure metal in our half-dollars, 
 quarter-dollars, dimes, and half-dimes. The Mexicans, with the 
 same object in view, did not diminish the intrinsic value of their 
 coin, but sought to prevent its exportation by effacing the stamp, 
 which was the certificate of its value. Of the two plans we prefer 
 the Mexican. 
 
 After the revolution broke out, "hammered money" was not for 
 a long time the chief currency of the Republic. In 1835, bank 
 notes began to come in freely from the United States, more freely 
 in 1836, and still more freely in 1837. Then the banks suspended 
 specie payments. The paper of most of the banks of Mississippi, 
 which formed much of the currency of Texas, depreciated greatly, 
 and that of some of them became worthless. Many of the people 
 of Texas suffered severely thereby, but their aggregate losses did 
 not equal their aggregate gains, as many of these notes had been 
 obtained on loans, and many of these loans were never repaid. 
 
 To these notes of suspended banks, were added " shin-plasters," 
 or notes for fractional parts of the dollar, put into circulation by 
 individuals and municipalities. The issue of these began in 1837, 
 and continued till 1840, when an end was put to them by the 
 bankruptcy of the issuers. 
 
 For two years after the revolutionary outbreak, or from the fall 
 of 1835 to the fall of 1837, bank-notes and " shin-plasters" formed 
 almost the exclusive medium of Texas. The government had issued 
 
THE FISCAL HISTORY OF TEXAS. 229 
 
 a large quantity of drafts on its empty treasury, and these were a 
 tender for public dues; but, as they were for odd numbers of dollars 
 and cents, they never became a common currency. 
 
 The first issues of treasury notes were in November, 1837, though 
 some of the notes are said to bear date in September. As these 
 were for round sums and for small amounts, they were much better 
 fitted to serve the purposes of a circulating medium than were 
 the audited drafts. As the notes of the banks of the United States 
 were of almost as many different values as the banks that issued 
 them, the want was sensibly felt of some one medium that 
 should have one value. As the treasury notes bore on the face an 
 interest of ten per cent., this was an inducement to hoard them, on 
 the part of such Texans as could afford it; and this, also, gave 
 them a market in the United States. 
 
 Through these causes combined, as explained at length in a 
 preceding chapter, these notes were kept at par with specie, or 
 nearly at par, for several months, and till the issues exceeded half 
 a million. They then, in the spring of 1838, began to depreciate, 
 and as each additional emission increased the depreciation, they 
 were, in January, 1839, worth no more than forty cents in the 
 dollar. 
 
 To these treasury notes bearing interest, the first issues of which 
 were known as the " printed," and the second as the "engraved," 
 succeeded, in the spring of 1838, treasury notes bearing no in 
 terest, and which were familiarly known as "red backs," on account 
 of a red impression on the back. When first issued, in the spring 
 of 1839, they were worth thirty-seven and a-half cents in the dol 
 lar, but in 1841 they were worth no more than twelve to fifteen 
 cents. In the winter of 184142, they fell to ten cents, to five 
 cents, to four, to three, to two cents in the dollar. Finally, they 
 became worth nothing in many parts of Texas. 
 
 Thus, in little more than three years, the treasury note system 
 ran its course. As soon as it was fairly established, it supplied 
 Texas with its only general circulating medium. Just on the same 
 principle that bank-notes in the United States displace gold and 
 silver, did treasury notes in Texas displace bank-notes. For, 
 where there are two currencies of like denominations, that of the 
 least value will always drive the other out of circulation. 
 
 The evils this system did were immense, and such as for which, 
 
230 THE FISCAL HISTORY OF TEXAS. 
 
 even if it were so disposed, the government could afford no com 
 pensation to the sufferers. A receives a treasury note at par. He 
 keeps it, for a time, and then passes it to B at ninety cents in 
 the dollar. At the end of a week, a month, or a day, B passes it 
 to C at eighty cents. So it passes to D, E, F, G, H, I, till, finally, 
 it reaches J at ten cents. J passes it to K at nine cents, who passes 
 it to L at eight cents, and thus it passes on to M, N, 0, P, Q, R, 
 S, till it reaches T at one cent. In this way have the poor Texans 
 been " scaled" by their government, and this may be one reason 
 that they wish to scale others in their turn. 
 
 It would be curious to calculate the amount of evil that may 
 be done, and the number of persons that may be made to suffer, 
 through a government note for one dollar. It is true that a fluc 
 tuating bank currency may produce the like evils, but that we have 
 not immediately under consideration. One thing is certain, that, 
 as neither bank nor government can afterwards atone for such 
 wrongs, neither bank nor government ought to be suffered to inflict 
 them. 
 
 Great, however, as were these evils, they were small compared 
 with those produced by continental money, for that was made a 
 legal tender, and supported by penal enactments. In Texas, on 
 the contrary, every man was at liberty to refuse or receive trea 
 sury notes at his option. As the most general circulating medium, 
 they regulated prices ; but, as it was known that they were con 
 tinually varying in value, if a man gave a note payable at a distant 
 day, it was understood that he was to pay it in silver, or in so 
 many treasury notes as might then be the equivalent of the silver 
 money therein expressed. 
 
 To the treasury notes succeeded the exchequer bills, which were 
 but treasury notes in a new form. These were so few in number, 
 and so variant in value, that they never became a common circu 
 lating medium. They were merchandise, and a tender to govern 
 ment for public dues. 
 
 By this time, there was little circulating medium of any kind in 
 Texas ; but this was no great calamity, as the people had but little 
 left to circulate. They no doubt, however, like others in similar 
 circumstances, attributed to want of circulating medium the evils 
 they suffered from want of circulating capital. 
 
 As the issues of audited drafts amounted to $7,834,207 57, 
 
THE FISCAL HISTORY OF TEXAS. 231 
 
 those of treasury notes to $4,717,939, and those of treasury bonds 
 to $766,800, or, in all, to $13,318,146 57, if paper issues could 
 make a people rich, the Texans would have been the most wealthy 
 people in the universe. 
 
 What they suffered from this policy is sufficiently attested by a 
 provision inserted in their State Constitution, adopted August 27, 
 1845, which declares that 
 
 " In no case shall the Legislature have power to issue treasury war 
 rants/ t treasury notes/ or paper of any description intended to circulate 
 as money." 
 
 It is never without deep experience of the evils of paper issues 
 that a people impose such restrictions on their rulers. 
 
 It is now time to turn our attention to the policy of Texas con 
 cerning banks. 
 
 It has already been mentioned that the Congress of the Repub 
 lic made full recognition of the Coahuilan decree for the establish 
 ment of the Agricultural and Commercial Bank, and also that it 
 passed an act to incorporate the Texas Railroad, Navigation, and 
 Banking Company, with a capital of five millions, to be increased 
 to ten millions, and with a charter for forty-nine years. Other 
 schemes, equally magnificent, were, as has been duly recorded in 
 other parts of our history, favorably received by the Texan Con 
 gress. But, about this time, the banking system of the United 
 States descended with a mighty crush; and this produced a change 
 in the minds of the Texan lawgivers. On the 14th of December, 
 1837, they passed an act by which it was made unlawful for any 
 person or persons to either issue or put in circulation any printed 
 or lithographed promissory note, under a penalty of not less than 
 five nor more than fifty dollars for each offence. A like penalty 
 was imposed on any person who should so much as present in pay 
 ment for debt, or for the purchase of property, any such notes ; 
 and it was made the special duty of all grand-juries to inquire into 
 and present all persons offending against the provisions of this 
 act. 
 
 Perhaps this law was intended in part to secure an exclusive 
 field for the circulation of treasury notes, by forbidding the issue 
 of small notes by individuals and municipalities. 
 
 After the explosion of the treasury note system, an act was 
 passed February 3, 1841, to authorize McKinney and Williams 
 
232 THE FISCAL HISTORY OF TEXAS. 
 
 to issue their notes to the amount of thirty thousand dollars for 
 circulation as money; but a declaration was added: 
 
 " That banking privileges, as a general, rule, being inexpedient, the pri 
 vileges hereby granted to McKinney, Williams, & Co. are conceded to them 
 in consideration of their having made large advances to this government at 
 an early period of its existence/ 
 
 The next law that we can find having a bearing on the subject, 
 is entitled " An act to Suppress Private Banking," passed February 
 5, 1840. In this, it is provided 
 
 " That all laws granting to any individual, individuals, or corporations 
 the authority to issue either bills or promissory notes, to pass or circulate as 
 money, are hereby repealed/ 7 
 
 For each offence against the act, the penalty was a fine of five 
 hundred dollars, and imprisonment for not less than three nor 
 more than twelve months; and it was made the special duty of 
 the judges of the District Court to give the act in charge to the 
 grand-juries of the several counties, at the beginning of each term 
 of said courts. 
 
 This act took from McKinney, Williams, & Co. the privilege 
 conferred by the law of February, 1841 (a privilege, by the way, 
 of which they could not avail themselves), but it did not repeal the 
 charters of the Commercial and Agricultural Bank, or of the Texas 
 Railroad, Navigation, and Banking Company. It simply deprived 
 them of the power to issue paper to circulate as money, but left 
 them with full power (if so be they had any legal existence) to dis 
 charge the functions of banks of deposit, transfer, discount, and 
 exchange. 
 
 These are the only acts relating to banking that appear to have 
 been passed by Texas as an independent empire ; and the result 
 was that Texas, as a Republic, had no banks in operation. 
 
 To prevent their suffering in future such evils as the citizens of 
 other parts of our Union have been subjected to, the people of 
 Texas embodied the following provisions in their State Consti 
 tution : 
 
 " ART. VIII. SECTION 28. No corporate body shall hereafter be cre 
 ated, renewed, or extended, with banking or discounting privileges. 
 
 ."SECTION 32. The Legislature shall prohibit by law individuals from 
 issuing bills, checks, or promissory notes, or other paper, to circulate as 
 money/ 
 
 These provisions are sufficiently stringent ; some of them, per- 
 
THE FISCAL HISTORY OF TEXAS. 233 
 
 haps, almost too much so. It is only as paper-money factories 
 that banks do harm. We can see no objection to banks of deposit, 
 discount, transfer, and exchange, provided they operate with hard- 
 money only, or with paper which shall be, dollar for dollar, the 
 representative of specie actually in their vaults. But the Legis 
 lature of Texas is by the constitution prevented from establishing 
 even hard-money banks. 
 
 In accordance with these constitutional provisions, an act was 
 passed on the 7th of April, 1846, declaring that 
 
 11 No person or persons within this State shall issue any bill, promissory 
 note, check, or other paper, to circulate as money. 
 
 " Every person who may violate this act shall be subject to indict 
 ment therefor, by a grand-jury, as for a misdemeanor, at any time within 
 twelve months after so offending; and shall be subjected to a fine of not 
 less than ten dollars, nor more than fifty dollars, for each and every bill, 
 promissory note, check, or other paper, issued by them in violation of the 
 first section of this act." 
 
 Another act was passed, nearly two years afterwards, or on the 
 20th of March, 1848, the first section of which provides 
 
 " That any corporation, company, or association of individuals who shall 
 use or exercise banking or discounting privileges in this State, or who shall 
 issue any bill, check, promissory note, or other paper in this State, to cir 
 culate as money, without authority of law, shall be deemed guilty of a mis 
 demeanor, and shall be liable to a fine of not less than two thousand dollars, 
 nor more than five thousand dollars, which may be recovered by a suit in 
 the District Court, in the name of the State." 
 
 The second section makes it the duty of the attorney-general 
 to institute suit against offenders, makes simple service of citation 
 sufficient service, and provides that, in any judgment that may be 
 obtained, execution may be levied upon the estate of the corpora 
 tion, company, or association of individuals, and in default of such 
 estate, on the estate of the officers of such corporation, company, 
 or association. 
 
 The third section enacts " that in any suit instituted under the 
 provisions of this act, either party may appeal to the Supreme 
 Court of the State, and no bond or security shall be required of 
 the State on any such appeal." 
 
 The fourth section provides that each and every month that any 
 corporation, &c. shall exercise banking or discounting privileges, 
 shall be deemed a separate oifence ; and each and every bill, &c., 
 issued to circulate as money, shall be deemed a separate offence. 
 
234 THE FISCAL HISTORY OF TEXAS. 
 
 As the laws of the Republic, of December 14, 1837, and Feb 
 ruary 5, 1844, remain unrepealed, they would seem quite sufficient, 
 with the provisions of the constitution, and the acts of the State 
 of April 7, 1846, and March 20, 1848, to put an end to paper- 
 money evils in Texas. But the reader may be disposed to ask if 
 these various provisions produce the effect intended, for he is well 
 aware that laws often prove nugatory, sometimes through the 
 faults of the officers whose duty it is to execute them ; sometimes 
 through the state of public opinion being such as to prevent their 
 proper enforcement ; sometimes through defects in the mere word 
 ing of the law ; and sometimes through a neglect to provide the 
 necessary auxiliary means to carry the law into operation. 
 
 We answer that the effect intended has been produced, though 
 not to the whole extent that the framers of the constitution de 
 sired. 
 
 Through some mysterious means, the Commercial and Agricul 
 tural Bank has been brought into operation, for it does not appear 
 that it has ever been certified to the Executive "that one hundred 
 thousand dollars had entered its vaults," and this was an indispens 
 able condition of its charter. A writer, in the sixth volume of 
 De Bow s Commercial Review, states that 
 
 "Messrs. J. Lake & Co., by means of the credits which they got through 
 the Ohio State Bank law, started three other Ohio banks (in addition to 
 the Bank of Wooster), besides buying the Mineral Bank of Maryland and 
 a bank in Texas. The foundation of the whole is $171,900 of stock 
 owned by Lake in the Wooster Bank. It is possible that not a cent of 
 money was paid at all, but stock notes given/ : 
 
 As the Commercial and Agricultural Bank is the only bank in 
 Texas, the fair inference is that this is the bank affirmed to have 
 been bought by J. Lake & Co. But this is inference. Wherever 
 it obtained the means, certain it is that the Commercial and Agri 
 cultural Bank commenced operations at Galveston some six years 
 ago, and continues them to this day. It has also established a 
 branch at Brownsville, with the view of circulating its paper in the 
 adjoining State of Tamaulipas. But the Mexicans will have none 
 of it. They prefer their own defaced silver coin to any "promises 
 to pay," however prettily they may be adorned by the art of the 
 engraver. 
 
 The Attorney-General of Texas has been, for some time, con 
 testing with the bank the legality of its existence; but, as he was 
 
THE FISCAL HISTORY OF TEXAS. 235 
 
 the private counsel of the bank before he was elevated to his pre 
 sent dignity, the opinion of some people is that the State will not 
 gain much in the contest. Texas found no difficulty in abolishing 
 the privileges which the Mexican laws conferred on the empre- 
 sarios, or contractors for settling the public lands. But when it 
 comes to a question about privileges conferred on a bank, the case 
 is very different. The bank then proves too powerful for the State, 
 with all its hard-money laws, and its hard-money constitution. 
 
 The laws of Texas are, as we have seen, very strict in regard to 
 paper currency ; but a certain English judge once said that he 
 never saw an act of Parliament through which he could not drive 
 a coach and four horses, and our paper-money men in America 
 can, when necessary, drive a whole ox team, horns, hoofs, and all, 
 through acts of Assembly. If the reader will scan the laws of 
 Texas in regard to paper currency, he will find that, though they 
 rigidly prohibit the issue of bank-notes, they do not prohibit their 
 reissue, much less the simple passing of notes issued by banks in 
 another State. Neither do they prohibit any citizen of Texas 
 from indorsing such issues, although such indorsement may give 
 them a currency in Texas they would not otherwise obtain. Penal 
 acts are to be strictly construed. Constructive offences are not to 
 be admitted in a Republic; otherwise, no one citizen knows how 
 soon he may be arraigned as a criminal. 
 
 Taking advantage of these most excellent principles, the house 
 of R. & D. G. Mills, of Galveston, have for years been in the habit 
 of indorsing the notes of the Northern Bank of Mississippi at 
 Holly Springs, and thus giving them a currency in Texas, as the 
 Texas State Gazette expresses, "not for the purpose of making 
 money, but to facilitate the operations of their own business, by 
 affording a convenient medium of circulation." The Bank of 
 Holly Springs is of very doubtful reputation, the notes of which 
 would never of themselves have obtained currency in Texas. But 
 being indorsed by what was long regarded as the richest commer 
 cial firm in the State, they passed freely, to the amount, as the 
 Houston Telegraph supposes, of three hundred thousand dollars, 
 though the Austin State Grazette asserts "it is scarcely possible 
 tUat there ever was, at any one time, more than forty thousand 
 dollars in circulation." 
 
 All this did very well for years in succession. "Mills s money, 
 
236 THE FISCAL HISTORY OF TEXAS. 
 
 as it was called, was regarded as being as good as gold and silver, 
 or even better, inasmuch as it could more readily be carried from 
 place to place. The rest of the story we will let the editor of the 
 Texas State Grazette tell in his own words, as we find it in his 
 paper of February 7, 1852, premising the fact that Austin, the 
 home of the editor, is, by the post-route, two hundred and fifty 
 miles inland from Galveston, the home of the Messrs. Mills. 
 
 " The news of the suspension of the house of R. & D. Gr. Mills was re 
 ceived in town a few days since, and of course created no little excitement, 
 as the bills of the Northern Bank of Mississippi, bearing their indorsement, 
 had for some time circulated among us with all the facility of gold. The 
 sudden and unexpected announcement of this fact of course created a great 
 revulsion, and for a time all confidence was destroyed in this money j sub 
 sequent advices, however, and the opinion of men acquainted with the mem 
 bers of this house, and not altogether unadvised of their true condition, 
 have produced a considerable modification of the panic and a restoration of 
 confidence." 
 
 From this it will be seen that the people of Texas have, in spite 
 of their hard-money laws and hard-money constitution, had a very 
 pretty little paper-money panic. And they will have more, unless 
 those whose duty it is to administer the laws shall discover that 
 putting foreign bank-notes in circulation, by indorsing them, is a 
 mere evasion of the act of Assembly which forbids the emission of 
 paper for circulation. By the method they pursued, Messrs. R. 
 & D. G. Mills made their house at Galveston a branch of the Bank 
 of Holly Springs. If this practice is tolerated, other "wild-cat 
 banks" will have their -branches in Texas. The Bank of Holly 
 Springs and its agents will not be suffered to monopolize so very 
 profitable a business. 
 
 It is to be observed that the Messrs. Mills are, as are also 
 Messrs. McKinney and Williams, of the Commercial and Agricul 
 tural Bank, very amiable men in the private walks of life, and 
 highly meritorious citizens, who rendered great aid to Texas in her 
 hours of adversity. But they would add greatly to the esteem in 
 which they are justly held by their fellow-citizens if they would 
 set a proper example of obedience to those provisions of the law 
 and the constitution which are designed to insure to Texas the 
 benefits of a sound circulating medium. 
 
 Notwithstanding the subterfuges by which they are violated or 
 evaded, the hard-money laws of Texas have done much good. The 
 
THE FISCAL HISTORY OF TEXAS. 237 
 
 Commercial Bank has, as is said by some, not more than fourteen 
 thousand paper dollars in circulation, and if the editor of the State 
 G-azette is correct, the circulation of the Holly Springs branch 
 notes hardly amounts to twenty-five thousand dollars. These sums 
 are necessarily conjectural : but it is agreed on all hands that at least 
 nine-tenths, perhaps nineteen-twentieths, of the circulating medium 
 of Texas consists of gold and silver. The notes of the banks of 
 other States are brought into Texas by immigrants and travellers, 
 but they are soon sent out again in pay for commodities. They 
 form no permanent part of the circulating medium of the State; 
 and so little inconvenience do they occasion that, within the bounds 
 of the commonwealth, there is not one broker, exchange merchant, 
 or other person, whose business is to buy and sell bank-notes. 
 
 To this exemption from the curse of paper-money, Texas is in 
 part indebted to her situation. If she had, by her side, a petty 
 State, like Rhode Island, with a hundred petty banks, each issuing 
 petty one and two dollar notes, her hard-money laws and hard- 
 money constitution would avail but little. The public good would 
 then prove no match for private cupidity. But Arkansas, one of 
 the States adjoining Texas, has no banks, and Louisiana, the other 
 adjoining State, permits her banks to issue no notes of a less de 
 nomination than five dollars. 
 
 The result of this hard-money policy is that business in Texas 
 rests on a more stable foundation than it does in many other parts 
 of the Union. That it is absolutely free from vicissitude is what 
 we do not assert. That would be impossible in a State containing 
 some two hundred thousand inhabitants, connected by strong poli 
 tical and commercial ties with other States containing upwards of 
 twenty millions, most of whom are subject to paper-money vacilla 
 tion, as certain, though not as regular as the return of the seasons. 
 The main export of Texas is, moreover, cotton, and the chief 
 market for that is England, another paper-money country, subject 
 to money revulsions, not as frequent, but sometimes as violent as 
 our own. In addition to this, it should be taken into consideration 
 that, in all new settlements, some time must elapse before the dif 
 ferent relations of supply and demand can attain the regularity 
 which they have in old communities. 
 
 All these difficulties Texas has to contend with. But, unbol- 
 stered by bank credits, and governed by that best of all regulators, 
 
238 THE FISCAL HISTOKY OF TEXAS. 
 
 gold and silver, her merchants limit their purchases of goods 
 abroad by the actual demands of the planters at home, measuring 
 that demand by the surplus crops the planters have to dispose of. 
 Exchanges are regular. The maximum rates never exceed the 
 cost of transporting specie, and often fall below it. A gentleman 
 of Austin told us that he had, in the course of years, negotiated 
 bills on New York to the amount of two hundred thousand dollars, 
 and had seldom given or received either premium or discount. At 
 Galveston, from what we could learn, exchanges on New York have 
 not for years been at any time at more than one and a half pre 
 mium. Sometimes exchanges set against the North and in favor 
 of Texas. 
 
 Prices are not low. At Austin, in March, 1852, butter was 
 from thirty-five to forty cents a pound ; flour was ten dollars and 
 a half a barrel ; beef five cents a pound ; chickens twenty-five 
 cents a piece ; eggs twenty-five cents a dozen. These facts show 
 that hard-money and high prices are not incompatible, though it 
 is proper to observe that the prices in that particular neighbor 
 hood at that time were owing in part to demands from immigrants, 
 and in part to a detachment of United States forces having been 
 quartered in the town. Throughout Texas, however, prices are 
 quite as high as they are (other things considered) in the most 
 paper-money loving parts of the Union. 
 
 The rate of interest is high, because the profits of trade are 
 great. Money is scarce, as money ought to be, for without scarcity 
 it would lose its value. But gold and silver money is in Texas 
 quite as plentiful, in proportion to other circulating wealth, as 
 paper-money is in New York or Massachusetts. 
 
 How long this state of things will last, we know not. The editor 
 of the Texas State Gazette, the government paper, states that it 
 was want of time only that prevented the Legislature, at its recent 
 session, from taking the initiatory steps to such a change in the 
 constitution as will make it possible to establish paper-money 
 banks. The editor himself is in favor of the change. The Demo 
 cratic party, he observes, is not opposed to banks ; it is only op 
 posed to a bank of the United States. It is an error, moreover, he 
 asserts, to suppose that banks are intended for the benefit of the 
 rich ; they are, in reality, intended for the benefit of the poor. 
 
 Arguments like these will hardly fail to have their effect in a 
 
THE FISCAL HISTORY OP TEXAS. 239 
 
 country where many must be desirous of an inflation of the cur 
 rency, even if it should last only long enough to enable them to 
 get high prices for the square leagues of land for which they can 
 not now find purchasers. The Legislature being already gained, 
 all the editor has to do is to unite with himself one-half of the 
 other able editors in the State, and the work is accomplished. It 
 may be very true that three-fourths of the people of Texas may 
 be, in their hearts, opposed to a renewal of the paper-money poli 
 cy; but Americans are always in haste to be rich, and the Texans 
 are (whatever some people may think to the contrary) full-blooded 
 Americans. Many will favor the projected change, not because 
 convinced that it will benefit the community, but because they 
 will hope thereby to benefit themselves. 
 
 Even supposing the paper-money men to remain a minority, a 
 well-organized minority, closely bound together by selfish interests, 
 is almost always too strong for a majority that has only the public 
 good in view. 
 
 At first sight, indeed, there would seem to be some difficulty in 
 effecting the desired amendment to the constitution. First, it 
 must receive the approbation of two-thirds of each House ; second 
 ly, it must be published in the public prints for at least three 
 months before the next general election of representatives ; third 
 ly, it must receive a majority of the votes of all the citizens voting 
 for representatives; fourthly, it must have the sanction of two- 
 thirds of each House of the next Legislature; and fifthly, the 
 amendment must be read on three several days in each House. 
 
 These are obstacles indeed. But greater obstacles than these 
 can be overcome, when the object is individual enrichment through 
 legislative enactment. 
 
240 THE FISCAL HISTORY OF TEXAS. 
 
 CHAPTER XXXIII. 
 
 COMPARISON OF THE ACTION OF TEXAS, THE OTHER STATES, AND THE 
 UNITED STATES, IN RELATION TO PUBLIC DEBTS. 
 
 Laws of Texas concerning interest on private debts Their good effect Erroneous 
 views of the Texans concerning their public debts Arguments drawn from the 
 action of the United States in relation to continental currency shown to be un 
 founded Contrast of the conduct of Texas and that of the other States in rela 
 tion to public debts. 
 
 THE chief arguments adduced by the Texans in favor of their 
 scaling system are the examples set by other governments in 
 times of difficulty, and that the value a government receives in 
 time of trouble is all that it is honestly bound to pay in times of 
 prosperity in other words, that no insurance is due on public 
 debts. They do not carry the doctrine so far as to say that no 
 insurance is due on private debts. From the remains of that 
 superstition of the Middle Ages, which teaches that the receiving 
 of interest is a sin, they^re freer than the people of most other 
 countries. They regard it as almost as absurd for the Legislature 
 to attempt to regulate the rent (i. e. interest) of money as to regu 
 late the rent of houses and lands (i. e. the interest of money in 
 vested in houses and lands). Their statutes make a distinction 
 between "legal and conventional interest." " On all written con 
 tracts, when no specific premium or rate of interest is expressed, 
 interest shall be allowed at the rate of eight per cent, per annum." 
 But " the parties to any written contract may agree to and stipu 
 late for any premium or rate of interest, not exceeding twelve per 
 cent, per annum on the amount or value of the contract ; and the 
 same may be taken, * recovered, and allowed." 
 
 Thus, under specific, contracts, the lender can, by law, recover 
 twelve per cent, interest. He is free to take more, if he can get 
 it. But the law will not aid him in collecting it. It is then a 
 debt of honor between the parties ; and due means are taken that 
 
THE FISCAL HISTORY OF TEXAS. 241 
 
 the creditor shall not convert this debt of honor into a debt re 
 coverable by law. To insure this, it is provided 
 
 " That all contracts or instruments of writing whatever, which may, in 
 any way, directly or indirectly, violate the foregoing provisions of this act, 
 by stipulating for allowing or receiving a greater premium or rate of inte 
 rest than twelve per cent, per annum, for the loan, payment, or delivery of 
 any money, goods, wares, merchandise, bonds, notes of hand, or any com 
 modity, shall be void and of no effect for the whole premium or rate of 
 interest only ; but the principal sum of money, or the value of the goods, 
 wares, merchandise, bonds, notes of hand, or commodity, may be received 
 and recovered/ 
 
 This law has been pretty well tested, for it was passed in 1840, 
 and remains to the present day unmodified, affording an example 
 of stability that is quite remarkable in Texan legislation. 
 
 Perhaps a better law could not be devised. The business of 
 borrowing and lending is left free, as it ought to be. But it is 
 free all round. The borrower is free to pay a sum exceeding 
 twelve per cent., if he chooses; and the lender is free to receive 
 whatever the borrower is willing to give. At the same time, the 
 courts of justice are left free not to interfere with the parties. 
 
 But cases of extortion may occur. Then the debtor has his 
 remedy; and the would-be extortioner is punished by being de 
 prived of the whole of the interest he has bargained for. If the 
 law went further than this if it deprived the money-lender of 
 principal also, it would hold out inducements to dishonest bor 
 rowers to defraud their creditors. 
 
 The money-lender has an interest in not charging more than 
 twelve per cent., for if he charges fifteen, fourteen, thirteen, or 
 even twelve and a half, he may forfeit the whole of the interest, 
 and not recover the principal without a lawsuit. At the same 
 time, if commercial interest rises above this rate, he has an inte 
 rest in lending, because the borrower has an interest in paying. 
 If he does not pay according to agreement, his credit is (except in 
 attempts at extortion) forever gone in the money-market of Texas. 
 
 Borrowers and lenders ought to be at liberty to make such con 
 tracts as they choose, and it is proper for the law to enforce these 
 contracts when neither party takes undue advantage of the other. 
 But there is no good reason why all the judges, all the jurors, all 
 the sheriffs, all the constables, and all the prisons of a country 
 should be put in requisition to enforce extortionate contracts. On 
 16 
 
242 THE FISCAL HISTORY OF TEXAS. 
 
 the contrary, those who attempt to enforce such contracts ought 
 to be punished ; and for this the laws of Texas sufficiently provide 
 in compelling the would-be extortioner to forfeit the whole of the 
 interest he may have bargained to receive. 
 
 The law works well. Texas is a country of unlimited natural 
 resources, but of very limited capital. The demand for capital is 
 consequently great, and the rent of loanable capital is very high. 
 This is shown not only in the rent or interest demanded for money 
 loaned, but in the rent demanded for improved lands. In the neigh 
 borhood of Austin, two hundred and fifty miles in the interior, 
 improved lands rent for ten dollars an acre per annum, while lands 
 nearly as good and but a few miles distant can be bought, in fee 
 simple, at one or two dollars an acre. The immigrants from the old 
 States, bringing their working hands with them, find it more advan 
 tageous to pay this high rent for lands on which their labor will 
 be immediately productive, than to purchase provisions till they 
 can bring their own lands into cultivation. As the number of acres 
 of improved land offered for rent is relatively small, and the num 
 ber of persons who wish to rent is relatively great, the high price 
 above stated is given and received. 
 
 So in the case of loanable capital in the form of money. The 
 demand for it is great. The supply is limited, and the rate of 
 commercial interest is consequently high. At Galveston, it is 
 seldom below twelve per cent., and sometimes rises to twenty. It 
 has been known to be sixty, but then only for a few days. In New 
 York and Boston, commercial rates rise sometimes in the same 
 ratio above legal rates, for laws cannot give fixidity to that the 
 very essence of which is variability. 
 
 In such a country as Texas, any restrictions on the free circula 
 tion of loanable capital would be very injurious; and so well are 
 the laws of Texas adapted to the circumstances of the country, that 
 we could hear of but one case in which a debtor refused to pay 
 interest on the ground of having been charged more than the law 
 allowed, and then the jury brought in a verdict in favor of the 
 lender. 
 
 One consequence of this freedom of borrowing and lending is an 
 increase in the amount of capital loaned. Many persons lend at 
 commercial rates who would not lend at all, if the laws (as in 
 
THE FISCAL HISTORY OF TEXAS. 243 
 
 some of the old States) made it a crime to lend above a specified 
 rate. 
 
 In Texas, moreover, loanable capital is not collected into banks, 
 and there placed under the control of irresponsible boards of 
 directors. Every man lends his own capital without the interven 
 tion of banks or brokers. No " go-between" is necessary to evade 
 unjust and oppressive laws, for there are no unjust and oppressive 
 laws to evade. 
 
 One consequence is an escape from much of that litigation which 
 is so common in the old States. The money which debtors in 
 New York and Pennsylvania pay to their lawyers, they pay in 
 Texas to their creditors. The lawyers in Texas have much cause 
 of complaint as to this freedom of borrowing and lending, as it 
 deprives them of much of their business. But they are the only 
 men who have cause to complain. 
 
 We do not pretend to say that credit in Texas is unattended 
 with evils. Wherever there is credit, there must be debt. Where 
 profits of trade are high, men are naturally disposed to stretch their 
 credit to the utmost in order that they may get the capital of others 
 into possession. They thus involve themselves in debts, from which 
 in some cases it is difficult, in others impossible, to extricate them 
 selves. This occurs in Texas as elsewhere. In addition to this, 
 Texas, as part of a paper-money confederation, suffers from every 
 contraction and expansion of the banks of New York and Phila 
 delphia ; but having no banks of her own, or none of much account, 
 and being exempted by her location from the operations of the 
 banks of the other States, except in a secondary degree, she suffers 
 much less than other parts of the Union. 
 
 Some readers may regard this as an episode. If it is, we cannot 
 help it. It is connected with the main chain of our history. The 
 laws have much to do in forming public opinion. The laws of 
 Texas cause a distinction to be made in the public mind between 
 legal and conventional rates of interest. The former may be re 
 covered by law ; the latter cannot when they exceed a certain 
 rate, but ought to be paid, except when the amount is extortion 
 ate. 
 
 The Texans regard their public debt as falling within the last 
 category. The full amount may be due according to the letter of 
 the contract, but it is not due in equity ; it is not due in honor, 
 
244 THE FISCAL HISTORY OF TEXAS. 
 
 for the government never received (as they maintain) adequate 
 consideration for it. 
 
 We differ from them in judgment. If a private individual wishes 
 to borrow, there are relatively few to whom he can make known 
 his wants. The whole world knew of the necessities of Texas, and 
 by issuing her securities in as small amounts as five, three, two, 
 and even one dollar, she took every means in her power to enlist 
 every man, woman, and child who had a dollar to lend among her 
 creditors. She sent agents to the United States, agents to England, 
 and agents to France, and all for no other purpose in the world 
 than to get people s dollars from them. In order to induce folks to 
 part with their money, she pledged everything she had in the world 
 her lands, her customs, her direct taxes, her license-taxes, and 
 above all her "public faith," which is her public honor. To suit 
 the various tastes and fancies of men and women, who had money 
 to lend, she issued her securities in every variety of form, treasury 
 notes and exchequer bills, printed notes and engraved notes, notes 
 with interest and notes without, " red backs," and star notes, and 
 change notes, eight per cent, treasury bonds and eight per cent, 
 funded, and ten per cent, consolidated debts. 
 
 Texas borrowed in the open market of the world, and if she got 
 but little for some of her securities, it was because they were worth 
 but little. That they brought even the little they did was because 
 Texas promised much. If her meaning was, " Though I promise to 
 pay one hundred cents, I intend to pay only fifty cents, or twenty 
 cents, as suits my convenience," she ought to have said so. Then 
 she could not have borrowed at all. 
 
 If hard pushed by arguments of this kind, the friends of the 
 scaling system in Texas attempt to defend themselves by saying 
 that the United States scaled their debts in the case of the con 
 tinental issues. Those who are in want of precedents for injus 
 tice will never be at a loss to find them. It would have been better 
 if the Texans had so used the experience of the United States in 
 the case of continental money as to avoid striking on the same 
 rock. Speaking of this same continental money, an eye-witness 
 of its effects says: 
 
 " We have suffered more from this cause than from every other cause of 
 calamity. It has killed more men, pervaded and corrupted the choicest 
 interests of our country more, and done more injustice than even the arms 
 and artifices of our enemies. * * * * 
 
THE FISCAL HISTORY OF TEXAS. 245 
 
 " It has polluted the equity of our laws, turned them into engines of 
 oppression and wrong ] corrupted the justice of our public administration; 
 destroyed the fortunes of thousands of those who had most confidence in 
 it ; enervated the trade, husbandry, and manufactures of our country, and 
 gone far to destroy the morality of our people."* 
 
 The Revolutionary Congress did scale this continental money ; 
 and by the very act of scaling greatly aggravated the evils above 
 described. Deeply did it deplore the necessity for the act. 
 Speaking of it in after years, Mr. Gerry said : 
 
 " Congress were reduced to the necessity of scaling the old debt, to sink 
 it, and of beginning anew, or of giving up the cause. Sad alternative ! to 
 violate the public faith, or be enslaved." 
 
 The first Congress, under the present Constitution of the United 
 States, took measures for funding the revolutionary debt. The 
 foreign debt was paid at par, the domestic certificate debt was 
 funded at par, and the continental bills were funded at one hundred 
 for one. While they were yet a common circulating medium (ten 
 years before), they had depreciated to a thousand for one. 
 " Their circulation was never more brisk than when they were five 
 hundred for one." As they were in everybody s hands when they 
 became worthless, it was argued that the sinking of them in this way 
 by depreciation was equivalent to sinking them by general taxa 
 tion ; and that to impose a general tax for the sake of redeeming 
 them in the hands of those with whom they chanced to be found 
 ten years afterwards, was very like taxing the community a second 
 time for the sake of that for which it had been very heavily taxed 
 already. 
 
 Whatever may be thought of this argument, a better may be 
 found in the fact that it was utterly impossible to redeem the con 
 tinental bills at par, or pay the interest on them if funded. The 
 issues amounted to $357,000,000, without including the counter 
 feits thrown into circulation by the British. Even supposing it 
 possible to distinguish the clumsily executed originals from the 
 counterfeits, the attempt to pay the interest on them would have 
 crushed the government. 
 
 The United States assumed all the rest of the revolutionary 
 
 * See Essays by Pelatiah Webster, a merchant of Philadelphia, published at dif 
 ferent intervals from 1776 to 1780, in pamphlet form, and collected into a volume in 
 1790. 
 
246 THE FISCAL HISTORY OF TEXAS. 
 
 debt at par, and thereby assumed as much as they could bear. 
 Even to enable them to bear so much as they assumed, it was 
 found necessary to defer for ten years the payment of interest on 
 one-third of the debt. 
 
 The cases of the United States and Texas are so different that 
 the action of the first in funding the continental bills at one 
 hundred for one, cannot be adduced as an excuse, much less as a 
 justification of the latter for the course she is pursuing. 
 
 The continental bills were sunk by a depreciation equivalent to 
 a tax to that amount on the people who were benefited by the 
 Revolution. Not one of them was exported. This cannot be said 
 of the promissory notes of Texas. And if Texas insists on scaling 
 them, she will throw great part of the costs of her revolution on 
 people deriving no benefit from it. This is a point of great im 
 portance. Some of the Texans seem to think that the notes being 
 held by non-residents is reason enough in itself why they should 
 be scaled down to the lowest rate possible. To us it is an addi 
 tional reason why they should be paid in full. If the notes were 
 held by residents of Texas, it might be supposed that they re 
 ceived some compensation in the increased value of their lands 
 and the general prosperity consequent on the successful issue of 
 the struggle. But no such compensation can be afforded to non 
 residents. They suffer all the injustice, without any abatement. 
 
 The other point of distinction is that the United States had not 
 the power to redeem their continental bills, while Texas has full 
 ability to pay her promissory notes. 
 
 None but those who have turned their attention specially to the 
 subject know the state of poverty and destitution in which the old 
 thirteen States were left by the revolutionary war a state from 
 which they hardly began to emerge till the present Constitution 
 was brought into operation, and till the wars of the French Revo 
 lution created a new demand for our products, and gave employ 
 ment to our shipping. In the very debate which was had on the 
 funding of the public debt (1791), Mr. Boudinot said there was one 
 township in New Jersey in which three hundred executions were 
 out for non-payment of taxes. And the Secretary of the Treasury, 
 in his report, "with his plan for supporting public credit," made 
 the following statement in regard to the value of land : 
 
 " The present depreciated state of that species of property is a serious 
 
THE FISCAL HISTORY OF TEXAS. 247 
 
 calamity. The value of cultivated lands, in most of the States, has fallen, 
 since the Revolution, from twenty-five to thirty per cent. In those further 
 south, the decrease is still more considerable. Indeed, if the representa 
 tions continually received from that quarter may be credited, lands there 
 will command no price which may not be deemed an almost total sacrifice." 
 
 How different the condition of Texas, with her lands rising in 
 value, and prosperity in all her quarters ! 
 
 If any foreign government had bestowed on the United States, 
 either in payment for wild lands or for any other cause, a sum of 
 money equal to their debts, they would have redeemed every dollar 
 of the continental bills. But the United States have bestowed on 
 Texas, in payment for wild lands, a sum exceeding the whole 
 amount of her circulating debt, and yet Texas will not pay. 
 
 As little of excuse or justification can Texas derive from the 
 recent conduct of some of the States of our Union. Mississippi 
 has repudiated the Union Bank bonds, because, as she avers, they 
 were issued and negotiated in violation of law and of constitution. 
 Texas cannot make this excuse. All her debts were incurred in 
 strict conformity with both law and constitution. 
 
 Florida pleads minority : that she was a mere territory, and 
 that the United States, as her guardian, ought to have prevented 
 her running into debt. Texas cannot set up this plea, for she was 
 an independent Republic, in the plenary enjoyment of all the at 
 tributes of sovereignty. 
 
 The only two of the remaining States that have repudiated any 
 portion of their debts are Indiana and Michigan, and they have 
 done it on the ground that gross frauds were practised in their 
 negotiation. Texas cannot make this apology. All her debts 
 were fairly and openly contracted. 
 
 Arkansas does not pay ; but she has not repudiated. She ac 
 knowledges the amount due, and once every two years, through 
 her Governor, expresses her deep regret that she cannot discharge 
 her obligations. Texas can pay, and will not. 
 
 Illinois, Indiana, and Michigan, finding it impossible to pay in 
 money certain of their admitted debts, freely surrendered to their 
 creditors the railroads and other improvements on which the 
 borrowed money had been expended. To this they added lands. 
 They did the best their circumstances would permit. If Texas 
 would do likewise, her creditors would have no cause of complaint. 
 
 Pennsylvania, Maryland, and perhaps some of the other States, 
 
248 THE FISCAL HISTORY OF TEXAS. 
 
 suspended for a time the payment of interest, or paid only in in 
 convertible paper. But this was matter of stern necessity, caused 
 by the suspension of specie payments on the part of the banks, 
 with the derangement of commerce and the prostration of industry 
 thereon consequent. But, as soon as the banks resumed specie 
 payments, and as soon as Pennsylvania and Maryland could bring 
 into successful operation the new revenue systems which the 
 change of times made necessary, they resumed the payment of 
 interest in lull. 
 
 Texas stands alone. She repudiates on principles on which the 
 other States have never acted. They all, except her, admit, in 
 the language of Mr. Sedgwick, that, " whenever a voluntary 
 engagement is made for a valuable consideration for property ad 
 vanced, or services rendered, and the terms of the contract are 
 understood, if no fraud or imposition is practised, the party en 
 gaging is bound to the performance, according to the literal mean 
 ing of the words in which it is expressed." None of the States 
 except Texas attempts to set aside such contracts on the plea 
 that they have not received as much as they have promised to 
 give. None of the States but Texas maintains that insurance is 
 not due on money borrowed in times of adversity. None of the 
 States but Texas thinks of reopening accounts ten years after they 
 have been fairly audited, and ten years after the negotiable certi 
 ficates of the same have been in circulation. None of the States 
 but Texas gives a preference to domestic over foreign creditors. 
 None of the States but Texas attempts to draw a line of distinction 
 between original holders and assignees of evidences of public debt. 
 None of the States but Texas has, or might have, ten millions 
 in her treasury, and fifty million dollars worth of public lands. 
 The public lands in the other States are, for the most part, the 
 property of the Federal Government. In this respect, Texas has 
 great advantages over the other States. Yet she will not pay 
 what she owes. 
 
THE FISCAL HISTORY OF TEXAS. 249 
 
 CHAPTER XXXIV. 
 
 PRESENT CONDITION OF TEXAS. 
 
 Improved condition of Texas as set forth in the inaugural address of Governor Bell 
 and Lieutenant-Governor Henderson Contrast with its condition a few years 
 previous as set forth by President Houston This the result of annexation, and 
 this " a sufficient consideration" for all the debts Texas has incurred Complaints 
 against Texas Unreasonable demands of her public men Land-speculations in 
 Texas Their eifects on the public mind Popular arguments of the Texans in 
 favor of scaling Led to scaling in part by the necessity of making equation of 
 currencies Audited claims not to be reopened Popular arguments in favor of 
 scaling briefly examined Less made by investments in Texan securities than by 
 other investments Prices of leading stocks in New York market in 1842, 1845, 
 and 1852 Prices of bank and other stocks in Philadelphia in 1842, 1845, and 
 1852 Bad effects on American reputation in Europe if Texas does not review her 
 course Indications of a change for the better in public sentiment in Texas The 
 interest of Texas will be promoted by her complying with her contracts. 
 
 SINCE annexation to the Union, the fiscal concerns of Texas have 
 undergone a striking improvement. Her revenues have exceeded 
 her expenses, and the interest on the bonds received from the 
 United States has enabled her to release the State tax collected 
 in each county for the benefit of such county.* 
 
 General prosperity prevails ; but on this point it will be best to 
 let the Texans themselves speak. 
 
 In the address which Governor Bell made to the Legislature, 
 December 22, 1851, at the commencement of his second term of 
 office, he uses the following language : 
 
 " I cannot conclude this address without expressing to you who are now 
 present, and to my fellow-citizens generally, my heartfelt congratulations 
 upon the prosperous condition of our young State. To me, the contrast 
 between what Texas is, and what she was in 1836, is indeed most striking: 
 it is difficult to realize the great and happy change that has taken place. 
 * A dark cloud then hung lowering over this fair land. 
 The Lone Star shot fitful through the gloom now beaming with the 
 light of peace and hope now almost quenched in blood, yet ever with a 
 
 * See Appendix N for revenue of State of Texas ; Appendix for assessment of 
 taxes ; Appendix P for agricultural statistics. 
 
250 THE FISCAL HISTORY OF TEXAS. 
 
 halo of glory encircling it. We have lived to see that lost pleiad restored 
 to its proper place among its sisters, no longer obscured by doubt or dif 
 ficulty, but shining far abroad to the nations of the earth a beacon, which 
 every day grows brighter and more glorious." 
 
 This is magniloquent ; but magniloquence is excusable in the 
 Governor of a State, which, even in its reduced limits, is larger 
 than the whole empire of Austria. 
 
 Similar is the language which James W. Henderson, the newly- 
 elected Lieutenant-Governor, used on the same occasion : 
 
 "I may be permitted to offer to the Senators and Representatives of Texas, 
 and to my fellow-citizens, my sincere congratulations upon the happy and 
 prosperous condition of all the States of this now glorious Union. 
 
 ******** 
 
 "Whilst these prospects are gratifying to us as citizens of the great Re 
 public, we have, as citizens of Texas, equal cause to rejoice in the vast im 
 provements which are everywhere presented throughout the broad limits of 
 our own State. When we contrast our present condition, social, moral, 
 and political, with that of a few years past, we are astonished at our rapid 
 advancement; and look back with the deepest interest to the time when 
 Texas, without organization and without means, yet impelled by a strong 
 sense of the value and blessings of liberty, dissolved her political connection 
 with Mexico, and established an independent republican government, under 
 the most trying and discouraging circumstances that ever befel an oppressed 
 and resisting people. 
 
 "Yes! at a time when Texas, without a dollar in her military chest, not 
 a bayonet bristling in her ranks; with the hopes of her people depressed by 
 the atrocities committed upon her citizens and soldiers : when the homes of 
 her citizens were in flames, when her soldiers lay butchered upon the ill- 
 fated plains of Goliad, and around the desolated walls of the Alamo nay, 
 at a time when the progress of desolation and hostility marked the track 
 of the invader as visibly as if the besom of destruction had swept over the 
 land the hearts of the people failed not; and they met in convention to 
 deliberate upon the affairs of Texas. 
 
 ******** 
 
 "Since that day [the day of the battle of San Jacinto] the prosperity of 
 Texas has been steadily advancing: her march has been onward, until we 
 now behold her happy and prosperous, and rejoicing in the beautiful bless 
 ings of a kind and beneficent Providence/ 
 
 Some of the politicians of Texas maintain that she ought not 
 to pay her debts, because, as they say, " she received no considera 
 tion for them." We assert that she has received ample considera 
 tion for them in all the blessings attendant on liberty and inde 
 pendence so eloquently set forth in the discourses of Gov. Bell and 
 Lieut. -Gov. Henderson. All the courage and all the wisdom of 
 the men of Texas would have availed them nothing without the 
 
THE FISCAL HISTORY OF TEXAS. 251 
 
 auxiliary aid of money. Without the supplies obtained from the 
 United States, and for which her present certificate debts were 
 exchanged, the struggle with Mexico could never have been 
 brought to a successful issue. 
 
 One way of testing the value of what we part with is by con 
 sidering the value we thereby acquire. To do this fairly in the 
 present instance, let us suppose that all the land and all the other 
 wealth of Texas had been the property of one man. Would not 
 that man consider himself fortunate if, by an expenditure of ten or 
 twelve millions, he could bring his property from under an anar 
 chical and unenlightened despotism into the control of a free, 
 stable, and enlightened government. Lands which, when Texas 
 was part of Mexico, were worth but from one cent to fifty cents an 
 acre, are, now that Texas is part of the United States, worth from 
 one dollar to fifty dollars an acre. The case is not weakened by 
 the fact that the advantages of this rise in value are shared by 
 many men, instead of being monopolized by one. 
 
 Verily, Texas got her independence cheap. There are few 
 people suffering under the yoke of oppression who would not be 
 willing to pay many times as much to obtain their liberty. Even 
 if the Texans should esteem religious and political freedom as not 
 worthy to be taken into the account, they have gained more in 
 their increase of wealth than they have promised to pay to those 
 who aided them in their struggles. 
 
 The present condition of Texas will appear the more remarkable 
 if we contrast it with her condition a short time before she was an 
 nexed to the Union, as depicted by President Houston in his mes 
 sage to the seventh Congress, December 1, 1842 : 
 
 " The nation has been gradually declining. Instead of deriving facilities 
 and advantages from the march of time, its decline since the year 1838 to 
 the present period of depression has been more rapid than perhaps that of 
 any other country on the globe possessing the same natural advantages. 
 
 The rapid improvement that has since taken place has been 
 chiefly owing to annexation. This is admitted by Governor Bell, 
 in the message from which we have already made quotations. 
 
 "It was not until Texas took her place as one of the States of the great 
 American Union that she occupied the position which nature designed for 
 her. From that period to the present, her onward march to power and im 
 provement has been unexampled. Nations behold the position of our hopes. 
 From every land immigrants are flocking in welcome crowds to partake of 
 
252 THE FISCAL HISTORY OF TEXAS. 
 
 our prosperity. From the vine-clad hills of France and Germany, from 
 Ireland s green shores, and England s smiling fields, and from our own 
 sister States, they swell the flowing tide, until the solitary plains have been 
 made to rejoice, and the wilderness to blossom as the rose. A land more 
 fair and happy never sun viewed in its wide career ; salubrious, mild, its 
 hills are green, its woods and prospects are fair, prairies fertile, and, to 
 crown the whole, it is our home the land of liberty and all its sweets." 
 
 All this is true ; but all who have had any transactions, in the 
 way of dollars and cents, with the government of this fair land, 
 have abundant cause of complaint, and the United States among 
 the rest. The war with Mexico, which was brought on by the an 
 nexation of Texas, cost, as has been computed, $300,000,000. 
 This expense was borne by the United States. Texas was enriched 
 by the expenditures it caused within her borders ; so much so that 
 it is said a part of her population would be very glad if hostilities 
 should be renewed. Part of the gross cost of the war must be 
 charged to the account of California, Utah, and New Mexico. 
 But, independently of this, the United States have expended in 
 Texas, and for her benefit, more millions than her debts amount 
 to. Nearly half the army of the United States is employed in 
 Texas. Yet Texas, with all these liberal outlays in her borders, 
 is not content unless she can wrest from the United States five 
 millions in bonds, to which she has no claim till the conditions to 
 which she assented in her act of November 25, 1850, are fully 
 complied with. 
 
 The truth is that some of the politicians of Texas seem to think 
 that the United States have been annexed to Texas, and not 
 Texas to the United States. If any demand they make, no matter 
 how unreasonable it may be, is not at once granted, they are loud 
 in their outcries about the grievance to which their State is sub 
 jected. In view of this state of feeling that prevails among them, 
 it is a pity that a direct vote was avoided in Congress on their 
 unjust pretensions to one-half of New Mexico. We have already 
 said that it was judicious to avoid that vote, seeing the condition 
 into which public affairs had been brought by the insane doings of 
 politicians of different parties. Yet an evil has attended what 
 Texas has interpreted as an implied acquiescence in her claims. 
 Grant one unreasonable demand to an unreasonable man or an 
 unreasonable State, and you pave the way for other demands 
 
THE FISCAL HISTORY OF TEXAS. 
 
 equally unreasonable. Let Texas have the reserved bonds, an< 
 there is no knowing what new claim she will set up. 
 
 If her politicians are frustrated in their present design, they 
 will, it may be, commence a new agitation, and perhaps appeal to 
 sectional feelings to give it additional force. They have, no doubt, 
 still in them much of the remains of the " old Adam," which led 
 to such violent party conflicts in the days of the Republic ; exem 
 plifications of which are to be found in the bitter controversies of 
 Gov. Smith and his council, in the land-speculator s rebellion, and 
 in the war about the land-office archives. The wrath which 
 they formerly poured, in all its concentrated energy, on the heads 
 of one another, they may now pour out on the people of other 
 States. But if they do, its venom will be weakened by its diffusion. 
 
 Whatever their policy may be, their demand for the reserved 
 bonds should be resisted calmly resisted, but firmly resisted till 
 the conditions set forth in the act of Congress of September, 1850, 
 and assented to by the Legislature of Texas in its act of Novem 
 ber 25, 1850, are fully complied with. 
 
 That there is this strong disposition to get hold of the bonds, 
 and at the same time pay the public creditors but half their dues, 
 is owing to a wish to apply the money to internal improvements. 
 "It was great folly in Texas," said one of her Senators, "to pay 
 her debts at all." "What," said a gentleman from Louisiana, 
 "folly to pay them at all?" The Louisianian being a creditor 
 of the State, felt some alarm. "Yes," replied the Senator, "it 
 was folly to pay them at all. Texas ought to have taken the money 
 she got from the United States, have invested the same in rail 
 roads, and then given the public creditors shares in those rail 
 roads." 
 
 We have mentioned elsewhere that land-speculations afford the 
 key to all movements in Texas. They had, if some authorities 
 are to be believed, much to do in bringing on the revolution ; they 
 caused the wars with the Cherokee Indians; and they are now the 
 chief obstacle to the creditors of the State being paid their just 
 demands. The money is wanted to make railroads, in order to 
 promote sales of land in larger quantities, and for higher prices 
 than would otherwise be possible. 
 
 Certainly no other country affords such beautiful opportunities 
 as Texas for land-speculations, and her inhabitants have taken full 
 
254 THE FISCAL HISTORY OF TEXAS. 
 
 advantage of them. From the best accounts that can be collected, 
 the whole number of acres in cultivation in 1848 was only 512,641, 
 while the number of acres assessed and subject to taxation was 
 38,788,439.* According to a more recent statement, the whole 
 amount of land owned by individuals is 63,783,054. f In a com 
 munity in which each land-owner has one hundred times as much 
 land as he has either ability or disposition to cultivate, there must 
 naturally be a strong wish to dispose of the surplus to advantage. 
 The necessary result is that the land-speculation interest is pre 
 dominant. Compared with it, the creditor interest is feeble in 
 deed, as nine-tenths of the public creditors reside in other States. 
 We met with many persons in the State who were dissatisfied with 
 the scaling system; but, as they are without organization, they 
 are without influence. Some of the newspaper editors are of this 
 number; but arguments in favor of paying the debts of the Repub 
 lic are hardly agreeable to the majority of their readers, and a 
 stump orator who should take the field in behalf of the public 
 creditors would find little sympathy in his hearers. 
 
 "Rapacious bond-holders," and "greedy speculators," are 
 among the mildest of the epithets bestowed on such of the credit 
 ors as seek payment according to the letter of the contract. Land- 
 speculations are, in Texas, quite in accordance with the orthodox 
 faith. It is only stock-speculations that are criminal. 
 
 When men have a deep interest in any scheme, it is not very 
 difficult for them to persuade themselves of its entire justice. 
 And hence it ought to occasion no surprise that the project to 
 take the money belonging to the public creditors, and apply it to 
 the promotion of land-speculations, has considerable popularity in 
 Texas. We have already treated at some length of the arguments 
 by which this project is supported; but more on this head is neces 
 sary. So many phases as error assumes, so many is it necessary 
 to expose. 
 
 One reason why the arguments in favor of scaling have had so 
 much effect on the Texan mind is that scaling, in a certain sense, 
 and to a certain extent, in non-audited debts, was just and proper. 
 This was the case in regard to a part of the second and third class 
 debts. If any man made out his bill for services or supplies at 
 
 * See Appendix P. I See Appendix K. 
 
THE FISCAL HISTORY OF TEXAS. 255 
 
 treasury note prices, it was just and proper for the auditor and 
 comptroller to reduce them to their equivalents in specie. This 
 scaling, if it may so be called, was a mere equation of currencies; 
 and as payment was to be made in the better currency, no one 
 could object to it. This kind of scaling was righteously applied 
 to the non-audited, or second and third class debts, and it is well 
 worthy of remark how little it reduced the original amount. The 
 ostensible sum of the second class debt was $968,763 28, reduced 
 by scaling to $896,217 80, being a deduction of only 7f cents in 
 the dollar. The ostensible amount of the third class debts was 
 reported by the auditor as $97,675 10, and the par value as the 
 same. From this it appears that nearly all those whose accounts 
 were unaudited when the scaling act was passed, had made out 
 their accounts in specie; and it was right that the few who had 
 made out their accounts in treasury note prices should have the 
 amounts reduced to their equivalents in specie. 
 
 Thus far, then, the scaling was unobjectionable. But the audi 
 tor and comptroller had no right the Legislature had no right to 
 direct them to go further. After an account has once been regu 
 larly audited, and a certificate thereof duly issued, it is too late to 
 change it. A treasury note, or certificate of stock, or any other 
 negotiable public security, is like a bank-note. It is evidence that 
 the amount expressed on its face is due to the holder, and so 
 acknowledged by the government. If the government, in audit 
 ing any claim, neglected to make a proper equation of currencies, 
 the fault was the government s, and it ought to suffer the loss, if 
 any. The loss ought not to be thrown on innocent third parties, 
 who have no means of knowing what a government owes, except 
 the government s own acknowledgments of what is due. Hence 
 the whole of the first class debts, " consisting," in the language 
 of the auditor and comptroller, " of audited and ascertained 
 claims," ought to have been left untouched. After the evidences 
 of them had been in circulation, none of them for less than eight 
 years, and some of them for twelve years, they ought not to have 
 been subject to a re-audit. 
 
 To admit any other principle than this would be to overthrow 
 the very foundation of all negotiable securities. The amount ex 
 pressed in the treasury notes and certificates of stock is what 
 
256 THE FISCAL HISTORY OF TEXAS. 
 
 Texas owes, and this amount she must pay, unless she means to 
 violate her contracts. 
 
 Suppose the Republic of Texas, instead of constituting herself 
 a bank of issue, had, after the manner of South Carolina, esta 
 blished a public bank, to issue notes and aid in fiscal operations. 
 If Texas had done this, she would have done what she had a per 
 fect right to do ; for, as she was then without the Union, she was 
 not bound by the provisions of the United States Constitution. 
 
 Suppose, then, that this Bank of Texas, founded exclusively on 
 the credit and resources of the Republic, and carrying on opera 
 tions for its exclusive benefit, had done just what the Republic did, 
 that is, issued notes in such excess that they depreciated to fifty, 
 forty, thirty, twenty, ten, and even fewer cents in the dollar. 
 Suppose, finally, the Bank of Texas should, by some turn of for 
 tune, become suddenly rich become possessed of ten millions in 
 United States bonds, besides much other wealth worth millions 
 more ; would not the Bank of Texas, under such circumstances, 
 be expected to pay its notes in full ? 
 
 If it did not, it would do worse than our incorporated banks in 
 the United States have done. They all, like the Republic of 
 Texas, issued notes in excess. They continued to issue them at 
 various stages of depreciation. But all, such of them as have any 
 credit or character to sustain, have paid their notes in full, without 
 regard to the rate of depreciation at which they were issued. 
 
 The case is not altered by the fact that the Republic of Texas, 
 instead of establishing a separate bank, constituted herself a bank 
 of issue. 
 
 " It is pretty well, said one Texan, " for the State to pay as 
 much as she does. Those who bought the paper of a revolutionary 
 government had no right to expect any more." This argument 
 is not satisfactory. A revolutionary government is as much bound 
 as is an established government to fulfil its contracts. Nothing 
 but inability will excuse either. And till it can be shown that 
 other revolutionary governments have had as ample means as 
 Texas, their defaults of payment will not afford her even the sha 
 dow of an apology. 
 
 Another Texan is willing to admit that, " if the loans had been 
 in gold and silver, Texas would be bound to pay in full ; but as 
 they were obtained in another way, it is quite enough if she pays 
 
THE FISCAL HISTORY OF TEXAS. 257 
 
 in part. He forgets that, if the loans had been in gold and silver, 
 they would have been expended for the very articles of clothing, 
 provisions, and munitions of war, that Texas obtained by the sim 
 ple intervention of her paper. Texas is as much bound t.o pay for 
 value in kind as for value in cash. 
 
 Through trading connections, a market was got for Texan secur 
 ities that could not otherwise have been obtained. A man may 
 be very unwilling to lend a government, especially a foreign 
 government, one hundred dollars in gold and silver, and yet be 
 ready to sell goods to that value, and receive pay in the obliga 
 tions of such government. Much more ready may he be to re 
 ceive payment of old debts in such obligations. In this way, 
 Texas borrowed to a large amount from the people of the United 
 States, and it was the only way in which she could borrow. 
 
 A third Texan says, the holders of her securities will, under 
 the scaling system, get more than they expected when they bought 
 them, and therefore they ought to be satisfied. No doubt many 
 holders of Texan securities had, at times, very faint hopes of their 
 ever being paid at all ; and when they purchased such securities, 
 it must have been at a price which they regarded as proportionate 
 to the risk. But this is not a good reason that they should not be 
 paid in full, when the State has ample ability. If the " degree of 
 hope" of the creditors is to be the standard of adjustment, the 
 State owes compensation not only to those whose hope has been so 
 long deferred, but to those who have been doomed to absolute dis 
 appointment. When hope was raised high by the Texan official 
 announcements that General Hamilton had negotiated a loan in 
 Europe, some men invested their all in Texan securities, and 
 thereby lost their all. 
 
 Besides this, it should be recollected that the receipt of these 
 government liabilities was not always matter of choice. It was some 
 times matter of necessity. The government had nothing else to 
 give its creditors, and they consequently had nothing else to pay to 
 those to whom they were indebted. Texan securities had a forced 
 circulation, not through law, but through circumstances. As an 
 example, we may mention the case of a lady of Washington City, 
 who could get nothing else from a Texan minister to the United 
 States but Texan securities in pay for his board. After waiting 
 IT 
 
258 THE FISCAL HISTORY OF TEXAS. 
 
 some ten years, the Texan authorities are trying, by their scaling, 
 to deprive this widow of a great part of her just demands. 
 
 The prospect that "speculators" will be enriched, if the State 
 pays her debts in full, seems, with some Texans, quite reason 
 enough why she should pay only one-half. For, as already re 
 marked, growing rich by speculations in lands is quite consonant 
 with Texan principles of morality, because the Texans hold many 
 lands ; while growing rich by speculations in stocks is wicked, 
 because Texans hold few stocks. 
 
 In our view, speculations in stocks are just as conformable with 
 the principles of morality and religion, as are speculations in lands, 
 or speculations in anything else. When men buy any commodity 
 with the intention of reselling it, they do so with the hope of gain. 
 At the same time, they know there is a risk of loss. This was the 
 precise case with those who dealt in Texan securities, and we know 
 not why they, among all dealers in commodities, especially when 
 they ran so great a risk of loss, should alone be deprived of all 
 chance of gain. 
 
 The Texan Government had for sale two kinds of merchandise 
 land and paper. Some took the one, and some the other. Both 
 its land and its paper were then very low the one worth, perhaps, 
 ten cents an acre, the other ten cents in a dollar. Many who took 
 the land at these low rates have done very well by it, it being now 
 worth two, five, ten, and twenty dollars an acre. There is no 
 murmuring at the good luck of those who took land, because it is 
 now worth many times as much as it was ten years ago. Neither 
 should there be any murmuring at the good luck of those who took 
 paper, if it should now be worth more than it was when they re 
 ceived it. 
 
 As there is no law of nature fixing the value of the interest on 
 debts, so there is no law of nature fixing the market value of the 
 principal of debts. As flour is sometimes worth ten dollars a 
 barrel, and sometimes only five, and as cotton is sometimes worth 
 twelve cents a pound, and sometimes only six, so stocks are sold 
 sometimes at a premium, and sometimes at a discount. Public 
 securities are, as has elsewhere been observed, a merchandise sub 
 ject to like laws of prices with other merchandise. But these 
 general laws of prices have particular effects on each species of 
 merchandise, according to its particular nature. Supposing the 
 
THE FISCAL HISTORY OF TEXAS. 259 
 
 money-market to be the same in other respects, government secur 
 ities rise or fall in price according to the supposed ability and the 
 supposed inclination of government to pay. Texas Government 
 merchandise was low in the market, because the ability to pay at 
 all depended on remote and uncertain contingencies. Texas secur 
 ities have since risen, because the ability of the government to 
 pay has been increased. But Texas securities have not risen to 
 par, because, though the government can pay, it will not. 
 
 But, supposing all the creditors of Texas to be paid in full, and 
 that they purchased their claims at second hand, and at very low 
 rates have they, after all, done so very good a business ? Might 
 they not have made more money by other investments ? Twelve 
 per cent, interest may be recovered by law in Texas, and as money 
 is freely borrowed at that rate, we may rest assured that the pro 
 fits of trade are rather above than below it. At compound inte 
 rest, paid semi-annually, money, at twelve per cent., will double 
 itself in six years. The government admits that it obtained the 
 equivalent of fifty cents in silver from those who received its second 
 issues of treasury notes ; and, though it promised interest, it ceased 
 to pay interest, even in paper, after the 1st of January, 1841. A 
 man who gave one thousand dollars in specie, or its equivalent, 
 for these notes, might, if he had kept that money in trade, have 
 made it two thousand dollars at the end of six, and four thousand 
 dollars at the end of twelve, years. But at the close of this pe 
 riod, he gets from the Texan Government how much ? One 
 thousand dollars, or exactly what he advanced twelve years ago ! 
 The government did promise to pay him two thousand dollars ; 
 but it pays only one thousand. It did promise to pay him interest; 
 but it does not. 
 
 If the matter be fairly investigated, it will be found that those 
 Texans who kept their money in trade, or who invested it in lands, 
 have done much better than those who invested it in government 
 securities. The value of money to the man who parts with it is 
 to be estimated by what he would have gained by it, if he had 
 kept it in his own hands. 
 
 In regard to those citizens of the United States who made invest 
 ments in the securities of Texas, it will not be hard to show that 
 they could have done much better by employing their money at 
 home. In evidence of this, we give the following table. The quota- 
 
260 THE FISCAL HISTORY OF TEXAS. 
 
 tions for 1842 are from Hunt s Merchants Magazine for January, 
 1843 ; those for 1845 from the same work for July, 1845 ; those 
 for 1852 from the Journal of Commerce, and the Courier and 
 Inquirer : 
 
 Prices of State Stocks in the New York Market. 
 
 Stock. Interest. Redeemable. Price, April, 1842. May, 1845. Nov. 1852. 
 
 New York State, 6 1860 82 a 84 108 120 
 
 " " 5 1861 77 a 80 104 
 
 " 5 1855 75 a 77 106f 114f 
 
 Pennsylvania, 5 31 a 33 73| 96 
 
 Ohio, 6 1856-60 50 a 55 97f 110 
 
 Kentucky, 6 1860 68 a 70 101 f 110 
 
 Alabama, 5 1865 35 a 40 72 95 
 
 Indiana, 5 1861 15 a 17 34* 99 
 
 Illinois, 6 1870 15 a 16 39 83 
 
 Maryland, 6 40 a 45 109 
 
 Michigan, 6 1860 15 a 30 
 
 New York stocks were, March 1, lower than they were April 15, 
 
 1842, five per cents, being then 68 a 72, and five and a half per 
 cents. 71 a 73. Others of the stocks above quoted were at times 
 lower than they were April 15, 1842. Illinois sixes have been 
 sold at 13. 
 
 It is evident that, if a man had bought these stocks at the rates 
 they were in 1842, and sold them at the rates at which they were 
 in 1845 or 1852, he would have made immense sums of money. 
 But if he had bought and sold at shorter intervals, his gains would 
 have been proportionally much greater. 
 
 New York sixes, in April, 1842, averaged 83; in April, 1843, 
 they averaged 1 04. Gain on investment in one year equal to 
 twenty-five per cent. 
 
 Ohio sixes averaged, in April, 1842, 52J; in May, 1843, they 
 averaged 86. Gain on investment in thirteen months equal to 65 
 per cent. 
 
 Kentucky sixes were, in April, 1842, at 69 on an average; in 
 May, 1843, at 95. Gain in one year equal to 36 per cent. 
 
 Illinois sixes were, in December, 1842, 18 a 18} ; in May, 1843, 
 they were 29J a 30J. Gain in the short period of six months 
 equal to 61 per cent. 
 
 Indiana fives were, in December, 1842, 20 a 21|. In May, 
 
 1843, 28 a 30. Gain in six months equal to 38 per cent. 
 Considering the quickness of the returns, any of these stocks 
 
THE FISCAL HISTORY OF TEXAS. 261 
 
 were better speculative investments than the best securities Texas 
 could offer. 
 
 Such fluctuations in stocks are great evils, but where paper-money 
 is used, they are unavoidable. 
 
 Take next the prices of bank and other stocks at Philadelphia, 
 on the 1st of January, 1842, and compare them with their prices 
 in May, 1845, and November, 1852.* 
 
 Banks. Jan. 1, 1842. May 2, 1845. Nov. 1852. 
 
 Pennsylvania, . . 150 258 480 
 North America, . . 160 380 620 
 Philadelphia, . . 46 110 140 
 Farmers & Mechanics , 29 42J 71 
 Commercial, 35 53 65 
 Northern Liberties, . 25 42 60 
 Mechanics , 17 25 33 
 Southwark, 48 63 80 
 Kensington, 30 57 68 
 Penn Township, 30 29 32 
 Girard, 12 8| 13 
 Western, 26 46 70 
 Manufacturers & Mechanics , 21 23 30 
 Moyamensing, 32 41 J 75 
 New Orleans Gas, . 4 35 125 
 Lehigh Coal & Naviga 
 tion (shares), . . 10 14J 70 
 Lehigh loans, 6 per ct., 40 45 95 
 Chesapeake & Delaware 
 
 Canal (shares), . 5 29 135 
 Chesapeake & Delaware 
 
 loans, 6 per ct, . 20 71 101 
 Camden & Amboy Rail 
 road shares, . 75 110 147 
 Norristown Railroad, 7j 45 
 
 Some of these stocks have been sold at much lower rates than 
 those mentioned in the first column. Philadelphia Bank shares, 
 for example, have been sold at 25 ; Farmers & Mechanics at 19 ; 
 Penn Township at 20 ; Mechanics at 7 ; and Girard at 2. 
 
 On stock-jobbing principles, the securities of Texas have been 
 among the poorest investments, considering the risk attendant 
 
 * The prices for 1842 are from the Journal of Banking ; those for 1845 and 1852 
 are from the Philadelphia Commercial List and the books of a leading broker. The 
 shares of the Bank of Pennsylvania and of the Bank of North America were ori 
 ginally $400 each. Each share has since been divided into four, of $100 each ; but, 
 to facilitate comparison, we have made our quotations as if the shares had not been 
 divided. 
 
262 THE FISCAL HISTORY OF TEXAS. 
 
 on them, and the slowness of the returns. A man might have 
 made more money by investing in almost anything else. 
 
 It may be that they who have been so unfortunate as to invest 
 their earnings in Texan bonds and treasury notes would, if they 
 had employed their money in other ways, have lost instead of 
 gaining. But this does not, in the least, affect the validity of 
 their claims. And if Texas does not pay them dollar for dollar 
 what she has promised, Texas must bear the infamy (the term is 
 not too strong) Texas must bear THE INFAMY that properly at 
 taches to men and States that can pay their debts and will not. 
 
 Nor will Texas bear this infamy alone. The whole family of 
 States of which she is a member must share it with her. An 
 American cannot now enter certain circles in Europe without being 
 reproached with what Pennsylvania has done in relation to her 
 debts. Yet Pennsylvania never repudiated one dollar of her ob 
 ligations. The most she did was to defer payment of the interest, 
 or pay in inconvertible paper, till she could bring a new revenue 
 system into operation, and till her banks could resume specie pay 
 ments. This was matter of stern necessity. But State credit is 
 like female reputation. The greatest circumspection is necessary 
 for its preservation. 
 
 But we are not without hopes that Texas will yet redeem her 
 character. If the case of her creditors could be fairly presented 
 before her people, we should have no fears of the result. But 
 there is great difficulty in doing this, owing to the scattered state 
 of the population and the few persons in Texas who have any in 
 terest in supporting the creditors cause. The men of Texas are 
 just as honest as the men of France, England, or "Germany, or the 
 men of New York, Massachusetts, or Virginia. Their minds have, 
 unfortunately, got a wrong twist on the subject of their public 
 debt ; but all would soon be right if the truth could only be fairly 
 laid before them. 
 
 Already are there indications of a change of sentiment. The 
 Texas State G-azette declares that the number of those who believe 
 the debt must ultimately be paid in full increases every year. 
 Attention has been awakened by the cases of individuals to whom 
 gross injustice has been done by the scaling system ; and the 
 further these inquiries are pushed, the greater will be found to 
 be the number of cases of hardship. What but injustice can be 
 
THE FISCAL HISTORY OP TEXAS. 263 
 
 done when debts are averaged ? How perfectly absurd it would 
 be in a State to strike an average of the debts due to her ! Not 
 less absurd is it for one to strike an average of the debt due by 
 her. 
 
 It was a monstrous thing in Texas to reopen accounts which all 
 those concerned supposed had been finally passed upon some eight 
 or twelve years previous. The reaudit, if made at all, should 
 have been as careful as the original audit. But this was impossi 
 ble. Many of the original claimants were dead ; others had lost 
 their vouchers ; others had no interest in seeing the audit fairly 
 made, as they had long since parted with the treasury notes or the 
 stock certificates they had received in satisfaction of their claims. 
 
 Under these circumstances, it was impossible to ascertain the 
 exact value Texas had received in each case, even according to 
 her own estimate of such value; and, as it was thus impossible to 
 carry out the principles she has adopted, this of itself is sufficient 
 reason for abandoning it. 
 
 Motives of interest and motives of duty point in this instance 
 in the same direction. The celebrated Col. Chartres said he would 
 give one hundred thousand pounds for a character not for its own 
 sake, but because he would get two hundred thousand pounds by 
 it. Texas will do well in buying a character, even if it should 
 cost her ten million dollars. She would gain by it one hundred 
 millions. By this is of course meant a character for paying debts. 
 A character for courage and conduct she has already. 
 
 If the land-speculating interest in Texas only knew where its 
 true interest lies, it would be foremost in abandoning the scaling 
 system. No State in the Union stands more in need of railroads, 
 and in few States could they be made at less expense. If the 
 whole five millions that would be acquired by repudiating half the 
 public debt should be applied to internal improvements, it would 
 go but a little way in constructing the works that are wanted. It 
 will require many millions more to construct the railroads which 
 are so desirable in Texas, and which she will have in a few years, 
 if she now redeems her plighted faith. But if she persists in re 
 pudiating regularly audited debts, for which her truth and honor 
 were solemnly pledged, the whole world (that is, the money-lend 
 ing world) should unite in one combination against her. Texas 
 will then, notwithstanding her great natural advantages, be far 
 
264 THE FISCAL HISTORY OF TEXAS. 
 
 behind her sister States ; for no extensive system of railroads can 
 be completed without resort to loans. 
 
 We trust, however, in this case, more to natural sentiments of 
 justice than to hopes of gain. 
 
 It is true, indeed, that the United States are bound for the 
 whole of the debt for which the revenues were pledged ; but Texas 
 must evince a hearty concurrence with the United States in the 
 payment of these debts, and interpose no further obstacles in rela 
 tion to the reserved bonds. In justice to herself, Texas must go 
 further. She must repeal all her scaling acts, and pay the residue 
 of her creditors in full, according to contract. 
 
 The case of one class of them is peculiarly hard. We allude to 
 the holders of eight and ten per cent, funded debt of 1840. It is 
 true that they are the only owners of circulating evidences of debt 
 who have as yet been paid anything; but they have been scaled 
 most awfully down even to thirty cents in the dollar. If some 
 thing be not done for their relief, their condition will be worse 
 than that of any other contract creditors. 
 
 They have strong claims on Texas. From the supplement to 
 the report of the auditor and comptroller, Dec. 27th, 1849, it 
 appears that treasury notes to the amount of $777,080 were in 
 vested in the ten per cent, funded debt of 1840, and notes of the 
 same kind to the amount of $22,800 in the eight per cent, funded 
 debt of the same year. Thus the whole, or nearly the whole of 
 their stock represents debts for which the revenues were originally 
 pledged. It will be very hard if these creditors, having parted 
 with these evidences, and taken others in exchange for them, in 
 order to promote the convenience of the Republic, shall now be paid 
 only thirty cents in the dollar. If they had retained their origi 
 nal evidences, they would have come within that class of creditors 
 for whom, agreeably to the decision of the President and of the 
 Secretary of the Treasury, the United States are, in the default 
 of Texas, bound to provide. 
 
 Texas has still from three to four millions in her treasury. She 
 cannot apply this amount, or so much of it as may be necessary, 
 in a better way than by making up to the holders of the funded 
 debt of 1840, and others who have been improperly scaled, the 
 sum that is justly their due. 
 
 If the United States should pay all the debt, the creditors would 
 
THE FISCAL HISTORY OF TEXAS. 265 
 
 indeed be satisfied, but the reputation of Texas would not be left 
 without blemish. Her breaches of faith have been many. She 
 must show to the world, by her present and her future conduct, 
 that those breaches of faith were produced by necessity, and not 
 by inclination, and that if she at any time favored the scaling sys 
 tem, it was through want of acquaintance with the true nature of 
 stock securities. She will thus effectually wipe off the reproach of 
 repudiation, and take her stand proudly in the foremost ranks of 
 the States of the Union. 
 
APPENDIX. 
 
 A. 
 
 AMOUNT OF AUDITED DRAFTS. 
 
 FROM Jan. 1, 1836, to Dec. 31, 1836, one year,* $502,179 23 
 
 " Jan. 1, 1837, to Dec. 31, 1837, one year,* 718,258 98 
 
 " Jan. 1, 1838, to Sept. 30, 1838, nine months,* 885,458 61 
 
 " Sept. 30, 1838, to Sept. 30, 1839, one year,* 1,370,810 15 
 
 " Sept. 30, 1839, to Sept. 30, 1840, one year,f 2,245,244 62 
 
 " Sept, 30, 1840, to Sept. 30, 1841, one year,| 1,265,038 70 
 
 " Sept. 30, 1841, to Feb. 19, 1846, 4 yrs. & 4 mos., 694,791 81 
 
 Total to February 19, 1846, . . $7,681,782 10 
 
 The total given by the auditor and comptroller does not include the 
 drafts issued under the Exchequer System. 
 
 A small amount issued in 1835 appears to be included in the accounts 
 of 1836. 
 
 For two years, these audited drafts were, with the exception of land- 
 script, the only governmental paper tender; yet the amount redeemed in 
 these years, by receiving them in payment of public dues, appears to have 
 been only $8,687 97, besides $16,134 02, redeemed by drafts on agents in 
 the United States. 
 
 As before the close of these two years, the amount of audited drafts 
 afloat considerably exceeded one million dollars, and as they had in May, 
 1837, fallen so low as to be worth only fifteen cents in the dollar, this fact 
 affords indubitable evidence that the Texans of those days had little dispo- 
 
 * First Auditor s Report, October 25, 1839. 
 
 f Comptroller s Report, October 1, 1840. 
 
 J Secretary of the Treasury s Report, October 20, 1841. 
 
 \ Supplement to Auditor and Comptroller s Report, December, 1840. The amount 
 from September 30, 1841, to February 19, 1846, has been obtained by deducting 
 from the total the amounts that were issued previous to September 30, 1841. 
 
268 APPENDIX. 
 
 sition to pay taxes, or that those whose business it was to collect them 
 
 were strangely negligent of their duty. 
 
 This table is the best we can give of the expenditures of the Texan 
 
 Government in different years. By scanning it, the reader will find that 
 
 in those years in which the exigencies of the government were the least, 
 
 its expenditures were the greatest. 
 
 According to the supplement to the auditorial report of December, 1849, 
 
 the final disposition of these drafts was as follows : 
 
 Received in payment of public dues, . . . $636,322 66 
 Invested in ten per cent, fund of 1837, . . 837,50000 
 
 " of 1840, . . 45,600 00 
 
 Amount paid at the treasury, .... 5,985,131 21 
 Leaving unliquidated, 177,228 23 
 
 The reader must not suppose that the amounts paid at the treasury 
 were paid in gold and silver. Giving treasury notes in exchange for au 
 dited drafts was called paying them. 
 
 In addition to the above, outstanding claims to the amount of $72,077 28 
 have been audited by virtue of a special act of the Legislature at its second 
 session ; and, by virtue of other special acts, other claims to the amount of 
 some two hundred thousand dollars have been brought in, and duly 
 audited. 
 
 B. 
 
 PROMISSORY NOTES. 
 
 First emission, printed notes, Nov. 4, 1837, to Jan. 15, 1838,* $514,510 
 
 Second emission, engraved notes, Jan. 15, 1838, to Nov. 3, 1838,* 436,289 
 
 " " Nov. 3, 1838, to Jan. 1, 1839,f 214,340 
 
 Third emission, "red backs," Jan. 1, 1839, to Sept. 30, 1839/f 1,569,010 
 
 " " " Sept. 1839, to Sept. 1840,J 1,983,790 
 
 Total, $4,717,939 
 
 This does not include reissues. 
 
 * Report of Secretary of the Treasury, November 3, 1838. 
 
 f Ibid., 1839. 
 
 J Supplement to Report of Auditor and Comptroller, December, 1849. 
 
APPENDIX. 269 
 
 The amount issued subsequently to September, 1839, has been ascer 
 tained by deducting from the total the amounts that appear to have been 
 issued previous to September, 1839. 
 
 Probable Amounts in Circulation. 
 
 September 30, 1838,* .... $684,069 59 
 
 November 3, 1838,* .... 812,454 00 
 
 September 30, 1839,f .... 2,013,762 55 
 
 September 30, 1840,j .... 3,287,962 42 
 
 September 30, 1841,J .... 4,381,004 64 
 
 January 1, 1850, .... 664,593 00 
 
 November 12, 1851, . . . . 296,353 00 
 
 The scale finally adopted by the auditor and comptroller, for estimating 
 the value the government received in exchange for its treasury notes, was 
 as follows : 
 
 July, 1838, to November, 1838, ... 80 cents in the dollar. 
 November, 1838, to March, 1839, ... 60 " " 
 
 March, 1839, to July, 1839, .... 50 
 
 July, 1839, to November, 1839, . . .33$ " " 
 
 November, 1839, to March, 1840, ... 25 " " 
 
 March, 1840, to June, 1840, .... 20 " 
 
 After June, 1840, ....... 16| " " 
 
 i 
 
 Up to July, 1838, they appear to have been estimated as of par value 
 with silver. As mentioned in other parts of the volume, they subsequently 
 fell to two cents in the dollar ; but then they had ceased to be paid out by 
 the government. 
 
 From the Supplement to the Report of the Auditor and Comptroller, De 
 cember 27, 1849, we gather the following particulars respecting these trea 
 sury notes : 
 
 Redeemed at the treasury, and cancelled, .... $772,439 
 
 Invested in ten per cent, stock of 1840, . . . . 777,080 
 
 " in eight per cent, stock of 1840, .... 22,800 
 
 Received in collection of revenue, and destroyed, . . 483,074 
 
 Due by collectors, and likely to be paid over, . . . 165,000 
 
 * Report of Secretary of the Treasury, November 3, 1838. 
 
 f Ibid., 1839. 
 
 J Various public documents. In the total for 1841, treasury bonds are included. 
 In his report of October, 1841, Secretary Chalmers states there had, in that year, 
 been no new emission of treasury notes. 
 
 \ Reports of Auditor and Comptroller. 
 
270 
 
 APPENDIX. 
 
 Like the audited drafts, not one dollar of these treasury notes was paid 
 in specie. They were paid, or redeemed, at the treasury, after the manner 
 of the Kilkenny banker, by giving new notes for old ones. 
 
 c. 
 
 REVENUES OF THE REPUBLIC OF TEXAS FROM SEPTEMBER, 1835, TO 
 OCTOBER, 1851. 
 
 
 Three years, ending 
 
 One year, ending 
 
 One year, ending 
 
 
 Sept. 30, 1838. 
 
 Sept. 30, 1839. 
 
 Sept. 30, 1840. 
 
 Customs . . . 
 
 . $133,649 88 
 
 $122,169 35 
 
 $166,821 12 
 
 Direct taxes . . 
 
 . 100,455 12* 
 
 
 
 Lands and land dues 
 
 13,920 75f 
 
 
 123,224 66J 
 
 Town lots . . . 
 
 7,202 40 
 
 5,287 50 
 
 168,797 52 
 
 Miscellaneous . . 
 
 3,195 00 
 
 55,473 43 
 
 1,828 56 
 
 Total . . . 
 
 . $258,423 15 
 
 $182,930 28 
 
 $460,671 86 
 
 
 One year, ending 
 
 Three years, 
 
 Fourteen months, 
 
 
 Sept. 30, 1841. 
 
 1842-3-4. NOT 
 
 .1,1844, to Jan. 1,1845. 
 
 Customs . . . 
 
 . $151,990 45 
 
 $360,177 46 
 
 $340,506 40 
 
 Direct taxes . . 
 
 . 179,503 91 
 
 80,335 39 
 
 27,561 49 
 
 Licenses . 
 
 42 686 37 
 
 16,503 50 
 
 15,140 16 
 
 Lands and land dues 
 
 68,025 62 
 
 
 
 Miscellaneous . . 
 
 429 32 
 
 502 58 
 
 1,815 25 
 
 Total . . . 
 
 . $442,635 67 
 
 $457,518 93 
 
 $385,023 30 
 
 
 Twenty-two months, 
 
 Two years, ending 
 
 Two years, ending 
 
 Feb. 19, 1845, to Dec. 31, 1847. 
 
 Oct. 31, 1849. 
 
 Oct. 31, 1851. 
 
 Customs . . . 
 
 . $51,206 13 
 
 $8,075 13 
 
 $13,446 99 
 
 Direct taxes . . 
 
 . 21,154 87 
 
 12,882 20 
 
 8,790 34 
 
 License-taxes . . 
 
 7,692 29 
 
 3,833 53 
 
 2,092 09 
 
 Lands and land dues 
 
 
 
 19,708 27 
 
 Town lots . . . 
 
 
 
 475 00 
 
 Miscellaneous . . 
 
 . 29,596 00$ 
 
 75,363 98 
 
 343 00 
 
 Total .... $109,649 29 $100,154 84 $44,855 69 
 
 The whole amount of revenue collected in the two years beginning Sep 
 tember 30, 1835, and ending September 30, 1837, appears to have been 
 only $9,607 28, leaving $248,815 87 as the revenue proper to the year 
 ending September 30, 1838. 
 
 * Part for land dues and licenses. 
 
 | Part for licenses. 
 
 J Including licenses and land-tax. 
 
 \ Including $26,922 57 claims against United States Government. 
 
APPENDIX. 
 
 271 
 
 This table must not be regarded as official, though it has been formed 
 from official documents. It is defective, in one place, in containing no 
 account of the receipts from January 1 to February 19, 1846, and has a 
 surplusage in another, inasmuch as it embraces twice the receipts from 
 October 31, 1847, to December 31, 1847, and, perhaps, those from Novem 
 ber 1, 1844, to January 1, 1845. It, however, approximates near enough 
 to correctness for purposes of comparison. 
 
 There are discrepancies in some of the documents, owing to changes in 
 modes of keeping accounts, consequent on frequent changes of officers in 
 times of trouble. After the officers of the Treasury Department of Texas 
 shall have got through the arduous duty of paying off the public debt, they 
 may find a revision of the revolutionary accounts of the Republic not un 
 worthy of their attention, provided the Legislature make an appropriation 
 for the necessary expense. 
 
 D. 
 
 RECAPITULATION OF REVENUE OF THE REPUBLIC OF TEXAS, SHOWING 
 THE TOTAL AMOUNT OF EACH BRANCH. 
 
 1835-38 
 
 1838-39 
 
 1839-40 
 
 1840-41 
 
 184*2-3-4 
 
 1844-46 
 
 1846-47 
 
 1847-49 
 
 1849-51 
 
 Customs. 
 $133,649 88 
 122,169 35 
 166,821 12 
 151,990 45 
 360,177 46 
 340,506 40 
 
 51,206 13 
 8,075 13 
 
 13,446 99 
 
 Total $1,348,042 91 
 
 Lands and land dues. 
 
 1835-39 $13,920 75f 
 
 1839-40 123,224 66J 
 
 1840-41 68,025 62 
 
 1849-51 19,708 27 
 
 Total $224,879 30 
 
 Direct taxes. 
 
 183 5-39 $100,455 12* 
 
 1840-41 179,503 91 
 
 1842-3-4 80,335 39 
 
 1844-45 27,561 49 
 
 1846-47 21,154 87 
 
 1847-49 12,882 20 
 
 1849-51 8,790 34 
 
 Total $430,683 32 
 
 
 Licenses. 
 
 1840-41 
 
 $42,686 37 
 
 1842-3-4 
 
 16,503 50 
 
 1844-46 
 
 15,140 16 
 
 1846-47 
 
 7,692 29 
 
 1847-49 
 
 3,833 53 
 
 1849-51 
 
 2,092 09 
 
 Total $87,947 94 
 
 * Part land dues and licenses. 
 
 f Part for licenses. 
 
 J Including licenses and land-tax. 
 
272 
 
 APPENDIX. 
 
 Sales of town lots.* 
 
 1835-38 $7,202 40 
 
 1838-39 5,287 50 
 
 1839-40 168,797 52 
 
 1849-51 475 00 
 
 Total $181,762 42 
 
 Miscellaneous. 
 
 1835-38 $3,195 00 
 
 1838-39 55,473 43 
 
 1839-40 1,828 56 
 
 1840-41 429 32 
 
 1842-3-4 502 58 
 
 1844-46 1,815 25 
 
 1846-47 29,596 00 
 
 1847-49 75,363 98 
 
 1849-51 343 00 
 
 Total $168,547 12 
 
 RECAPITULATION. 
 
 Customs $1,348,042 91 
 
 Direct taxes 430,683 32 
 
 Lands and land dues 224,879 30 
 
 Licenses 87,947 94 
 
 Miscellaneous 168,547 12 
 
 Town lots 181,762 42 
 
 Total $2,441,863 01 
 
 SUMMARY OF DIFFERENT PERIODS. 
 
 1835-37 $9,607 28 
 
 1837-38 248,815 87 
 
 1838-39 182,930 28 
 
 1839-40 460,671 86 
 
 1840-41 442,635 67 
 
 1842-3-4 457,518 93 
 
 1844-46 385,023 30 
 
 1846-47 109,649 29 
 
 1847-49 100,154 84 
 
 1849-51 44,855 69 
 
 Total $2,441,863 01 
 
 A joint committee of the Legislature of the State reported, February 7, 
 1850, that there were due, by sundry officers of the late Republic of 
 Texas, various sums, amounting in all to $73,601 06 in par funds, and 
 $187,297 19 in Texas promissory note funds, including interest at eight 
 per cent, per annum, and after allowing all the credits claimed by said 
 officers. They further reported the whole amount of unsettled accounts as 
 being $473,394 53 in promissory notes, and $142,612 19 in par funds. 
 Total, $616,006 92. 
 
 * These were Galveston and Austin city lots. 
 
APPENDIX. 273 
 
 E. 
 
 KIND OF FUNDS RECEIVED. 
 
 According to the best accounts we can gather, the revenue of the Repub 
 lic of Texas was received in the form following, to wit : 
 
 Audited drafts* $636,322 66 
 
 Treasury notes* . . . . . . . 648,074 00 
 
 Treasury bonds* 40,100 00 
 
 Ten per cent, stock* . 10,000 00 
 
 Land-scriptf . 7,336 47 
 
 Exchequer bills, 1842-46J 271,351 76 
 
 Exchequer bills, specie, &c.J 70,005 44 
 
 Par funds, 1842-46J 275,420 14 
 
 Specie, 1842 to Feb. 19, 1846J .... 10,440 49 
 
 Special drafts, 1842-46J 33,855 52 
 
 Property taken in payment for taxesj . . . 8,016 14 
 
 Exchequer bills, and special drafts, 1847-49 . 1,586 45 
 
 Specie, Feb. 20, 1844, to Oct. 31, 1849 . . . 125,292 36 
 
 Exchequer bills, and special drafts, 1849-51 1| . . 1,765 42 
 
 Specie, 1849-51|| . . 3,821 01 
 
 Audited paper and promissory notes, 1849-51|| . . 39,270 01 
 
 Total revenue of Republic from taxes . . $2,182,657 87 
 From Bank of United States : J 
 
 In checks of loan commissioners, payable Sept. 30, 1839 $80,000 00 
 
 In post-notes of U. S. Bank, payable Jan. 1, 1840 . 200,000 00 
 
 Acceptances in favor of J. P. Henderson . . . 10,000 00 
 
 Government drafts on Hamilton and Burnley, 1840 . 158,495 98 
 
 Funds from same source in fiscal year, 1841 . , 4,776 00 
 
 " " " " " balance . 4,108 02 
 
 Brookfield loan, 1S35H" 1,100 00 
 
 Triplet loan (1836), specie^ . ... 20,070 00 
 
 Erwin loan (1836), speciej . . . 45,820 00 
 
 Total revenue of Republic from taxes and loans . $2,707,027 87 
 
 * Supplement to Auditorial Report, Jan. 1, 1850. 
 
 f Report of Henry Smith, Secretary of the Treasury. 
 
 J Manuscript Records of Texas Treasury Department. 
 
 \ Treasurer s Report, Nov. 16, 1849. 
 
 || Comptroller s Report, Nov. 14, 1851. 
 
 ^[ Journal of Provisional Government. 
 
 18 
 
274 APPENDIX. 
 
 This includes the amount collected by the State for arrears to the Re 
 public. 
 
 With the exception of the one thousand dollar note, referred to in an 
 early part of our history, the post-notes above mentioned were the only 
 bank-notes that appear ever to have come into possession of the Republic 
 of Texas, and they never approached nearer its treasury than the city of 
 New Orleans. There they were sold ; some of them at a net discount. 
 
 We cannot find from the records that, previous to the adoption of the 
 Exchequer System, the government ever realized one dollar of its taxes in 
 specie. But we learn from undoubted authority that $8 30 were actually 
 paid in for land dues in " hammered" silver. This treasure gave the account 
 ing officers great trouble. They could not pay it out, for that would have 
 been making an improper distinction among the public creditors. They 
 were obliged to keep it, and also to keep a distinct account of it a separate 
 entry of it being necessary in each general statement. 
 
 After the Exchequer System was adopted, the returns were made in such 
 a way that it is impossible to say exactly how much specie was received. 
 So many kinds of "funds" are the equivalents of "specie," that the expres 
 sion "par funds" is very indefinite. Possibly, some government drafts on 
 the depositories, received in payment of public dues, are included in the 
 total. The principle of " set-offs," properly understood and properly ap 
 plied, is an excellent one; but it is so liable to abuse that, whenever it is 
 used, the treasury records should show how, and to what extent it is applied. 
 A government draft may be the equivalent of specie, but yet it is not the 
 same as specie. If a public treasurer pays out specie, there is an end of 
 the transaction. But if he gives a draft on a distant depository, it may 
 remain out for months, perhaps for years. 
 
 In the year 1842, the Texan Government adopted the practice of draw 
 ing drafts on its collecting officers, and making them, by special enactments, 
 receivable for certain public dues. They were known by different names, 
 as "assessors drafts," "Henderson drafts," &c., according to the name of 
 the person whose claim they were issued to discharge, or the purpose they 
 were intended to serve. We have included them in the table, so far as we 
 could trace them, under the head of " special drafts." Of drafts of this kind, 
 of which special mention is made, from 1842 to Jan. 1, 1846, amounting 
 to $51,402 86, there remained outstanding, on the 1st of Jan. 1846, 
 $17,547 34. The treasurer, on paying them out, credited himself as with 
 so much specie j but that they were not the same as specie (though they 
 may have been its equivalent) is sufficiently proved by the fact that some 
 of these drafts were not paid till 1849-51, and some of them may be out 
 standing yet. 
 
 It will, perhaps, be remarked that, while the gross revenues of the Repub- 
 
APPENDIX. 
 
 275 
 
 lie amounted to $2,441,863 01, according to Appendix D, the table in Ap 
 pendix E shows in what kind of funds the amount of only $2,182,657 87 
 was received. The difference is $259,205 14. A part of this sum, but 
 not probably a large part, was received in exchequer bills between Jan. 1, 
 1846, and Oct. 31, 1847. But the principal part was probably in treasury 
 notes, which had been received once before in payment of dues, and then 
 reissued. The auditor and comptroller, in their report of Jan. 1850, give 
 only "the amount of treasury notes received in collection of the revenue, 
 and destroyed" not the amount thus received and reissued. 
 
 F. 
 
 TABULAR VIEW OP THE DEBT OF TEXAS AT DIFFERENT PERIODS. 
 
 Sept. 30, 1838. 
 
 Audited drafts . . . $775,255 73 
 Treasury notes and bonds 684,069 59 
 Funded debt .... 427,200 00 
 Five million loan . 
 
 Sept. 30, 1839. 
 $284,841 37 
 2,013,762 45 
 803,479 53 
 
 Sept. 30, 1840. 
 
 $175,209 86 
 3,387,962 42 
 1,617,069 00 
 305,261 00 
 
 $1,886,525 32* $3,102,083 35f $5,485,502 28J 
 
 Sept. 30, 1841. 
 
 Audited drafts $193,643 53 
 
 Treasury notes and bonds 4,381,004 64 
 
 Funded debt 1,672,300 00 
 
 Five million loan 457,380 00 
 
 Naval debt 1,000,000 00 
 
 Nov. 12, 1851. 
 
 $116,828 99 
 
 2,967,993 00 
 
 1,418,777 23 
 
 457,380 00 
 
 475,907 00 
 
 $7,704,328 17 $5,436,886 22|| 
 
 Interest $3,150,246 70 
 
 Claims filed, but not audited 1,060,120 22 
 
 Claims not filed 2,789,738 20 
 
 $12,436,991 34|| 
 
 This table must, in some of its particulars, be regarded as only an ap 
 proximation to the truth, for it was not always possible for the officers of 
 
 * Treasurer s Report for 1838. 
 
 f Treasurer s Report for 1839. 
 
 J Stock Commissioner s Report and Secretary of Treasury s Report for 1840. 
 
 Secretary of Treasury and Treasurer s Report for 1841. Mr. Chalmers esti 
 mates the naval debt at $1,000,000, including the bonds forfeited and the interest. 
 
 j| Auditor and Comptroller s Report of November 12, 1851. For particulars, see 
 the report at length in Appendix. 
 
276 APPENDIX. 
 
 the Republic to ascertain the exact amount due, but it is sufficiently correct 
 to serve the purposes of comparison. 
 
 We could find no statements, from which to form a table of the public 
 debt, of a later date than September, 1841, till we came to the auditorial 
 reports of 1850 and 1851. Probably both government and people became 
 tired of thinking about what they could not pay. Very little appears to 
 have been added to the capital of the debt after 1841, for the very good 
 reason that the credit of Texas was by that time so exhausted that she 
 could borrow no more. The increase since that time has been chiefly 
 owing to increments of interest, and to the bringing in of old claims not 
 before presented. 
 
 Of the claims not filed, it is probable that only a part will be presented, 
 owing to the death of the parties in some instances, and the loss of vouchers 
 in others. 
 
 It may also be expected that, owing to the loss of treasury notes, bonds, 
 and certificates of stock, payment of only part of the certified debt will be 
 demanded. 
 
 The following amounts of ascertained claims appear not to have been 
 filed with the auditor and comptroller on the 12th of November, 1851 : 
 
 Ten per cent, bonds of 1837 $185,502 77 
 
 1840 63,000 00 
 
 Eight " " " 2,800 00 
 
 Treasury bonds 43,000 00 
 
 Treasury notes 296,353 00 
 
 Five million loan 280,000 00 
 
 $870,655 77 
 
 RECAPITULATION OF PUBLIC DEBT OF TEXAS. 
 
 April 11, 1837* $570,163 44 
 
 Nov. 30, 1837* 1,090,986 45 
 
 Sept. 30, 1838 . . 1,187,525 32 
 
 1839 3,102,083 35 
 
 1840 5,485,502 28 
 
 1841 7,704,328 17 
 
 Nov. 12, 1851 12,436,991 34 
 
 * Report of Henry Smith, Secretary of the Treasury. The debt in April and 
 November, 1837, consisted exclusively of audited paper. 
 
APPENDIX. 
 
 277 
 
 G. 
 
 IMPORTS AND EXPORTS OF THE REPUBLIC OF TEXAS. 
 
 From 
 
 United States 
 
 Great Britain and Ireland 
 
 France 
 
 Germany 
 
 Spanish West Indies . . 
 British West Indies . . . 
 
 Belgium 
 
 Hanse Towns .... 
 Austrian Adriatic dominions 
 
 Yucatan 
 
 Sardinia 
 
 Year 
 
 July 
 
 $412, 
 
 32, 
 
 7, 
 
 12, 
 
 IMPORTS. 
 
 ending 
 31, 1843. 
 ,983 03 
 
 474 57 
 425 17 
 592 73 
 
 729 82 
 
 Year ending 
 
 July 31, 1844. 
 
 $593,225 14 
 
 51,059 89 
 
 5,524 58 
 
 148 87 
 
 3,624 10 
 
 3,516 48 
 
 27,494 54 
 
 1,185 86 
 
 663 57 
 
 Fifteen months, end 
 ing Oct. 31, 1845. 
 $1,151,733 21 
 9,466 73 
 2,048 00 
 
 11,184 65 
 3,722 08 
 
 20,634 01 
 5,113 94 
 
 467 70 
 
 Total $471,205 32 $686,443 03 $1,204,370 32 
 
 EXPORTS. 
 Year ending 
 To July 31, 1843. 
 United States $281 342 64 
 
 Year ending 
 July 31, 1844. 
 
 $249 151 62 
 
 Fifteen months end 
 ing Oct. 31, 1845. 
 $486 327 16 
 
 Great Britain and Ireland 76,028 64 
 France ... . . 260 00 
 
 205,345 05 
 15 435 00 
 
 103,484 10 
 8 650 00 
 
 Germany 41,710 85 
 Spanish West Indies . . 16,426 62 
 Hanse Towns .... 
 Austrian Adriatic dominions 
 Yucatan 
 
 1,031 24 
 112,095 46 
 
 29,013 85 
 3 047 12 
 
 23,262 25 
 85,581 16 
 13,468 97 
 
 Belgium 
 
 
 49 434 48 
 
 British West Indies . . . 
 Sardinia 
 
 
 1,455 04 
 
 57 551 88 
 
 
 
 
 /Total $415,768 75 $615,119 34 $829,215 04 
 
 This table is of interest in showing the countries with which Texas 
 traded, and the proportion of her trade with each, during the days of her 
 independence. It is matter of regret that the table does not embrace all 
 the years of the Republic. A summary of the exports and imports of 
 several other years will be found in the adjoining table. 
 
278 
 
 APPENDIX. 
 
 From September, 1835, to September 30, 1838 (3 years) $1,740,376 87 
 
 " September, 1838, to September 30, 1839 (1 year) 1,506,897 67 
 
 " September, 1839, to December 31, 1840 (15 months) 1,378,568 98 
 
 " December, 1840, to December 31, 1841 (1 year) No returns 
 
 " December, 1841, to July 31, 1842 (7 months) No returns 
 
 " July, 1842, to July 31, 1843 (1 year) 471,205 32 
 
 " July, 1843, to July 31, 1844 (1 year) 686,503 03 
 
 " July, 1844, to October 31, 1845 (15 months) 1,204,370 32 
 
 EXPORTS. 
 
 From September, 1835, to September 30, 1838 (3 years) $183,323 00 
 
 " September, 1838, to September 30, 1839 (1 year) 274,518 09 
 
 " September, 1839, to December 31, 1840 (15 months) 220,401 15 
 
 " December, 1840, to December 31, 1841 (1 year) No returns 
 
 " December, 1841, to July 31, 1842 (7 months) No returns 
 
 " July, 1842, to July 31, 1843 (1 year) 415,768 75 
 
 " July, 1843, to July 31, 1844 (1 year) 615,119 34 
 
 " July, 1844, to October 31, 1845 (15 months) 839,215 00 
 
 The returns for the years 1838, 1839, and 1840 (when the treasury 
 notes were in use) illustrate the effect paper-money has in encouraging 
 imports and discouraging exports; while those for 1843, 1844, and 1845 
 (after the treasury note system had exploded) show the effect hard-money 
 has in discouraging imports and encouraging exports. 
 
 H. 
 
 RECEIPTS FROM CUSTOMS DURING THE YEAR ENDING JULY 31, 1844. 
 
 Districts. Paid in 
 par funds. 
 
 Paid in 
 exchequer bills. 
 
 Remaining 
 Yalue of secured in store 
 excheq. bills, out of this year s 
 
 Total of net 
 revenue at 
 tariff rates. 
 
 
 
 
 
 imports. 
 
 
 Galveston $65, 
 
 733 17 
 
 $86,379 06 
 
 $74,427 29 
 
 $1,130 50 
 
 $11,290 96 
 
 Brazos 
 
 659 37 
 
 1,496 30 
 
 1,269 18 
 
 
 1,928 55 
 
 Calhoun 5,519 07 
 
 10,568 51 
 
 9,702 96 
 
 4,417 87 
 
 19,639 90 
 
 Aransaso 
 
 513 34 
 
 
 
 671,38 
 
 1,184 72 
 
 Sabine 
 
 581 33 
 
 76 37 
 
 48 35 
 
 
 629 68 
 
 San Augustine 
 
 292 85 
 
 6,512 72 
 
 5,920 28 
 
 8G3 99 
 
 7,077 12 
 
 Red River 
 
 
 4,118 55 
 
 4,118 55 
 
 1,992 37 
 
 6,110 92 
 
 Total $73,299 13 
 
 ,151 51 $95,486 61 $9,076 11 $177,861 85 
 
APPENDIX. 279 
 
 I. 
 
 STATEMENT SHOWING THE WHOLE AMOUNT OF EXCHEQUER BILLS ISSUED 
 BY THE TREASURY DEPARTMENT. 
 
 Number of bills. Of what denomination. Amount issued. 
 
 300 
 
 499 
 
 899 
 2,698 
 7,196 
 1,000 
 1,000 
 2,000 
 3,800 
 3,800 
 7,600 
 7,600 
 
 From which must be deducted the following amounts, to wit : 
 
 Amount destroyed at different times, under the provisions of 
 
 the act approved January 29, 1842 $64,865 00 
 
 Amount in the treasury at this time 17,600 00 
 
 Probable amount in the hands of receiving officers . . . 54,816 71 
 
 $100 00 
 
 $30,000 
 
 50 00 
 
 24,950 
 
 20 00 
 
 17,980 
 
 10 00 
 
 26,980 
 
 5 00 
 
 35,980 
 
 3 00 
 
 3,000 
 
 2 00 
 
 2,000 
 
 1 00 
 
 2,000 
 
 75 
 
 2,850 
 
 50 
 
 1,900 
 
 25 
 
 1,900 
 
 12* 
 
 950 
 
 
 $150.490 
 
 $137,281 71 
 Probable amount in circulation $13,208 29 
 
 TREASURY DEPARTMENT, WASHINGTON, j P. B. MILLER, 
 
 December 4, 1843. j Secretary of Treasury. 
 
 RATES OF VALUE OF EXCHEQUER BILLS, JULY 31, 1843, TO JULY 31, 1844. 
 
 
 
 
 
 San 
 
 Red 
 
 During 
 
 quarters ending 
 
 Galveston. Brazos. 
 
 Calhoun. 
 
 Sabine. Augustine. 
 
 River. 
 
 1843 
 
 , October 31 
 
 60 
 
 60 
 
 60 75 
 
 100 
 
 1844 
 
 , January 31 
 
 100 82 
 
 100 
 
 75 
 
 100 
 
 
 
 
 80 80 
 
 
 100 
 
 
 
 April 30 
 
 100 
 
 70 
 
 75 
 
 100 
 
 
 
 
 80 
 
 80 
 
 
 
 
 it 
 
 70 
 
 100 
 
 
 
 
 < 
 
 60 
 
 
 
 
 
 tt 
 
 50 
 
 
 
 
 
 July 31 
 
 60 
 
 60 
 
 80 100 
 
 100 
 
 
 " 
 
 75 
 
 75 
 
 
 
 
 
 
 80 
 
 80 
 
 
 
 
 
 
 
 70 
 
 
 
280 APPENDIX. 
 
 From August 1, 1844, to October 31, 1845 (fifteen months), the value 
 of exchequer bills was as follows : 
 
 At Galveston 80, 90, 80, 90, 95, 100 
 
 " Brazos 80, 90 
 
 " Callioun 80, 100, 80, 90, 100 
 
 " other places 100 
 
 K. 
 
 THE PUBLIC LANDS AND LAND-SCRIPT. 
 
 Mr. Gr. W. Smyth, the Commissioner of the General Land-Office, says, 
 in a report dated November 1, 1849 : 
 
 "On the subject of land-script, I have received, through the politeness of 
 James B. Shaw, Esq., Comptroller, a statement of 1,220,387s acres, the 
 amount sold by the various agents of the government, or unaccounted for 
 by them, and supposed to be sold: to which I have added 108,816, issued 
 by this office, by virtue of an act approved February 5, 1841, making an 
 aggregate of 1,329,203 acres." 
 
 The Triplet loan of January 11, 1836, of $20,070, was liquidated by a 
 grant of 153,357 acres; and the Erwin loan of $45,820, with $6,170 44 
 added for interest, was liquidated by a grant of 121,589 acres of land, and 
 by a payment of about five thousand dollars in money to the heirs of 
 Erwin in February, 1852. 
 
 The sales made by the agents abroad, and the liquidation of the Erwin 
 and Triplet loans, appear to have been the chief fiscal aid Texas derived, 
 during her revolutionary struggle, from her immense territorial possessions, 
 except in so far as they enabled her to recruit her armies by land bounties 
 to the soldiers. 
 
 An act of February 5, 1841, authorized any holder of promissory notes, 
 bonds, funded debt, or any other liquidated claim against the government, 
 to surrender the same and receive in lieu thereof land-script, at the rate of 
 two dollars an acre. In accordance with this provision, as appears from 
 the report of the Land-Office Commissioner, quoted above, script to the 
 amount of 108,816 acres had been issued up to November, 1849, thus 
 redeeming $217,632 of public liabilities. But, on the other hand, it 
 appears, from the Auditorial Keport of January 1, 1850, that $66,400 of 
 ten per cent, stock of 1837 had been issued in exchange for land-script; 
 
APPENDIX. 281 
 
 thus reducing the net amount of government liabilities, redeemed in this 
 way, to $151,232. 
 
 The advantage derived from the 1,220,000 acres sold abroad by agents 
 it is not easy to estimate. Returns were received for part of the same in 
 necessary supplies. Another part, by absorbing some of the treasury notes 
 and bonds thrown into the Mobile and New Orleans market, aided in sus 
 taining the value of Texan securities in the United States. 
 
 The following statement in a Texan newspaper, made professedly on the 
 authority of a public document, which appears not to have been printed, 
 embraces the latest information we have met with respecting the public 
 lands of Texas : 
 
 " A report of the late Commissioner of the General Land-Office gives a 
 very lucid and satisfactory exposition of the present condition of Texas 
 land affairs, showing the amount of lands titled by Spain and Mexico; as 
 also the quantity that has been patented by Texas the amount set apart 
 for universities, colleges, and common schools and the amount now on 
 hand. 
 
 "By the act of 1836, Texas had 379,054 square miles, or 242,594,550 
 acres. There was ceded to the United States, by the late Compromise Law, 
 67,000,000 acres leaving Texas 175,594,560 acres. The whole amount 
 of claims originating under the late Republic and State of Texas is 
 48,265,663 acres. Making the total amount of every description of claims 
 against the public domain 63,783,054 acres. There will, consequently, 
 remain to Texas, after every legal claim for land officially known to exist 
 against her shall have been satisfied, 111,812,079 acres; this land, esti 
 mated at only fifty cents per acre, would be $55,906,039. 
 
 " Lauds patented for educational purposes : 
 
 "For two State universities .... 199,102 acres. 
 " denominational colleges . . . 31,106 " 
 " schools in each county .... 175,945 " 
 
 "Total 406,153 acres. 
 
 " This includes only the lands surveyed and patented. There are some 
 300,000 acres more already ordered by law to be surveyed for the primary 
 or common school purposes." Marshall Patriot. 
 
 There are great discrepancies in the accounts of the superficial contents 
 of Texas, both before and since the reduction of her limits. 
 
282 APPENDIX. 
 
 % 
 
 L. 
 
 REVENUE LAWS OF TEXAS. 
 
 Acts of Texas relating to Duties on Imports and Tonnage. 
 
 December 12, 1835. Ordinance imposing twenty per cent, duties on such 
 imports as are entitled to debenture in the ports whence shipped, and ten 
 per cent, on other imports. 
 
 December 15, 1835. A tonnage duty of $1 25 a ton imposed, and a duty 
 of twelve and a half cents a gallon on whiskey, American gin, rum, and 
 brandy. 
 
 December 27, 1835. The duties on imports increased; those at ten to 
 fifteen per cent., and those at twenty to twenty-five per cent. 
 
 [The above were by the Provisional Government.] 
 
 December 30, 1836. Act passed imposing duties at various rates, from 
 one per cent, to fifty ; and a tonnage duty of twenty-five cents a ton. 
 
 June 12, 1837. An act establishing ports of entry, and imposing duties 
 on imports, at various rates, ad valorem and specific. 
 
 December 18, 1837. An act to admit sugar, coffee, tea, salt, iron, and 
 sundry other articles, free of duty. 
 
 May 9, 1838. An act prohibiting giving bonds for duties, and requiring 
 said goods to be held till the duties should be paid. The goods to be sold 
 if the duties were not paid within ten days. 
 
 January 15, 1839. An act passed allowing bonds to be given for the 
 payment of duties. 
 
 February 5, 1840. An act altering the several acts to raise a public 
 revenue by import duties. This act extends through nineteen sections. 
 
 January 4, 1841. An act for the regulation of the coasting trade, and 
 the protection of Texan shipping. Eight sections. 
 
 February 5, 1841. An act doubling the specific duties on imports, and 
 increasing the ten and fifteen per cent, ad valorem duties to forty-five per 
 cent. Sugar, coffee, salt, iron, and steel were exempted from the operation 
 of this act, and allowed to be imported at the old rates. 
 
 January 24, 1842. A supplement passed to the customs act. It ex 
 tended through twenty-four sections, and imposed duties on articles before 
 exempt : on flour one dollar a barrel ; on salt ten cents a bushel ; on powder, 
 lead, and firearms of every description, fifteen per cent, ad valorem. No 
 thing was left free of import duty but live stock, Bibles, Testaments, and 
 primary school-books. 
 
APPENDIX. 283 
 
 Acts of Texas relatiny to Internal Taxes. 
 
 December 21, 1836. The sheriffs made collectors of taxes in their re 
 spective counties. 
 
 June 12, 1837. An act passed imposing a tax of one and a half per 
 cent, ad valorem on all property, real, personal, and mixed; on each whole 
 sale and retail dealer fifty dollars per annum ; on each retailer of liquors 
 one hundred dollars ; on each billiard-table two hundred dollars ; on each 
 nine-pin alley one hundred and fifty dollars ; on each tavern in a town one 
 hundred dollars ; on horses and cattle, the property of citizens of the United 
 States, one dollar a head ; on each white male, from twenty-one to fifty 
 years of age, one dollar a year; on each peddler fifty dollars for each county. 
 
 May 24, 1838. An act providing that hereafter direct taxes should be 
 levied only on lands and slaves ; horses, over two ; mules, over two ; neat 
 cattle, over twenty-five in number ; clocks, watches, pleasure-carriages, town 
 and city lots, taverns, grogshops, billiard-tables, nine-pin alleys, merchants, 
 and polls. 
 
 January 26, 1839. An act passed requiring inventories to be made out 
 and sworn to of all taxable property, and imposing a double tax on all lands 
 held by agents and representatives ; also imposing a tax of from one to five 
 dollars on land-certificates. 
 
 January 14, 1840. An act passed to raise a revenue by direct taxation. 
 This act extends through forty sections. 
 
 January 14, 1841. An act to provide for the better collection of moneys 
 due from delinquent agents and officers of the government. Punishment, 
 fine and imprisonment. 
 
 February 5, 1841. An act to amend " an act to raise a revenue by direct 
 taxation." Nine sections. 
 
 January 28, 1842. An act prolonging to May, 1842, the period for the 
 payment of taxes for 1841, and abolishing the penalty of double taxes for 
 non-payment of the taxes of 1841. 
 
 February 5, 1842. An act to amend "an act to raise a revenue by direct 
 taxation." 
 
 January 16, 1843. An act for the more certain collection of the license- 
 tax. 
 
 May 13, 1846. An act to provide for the assessment and collection of 
 taxes. 
 
 March 20, 1848. An act to provide for the more certain collection of 
 taxes for the years 1846 and 1847. 
 
 February 11, 1850. An act passed reducing the taxes on property one- 
 fourth, and the poll-tax one-half. 
 
284 APPENDIX. 
 
 M. 
 
 TENDERS FOR PUBLIC DUES IN TEXAS. 
 
 December 30, 1835. Audited drafts made receivable for land dues. 
 
 January 10, 1836. McKinney and Williams authorized to raise 
 $100,000 by loan for the use of the government, and the bonds for the 
 same made receivable, six months after date, for all public dues. 
 
 January 12, 1836. Authority given to issue treasury notes to the amount 
 of $150,000, and the same made receivable for all public dues. 
 
 None of these bonds or treasury notes were issued ; but we note the acts 
 as indicative of the principles on which the Government of Texas com 
 menced operations. 
 
 October 4, 1836. The notes of any bank making loans to the Republic 
 made receivable to the amount of said loans, for all public dues, so long as 
 the bank should continue specie payments. 
 
 December 24, 1836. Audited drafts made receivable for duties on 
 imports. 
 
 January 7, 1837. Land-script no longer received in payment of public 
 dues. Up to this date, it appears to have been received without direct 
 authority of law. 
 
 January 12, 1837. The islands ordered to be sold for specie, or the notes 
 of current specie-paying banks. 
 
 June 9, 1837. The issue of treasury notes authorized, and declaration 
 made that they should be considered as cash and received as cash for all 
 dues to government. 
 
 June 12, 1837. It is enacted " that-all duties or public dues, of what 
 ever nature or description, shall be collected or paid in gold, silver, or such 
 current bank paper as the authorities may from time to time direct." 
 
 June 12, 1837. It is enacted, in another bill, that properly audited 
 drafts should be received in payment of all direct and license-taxes, except 
 those imposed on retailers of liquors, billiard-tables, nine-pin alleys, and 
 games of that kind. 
 
 December 14, 1837. Nothing but gold, silver, and treasury notes re 
 ceivable for customs ; and no bank-note to be received in payment of any 
 due to government. 
 
 May 6, 1838. A loan of five millions authorized, the bonds to be sold 
 for the notes of any bank whose paper shall be at par with the best bank 
 paper in the cities of New York or Philadelphia. N. B. At this time, the 
 banks of Philadelphia had not resumed specie payments. 
 
APPENDIX. 285 
 
 May 9, 1838. The prohibition against the receipt of bank-notes for 
 customs renewed. 
 
 January 15, 1839. The standard value for gold and silver coin declared 
 to be the same as in the United States. 
 
 February 5, 1840. Eight per cent, treasury bonds made receivable for 
 all dues to the government. 
 
 June 16, 1840. The receipts of audited drafts restricted to cases in 
 which the public debtor should present to the collector the amount due and 
 no more, if so required by the collector. 
 
 February 5, 1841. The public liabilities made receivable in exchange for 
 land-script at two dollars an acre. 
 
 January 14, 1842. The auditor required to audit all outstanding just 
 claims against the government, and said audited paper made receivable for 
 all government dues which have heretofore accrued, till further ordered. 
 
 June 19, 1842. From and after February 1, only gold and silver and 
 exchequer bills receivable for imposts and direct and license-taxes. Land 
 dues (the land-tax excepted) still payable in public liabilities ; but the 
 receipt of treasury notes no longer allowed in payment of taxes to be here 
 after assessed. 
 
 January 28, 1842. Those in arrears for taxes allowed to pay them as 
 heretofore in the promissory notes or other liabilities of government, or 
 one-sixth of the amount in gold, silver, or exchequer bills. 
 
 February 1, 1842. All postages to be received in gold, silver, or exche 
 quer bills. 
 
 June 27, 1842. The collectors of customs, direct and license-taxes, and 
 postages, required to receive exchequer bills at only the current rates at 
 which said bills are selling in the market. 
 
 January 17, 1844. Fines and forfeitures payable only in gold, silver, or 
 exchequer bills, and all bonds, obligations, or recognizances to the Repub 
 lic, made payable in gold or silver only. 
 
 February 5, 1844. Auditors certificates for carrying the mail made 
 receivable in payment of direct taxes. And " Bryan drafts," to the amount 
 of $2,133 62, authorized to bear five per cent, interest per annum, and to 
 be receivable for taxes and customs. 
 
 Other special drafts of this kind were authorized under different names. 
 
 February 3, 1845. The further issue and reissue of exchequer bills pro 
 hibited, and provision made that, from and after the receipt of such public 
 paper as was then receivable by laws, all dues to government should be 
 paid in gold and silver only, except land dues, which might be paid, as 
 heretofore, in audited drafts, treasury notes, or other liabilities of govern 
 ment. 
 
 February 3, 1845. County taxes hereafter levied made payable in gold 
 
286 
 
 APPENDIX. 
 
 or silver only, or such liabilities of the respective counties as the County 
 Commissioners Court may direct. 
 
 May 13, 1846. All coins made current by the laws of the United States, 
 and the exchequer bills of the Republic of Texas, declared to be receivable 
 in payment of all taxes and revenues. The same re-enacted March 20th, 
 1848. 
 
 March 2, 1848. Government liabilities, when in the hands of original 
 holders, made receivable at par rates (i. e. scaled rates), as "set-offs" 
 against the claims which government may have on such holders of its lia 
 bilities. 
 
 January 23, 1850. Arrears of taxes due the late Republic, if originally 
 collectible in government liabilities, made payable in the same, or one-fifth 
 of the amount in gold and silver ; if originally collectible in exchequer 
 bills, to be paid in said bills or in gold and silver, or else in government 
 liabilities at the rate of five dollars in such liabilities for one dollar in ex 
 chequer bills. 
 
 February 11, 1850. All coins made current by the laws of the United 
 States to be received at the rates thereby established. 
 
 February 11, 1850. Certificates of audited claims made receivable in ex 
 change for land-script, at the rate of fifty cents an acre. 
 
 N. 
 
 REVENUE AND EXPENDITURES OF THE STATE OP TEXAS. 
 
 
 RECEIPTS. 
 
 
 
 
 Year ending 
 
 Year ending 
 
 Two years, ending 
 
 
 October 31, 1848. 
 
 October 31, 1849. 
 
 October 31, 1851. 
 
 Direct and license-taxes . 
 
 . $91,905 28 
 
 $93,670 38 
 
 $200,347 29* 
 
 Sales of Austin city lots . 
 
 2,498 00 
 
 1,632 20 
 
 12,224 73f 
 
 Rents of public buildings 
 
 671 73 
 
 712 96 
 
 
 Sales of custom-houses 
 
 389 75 
 
 942 00 
 
 6,068 00 
 
 Fees of office 
 
 377 29 
 
 991 15 
 
 3,667 42 
 
 Fines and forfeitures . . 
 
 102 22 
 
 611 34 
 
 923 59 
 
 Miscellaneous .... 
 
 189 45 
 
 
 2,249 93J 
 
 Total 
 
 $96,133 72 $98,560 03 
 
 $225,480 96 
 
 * Including land dues and land patents, $4,014 14. 
 
 j- Including rent of public building. 
 
 J Including property redeemed for taxes, $1,656 66. 
 
APPENDIX. 287 
 
 Besides the above, the State appears to have received, between the 20th 
 of February, 1844, and the 31st of October, 1847, the sum of $50,157 85 
 for direct taxes and licenses. This makes the aggregate revenue, from the 
 foundation of the State government, February 20th, 1846, to the 31st of 
 October, 1851, $470,332 56. The average is $83,000 a year. This is 
 exclusive of county and private trust funds. 
 
 In addition to the above, the State has received 
 
 From the Treasurer of the late Republic, in specie $19,297 51 
 
 From arrears of revenue of late Republic, Feb. 1846, to Oct. 1849 125,292 36 
 
 Oct. 1849, to Oct. 1851 3,821 01 
 
 $148,410 88 
 
 Making, with the revenue of the State, a total of means, from February 
 20, 1846, to October 31, 1851, of $618,743 44. Average per annum, 
 $109,190. 
 
 EXPENDITURES. 
 
 On treasury warrants of late Republic outstanding Feb. 20, 1846 $15,724 29 
 For appropriations by State Legislature for payment of debts in 
 curred by late Republic 17,998 09 
 
 Total on account of late Republic $33,722 38 
 
 On account of the State, from February 20, 1846, to October 31, 
 
 1849, three years and eight months 292,349 31 
 
 On account of the State, from October 31, 1849, to October 31, 
 
 1851, two years 263,427 89 
 
 $589,499 58 
 
 In the above, expenditures for county and trust funds to the amount of 
 $3,989 65 are included, leaving for the expenditures of the State, from 
 February 20, 1846, to October 31, 1851, five years and eight months, the 
 sum of $551,787 55. This is at the rate of $97,374 a year, independently 
 of appropriations to the general school fund. 
 
 Besides the receipts and expenditures here given, others have been made 
 on account of county and private trust funds. 
 
 We have no account in detail of the expenditures for 1846 to 1851; but 
 their character may be judged of from the following estimate, by the comp 
 troller, of the expenses of the State for the year ending October 31, 1852 : 
 
 Legislative department $49,116 00 
 
 Executive " 28,000 00 
 
 Judicial " 33,500 00 
 
 Miscellaneous expenses 16,200 00 
 
 Total ... . $126,816 00 
 
288 APPENDIX. 
 
 The amount of specie on hand October 31, 1851, was 
 
 General fund $25,890 68 
 
 School fund 12,051 81 
 
 County and private trust funds 9,398 84 
 
 $47,341 33 
 
 The fiscal concerns of Texas are, so far as regards receipts and payments, 
 now well managed. Its sub-treasury system is more complete than that of 
 the United States, for its payments, as well as its receipts, are in gold and 
 silver. 
 
 The whole amount of its receipts and payments is, indeed, but small; 
 but when it is considered that, according to the report of he Commissioner 
 of the Texan Land-Office, the area of the State, within its reduced limits, 
 is 274,366 square miles, it will be obvious that much good management 
 must be requisite to effect receipts and payments in points both numerous 
 and remote. 
 
 One of the features of a good treasury system, as well as of a good com 
 mercial system, is the prevention of the unnecessary carriage of gold and 
 silver from point to point. This is effected by the judicious use of bills of 
 exchange ; and hence sound bills of exchange are as necessary as sound 
 money for the perfection of a treasury system. Government drafts are 
 sound public bills of exchange when they are drawn against gold or silver 
 actually in some depository, or in the hands of some public officer. There 
 being in the laws of Texas none of those absurd restrictions on the use of 
 government drafts that are found in the sub-treasury law of the United 
 States, the officers of the Texan Treasury Department make free use of them 
 to prevent the unnecessary carriage of gold and silver from point to point. 
 
 The area of Texas being greater than that of all our Atlantic States from 
 the northern limits of Pennsylvania and New Jersey to the southern limits 
 of Georgia, there would be immense expense in bringing all the receipts of 
 the State to Austin, and sending them to the points where they are to be 
 disbursed. This is avoided by giving to the public creditors drafts on the 
 public officers who collect the funds. 
 
 In this way, the State not only collects and disburses its own funds, but 
 collects part of the funds due to the counties. A man residing in Browns 
 ville, on the confines of Mexico, may own lands in various counties, some 
 near Arkansas, and some near Louisiana; provision is made that he may 
 pay to the treasurer of the county in which he resides his county taxes on 
 all his lands in all parts of the State. Due report of this is made at 
 Austin, and the officers of the Treasury Department there, by means of 
 government drafts, transfer to each county the balance that is due to it. 
 
 These government drafts, being for uncertain amounts of dollars and 
 cents, do not become a common circulating medium, and hence do not 
 
APPENDIX. 
 
 289 
 
 drive gold and silver out of circulation. All they do is to prevent the 
 unnecessary carriage of gold and silver from place to place. And in this 
 way they do much good and no evil. 
 
 0. 
 
 ASSESSMENTS IN TEXAS. 
 
 
 LAND. 
 
 TOWN 
 
 LOTS. 
 
 
 Acres. Value. 
 
 No. 
 
 Value. 
 
 1848 
 
 38,788,439 $24,612,155 
 
 31,525 
 
 $3,142,900 
 
 1849* 
 
 40,599,954 23,632,440 
 
 24,316 
 
 3,121,430 
 
 1850f 
 
 32,297,199 21,539,810 
 
 25,171 
 
 3,272,560 
 
 1851J 
 
 31,398,609 23,591,230 
 
 18,697 
 
 3,615,980 
 
 
 NEGROES. 
 
 HORSES. 
 
 
 No. Value. 
 
 No. 
 
 Value. 
 
 1848 
 
 40,610 13,398,490 
 
 62,384 
 
 2,056,575 
 
 1849* 
 
 38,207 12,773,540 
 
 53,470 
 
 2,073,395 
 
 1850f 
 
 48,297 17,492,500 
 
 68,507 
 
 2,530,375 
 
 1851J 
 
 51,064 20,492,250 
 
 71,798 
 
 2,878,930 
 
 
 CATTLE. 
 
 MONEY-LENDERS. 
 
 
 No. Value. 
 
 No. 
 
 Amount lent. 
 
 1848 
 
 518,867 2,117,900 
 
 179 
 
 101,485 
 
 1849* 
 
 523,676 2,064,440 
 
 255 
 
 120,315 
 
 1850f 
 
 676,545 2,621,895 
 
 350 
 
 209,415 
 
 1851J 
 
 709,396 2,980,485 
 
 482 
 
 324,675 
 
 STORES. MISCELLANEOUS PROPERTY. 
 
 
 
 
 Total value of 
 
 
 No. Value. 
 
 Value. property assessed. 
 
 1848 
 
 403 1,055,065 
 
 1,162,730, 
 
 47,647,300 
 
 1849* 
 
 480 1,092,755 
 
 1,221,625 
 
 46,099,940 
 
 1850f 
 
 581 1,651,340 
 
 1,396,720 
 
 50,714,615 
 
 1851J 
 
 532 1,709,970 
 
 1,479,195 
 
 57,072,715 
 
 
 
 Total of poll 
 
 Average value 
 
 
 Ad valorem tax. Total poll-tax. 
 
 and ad valorem tax 
 
 of land per acre. 
 
 1848 
 
 $95,294 60 $21,429 00 
 
 $116,723 60 
 
 63 cts. 
 
 1849* 
 
 92,199 88 21,288 00 
 
 123,487 60fl 
 
 58 " 
 
 1850f 
 
 76,071 91 11,520 50 
 
 89,242 41fl 
 
 66 
 
 1851J 
 
 85,609 07 12,040 00 
 
 116,652 07f 
 
 75 " 
 
 It will be seen that the value of taxable property increases, though, for 
 some unexplained reason, the number of acres of land returned for assess 
 ment decreases. 
 
 * No returns from five counties. f No returns from two counties. 
 
 J No returns from eight counties. 
 
 g In 1848 and 1849, this tax was 20 cents in 1850 and 1*851, 15 cents in $100. 
 
 || In 1848 and 1849, $1 00 in 1850 and 1851, 50 cents a head. 
 
 If Including estimates for the counties from which returns had not been received. 
 
 19 
 
290 
 
 APPENDIX. 
 
 The following particulars of the assessment of 1845 are given, as that 
 was the year in which Texas was admitted into the Union. 
 
 Land 21,885,990 acres Value $15,830,120 
 
 Town lots, number 18,322 1,589,874 
 
 Sales of merchandise 54,484 
 
 Money at interest 9,417 
 
 Negroes .... 
 Pleasure-carriages 
 Gold watches . . 
 Silver watches 
 Metal clocks . . 
 Wood " 
 
 23,262 
 
 Saddle horses 
 
 218 
 
 Stud " 
 
 508 
 
 Work 
 
 451 
 
 Race " 
 
 . 337 
 
 Cattle . . 
 
 593 
 
 
 800 
 
 130 
 
 12,041 
 
 22 
 284,336 
 
 DIRECT TAXES. 
 
 Specific ........... $21,525 48 
 
 Ad valorem .......... 20,372 17 
 
 Poll ............. 5,365 00 
 
 $47,262 65 
 The stores are valued at the amount of merchandise contained in them 
 
 on the 1st of January. 
 
 " Under no system has the entire landed interest of the State been taxed." 
 
 (Comptroller s Keport, Dec. 3, 1849.) 
 
 LICENSE-TAXES. 
 
 1847. 1848. 
 Amount of tax on 
 
 Merchandise .... $11,863 01 $7,004 29 
 
 Spirits by wholesale . . 3,749 47 2,330 05 
 
 " retail . . . 8,109 17 8,279 57 
 
 Peddlers 801 91 489 17 
 
 Doctors and lawyers . . 1,393 08 304 18 
 
 Boarding-houses ... 45 23 11 25 
 
 Taverns 719 34 267 55 
 
 Billiard-tables .... 553 32 770 81 
 
 Auctioneers .... 148 13 26 24 
 
 Restaurants .... 68 86 98 90 
 
 Ten-pin alleys ... 125 29 113 21 
 
 Brokers 98 95 228 98 
 
 Race-course .... 7 66 
 
 Theatre 25 00 33 25 
 
 Exhibitions 38 32 
 
 Commission merchants . 
 
 Professions 
 
 Estimate for counties from 
 
 which no returns were rec d 1,048 60 
 
 1849. 
 
 $6,367 73 
 5 } 8,804 04 
 
 349 32 
 
 20 00 
 
 1,229 05 
 
 329 14 
 
 162 00 
 
 229 26 
 
 25 00 
 
 91 65 
 
 249 98 
 
 15 00 
 
 1850. 
 
 $6,326 64 
 
 6,774 90 
 
 202 42 
 
 1,174 11 
 183 33 
 183 35 
 173 32 
 
 1 85 
 208 32 
 
 1,000 00 
 
 $27,739 08 $21,013 71 $17,872 17 $16,228 24 
 Note. Many of the returns for 1850 were for nine months only. 
 
APPENDIX. 
 
 291 
 
 Direct tax, ad valorem 
 
 " poll 
 Licenses . 
 
 RECAPITULATION. 
 
 1848. 1849. 
 
 95,294 60 92,199 88 
 21,429 00 21,288 00 
 21,013 51 17,872 17 
 
 1850. 
 
 76,071 91 
 11,520 50 
 16,228 24 
 
 Total 137,737 11 131,360 05 103,820 65 
 
 The decrease in the license-tax is accounted for, in part, " by the change 
 made, at the last session of the Legislature, of the tax on merchants, from 
 a specific tax on that calling, to an ad valorem tax of one-fifth of one per 
 cent, on the amount of purchases." (Comptroller s Report, Dec. 29, 1849.) 
 
 P. 
 
 AGRICULTURAL STATISTICS OF FORTY-ONE COUNTIES IN 1848. 
 
 Cotton in seed 
 
 Sugar .... 
 
 Molasses 
 
 Corn .... 
 
 Wheat 
 
 Eye, oats, &c. 
 
 Potatoes 
 
 Tobacco 
 
 Horses and mules 
 
 Cattle . . ! . 
 
 Sheep .... 
 
 Hogs .... 
 
 Butter 
 
 Cheese 
 
 Wool .... 
 
 Total of agricultural products 
 Total of manufactures 
 
 Land in cultivation 
 
 Average value of land in cultivation $8 50 an acre. This table has been 
 abridged from the report of the comptroller, of December 3, 1849. The 
 whole number of counties in the State, in 1848, was seventy-eight, having 
 in them 38,788,439 acres on which taxes had been assessed. The number 
 of acres on which taxes had been assessed, in the forty-one counties from 
 which the above returns were received, was 23,921,357. Supposing the 
 
 Quantity. 
 
 Value. 
 
 85,636,513 pounds, 
 
 $1,356,617 
 
 5,816,908 do. 
 
 195,934 
 
 176,446 gallons, 
 
 36,850 
 
 3,491,227 bushels, 
 
 1,512,731 
 
 33,039 
 
 29,052 
 
 150,515 
 
 75,650 
 
 742,003 
 
 296,589 
 
 92,527 pounds, 
 
 7,993 
 
 38,182 number, 
 
 1,356,79 
 
 369,901 
 
 1,895,790 
 
 39,950 
 
 61,202 
 
 223,358 
 
 315,855 
 
 774,083 pounds, 
 
 89,384 
 
 58,603 
 
 8,685 
 
 48,856 
 
 16,586 
 
 icts . . V " 
 
 7,255,712 
 
 - " r 
 
 133,436 
 
 1 manufactures 
 
 $7,389,148 
 
 316,153 acres, 
 
 $2,684,183 
 
292 APPENDIX. 
 
 number of acres in cultivation, and the products, to bear the same propor 
 tion to the acres taxed in the thirty-seven remaining counties, then the 
 whole number of acres in cultivation in Texas, in 1848, was 512,641, and 
 the total value thereof $4,307 449. On the same principle of calculation, 
 the total value of agricultural products was $11,765,012, and of manu 
 factures $216,362. Aggregate, $11,981,374. 
 
 It is evident that all those important branches of industry which are con 
 nected with house building are not embraced in these returns; and the pro 
 bability is that the products of many kinds of handicraft are entirely 
 omitted. From only thirteen counties in forty-one were any returns of 
 manufactures obtained. 
 
 Q. 
 
 ACT OF ANNEXATION. 
 
 In Convention of the people of the Kepublic of Texas, July 4, 1845. 
 
 AN ORDINANCE. 
 
 WHEREAS, The Congress of the United States of America has passed 
 resolutions providing for the annexation of Texas to that Union, which 
 resolutions were approved by the President of the United States on the first 
 day of March, one thousand eight hundred and forty-five ; and whereas, 
 the President of the United States has submitted to Texas the first and 
 second sections of the said resolution, as the basis upon which Texas may 
 be admitted as one of the States of the said Union ; and whereas, the ex 
 isting Government of the Republic of Texas has assented to the proposals 
 thus made, the terms and conditions of which are as follows : 
 
 JOINT RESOLUTION FOR ANNEXING TEXAS TO THE UNITED STATES. 
 
 Resolved, by the Senate and House of Representatives of ilie United /States 
 of America in Congress assembled, That Congress doth consent that the 
 territory, properly included within, and rightfully belonging to the Repub 
 lic of Texas, may be erected into a new State, to be called the " State of 
 Texas," with a republican form of government, to be adopted by the people 
 of said Republic, by deputies in convention assembled, with the consent of 
 the existing government, in order that the same may be admitted as one of 
 the States of this Union. 
 
 2. And be it further resolved, That the foregoing consent of Congress is 
 
APPENDIX. 293 
 
 given upon the following conditions, and with the following guarantees, to 
 wit: First. Said State to be formed, subject to the adjustment, by this 
 government, of all questions of boundary that may arise with other govern 
 ments; and the Constitution thereof, with the proper evidence of its adop 
 tion by the people of said Republic of Texas, shall be transmitted to the Pre 
 sident of the United States, to be laid before Congress for its final action, on 
 or before the first day of January, one thousand eight hundred and forty-six. 
 Second. Said State, when admitted into the Union, after ceding to the United 
 States all public edifices, fortifications, barracks, ports and harbors, navy and 
 navy yards, docks, magazines, arms and armaments, and all other property 
 and means pertaining to the public defence belonging to the said Republic 
 of Texas, shall retain all the public funds, debts, taxes, and dues of every 
 kind, which may belong to, or be due and owing to the said Republic ; and 
 shall also retain all the vacant and unappropriated lands lying within its 
 limits, to be applied to the payment of the debts and liabilities of said Re 
 public of Texas; and the residue of said* lands, after discharging said debts 
 and liabilities, to be disposed of as said State may direct; but in no event 
 are said debts and liabilities to become a charge upon the Government of 
 the United States. Third. New States of convenient size, not exceeding 
 four in number, in addition to said State of Texas, and having sufficient 
 population, may hereafter, by the consent of said State, be formed out of 
 the territory thereof, which shall be entitled to admission under the provi 
 sions of the Federal Constitution. And such States as may be formed out 
 of that portion of said territory lying south of thirty-six degrees thirteen 
 minutes north latitude, commonly known as the " Missouri Compromise 
 Line," shall be admitted into the Union, with or without slavery, as the 
 people of each State asking admission may desire. And in such State, or 
 States, as shall be formed out of said territory, north of said " Missouri Com 
 promise Line/ slavery or involuntary servitude (except for crime) shall be 
 prohibited. 
 
 Now, in order to manifest the assent of the people of this Republic, as 
 required in the above-recited portions of the said resolutions, we, the depu 
 ties of the people of Texas, in convention assembled, in their name, and by 
 their authority, do ordain and declare that we assent to, and accept the 
 proposals, conditions, and guarantees contained in the first and second 
 sections of the resolution of the Congress of the United States aforesaid. 
 
 Done at the City of Austin, Republic of Texas, July 4, 1845. 
 
294 APPENDIX. 
 
 R. 
 
 THE BOUNDARY ACT. 
 
 , % ^ 
 
 An act proposing to the State of Texas the establishment of her northern 
 and western boundaries, the relinquishment by the said State of all territory 
 claimed by her exterior to said boundaries, and of all her claims upon the 
 United States. 
 
 Be it enacted, <frc., That the following propositions shall be and the same 
 are hereby offered to the State of Texas, which, when agreed to by the said 
 State, in an act passed by the General Assembly, shall be binding and ob 
 ligatory upon the United States and upon the said State of Texas : Provided, 
 That the said agreement by the said General Assembly shall be given on 
 or before the 1st day of December^ 1850. 
 
 First. The State of Texas will agree that her boundary on the north shall 
 commence at the point at which the meridian of one hundred degrees west 
 from Greenwich is intersected by the parallel of thirty-six degrees and thirty 
 minutes north latitude, and shall run from said point due west to the meri 
 dian of one hundred and three degrees west from Greenwich; thence her 
 boundary shall run due south to the thirty-second degree of north latitude ; 
 thence on the said parallel of thirty-two degrees of north latitude to the Rio 
 Bravo del Norte; and thence, with the channel of said river, to the Gulf of 
 Mexico. 
 
 Second. The State of Texas cedes to the United States all her claim to 
 territory exterior to the limits and boundaries which she agrees to establish 
 by the first article of this agreement. 
 
 Third. The State of Texas relinquishes all claim upon the United States 
 for liability for the debts of Texas, and for compensation or indemnity for 
 the surrender to the United States of her ships, forts, arsenals, custom 
 houses, custom-house revenue, arms and munitions of war, and public 
 buildings, with their sites, which became the property of the United States 
 at the time of annexation. 
 
 Fourth. The United States, in consideration of said establishment of 
 boundaries, cession of claim to territory, and relinquishment of claims, will 
 pay to the State of Texas the sum of ten millions of dollars, in a stock 
 bearing five per cent, interest, and redeemable at the end of fourteen years, 
 the interest payable half yearly at the Treasury of the United States. 
 
 Fifth. Immediately after the President of the United States shall have 
 been furnished with an authentic copy of the act of the General Assembly 
 of Texas accepting these propositions, he shall cause the stock to be issued 
 
APPENDIX. 295 
 
 in favor of the State of Texas, as provided for in the fourth article of agree 
 ment : Provided, That not more than five millions of said stock shall be issued 
 until the creditors of the State, holding bonds and other certificates of stock 
 of Texas, for which duties on imports were specially pledged, shall first file 
 at the Treasury of the United States releases of all claim against the United 
 States for or on account of said bonds or certificates, in such form as shall 
 be prescribed by the Secretary of the Treasury, and approved by the Pre 
 sident of the United States : Provided, also, That nothing herein contained 
 shall be construed to impair or qualify anything contained in the third 
 article of the second section of the joint resolution for annexing Texas to 
 the United States, approved March 1, 1845, either as regards the number 
 of States that may hereafter be formed out of the State of Texas or otherwise. 
 
 s. 
 
 AN ACT PROVIDING FOR THE LIQUIDATION AND PAYMENT OF THE DEBT 
 OF THE LATE REPUBLIC OF TEXAS, JANUARY 31, 1852. 
 
 SEC. 1. Be it enacted by the Legislature of the State of Texas, That two 
 millions of dollars of bonds of the indemnity due the State of Texas, and 
 now at her disposal, for the sale to the United States of a portion of her 
 north-western territory, under the provisions of an act of Congress proposing 
 to the State of Texas the establishment of her northern and western bound 
 aries, &c., approved September 9, 1850, are hereby appropriated for the 
 payment of that portion of the debt of the late Republic of Texas embraced 
 in articles third, fourth, ninth, tenth, fourteenth, fifteenth, and sixteenth, 
 and interest which may have accrued thereon included in articles twelfth 
 and thirteenth of this section; which debt has been submitted for adjust 
 ment to the auditor and comptroller of the State, under the provisions of an 
 act to provide for ascertaining the debt of the late Republic of Texas, ap 
 proved March 20, A. D. 1848, and an act supplementary thereto, approved 
 February 8, A.D. 1850, and reported by them to the Legislature in their 
 report of November 12, 1851, as follows : 
 
 First. For ten per cent, consolidated fund, created by act of the 7th of 
 June, 1837, four hundred and forty-two thousand seven hundred and sixty- 
 eight dollars and seventy-six cents. 
 
 Second. For ten per cent, consolidated fund created by act of the 7th of 
 June, 1837, issued under an act for the relief of Swartwout and others, 
 seven thousand nine hundred and seventy dollars and forty-three cents. 
 
296 APPENDIX. 
 
 Third. For ten per cent, funded debt, created by act of 5th of February, 
 1840, two hundred and twenty-six thousand and two hundred dollars. 
 
 Fourth. For eight per cent, funded debt, created by act of 5th of Feb 
 ruary, 1840, seven thousand two hundred and eighty-four dollars. 
 
 Fifth. For eight per cent, treasury bonds, created by act of 5th of Feb 
 ruary, 1840, one hundred and fifty-three thousand three hundred and sixty 
 dollars. 
 
 Sixth. For ten per cent, treasury notes, issued under act of June 9th, 
 1837, first issue, forty-one thousand six hundred and thirty dollars. 
 
 Seventh. For ten per cent, treasury notes, issued under act of June 9, 
 1837, second issue, one hundred and sixty-five thousand six hundred and 
 eighty-five dollars and fifty cents. 
 
 Eighth. For treasury notes without interest, issued under act of 19th 
 of January, 1839, third issue, four hundred and fifty-seven thousand and 
 forty-eight dollars. 
 
 Ninth. For audited paper, issued under various enactments, sixty-nine 
 thousand four hundred and fifty- one dollars and fifty-two cents. 
 
 Tenth. For miscellaneous liabilities, twenty-six thousand one hundred 
 and twenty-nine dollars and eighty-seven cents. 
 
 Eleventh. For ten per cent, bonds, issued by commissioners to nego 
 tiate a loan for five millions of dollars, viz. : For loan obtained from Bank 
 of United States, four hundred thousand dollars; for purchase of steamer 
 " Zavalla," ninety thousand and fourteen dollars and eighty-four cents ; for 
 purchase of naval vessels under contract with F. Dawson, now owned by 
 James Schott and E. D. Whitney, one hundred and forty thousand dollars. 
 
 Twelfth. For interest on the above liabilities, issued subject to interest 
 as stated in the face of the certificates, one million four hundred and 
 sixty-eight thousand one hundred and fifty-five dollars and twenty-six 
 cents. 
 
 Thirteenth. For additional interest to July 1, 1850, allowed by act ap 
 proved February 11, 1850, on claims which had been audited prior to its 
 passage, one hundred and thirteen thousand six hundred and sixty-four 
 dollars and eighty cents. 
 
 Fourteenth. For amount filed and receipted for as second class debt, six 
 hundred and seventy-nine thousand two hundred and twenty-two dollars and 
 fifty cents. 
 
 Fifteenth. For amount filed and receipted for as third class, since recog 
 nized as second class, sixteen thousand four hundred and sixty-seven dollars 
 and ninety-five cents. 
 
 Sixteenth. For amount audited by special act of the Legislature, seventy- 
 two thousand and seventy-seven dollars and twenty-eight cents less thirty- 
 
APPENDIX. 297 
 
 eight thousand and fifty-three dollars and seventy-three cents, amount ac 
 knowledged by joint resolution, approved March 15, 1848. 
 
 SEC. 2. That the disbursements herein provided for shall be made in 
 the bonds or stock of indemnity alluded to in the first section of this act, or 
 the proceeds thereof, by the Treasurer of this State upon the certificates of 
 indebtedness, issued by the auditor and comptroller under the provisions of 
 the laws above named; and in all other respects the said Treasurer shall 
 be governed by the laws regulating the payment of money out of the State 
 treasury ; and the Comptroller of Public Accounts for the State of Texas is 
 hereby authorized to transfer a sufficient amount of said stock, when the 
 transfer shall be necessary, by simple indorsement, attested by his seal of 
 office, to be countersigned by the Treasurer of the State, which transfer 
 shall divest the State of all interest in such bonds or stock, and invest the 
 same in the holder thereof. Provided, that payment shall be made on any 
 claim against the State included in or forming a part of articles first, second, 
 fifth, sixth, seventh, eighth, and eleventh ; or for interest which may have 
 accrued thereon, included in articles twelfth and thirteenth, in the first sec 
 tion of this act. When the Governor of this State shall be notified by the 
 President of the United States that the Secretary of the Treasury of the 
 United States has been required by law to issue to the State of Texas the 
 five millions of dollars of stock withheld under the provisions of said act, 
 approved September 9, 1850, until certain creditors shall have filed releases 
 at the Treasury of the United States, as therein required ; or that said 
 Secretary has been required by law to issue to the State of Texas sums of 
 said stock, equal to the sums for which the State may at any time present 
 the required releases from any portion of said creditors, at the Treasury of 
 the United States ; after which notice, such claim or claims shall be paid 
 as provided for in other cases ; and upon payment of the same, or any por 
 tion of said claims, the corresponding amount of bonds of the reserved five 
 millions, which the State may be entitled to receive under the proviso of 
 this section, shall be drawn for by the comptroller, and deposited in the 
 treasury of the State, and shall be regulated and transferred in the same 
 manner as provided for other bonds, and together with the surplus left of 
 the appropriation named in the first section of this act, after payment of the 
 sums to which it is to be applied, appropriated for, and paid out only upon 
 the claims embraced in articles first, second, fifth, sixth, seventh, eighth, 
 eleventh, twelfth, and thirteenth of this act. 
 
 SEC. 3. That it shall be the duty of the comptroller, immediately after 
 the passage of this act, to forward to the Secretary of the Treasury of the 
 United States a schedule of the names of the creditors, for the payment of 
 whose claims conditional provision is made by the second section of this act, 
 stating the amount to which each creditor is entitled, 
 
298 APPENDIX. 
 
 SEC. 4. That before the payment of any of the claims provided for by 
 this act, the claimant shall be required to sign a receipt to the State of Texas, 
 that the amount so received is in full liquidation and payment of the claim 
 or claims so presented; and also a release exonerating the United States 
 from all liability for the same said release to be in form as prescribed by 
 the Secretary of the Treasury, and approved by the President of the United 
 States, for releases under said act, approved September 9, 1850, and that 
 this act be in force from its passage. 
 
 Approved January 31, 1852. 
 
 T. 
 
 REPORT TO PRESIDENT OF THE UNITED STATES, BY THE SECRETARY OP 
 THE TREASURY, ON THE PUBLIC DEBT OF TEXAS. 
 
 In obedience to your order, I proceed to report the condition and amount 
 of the debt of the late Jlepublic of Texas, as reported to me by the author 
 ities of the State, and to present very briefly my construction of the powers 
 and duties of the President, as prescribed by the first section of the act of 
 Congress, approved September 9, 1850. 
 
 By the act referred to, in consideration of certain concessions by the 
 State of Texas, it is provided that the United States " shall pay to the State 
 of Texas the sum of ten millions of dollars, in a stock bearing five per cent, 
 interest, and redeemable at the end of fourteen years, the interest payable 
 half yearly at the Treasury of the United States." 
 
 In the same section of the law, it is further provided " that no more than 
 five millions of said stock shall be issued until the creditors of the State 
 holding bonds and other certificates of stock of Texas, for which duties on 
 imports were specially pledged, shall first file at the Treasury of the United 
 States releases of all claims against the United States for or on account of 
 said bonds or certificates, in such form as shall be prescribed by the Secre 
 tary of the Treasury and approved by the President of the United States." 
 
 The release thus provided for has been prescribed by the Secretary of 
 the Treasury and approved by the President. It has been published in all 
 the leading newspapers in the commercial cities of the United States, and 
 all persons holding claims of the kind specified in the foregoing proviso 
 were required to file their releases (in the form thus prescribed) in the 
 Treasury of the United States, on or before the 1st day of October, 1851. 
 Although this publication has been continued from the 25th day of March, 
 
APPENDIX. 
 
 1851, yet, up to this time, comparatively few releases have been filed by 
 the creditors of Texas. 
 
 By the terms of the law, the President is to cause the stock to be issued, 
 and the restriction which forbids the issuing of five millions of said stock 
 until the releases of claims, as stated in the law, attaches to the stock in 
 his hands. 
 
 It would seem to result, from the foregoing propositions, that the Presi 
 dent should determine what classes and amounts of the Texas debts shall 
 be released to the United States, before he can lawfully deliver the whole 
 of the ten millions of stock to the State of Texas. 
 
 To form an opinion on this point, it becomes necessary to ascertain what 
 portion of the public debt of Texas was contracted by her while an inde 
 pendent Republic, with a special pledge of " duties on imports" for its 
 redemption. 
 
 I present herewith reports marked A, B, C, D, E, F, Gr, and IT, certified 
 by the auditor of the State, and verified by the signature of Governor Bell 
 and the seal of the State. 
 
 These papers show the laws under which the debts of Texas were con 
 tracted, and the amount of bonds or other evidences of debt issued under 
 the laws referred to respectively. 
 
 The amount of the debt in the aggregate and the character of each class 
 is presented in the paper accompanying this report, submitted to me by the 
 Assistant Secretary of the Treasury, and dated September 10, 1851. 
 
 From these papers it is shown that the public debt of Texas, with inte 
 rest at the rate prescribed by the laws under which it was contracted, com 
 puted up to 1st of July, 1850, amounts, in the whole, to the sum of twelve 
 millions four hundred and thirty-five thousand nine hundred and eighty-two 
 dollars and sixty-eight cents ($12,435,982 68). 
 
 By the terms of the act of Congress of 9th September, 1850, five of the 
 ten millions of stock provided for are to be issued to Texas at once ; the 
 remaining five are to be withheld by the President until all claims against 
 the United States for that portion of the above-stated public debt of Texas, 
 for the payment of which the " duties on imports are specially pledged," 
 shall be released to the United States. 
 
 What class or amount of this debt falls within this description is to be 
 ascertained by the laws of Texas, which laws, of course, form the basis of 
 the contract between her and the present holders of these claims. 
 
 It is obvious, from the most careless perusal of the law, that Congress 
 considered the United States as liable to pay all that portion of the debt of 
 Texas for the redemption of which " duties on imports" had been pledged 
 by the laws of Texas. 
 
 Upon no other hypothesis is there any justifiable motive for requiring 
 
300 APPENDIX. 
 
 releases to the United States to be filed for such claims, before Texas should 
 receive the last five millions of the stock to be paid her. In other words, 
 Congress admitted the liability of the General Government to pay all that 
 portion of the public debt of Texas, and laid its hand upon five millions of 
 the stock provided for as a security that Texas should pay that portion of 
 her debt, or, in her failure to do so, the five millions thus withheld should 
 be a fund out of which that class of the creditors of both Texas and the 
 United States should be paid in whole or in part, as the relative amount of 
 such debt and the fund reserved should determine. 
 
 The history of the debt contracted by Texas while she was yet an inde 
 pendent power, and her subsequent incorporation into the Union as a State 
 of the Republic of the United States, it is believed, makes the United States 
 liable fur this portion of the Texas debt. 
 
 The laws of nations which govern the subject are well understood, and 
 of easy application to the present question. These laws all proceed upon 
 the idea that the moral obligations of independent States are binding when 
 once they attach to compacts between States, or between States and indi 
 viduals, and that they never cease except by the voluntary agreement of the 
 parties interested, or by their fulfilment and complete discharge. Hence, 
 where an independent power contracts obligations, and is afterwards, by the 
 act of another power, jointly with herself, inco rporated into and subjected 
 to the dominion of the latter, whereby the national responsibility of the 
 former is destroyed, and the means of fulfilling her obligations transferred 
 to the latter, all such obligations, to the extent at least of the means thus 
 transferred, attach with all their force to the nation to whom such means 
 have been so transferred. 
 
 It will be found that all writers on public law having any authority are 
 agreed upon this point, from the time of Grotius to the present. Indeed, 
 the proposition thus asserted is so obviously just that it is not possible for 
 a nation in modern times to controvert it, without forfeiting that character 
 for justice and probity which, happily for mankind, has become indispens 
 able for sovereign States. It was this view of the subject which, doubtless, 
 dictated that provision of the law which I am now considering. 
 
 It was known to Congress that Texas had contracted debts to a large amount 
 to individuals while she was an independent power. It was equally well 
 known that revenue arising from " duties on imports" was, amongst all na 
 tions in modern times, one resource, if not the principal one, for the payment 
 of the debts of nations. It was known, also, by the framcrs of this act that, by 
 the annexation of Texas to the United States, the power to levy duties on 
 imports within the ports or territories of Texas was taken away from the 
 latter and transferred to the United States. It was therefore assumed that 
 the United States should pay, if Texas did not, all that portion of the debt 
 
APPENDIX. 301 
 
 of Texas for which duties on imports had been pledged ; for the obvious 
 reason that these duties thus pledged were taken from Texas and transfer 
 red to the United States; and to that extent the creditors of Texas, by a 
 plain principle of justice, had become the creditors of the United States. 
 
 With these facts and principles for the basis of legislation, the question 
 recurs, what class of debts were comprehended in the terms used in the 
 law ? 
 
 I entertain no doubt of what was the design of Congress. They evidently 
 intended that Texas should pay out of the ten millions granted all those 
 debts of hers for which they deemed the United States had become liable 
 by the incorporation of Texas into the Union ; and they deemed this go 
 vernment liable for all debts of Texas for the payment of which the duties 
 on imports had been pledged in any form. The words employed are, "for 
 which duties on imports are specially pledged." In all cases, therefore, 
 where duties on imports have, by the laws of Texas, been specially set apart 
 for the payment of any loan, in my judgment it becomes the duty of the 
 President to require the releases specified in the law of Congress before he 
 issues to Texas the remaining five millions of stock. 
 
 By the act of 7th June, 1837, the Republic of Texas pledged her public 
 faith for the redemption of every loan under that law, and also " so much 
 of the revenue arising from imports and direct taxation as may be neces 
 sary to meet the annual interest of the funded debt." (See Schedule A, 
 and the law there quoted.) Under this act, as appears by Schedule A, a 
 loan was effected, which, with its interest, leaves outstanding on the 1st of 
 July, 1850, $1,651,590 02. 
 
 The terms of the law plainly secure, by a pledge of import duties, the 
 payment of the interest, which, in effect, is a special pledge of duties on 
 imports for the payment of the interest, which interest, while the fund set 
 apart remains, is perpetually secured. This, then, is one of the loans coming 
 within the proviso referred to, releases of which should be filed in the trea 
 sury of the United States, for all interest which has accrued or may accrue 
 before the remaining five millions of stock can be issued to Texas. 
 
 The loans designated in Schedule B were made under the acts of the 
 18th November, 1836; the 16th of May, 1838; 22d January, 1839; 14th 
 January, 1840; and 5th February, 1840. The amount, with interest com 
 puted to 1st July, 1850, under. these acts, is $2,582,902 70. 
 
 By the 9th section of the act of 1836, the public faith, the proceeds of 
 the sales of public lands, and all the taxes on lands, which may accrue to 
 the State after the year 1838, are set apart for the payment of the interest 
 and principal of the loan therein provided for. 
 
 The only provision of the before-mentioned laws which it seems important 
 to consider as bearing on the act of Congress in question, is the 15th section 
 
302 APPENDIX. 
 
 of the act of 14th January, 1840. That section contains the following 
 provision : 
 
 "Be it further enacted, That, for the redemption of all loans negotiated 
 by the authority of the Republic of Texas, independently of the reservation 
 of the sinking fund, the proceeds of the sales of the public lands, its revenues, 
 and public faith are solemnly pledged." 
 
 It seems perfectly clear that a pledge of all the revenue of a government 
 whose organic form admitted the power to raise revenue by " duties on im 
 ports" is a special pledge of duties on imports, as well as all the other 
 sources of taxation known to such government. If, instead of a pledge of 
 the "revenues," a term comprehending every item of revenue, another form 
 of expression had been adopted, which had enumerated each item, includ 
 ing duties on imports, then no one would doubt that the law contained a 
 special pledge of the duties on imports. 
 
 If, then, the pledge of all " revenue," without enumeration of items or 
 classes, does not include duty on imports, neither does it, for the same 
 reason, include any other species of revenue ; and thus it would follow 
 that nothing was pledged by the act in question an absurdity too flagrant 
 for consideration. Such a construction would admit the possibility of an 
 intention by the Congress of Texas to hold out to the world a delusive 
 promise seeming to be substantial, and yet, in fact, offering no real security. 
 The section referred to, therefore, must be considered as pledging specially 
 the duties on imports, as well as any other species of revenue possible under 
 the government then existing. If these views are correct, all loans nego 
 tiated by Texas prior to the 14th January, 1840, and under that act, are 
 secured by a special pledge of the duties on imports. It follows that the 
 five millions of stock specified in the act of Congress of the 9th September, 
 1850, should not be issued until releases are filed as prescribed by all 
 owners of that portion of the debt of Texas. 
 
 The public debt created under one of the acts of 5th February, 1840, is 
 stated, in Schedule C, to amount, with interest up to 1st July, 1850, to 
 the sum of $1,628,936 26. I do not find any pledge in this act for the 
 payment of either the principal or interest of this portion of the debt. 
 
 The debt set out in Schedule D, with interest up to 1st July, 1850, is 
 $1,472,918 80. 
 
 This debt was created under another act of the 5th February, 1840. By 
 the 3d section of this act, it is provided that " the bonds before referred to 
 shall be at all times receivable by any collector of revenue, or at the Trea 
 sury Department, in payment of any debt to the government, or any duties 
 by imports or direct taxation, for the amount or value of such funds, and 
 the interest which may have accrued thereon." 
 
 It will be seen, by inspection of the specimen of the bonds under this 
 
APPENDIX. 303 
 
 act, furnished in Schedule D, that the pledge is stated on its face. The 
 phrase, " receivable for all government dues," is printed on the face of this 
 stock in conspicuous capitals. I cannot suppose that any interpretation 
 can be given to this act which would exclude the idea of a special pledge 
 of duties or " dues" to the government arising from " imports." It would 
 seem that no language could create a special pledge of duties on imports, if 
 a promise to receive the stock in payment for all government dues arising, 
 in the language of the law, " from imports or direct taxation," does not. 
 
 I am of opinion, therefore, that the debt set out in Schedule D, amount 
 ing to $1,472,918 80, should be released in the form prescribed and ap 
 proved by the President before the issue to Texas of the last five millions 
 of stock, as provided in the act of Congress of the 9th September, 1850. 
 
 The issues set forth in Schedule E are not sufficiently described to enable 
 me to determine whether the whole sum of issues there put down are go 
 verned by the same laws. It is quite certain that the sum of $420,000 of 
 principal and $89,000 of interest are due on notes issued and made re 
 ceivable "for all dues to the government." The $2,586,546 may, or may 
 not fall within any of the laws before mentioned as containing a special 
 pledge. If the latter were issued prior to the law of the 14th January, 
 1840, then they would be covered by the provisions of the 15th section of 
 that act, which pledges the " revenues" of Texas for their redemption; and, 
 in my judgment, all issues of evidence of public debt of Texas prior to that 
 law come within the fair meaning of the proviso in the first section of the 
 act of Congress of the 9th September, 1850. I am also clearly of opinion 
 that any portion of her public debt which, by the laws of Texas, is made 
 receivable in payment of "all dues to the government," are claims for 
 which the revenue arising from duties on imports are specially pledged. 
 
 As the report of the authorities of Texas does not enable me to say what 
 amounts are covered by the foregoing principles, it is only necessary for the 
 information of holders of the debt that they should know the classes which 
 the President deems it right should be released before the last five millions 
 of stock can be issued to the Government of Texas. 
 
 The amount set out in Schedule F, being $2,117,181 68, is made up of 
 parts of previous issues under the laws of Texas, and it does not appear 
 what portion of this amount falls within any of the laws of Texas author 
 izing issues or loans. 
 
 I repeat, therefore, that, for the information of all concerned, it will 
 suffice to declare that all the public debt of Texas created prior to the act 
 of Congress of that Republic of the 14th January, 1840, and all the debt 
 of said Republic made receivable for all public dues, are, in my judgment, 
 debts of Texas, for which the duties on imports are specially pledged, and 
 that releases of all claim against the United States for or on account of such 
 
304 APPENDIX. 
 
 debts should be filed in the Treasury Department of the United States 
 before the President will be justified in issuing the second five millions of 
 stock to Texas as provided in the act of Congress of the 9th September, 
 1850. 
 
 These views, though hastily sketched at this time, under the pressure of 
 much indispensable current business, are. nevertheless, the result of much 
 previous reflection and examination. I find them to accord with a very 
 elaborate argument on the subject, presented by the late Attorney-General 
 (R. Johnson), and therefore submit them with entire confidence in the legal 
 conclusions stated. 
 
 Very respectfully submitted. 
 
 THOS. CORWIN, 
 
 Secretary of the Treasury. 
 To the President. 
 
 EXECUTIVE CHAMBER, WASHINGTON, Sept. 13, 1851. 
 Concurring in the conclusions of the foregoing report, the Secretary of 
 the Treasury is hereby directed to issue the last five millions of stock to 
 Texas, on the condition specified in said report. 
 
 MILLARD FILLMORE. 
 
 U. 
 
 REPORT OF THE AUDITOR AND COMPTROLLER TO THE FOURTH LEGISLATURE 
 ON THE PUBLIC DEBT OF TEXAS. 
 
 AUSTIN, November 12, 1851. 
 To the Honorable Legislature of the State of Texas : 
 
 In conformity to the requirements of " an act to provide for ascertaining 
 the debt of the late Republic of Texas," approved 20th March, 1848, and 
 the act supplementary thereto, approved February 8th, 1850, we respect 
 fully submit the following report exhibiting the amount, character, and 
 classification of the claims filed and receipted for by us, under the provi 
 sions of said acts : 
 
APPENDIX. 
 
 305 
 
 7,970 43 
 
 754,000 00 
 
 24,280 00 
 
 766,800 00 
 
 331,371 00 
 
 74,441 26 
 42,387 73 
 
 457,380 00 
 195,907 00 
 
 280,000 00 
 $5,436,886 22 
 
 Interest on the above liabilities is 
 sued subject to interest, as stated 
 in tlie face of the certificates 
 
 Additional interest to 1st July, 
 1850, allowed, by act approved 
 llth Feb. 1850, on claims which 
 had been audited prior to its 
 passage . . . 
 
 Kate. 
 
 at 70 cts. 
 
 1 00 
 
 30 
 
 30 
 
 20 
 
 41,630 00 1 00 
 
 FIRST CLASS, 
 
 Consisting of audited or ascertained Claims. 
 
 Character of liabilities receipted for. Ostensible. 
 
 Ten per cent, consolidated fund 
 
 created by act of 7th June, 1837 $632,526 80 
 Ten per cent, consolidated fund 
 
 created by act of 7th June, 1837, 
 
 issued under an act for the relief 
 
 of Swartwout and others . . . 
 Ten per cent, funded debt created 
 
 by act of 5th February, 1840 . 
 Eight per cent, funded debt created 
 
 by act of 5th February, 1840 
 Eight per cent, treasury bonds 
 
 created by act of 5th Feb. 1840 
 Ten per cent, treasury notes issued 
 
 under act of the 9th June, 1837, 
 
 first issue 
 
 Ten per cent, treasury notes issued 
 
 under act of 9th June, 1837, se 
 cond issue 
 
 Treasury notes, without interest, 
 
 issued under act of 19th January, 
 
 1839, third issue 1,828,192 00 
 
 Audited paper issued under various 
 
 enactments 
 
 Miscellaneous liabilities .... 
 Ten per cent, bonds issued by com 
 missioners to negotiate a loan for 
 
 $5,000,000, viz.: 
 
 For loan obtained from Bank 
 United States 
 
 For purchase of steamer "Zavalla" 
 " " Naval vessels un 
 der contract with F. Dawson, 
 now owned by James Schott 
 and E. D. Whitney .... 
 
 50 
 
 25 
 
 various. 
 1 00 
 
 50 
 
 60 
 
 2,927,365 50 various. 
 
 $8,364,251 72 
 
 239,139 06 various. 
 
 Par yalue. 
 
 $442,768 76 
 
 7,970 43 
 226,200 00 
 
 7,284 00 
 153,360 00 
 
 41,630 00 
 165,685 50 
 
 457,048 00 
 
 69,451 52 
 42,387 73 
 
 400,000 00 
 97,953 50 
 
 140,000 00 
 $2,251,739 44 
 
 1,468,185 26 
 $3,719,914 70 
 
 113,664 80 
 
 20 
 
306 APPENDIX. 
 
 Character of liabilities receipted for. Ostensible. Rate. Par value. 
 
 Total amount filed of first class, in 
 cluding interest due thereon to 
 1st July, 1850 $8,603,390 78 $3,833,579 50 
 
 Less amount redeemed by issues 
 
 of land-script 1G,257 86 1 00 16,257 86 
 
 Total amount first class debt filed, 
 and unredeemed $8,587,132 92 $3,817,321 64 
 
 SECOND CLASS, 
 
 Consisting of Claims sufficiently authenticated to admit them to audit under the laws of 
 
 the late Republic. 
 
 Ostensible amount. Par value. 
 
 Amount filed and receipted for .... $755,218 05 $682,672 57 
 " " " as third class 
 
 claims since recognized 16,467 95 16,467 95 
 
 Amount audited by special acts of Legis 
 lature 72,077 28 72,077 28 
 
 Estimated amount on file not acted on . . 125,00000 125,00000 
 
 $968,763 28 $896,217 80 
 
 Less amount redeemed by the issue of 
 land-script and in payment of revenue 
 that accrued under the late Republic 6,318 16 3,450 17 
 
 Total amount of second class debts filed $962,44512 $892,76763 
 
 THIRD CLASS, 
 
 Consisting of Claims not sufficiently authenticated to authorize their being audited under 
 the laws of the late Republic. 
 
 Ostensible amount. Par value. 
 
 Amount filed and receipted for, less 
 
 $16,467 95, recognized and included in 
 the preceding statement of second class 
 
 claims $47,675 10 $47,675 10 
 
 Estimated amount on file not acted on . 50,000 00 50,000 00 
 
 Total amount third class filed .... $97,675 10 $97,675 10 
 
 RECAPITULATION. 
 
 Ostensible amount. Par value. 
 
 Amount of first class $8,587,13292 $3,817,32154 
 
 second class 962,445 12 892,767 63 
 
 third class J 97,675 10 97,675 10 
 
 Totals $9,647,253 14 $4,807,764 37 
 
 From the foregoing statement, it will be perceived that the entire 
 amount of claims filed, including interest on all liabilities stipulated to 
 
APPENDIX. 307 
 
 bear interest, amounts to $9,647,253 14; and, according to the value we 
 have assigned them, they were worth to the government $4,807,764 37. 
 
 As nothing has occurred since our report of 27th December, 1849, to 
 induce a change in our opinions respecting the rule which governed us in 
 assigning an equivalent value to each class of liabilities filed, we will re 
 peat the substance of the remarks in said report, as the reasons which 
 guided us in the discharge of that part of our official duty. 
 
 TREASURY NOTES. 
 
 The first issue of this character of indebtedness is known as the printed 
 interest notes. They were put in circulation during the fall and winter of 
 1837, for a temporary purpose, and until the engraved notes could be pro 
 cured; as soon as they were received, the further issue and reissue of the 
 former ceased. This occurred before any perceptible depreciation had 
 taken place, and it was the usage of the department to cancel them as they 
 were received. Hence, the government, for this class of liability, received 
 full consideration, and we have so rated it. 
 
 To the engraved interest notes, we have assigned an average value of 
 50 cents on the dollar. These notes were issued under the provisions of 
 the same act that the printed bills were, and took their place. About the 
 time of the first issue of these notes (the spring of 1838), this species of the 
 government paper commenced depreciating in value, so that, when the act 
 of 19th of January, 1839, prohibiting their further issue ; went into opera 
 tion, they were worth but about 40 cents on the dollar. 
 
 To the treasury notes not bearing interest, generally known as " red 
 backs," we have assigned an average value of 25 cents on the dollar. These 
 notes superseded the engraved interest notes above referred to, and the first 
 issue of them was made during the spring of 1839, when they were worth 
 about 37 cents on the dollar. They continued depreciating, so that in 
 1841, the government was compelled to pay them out at from 12 to 15 
 cents on the dollar. The value which we have given them is conceived to 
 be equitable, as an average, both to the government and the holders. It is 
 impossible to ascertain from the date of the issue of these bills, as shown 
 on the face, what they were worth when last paid out. For instance, a bill 
 issued in 1839, at say 37 1 cents on the dollar, and after having been 
 returned to the treasury in collection of revenue, may have been reissued 
 the year following at 25 cents on the dollar, and so on; and in 1841, 
 when it may have been last paid out at one-eighth of its ostensible value. 
 
 CONSOLIDATED FUNDED DEBT OF 7TH JUNE, 1837. 
 
 The stock known by this title was issued under the provisions of an act 
 of Congress approved June 7, 1837, and, could it be analyzed, would be sub- 
 
308 APPENDIX. 
 
 ject to the greatest variety of equivalent rates. We found it impracticable 
 to refer, in each instance, to the original record, to ascertain at what rate 
 each claim had been audited, for which this stock was issued. Even had, 
 or could we have done so, we would have failed to a great extent in acquir 
 ing this information, for the reason that the government, for a long time, 
 would not acknowledge any discount on her paper; and the result was that 
 accounts were made out, augmented in amount, so as to make good the de 
 ficit in the value of the currency. Hence, the only practicable mode which 
 suggested itself was to make an average of what the stock availed the go 
 vernment; which we accordingly did, and assigned to it a value of seventy 
 cents on the dollar. It is believed that this average is about what the go 
 vernment received in the main, and will, with a few exceptions (which will 
 be alluded to hereafter), fully remunerate the present holders, as it is now 
 generally in the hands of third parties, who, in most instances, acquired it 
 at a much less value from the original investor than that now assigned it. 
 
 EIGHT AND TEN PER CENT. FUNDED DEBT OF 5lH FEBRUARY, 1840. 
 
 "We have assigned to this class of securities an average value of thirty 
 cents on the dollar. This stock was issued under the authority of an act 
 of Congress approved February 5, 1840, and was created for the purpose of 
 withdrawing and lessening the amount of revenue currency then in circula 
 tion, with a view of enhancing the value of the residue. The inducements 
 held out to the creditors to surrender a revenue currency, and to take one 
 which could not be used in that way, was the promise of the government to 
 pay the stipulated interest semiannually in specie; which, it is well known, 
 she was unable to do. The value attached to this stock may act onerously 
 on some holders, but it will fully remunerate a large majority. It would 
 be much more difficult in this fund than any other to ascertain the exact 
 value the government received for the investments in it, as it is composed 
 of interest notes, " red backs," and audited paper. 
 
 EIGHT PER CENT. TREASURY BONDS. 
 
 Twenty cents on the dollar is the average equivalent value assigned this 
 class of the government paper. These bonds were issued to supersede, to 
 some extent, and take the place of treasury notes. There is less danger of 
 individual hardship growing out of the assignment of an average equivalent 
 value to these bonds, than that of any other of the government securities : 
 they were seldom ever issued at more than twenty-five cents on the dollar, 
 and rarely less than fifteen cents on the dollar. The value assigned them 
 is deemed equitable. 
 
APPENDIX. 309 
 
 AUDITED PAPER, 
 
 When issued at par, has been allowed accordingly; when less than par, 
 a corresponding deduction has been made; the records and vouchers showing 
 the rate at which it was audited. 
 
 In the first class, are included the bonds issued to the Bank of the United 
 States for a loan of $400,000 obtained from that institution in the year 
 1839; also, the claim of James Holford and associates for the purchase of 
 the steamer "Zavalla." A value corresponding to what the government 
 actually received has been assigned to each. 
 
 Since our last report, Messrs. James Schott and E. D. Whitney have filed 
 their claims, composed of one of the bonds issued to Frederick Dawson, of 
 Baltimore, in payment for the navy. These gentlemen, although not known 
 in the contract, are acknowledged by Mr. Dawson to have been equally in 
 terested in that transaction; and the readiness manifested in aiding the 
 cause of Texas, by undertaking and carrying out a contract requiring a large 
 pecuniary outlay at a time when the public credit was at an exceeding low 
 stage, procured for the contractors the commendations of the late Republic. 
 In assigning to this claim fifty cents on the dollar, as the value received by 
 the government, we have been governed by the law making the appropria 
 tion, and the contract entered into by the agent of the government and Mr. 
 Dawson. This contract, subsequently recognized by legislative enactment 
 (a copy of which accompanies), stipulates the price of the vessels at 
 $280,000 ; to secure the payment of which, two bonds of the Republic for 
 $280,000 each were deposited with the President of the Girard Bank at 
 Philadelphia, with the understanding that they could be redeemed, at the 
 end of twelve months, by the payment of $280,000 and ten per cent, interest 
 on the two bonds; otherwise, the said bonds to become the property of Mr. 
 Dawson. The government was unable to meet the payment at the time 
 specified ; and the president of the bank, according to instructions, delivered 
 the bonds, amounting to $560,000, to Mr. Dawson. We accompany this 
 statement with a communication from Messrs. Schott and Whitney, expla 
 natory of their claim, which is marked "B." 
 
 It may be proper to remark that the terms of the contract between the 
 government and James Holford and associates, for the purchase of the 
 steamer " Zavalla/ are similar to that entered into with Mr. Dawson. 
 
 In the average value assigned to the consolidated fund of 7th June, 1837, 
 there came to our knowledge a few cases of hardship, where the government 
 had received full consideration for the original obligation which had been 
 converted into this fund, and yet owned by the original investor. Had we 
 departed from the rate we had assigned to this or any other character of 
 liability in one instance, no matter how justifiable, others not possessing the 
 same merit would have claimed it; and the consequence would have been, 
 
310 APPENDIX. 
 
 that but few claimants would have been satisfied with any other classification 
 than that of par. For this reason, we determined, in all instances, to adhere 
 to the rate affixed to each class, and report such cases of hardship as might 
 arise, to the Legislature, in order that such relief may be awarded in the 
 premises as appears to be just. We therefore accompany this report with 
 a statement marked " C," of such cases, and hope the same will receive your 
 favorable consideration. In this connection, we refer you to the communi 
 cation of Dr. John W. King, upon the subject of his claim, which is in 
 closed in the statement last named. 
 
 On the liabilities stipulated to bear interest, we have calculated it from 
 the date of last payment to the 1st of July, 1850, in accordance with an 
 act approved February 11, 1850, except the interest treasury notes, on 
 which we have allowed interest to the 1st of January, 1841; as all holders 
 of this character of notes were required to fund them by that time, and the 
 appropriation for the further payment of interest on said notes was cancelled. 
 
 It may be proper to remark that we have attached the same value to the 
 interest which had accrued on the several classes of liabilities that we at 
 tached to the liabilities themselves. 
 
 THE SECOND CLASS 
 
 Is composed of claims against the late Republic of Texas which had not 
 previously been audited, but contracted under the sanction of law. We 
 have assigned to this class of claims, as we did to the first class, an equiva 
 lent value proportionate to what each claim availed the government in gold 
 and silver, as far as it was in our power to do. Owing to the large number 
 of claims filed immediately preceding the expiration of the law under which 
 we acted, we have been unable to complete the examination and registration 
 of the second and third classes. We have therefore ascertained, as nearly 
 as practicable, the amount of unexamined claims filed, and report them in 
 bulk. 
 
 THE THIRD CLASS. 
 
 This class is composed of claims for the auditing of which the existing 
 laws have made no provision, or where the proof is insufficient. In it, 
 however, are many meritorious claims, which will require special legislation 
 to place them on the same footing with valid claims against the government. 
 
 A number of claims have been filed for losses sustained during the Revo 
 lution and subsequent invasions, being caused by the destruction of property 
 by our own army and that of the enemy. On this character of claims, we 
 have declined taking any action; informing the claimants that the same 
 would be referred to the Legislature, for their consideration and action 
 thereon. These claims, numbered from 1 to 71, amounting to $426,314 03, 
 will be found accompanying, marked "D." 
 
APPENDIX. 311 
 
 It is necessary that some mode of assignment of the certificates of in 
 debtedness issued should be prescribed by law. 
 
 We have audited the claims of those who performed military service, 
 where the needful evidence was on file, regardless of any application of the 
 claimants holding the certificate, subject to his order or that of his legal 
 representative. As many of these parties are now deceased, the proceeds of 
 these claims should inure to the benefit of the heirs of the deceased. We, 
 therefore, respectfully recommend the enactment of the necessary law to 
 protect the rights of the widows and orphans of those who may have fallen 
 in the defence of the country, by prescribing the necessary regulations to 
 prevent persons from administering for the purposes of speculation. A law 
 of this character was enacted by the Congress of the late Republic, for the 
 protection of the estates .of deceased soldiers of the Georgia battalion. 
 [See article 1053, Hartley s Digest.] 
 
 Statements of several claims that would come under the second class were 
 presented within the term of limitation, but unaccompanied with the needful 
 proof. This the claimants not being able to procure before the expiration 
 of the limit, desire the privilege of producing hereafter. The statements 
 have been filed, but could not be acted on; and it may be a subject worthy 
 of consideration, whether additional time should not be allowed for the pre 
 sentation of testimony in such cases, if a general extension of the limit be 
 not granted. 
 
 Supposing that all the claims against the late government, as shown by 
 the official records, including the amount of supposed unaudited claims out 
 standing, had been filed as required by law, and assigning each class of 
 those not filed the same equivalent value we have to those filed, the debt 
 would then be as follows : 
 
 Ostensible. Par. 
 
 Claims filed, of all descriptions, including interest 
 
 as before stated $9,647,253 14 $4,807,764 37 
 
 Claims not filed, of all descriptions, including in 
 terest 2,789,738 20 2,019,514 27 
 
 Total debt with interest, including the amount 
 filed and unfiled $12,436,991 34 $6,827,278 64 
 
 All of which will more fully appear by reference to the accompanying 
 statement, marked "A." 
 
 Accompanying this report, is a register of the several claims acted on by 
 us, which we respectfully request may be returned when it shall no longer 
 be required by your honorable body. 
 
 .JOHN M. SWISHER, Auditor. 
 JAMES B. SHAW, Comptroller. 
 
312 APPENDIX. 
 
 V. 
 
 MR. PEARCE S REPORT. 
 Senate of the United States, August 17, 1852. 
 
 The Committee on Finance, to whom were referred sundry memorials 
 from creditors of the late Republic of Texas, report : 
 
 That the object of the memorialists is to obtain directly from the treasury 
 of the United States the payment of their claims against Texas, for which 
 that State had pledged its revenues from customs. They rest their claim 
 upon these grounds : 
 
 first: Because, when one nation is merged in another, " the superemi- 
 nent power which represents the individual and united sovereignty of both 
 becomes responsible for the debts of the subordinate State." 
 
 Second: Because the G-overnment of the United States having appro 
 priated to itself, under the articles of annexation, the revenues of Texas 
 arising from custom-house duties, which were, as the memorialists say, 
 solemnly mortgaged to them for the payment of their respective securities, 
 they have a clear right to ask payment of Congress. 
 
 And, third: They consider the obligation of the United States to pay 
 these claims as virtually admitted by the provisions of the act of Septem 
 ber, 1850, commonly called the Texas " Boundary Law." 
 
 The first of these reasons the committee do not think fairly applicable to 
 the case. It is true that the publicists recognize the doctrine that, when a 
 lawful power contracts, it lays an obligation on the nation itself, and conse 
 quently on all the future conductors of the community. So that, when a 
 separate sovereignty or people, being under such obligations, becomes united 
 with and merged in another, the obligations of the government or people so 
 merged fall upon the people or power by whom they are so absorbed ; and 
 that this is a just and proper transfer of obligation must be obvious when- 
 it is considered that otherwise the obligations of the community which thus 
 loses its separate existence would be entirely annulled, since there would 
 be no body politic of whom the performance of such obligations could be 
 demanded. 
 
 But that is not the case of Texas. Under our peculiar form of govern 
 ment and the articles of annexation, she has indeed parted with her exter 
 nal sovereignty. That, by our constitutional provisions, is vested exclu 
 sively in the Union. But her internal sovereignty, though somewhat 
 modified in certain particulars by the Constitution of the United States, 
 
APPENDIX. 313 
 
 still remains in full force and vigor. She is still a separate State, with an 
 independent government; a distinct community, with full power and right 
 to manage her own separate affairs ; still liable for her debts, to the pay 
 ment of which, according to the terms of the contract, she has pledged her 
 faith, her revenues, and her honor ; with full capacity to contract new lia 
 bilities, with ample resources to pay all her debts, and with every induce 
 ment of plighted faith, of public character, of justice and honor, to redeem 
 those obligations which she contracted when her fortunes seemed almost 
 desperate, and which furnished her with the means of securing liberty, 
 independence, and empire. 
 
 The second reason, however, has more force. 
 
 The publicists maintain that when a province is conquered and the con 
 quest is consummated by cession, it ceases to be a part of the State from 
 which it is wrested, and becomes a stranger to its obligations. " But in 
 that case the conqueror acquires no rights but those of the State with 
 which he is at war, and takes subject to all absolute or qualified alienations 
 previously made/ 7 Thus the King of Prussia, when he acquired Silesia by 
 conquest and cession, bound himself by treaty to pay the debts for which 
 that province had been mortgaged to British subjects. But, without such 
 express stipulation, Silesia would still have remained subject to the mort 
 gage, for he could conquer no rights but such as were vested in the enemy. 
 
 If this doctrine be true, it will hardly be denied that the peaceful annexa 
 tion, by legislative compact, of one nation to another, by which the pledged 
 revenues of the one have been transferred to the other, must work a like 
 result, and that the power which takes such pledged revenues must take 
 them cum onere. While a separate Republic, Texas had contracted debts 
 by the issue of stock, bonds, and treasury notes, for which she had, in 
 various forms, pledged her revenues from customs. This fact was well 
 known to Congress, as well at the time of annexation as at the period of pass 
 ing the Texas "Boundary Law." On the former occasion, by the articles 
 of annexation, it was provided that Texas should retain all the vacant and 
 unappropriated lands lying within her limits, to be applied to the payment 
 of her debts and liabilities, which in no event were to become a charge 
 upon the Government of the United States. Under this provision, Texas 
 has bound herself to the United States to pay her liabilities from the pro 
 ceeds of her public lands, and is estopped from asking the United States to 
 assume these liabilities. But to these articles of annexation, the creditors of 
 Texas were no parties ; and while they may well demand of Texas the pay 
 ment of their securities according to their tenor and form, they are not 
 estopped from saying to the Government of the United States that, as Texas 
 does not pay these securities, and as the United States have possessed 
 themselves of a portion of the resources which were pledged to give value 
 
314 APPENDIX. 
 
 and credit to them, the United States should make them equitable compen 
 sation for the diversion of these resources from the purposes to which they 
 were so pledged. This view seems to have been taken by Congress in the 
 passage of the Texas " Boundary Bill." It is provided in that bill that, in 
 consideration of certain concessions of Texas, the United States " shall 
 pay to the State of Texas ten millions of dollars, in a stock bearing five 
 per cent, interest, and redeemable at the end of fourteen years, the 
 interest payable half yearly at the treasury of the United States." But it 
 is also provided that " no more than five millions of said stock shall be 
 issued until the creditors of the State holding bonds and other certificates 
 of stock of Texas, for which duties on imposts were specially pledged, shall 
 first file at the treasury of the United States releases of all claims against 
 the United States for or on account of said bonds or certificates, in such 
 form as shall be prescribed by the Secretary of the Treasury, and approved 
 by the President of the United States." This last provision shows that 
 Congress designed to secure a settlement by Texas with such of her credit 
 ors as held evidences of her debt to them, secured by a pledge of the duties 
 on imports, and that the reserved five millions were not to be paid to Texas 
 until she had effected such settlement, and thus relieve the United States 
 from the equitable demand which these creditors might have against the 
 latter government. The proceedings in Congress upon the passage of this 
 act fully confirm this view. It appears, therefore, that the United States 
 have acknowledged a claim by these creditors upon them, and that, at the 
 time of the passage of the said act, the claims of this character were esti 
 mated not to exceed five millions of dollars. It has since appeared that, 
 besides the evidences of her debt on the face of which the revenues from 
 customs eo nomini were pledged for their payment, there are other evi 
 dences of Texan debt, in regard to which the same pledge was given, though 
 not in the same form. 
 
 By the act of 7th June, 1837, the Republic of Texas pledged her public 
 faith, and " so much of the revenues arising from imports, &c., as may be 
 necessary to meet the annual interest of the funded debt." The loan 
 effected under this act, with interest, was, on the 1st of July, 1850, 
 $1,651,590 02. This class of claims the President of the United States 
 and Secretary of the Treasury consider as coming within the terms of the 
 act of Congress of 1850, since a pledge for the perpetual payment of inte 
 rest is in effect a pledge for the payment of principal also. 
 
 Other loans were made and debts contracted by Texas, to which the same 
 pledge applies by virtue of the fifteenth section of the Texan law of 14th 
 January, 1840. This provides " that for the redemption of all loans nego 
 tiated by the authority of Texas, independently of the reservation of the 
 sinking fund, the sales of the public lands, its revenues, and public faith 
 
APPENDIX. 315 
 
 are solemnly pledged." This general pledge of " the revenues" of Texas 
 includes a special pledge of the duties on imports. Its effect is precisely 
 the same as if all the sources of revenue were separately designated ; since, 
 if this were not the case, the general pledge of its revenues would be a 
 pledge of no single item of revenue, and therefore no pledge of anything 
 at all. 
 
 Other debts were created under authority of an act of 5th July, 1840, 
 the third section of which provides that the bonds before referred to shall 
 be at all times receivable by any collector of revenue, or at the Treasury 
 Department, in payment of any debt to the government, or any duties by 
 imports or direct taxation for the amount and value of such funds, and the 
 interest which may have accrued thereon. 
 
 This pledge is evidenced on the face of the issues under this act, the 
 words receivable for all government dues being conspicuously printed upon 
 them. This quality of being receivable for all public dues, duties on imports 
 included, seems to the committee to be in effect a pledge of duties on im 
 ports for their payment. Under this construction, which the President and 
 Secretary of the Treasury have adopted (and as the committee think pro 
 perly adopted), the amount of Texas debt for which the holders have such 
 an equitable demand, as the committee have before stated, against the 
 United States, considerably exceeds the sum of five millions. The exact 
 amount has not as yet been ascertained by the committee, but it is believed 
 that the whole, principal and interest, exceeds eight millions of dollars. 
 
 It is understood that no part of this debt, principal or interest, has been 
 paid by Texas; neither the proceeds of her public lands, according to the 
 articles of annexation, nor the duties from imports, having been in any 
 manner applied to this purpose. Nor has Texas effected any settlement 
 with these creditors whereby the United States have been released from 
 these claims, though nearly two years have elapsed since the passage of the 
 act of Congress of 1850, and more than eighteen months since the accept 
 ance of that act by Texas. 
 
 By an act passed on the 31st of January, 1852, the State of Texas has 
 declared its willingness to settle with these creditors, not according to the 
 terms of their contracts, and the tenor of the evidences of debt held by them, 
 except in a few instances, but at certain rates, varying from seventy to 
 twenty per centum. 
 
 The second section of this act provides that payment at these reduced 
 rates shall not be made until " the Governor of this State shall be notified 
 by the President of the United States that the Secretary of the Treasury of 
 the United States has been required by law to issue to the State of Texas 
 the five millions of dollars of stock withheld under the provisions of said 
 act, approved 9th September, 1850, until certain creditors shall have filed 
 
316 APPENDIX. 
 
 releases at the Treasury of the United States as therein required, or that 
 said Secretary has been required by law to issue to the said State of Texas 
 sums of said stock equal to the sums for which the State may at any time 
 present the required releases from any portion of said creditors at the 
 Treasury of the United States, after which notice, such claim or claims 
 shall be paid, as provided for in other cases," &c. 
 
 This provision is wholly unsatisfactory to the most of the creditors hold 
 ing these debts, though it would doubtless be accepted by the comparatively 
 few whose claims are scaled at the rate of seventy per cent. 
 
 The committee do not think that it would become the United States, by 
 the passage of such a law as is contemplated in the above cited act, to unite 
 with Texas in the effort to compel her creditors to submit to the arbitrary 
 reduction of these claims which Texas proposes. And inasmuch as no portion 
 of these claims has been paid by Texas since the date of annexation, nor 
 any satisfactory arrangement made or proposed for their liquidation and the 
 release of the United States since the passage of the " Boundary Bill," the 
 committee think that the Government of the United States should protect 
 itself from these demands, increasing as they are, for the most part, at the 
 rate of ten per cent, per annum, and relieve the necessities of these creditors, 
 to many of whom longer delay must prove entirely ruinous, by the passage 
 of some act which shall at the same time satisfy the creditors, relieve the 
 United States from further demands by them, and meet the claim of Texas 
 for the reserved five millions. 
 
 This they think may be effected by issuing to the said creditors stock of 
 the United States to the amount of $8,555,000, bearing an interest of five 
 per cent, per annum, redeemable at the pleasure of the Government of the 
 
 United States after years, and taking from the creditors their receipts 
 
 in full and assignments of their evidences of debts, which may be held by 
 the United States as a set-off to the claim of Texas to the five millions re 
 served under the act of September , 1850. 
 
 This arrangement, it is believed, would be perfectly satisfactory to the 
 creditors of Texas, entirely equitable on the part of the United States, and 
 defensible as regards the State of Texas, while at the same time such provi 
 sions may be adopted as in the end will make this arrangement no more 
 burdensome to the National Treasury than if the reserved five millions were 
 applied to these claims or paid to Texas. 
 
APPENDIX. 317 
 
 W. 
 
 DEBTS OF THE REPUBLIC AND DEBTS OF THE STATE. 
 
 After the note to Chapter XXX. was in the hands of the printer, we, for 
 the first time, saw a communication on this subject in the Washington 
 Union of March 13, 1852, so much of which as our typographical arrange 
 ments will admit of, we shall now give to the reader. 
 
 Adverting to the assumption made by some, that " the final decree of 
 Texas, as to the amount and character of the Texas debt, is binding upon 
 the United States Government," the writer says 
 
 " If this be the legal and constitutional construction of the law of the 9th 
 of September, 1850, in which the Federal Government requires certain 
 holders of the debt to release her, as a condition precedent to her paying 
 Texas a given sum of money, the State has a right to certify that there is 
 no debt, or that she owes nothing, and the United States would be bound by 
 it. The release from the creditors required by the law would be full and 
 complete in a law of the State declaring that there was no debt, and this 
 sovereign declaration of a sovereign State to another power equally sovereign 
 would exonerate both from all responsibility for the debt in question. 
 
 tf The creditors of Texas have the right, nay, have been required, to pre 
 sent their claims at the treasury in Washington, and in so doing have noti 
 fied the Federal Government of the amount and character of them. Fur 
 thermore, the Secretary of the Treasury, previous to the passage of the late 
 law enacted by the Texas Legislature, had received officially from the authori 
 ties of the State, all the laws of the late Republic, creating and authorizing 
 the various classes of debt, as well as the amount and character of it. These 
 laws, passed from 1836 to 1840, form/ in the language of the Secretary, 
 1 the basis of the contract between the present holders and the State/ and 
 from them it is ascertained that the amount of the debt is much larger than 
 that certified by the recent law of Texas. Now, in adjusting this discre 
 pancy, by which law is Congress to be governed ? by that creating the 
 debt, or by that reducing or denying it ? 
 
 " The cardinal error of those who reason in this way lies in the unquali 
 fied assumption that, as Texas is a sovereign State, her acts, although sub 
 versive of her own constitution, cannot be questioned or set aside by any 
 judicial proceeding. This doctrine is admissible and true as between her 
 and a private citizen, but untenable where the Federal Government or an 
 other State is the party litigant. The Constitution of the United States 
 points out the method of adjusting difficulties of this character. The ques- 
 
318 APPENDIX. 
 
 tion under discussion involves a case in point. The Republic of Texas, by 
 various laws obtained various loans, and issued the evidence of such indebted- 
 dess in bonds and treasury notes. When she ceased to exist as a political 
 body, and was merged into the present State, the latter bound herself to the 
 United States, in the treaty of annexation, to pay the debt of the former 
 out of the proceeds of the public lands. The State also, in her constitution, 
 secured to the holders of the obligations of the late Republic all the rights 
 which they had against her during her political existence. In other words, 
 the State of Texas, when erected into a member of the Union, declared, in 
 her organic law, that the debt of the Republic should be determined by the 
 laws creating it." 
 
 The case appears to us to be briefly this : 
 
 A sovereign State has, by virtue of her sovereignty, the right, i. e. } the 
 political power, to repudiate her debts, either wholly or in part, and that 
 with or without reason. 
 
 But the legislature of a State is not The State. It is a body of limited 
 powers, denned by the constitution of the State, and, in a certain sense, by 
 the Constitution of the United States. As such, the legislature of a State 
 has no right to repudiate contract debts ; such an act being subversive of 
 the organic law to which it owes its existence, and by which its powers are 
 denned. If the contract debts of a State are repudiated, it can be only by 
 The State, that is, by the people of the State in convention assembled. 
 
 The Republic of Texas incurred certain debts for which she pledged her 
 revenue. 
 
 The State of Texas, that is, the people of Texas, in convention assem 
 bled, in the articles of annexation which they adopted as part of their con 
 stitution, assumed these debts as defined by the Republic. 
 
 The Legislature of Texas has no authority to set aside or define < r by 
 municipal regulations," the debts thus assumed by the State of Texas. 
 
 Texas having failed to discharge these debts according to her compact 
 with the United States, the Federal Government becomes liable for them, 
 both according to the principles of equity and the laws of nations. 
 
 The Federal Government is liable for these debts, as defined by the 
 Republic of Texas, and as assumed by the State of Texas, that is, by the 
 people in convention assembled. The Legislature of Texas, a body of 
 limited powers, has no authority to set aside the decisions of the Republic 
 of Texas and of the State of Texas. 
 
 The doctrine of State rights cannot, therefore, be invoked in defence of 
 the course the Legislature of Texas has pursued ; and, even if it could, it 
 ought not to be. When State legislatures violate the obligations of con 
 tracts, State-Rights men ought to be foremost in denouncing such iniquity. 
 
INDEX. 
 
 PAGE 
 
 ACCOUNTS, ordinance respecting the settlement of . .24 
 
 Acts, copies of 
 
 annexation act . . . ... . . 292 
 
 boundary act ....... 294 
 
 act of Texas assenting to boundary act . . . 179 
 
 liquidation act ....... 295 
 
 scaling act ....... 158 
 
 confirming award of auditor and comptroller . . . 202 
 
 Acts, extracts from 
 
 loan act of December, 1835 ..... 25 
 
 treasury-note act of January 7, 1836 .... 27 
 
 establishing General Land-Office . . 57 
 
 for augmenting navy ...... 70 
 
 making appropriations for navy . . . . 
 
 for more certain operation of sinking fund . . . 100 
 
 for issuing treasury bonds, February 5, 1840 . . . 100 
 
 for funding promissory notes, February 5, 1840 . . 101 
 
 ublic recognizances payable in gold an 
 rescinding interest on public debts after July 1, 1850 . . 168 
 
 making public recognizances payable in gold and silver . 123 
 
 imposing duties on imports, December 20, 1836 . . 218 
 
 to raise revenue by direct taxation, June 12, 1837 . . 218 
 
 to consolidate public debt, June 7, 1837 . . . 219 
 
 authorizing issue of promissory notes, June 9, 1837 . . 219 
 
 to authorize five million loan ..... 220 
 
 for more certain operation of sinking fund . . . 221 
 
 creating funds for support of government, 1840 . . 222 
 
 for funding the liabilities of government, 1840 . . 223 
 
 repealing act to provide for redemption of treasury notes . 223 
 to authorize issue of exchequer bill .... 224 
 
 to regulate collection of import duties .... 224 
 
 granting McKinney and Williams power to issue circulating 
 
 notes ........ 231 
 
 prohibiting paper-money issues .... 233 
 
 Agricultural and Commercial Bank, recognized by Government of 
 
 Texas ........ 59 
 
 proceedings under its charter .... 231, 234, 235 
 
 Agricultural statistics of Texas ..... 291 
 
 Annexation, resolution of, passed by Congress . . .130 
 
 assented to by Texas . . . . . .131 
 
 good effects of . . . . . . 146, 251 
 
 copy of resolution ...... 292 
 
 pledges of faith therein violated by Texas . . . 226 
 
320 INDEX. 
 
 PAGE 
 
 Archer, Mr. Branch Tanner, extracts from his address to General 
 
 Consultation ....... 19 
 
 Army, ordinances respecting ..... 23, 55, 93 
 
 Assessments in Texas, tabular view of .... 289 
 
 Assignees of public debts, their cases in some instances harder than 
 
 those of original claimants ..... 200 
 
 Audited accounts should not be reopened . . . . ix. 268 
 
 Audited claims made exchangeable for land-script, February, 1850 . 168 
 
 Audited drafts made receivable for land dues .... 25 
 
 amounts issued ....... 267 
 
 final disposition of them . ..... 268 
 
 violations of faith in respect to them .... 218 
 
 Auditor and comptroller, extracts from their report of November, 
 
 1851, and remarks on the same .... 191 
 
 act passed confirming their scaling award . . . 202 
 
 copy of their report of November, 1851 . . . 304 
 
 Bank of Agriculture and Commerce (see Agricultural and Commer 
 cial Bank) ....... 59 
 
 other bank prospects ...... 66 
 
 Bank-notes, influx of from the United States in 1835-37 . . 228 
 
 their issue prohibited by constitution and laws of Texas . 232-3 
 
 Banking by government, the worst form of banking ... 99 
 
 Bank stocks, prices of in Philadelphia, 1842, 1845, and 1852 . 261 
 
 Banks, efforts to alter constitutional provisions respecting . . 238 
 
 "Barring" debts of the Republic, act for, its character . . 225 
 
 Bell, Governor, his views of the obligations of public debt, . x 
 
 extracts from and comments on his message of November, 1851 191 
 
 vetoes liquidation act ...... 203 
 
 further extracts from his message of 1851 . . 249,251 
 
 Benton, Mr., makes the initiative motion in the Senate respecting 
 
 affairs of Texas ...... 171 
 
 Bonds of United States, sale to the amount of $1,000,000 ordered by 
 
 Texas ........ 206 
 
 Borden, Mr. Gail, his payments into the treasury . . .18, 62 
 
 Boundary act, passed by Congress of United States . . . 178 
 
 assented to by Texas ...... 179 
 
 copy of boundary act ...... 294 
 
 violated by Texas . . . . . .226 
 
 Bourgeois, Mr., preliminaries of a loan from him . . . 119 
 
 the loan defeated ...... 123 
 
 Bullock, Mr., and his pigs 109-112 
 
 Burnet, President, extracts from his message .... 50-51 
 Butler, Mr., of South Carolina, his remarks in United States Senate, 
 
 August 26, 1852 . . . .,.- . . 212 
 
 Chalmers, Mr., recommends that the debts be funded in a stock bear 
 ing two and a half per cent, interest . . . 113 
 Chenoweth, Mr., regards the debt as beneficial ... 56 
 Circulating paper, gross amount of . . . . 230 
 Civil list, moderate allowance for . . . .27 
 
 allowance greatly increased ..... 55 
 
 Clay, Mr., his motion in the Senate ..... 172 
 
 extracts from his speech ..... 172 
 
 Cochran, Mr. James, " advances several hundred dollars" . . 18 
 
 Comptroller, see Auditor and Comptroller, .... 
 
 Congress of Texas, first, proceedings under first session . . 54 
 
 " " second session . . 62 
 
INDEX. 321 
 
 PAGE 
 
 Congress of Texas, second proceedings under called session . . 68 
 
 " " first regular session . . 71 
 
 " second session . . 77 
 
 third, meets November 5, 1838 ... 82 
 
 fourth 
 
 November 11, 1839 
 
 fifth November 2, 1840 . . .104 
 
 sixth November, 1841 . . .116 
 
 " June, 1842 (special session) . 118 
 
 seventh November, 1842 . . . 120 
 
 eighth December, 1843 . . .123 
 
 ninth December, 1844 . . .126 
 
 " June, 1845 (special session) . . 130 
 
 Congress of United States (see United States) 
 
 Consolidated Fund of 1837, act passed for establishing . . 65 
 
 remarks on as scaled ...... 193 
 
 breaches of faith respecting ..... 219 
 
 Constitution of State of Texas, provisions in it respecting public debt 
 and government paper money .... 
 
 respecting obligation of contracts .... 167 
 
 respecting banking and paper money .... 232 
 
 Consultation, The General, meets October 16, 1835 ... 17 
 proceedings under it . . . . . 17, 22 
 
 Continental money ; comparison of it and Texas paper money . 135 
 its having been scaled by the United States no justification of 
 
 Texas 244 
 
 Corwin, Mr., Secretary of the Treasury of the United States ; his re 
 port on the debts of Texas . . . .298 
 
 Creditors of Texas, divided into two parties .... 205 
 
 diversified action of ...... 207 
 
 present condition of ...... 215 
 
 Currency in Texas, general view of . . . . 227 
 
 Customs, amounts received in different years . . . 271 
 
 amounts received at different ports, 1843-44 . . . 278 
 
 synopsis of acts respecting ..... 282 
 
 Dawson, Schott, and Whitney ; remarks on their case . . 197 
 
 Debt, public, a public evil ...... viii 
 
 Debt of Texas, its small amount, Sept. 1836 . 52 
 
 Sept. 1837 .... 73 
 
 Debt, payable, of Texas, tabular view of . . . . 204 
 
 Debt, suspended " ... 206 
 
 Debts of the Republic and debts of the State, distinction between 216, 317 
 
 Debt of Texas at different periods, tabular view of . . . 275 
 
 First class ... . . . . .305 
 
 Second class ....... 310 
 
 Third class . . . . .310 
 
 Direct taxes, amount received in different years . . .271 
 
 Dues on land, collectors appointed ..... 24 
 
 Dues, public, synopsis of tenders of . . . . . 284 
 
 Eight per cent, funded debt of 1840, authorized . . . 101 
 
 remarks on as scaled ...... 194 
 
 violations of faith respecting ..... 223 
 
 hard case of holders of . . . . . . 264 
 
 England, government of, rates at which it has borrowed . . 149 
 
 Equation of currencies proper in settling non-audited accounts . 254 
 
 Erwin, Mr., loan from ....... 53 
 
 21 
 
322 INDEX. 
 
 PAGE 
 
 Exchequer bills issued ....... 116 
 
 ordered to be received at only their market value . . 118 
 depreciation of . . . . . . 117-119 
 
 small denominations issued ..... 122 
 
 their continued depreciation . . . . 124 
 
 their further issue prohibited ..... 129 
 
 violations of faith in respect to them .... 224 
 
 did not become a general currency .... 230 
 
 table of amounts issued ...... 279 
 
 their rates of value, 1843-44 ..... 279 
 
 " ^ 1844-45 280 
 
 English, amounts issued ..... 144 
 
 not paid in for duties ...... 144 
 
 Expenditures of State of Texas ..... 286 
 
 Exports of Texas, 1838 to 1845, tabular views of . . 277-8 
 
 Finance Committee, first report of . . . .31 
 
 their plan for raising revenue . . . .32 
 
 Fiscal policy of Texas, general view of .... 135 
 
 Five million loan authorized ...... 57 
 
 act to authorize modified ..... 80 
 
 violations of faith respecting ..... 220 
 
 Funded debt of 1840, violations of faith in regard to it . . 223 
 
 hard case of holders of . . . . . . 264 
 
 Funding of public debt, act to authorize, June 7, 1837 . . 65 
 
 stock books again opened . . . .94 
 
 act of 1840, summary of . . . . , . 101 
 
 repealed Feb. 1841 . 106 
 
 Galveston town-plot, sale of . . . . .56 
 
 General Consultation, The, proceedings under ... 17 
 
 Government bank proposed by President Lamar ... 87 
 
 Government banking the worst form of banking ... 90 
 
 Government ad interim, proceedings under .... 49 
 
 Government, Provisional, legislative proceedings under . . 23 
 
 executive . . .29, 42 
 
 in relation to public lands ..... 37 
 
 extract from its declaration ..... 217-18 
 
 Greene, Gen. Thos. J., mortgages his property in the United States 
 
 for the benefit of Texas ..... 55 
 
 Great Britain, rates at which it has negotiated loans . . . 149 
 
 amount of exchequer bills issued .... 144 
 
 does not suffer them to be paid in for duties . . . 144 
 
 Hall, Capt., brings donations from citizens of New Orleans . . 21 
 Hamilton, Gen. J., his letter announcing that a loan had been ef 
 fected 107 
 
 extract of his letter from London, May 18, 1841 . . 109 
 
 his efforts defeated by proceedings at Austin . . 110-112 
 
 "Hammered dollars" a currency in Texas .... 227 
 
 Hard money policy commences January, 1844 . . . 123 
 
 Hard money laws of Texas, their good effects . . . 236 
 
 Hardships of old soldiers and civil officers ... 164 
 Henderson, Lieut.-Governor, extracts from his communication to the 
 
 legislature, 1851 ...... 250 
 
 Holford, James, debt due to him ..... 199 
 
 Holly Springs, bank of, circulation of its notes in Texas . . 235 
 
INDEX. 323 
 
 PAGE 
 
 Houston, Gen. Samuel, installed as President ... 54 
 
 vetoes act to open land-offices ..... 58 
 
 stops the sale of land-script at New Orleans and Mobile . 64 
 
 his message of June 6, 1837 ..... 67 
 
 extract from his message of December 21, 1837 . . 72 
 
 opposes unsuccessfully a new issue of treasury-notes . . 79 
 
 his second term commences, December, 1841 . . . 116 
 
 extracts from his address to seventh congress . . . 120-1 
 
 his account of archives insurrection .... 121 
 
 denounces repudiation ...... 123 
 
 comparison of expenditures in his second term with those un 
 der his predecessor ...... 126 
 
 idem of imports and exports, ..... 128 
 
 his remarks in United States Senate, August 17, 1852 208, 211 
 
 Hutchins, Mr., of Natchez, his donation to Texas ... 32 
 
 Imports, tabular views of ...... 277-8 
 
 acts respecting duties on .... 24, 56, 73 
 
 synopsis of acts respecting duties on . . . . 282 
 
 Interest on all liabilities of Republic stopped after July 1, 1850 . 168 
 
 the injustice of this act ...... 201 
 
 the act a breach of faith ...... 225 
 
 Interest on private debts, the laws of Texas concerning, and the 
 
 good effects thereof ...... 240 
 
 Jaudon, Mr. Samuel, ex-cashier of United States Bank, intended to 
 
 be President of National Bank of Texas . . . 108 
 
 Jones, President Anson, his sound views of public debt and paper- 
 issues ........ 129 
 
 Kauffman, Mr., speaker of the fifth Congress, extracts from his re 
 marks 104,106 
 
 Lamar, Mirabeau B., installed as President .... 87 
 
 his first message ...... 87 
 
 proposes a Government Bank ..... 87-90 
 
 extracts from his message to Fourth Congress ... 98 
 
 condition of affairs at close of his administration . . 102 
 
 Land, grants to soldiers and settlers . . .22, 27, 28, 75, 93 
 
 amount held by individuals .... 132, 254 
 
 " in cultivation ...... 254 
 
 " owned by State of Texas . . . 132, 281 
 
 overrated as a fiscal resource ..... 134 
 
 cession of to United States recommended . . 146, 156, 161 
 
 recommendation to pay public creditors with . . . 161 
 
 Land-dues, amount received in different years . . . 271 
 
 Land-offices, closed by Provisional Government ... 22 
 
 act for opening of them ...... 57 
 
 opening of them postponed ..... 68 
 
 new act for opening of them ..... 71 
 
 Land-office archives, insurgents take possession of . . 121 
 
 Land-office, General, act for establishing .... 57 
 
 commissioner of, his report to November 1, 1838 . . 82 
 
 November, 1845 . . 131 
 
 November, 1851 . . 280 
 
 Land-script, unreasonable expectations from the sale of . 75, 140 
 
 the whole amount sold ...... 280 
 
 audited claims exchangeable for .... 168 
 
324 
 
 INDEX. 
 
 Land speculations in Texas, remarks on 
 
 their extent ...... 
 
 Land speculators rebellion . 
 
 Land titles in Texas, difficulties respecting 
 
 Legislature of State of Texas, the first meets February, 1846 
 
 the second meets December, 1847 
 
 the third meets November, 1849 . . . 
 
 the fourth meets November, 1850 
 
 the fourth meets November, 1851 . . . 
 
 License taxes, amount received in different years 
 Liquidation act passed ...... 
 
 copy of it . . . . . . 
 
 Loan acts, to borrow $100,000 . 
 1,000,000 
 
 " " $20,000 . 
 
 " ^ $5,000,000 . . . . 
 
 the last modified . 
 
 another act for $1,000,000 . 
 Loan agents sent to United States to negotiate 
 
 rumors of their success . 
 
 agents sent to Europe . 
 Loans effected, from Mr. Brookfield . 
 
 Mr. Triplett and others . 
 
 Mr. Erwin and others . 
 
 Pennsylvania Bank of United States 
 
 joy produced by prospect of a loan in Europe . 
 
 illusions respecting . 
 
 PAGE 
 
 253 
 
 254 
 
 37-41 
 
 170 
 
 146 
 
 156 
 
 161 
 
 179 
 
 181 
 
 271 
 
 203 
 
 295 
 
 25 
 
 25 
 
 57 
 
 57 
 
 80 
 
 94 
 
 21 
 
 42 
 
 96 
 
 36 
 
 53 
 
 53 
 
 98 
 
 96-98 
 140 
 
 27 
 
 Marque and reprisal, letters of, granted .... 
 
 Mason, Mr., of Virginia, his motion and remarks in United States 
 
 Senate, August 26, 1852 ..... 208 
 
 Mexico, the Texans threaten to invade it .... 105 
 
 McKinney and Williams offer to advance money to Texas . . 20 
 
 authorized to issue circulating notes .... 231 
 
 Military operations, glances at .... 18, 19, 49 
 
 1 Mills money" . . . . . 235 
 Mobile, complaints respecting agency at . . .76 
 Mr. Moore, of Pennsylvania, his remarks in United States House of 
 
 Representatives, on Texas s claim to part of New Mexico . 177 
 
 Nacogdoches Land Speculators, troubles with . . . 38-41 
 
 National Bank, recommended by President Lamar ... 87 
 
 plan of, prepared by Mr. J. Horseley Palmer . . . 108 
 
 Navy, ordinance to establish ...... 23 
 
 two vessels procured ...... 42 
 
 deplorable condition of . . . . . .54 
 
 act to increase ....... 6B 
 
 President Houston calls attention to its inefficiency . . -Q3 
 
 act to augment it ...... ft) 
 
 gloomy report on ...... 73 
 
 totally destroyed ...... 93 
 
 steamship " Zavalla" purchased .... 93 
 
 other vessels procured from Dawson, Schott, and Whitney . 93 
 
 appropriations for navy ..... 93 
 
 New Orleans, contributions from citizens of . . . .21 
 
 agency at, complaints of . . . 76 
 
 Northern Bank of Mississippi, circulation of its notes in Texas . 235 
 
INDEX. 325 
 
 PAGE 
 
 Ohio bank-law, said to be means of establishing a bank in Texas . 234 
 
 Paper-money disease, hereditary in Americans 
 
 Paper-money issues prohibited by Constitution and laws of State 
 
 of Texas 131,232-3 
 
 how these laws are evaded ..... 235 
 
 Paper-money panic in Texas ...... 236 
 
 Pearce, Mr., of Maryland, introduces the "Boundary Bill" in the 
 
 United States Senate ...... ^174 
 
 extracts from his speech ..... 174-7 
 
 makes report to Senate on debt of Texas, August 17, 1852 . 207 
 his speech in the Senate, August 26, 1852 . . .209-11 
 
 copy of his report ...... 312 
 
 Pratt, Mr., of Maryland, his remarks in Senate, August 26, 1832 . 212-14 
 
 Promissory notes, amount issued ..... 268 
 
 (see treasury notes.) 
 
 Provisional Government, proceedings under .... 23-48 
 
 extract from its declaration . 218 
 
 Public debt a public evil . . . viii 
 
 Public dues on land, collectors appointed .... 25 
 
 amount collected in different years . . . .271 
 
 Public tenders, frequent changes of . . . . 142 
 
 synopsis of changes of . . . . . . 284 
 
 " Red backs." See treasury notes. 
 
 Revenue, estimate of . . . . . . . 98-99 
 
 Revenue laws of Texas, synopsis of . . . . 282 
 
 Revenue system of Texas, frequent changes in ... 141 
 
 Revenue of the Republic, tabular view of .... 270-2 
 
 in what kind of funds received ..... 273 
 
 Revenue of the State, tabular view of ..... 286 
 
 Robinson, J. W., made Lieutenant-Governor .... 21 
 
 made acting Governor ...... 48 
 
 Royal, Mr. R. R., President of Council .... 17 
 
 advances money to Texas ..... 18 
 
 Saligny, Mr. de, Minister from France, his difficulties with the Texan 
 
 Government ...... 109-112 
 
 Santa Anna captured by the Texans . . . . .49 
 
 Scaling of the interest of the debt proposed by Mr. Chalmers . 113 
 of principal recommended to first Legislature by Committee of 
 
 House ........ 146 
 
 and also by Committee of Senate .... 153 
 
 act passed March 20, 1848 ..... 158 
 
 copy of act ....... 158 
 
 difficulty in applying its principles .... 199 
 
 the act a breach of faith ...... 225 
 
 examination of popular arguments in favor of . . . 255 
 Schott and Whitney, extracts from their letter to the Governor-of 
 
 Texas 198 
 
 Sedgwick, Mr., of Massachusetts, his view of contract debts . . ix 
 
 " Shin-plasters," a currency in Texas ..... 228 
 
 Sinking Fund established ...... 94 
 
 act to strengthen it ...... 100 
 
 Smith, Henry, elected Governor ..... 21 
 
 objects to management of money matters ... 33 
 
 hates the Nacogdoches land speculators . . 40 
 
326 INDEX. 
 
 PAGE 
 
 Smith, Henry, quarrels with the Council .... 43-48 
 
 made Secretary of the Treasury .... 64 
 
 reports a plan of revenue and finance .... 64 
 
 postpones operation of funding; act .... 68-71 
 
 first forbids and then allows the receipt of treasury notes for 
 
 public dues ....... 71 
 
 complains of agencies at New Orleans and Mobile . . 76 
 
 recommends funding of treasury notes . . . . 85 
 
 his estimates of revenue ..... 86 
 
 his report of November 3, 1838 ..... 88 
 
 Soldier, old, speech of, at Austin ..... 166 
 
 Solemn League and Covenant of the Texans .... 218 
 
 State of Texas, constitution of, adopted .... 145 
 
 government of, ad interim, ..... 146 
 
 money received from United States applied to current expenses 206 
 
 State stocks, prices of at New York, 1842, 1845, and 1852 . . 260 
 
 Stocks, prices of at Philadelphia, 1842, 1845, and 1852 . . 261 
 
 Steele, Mr., arraigned for contumacy ..... 37 
 
 Suspended debt, table of ... 206 
 
 Taxes, internal, synopsis of acts respecting .... 288 
 
 amount collected in different years .... 271 
 assessment of by the State of Texas . . . .289 
 
 Tenders, public, frequent changes of . . . . . 141 
 
 synopsis of ....... 284 
 
 Ten per cent. Fund of 1840, authorized . . . .101 
 
 remarks on as scaled ...... 193 
 
 violations of faith respecting ..... 223 
 
 hard fate of holders of . . . . . . 264 
 
 Ten per cent, stock of 1837, authorized .... 65 
 
 remarks on as scaled ...... 193 
 
 violations of faith respecting ..... 219 
 
 Texans, their erroneous views of public debt examined . 243, 254 
 
 unreasonable pretensions of their public men . . 252 
 
 Texas, her fiscal history interesting ..... v 
 
 her example may be productive of evil . . . . xi 
 
 her area as compared with other countries ... 49 
 her area, as stated by Committee of her General Land-Office 131, 280 
 
 her motives weakened for keeping faith with her creditors . 163 
 
 her claims to half of New Mexico unreasonable . . 177 
 
 her pledges of faith and breaches of faith . . . 217 
 comparison of her action with that of the United States and 
 
 the other States ...... 240 
 
 her present condition ...... 249 
 
 her past condition ...... 251 
 
 has received " sufficient consideration" . . . 250 
 
 her interest would be promoted by repealing her scaling acts 268 
 
 Toby, Mr. Thomas, agent at New Orleans . . . . . 56, 64 
 
 Town lots,, amount received from sale of .... 272 
 
 Treasurer appointed ....... 31 
 
 Treasury bonds, issue of authorized ..... 100 
 
 remarks on as scaled ...... 196 
 
 violations of faith respecting ..... 222 
 
 Treasury notes, issue of authorized January 7, 1836 . . 27 
 act for issue of $500,000 . . . .65 
 
 issues commence November 1, 1837 .... 71 
 
 for issue of $100,000 additional .... 73 
 
INDEX. 327 
 
 PAGE 
 
 Treasury change notes authorized ..... 75 
 
 notes, why for a time at par with silver ... 77 
 
 additional issues authorized May 18, 1838 . . 77, 80 
 
 no longer received for public dues .... 116 
 
 difficulty of keeping such notes at par . . 124, 143 
 
 remarks on as scaled ...... 193 
 
 violations of public faith respecting . . . 219, 223 
 
 evils of as a currency ...... 229 
 
 amounts issued ....... 268 
 
 " in circulation at different periods . . . 269 
 
 final disposition of ...... 269 
 
 rate of scaling of ...... 269 
 
 Triple tt, Mr., loan from ...... 53 
 
 United States acknowledge independence of Texas ... 62 
 
 pass resolution of annexation ..... 130 
 
 rates at which they have negotiated loans . . . 150 
 
 pass " Boundary Act" ...... 178 
 
 controversy with Texas respecting the same . . . 180 
 
 proceedings in Congress, August, 1852 .... 207 
 
 United States Bank note, proceedings in relation to . . 32 
 
 United States bank, loan obtained from .... 98, 105 
 
 scaled by auditor and comptroller .... 196 
 
 Vicksburg, loan from the Commercial and Railroad Bank of, frus 
 trated ........ 95 
 
 War, Secretary of, his reasons for not issuing land warrants to sol 
 diers ........ 70 
 
 his report on fraudulent land claims .... 82 
 
 White, Mr. David, agent at Mobile . . . . . 56, 64 
 
 Wood, Gov., recommends scaling of the debt .... 156 
 
 extract from his message to third Legislature . . . 161 
 
 " Zavalla," steamship, purchased ..... 93 
 
 remarks on the debt due for it, as scaled . . . 196 
 
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 are so arranged as to read in an historical order. 
 
 Arranged at the top of each page is the period in which the prominent events of sacred history 
 took place. The calculations are made for the year of the world before and after Christ, Julian 
 Period, the year of the Olympiad, the year of the building of Rome, and other notations of time. 
 At the close is inserted a Chronological Index of the Bible, according to the computation of Arch 
 bishop Ussher. Also, a full and valuable index of the subjects contained in the Old and New Testa 
 ments, with a careful analysis and arrangement of texts under their appropriate subjects. 
 
 Mr. Greenfield, the editor of this work, and for some time previous to his death the superintend 
 ent of the editorial department of the British and Foreign Bible Society, was a most extraordinary 
 man. In editing the Comprehensive Bible, his varied and extensive learning was called into suc 
 cessful exercise, and appears in happy combination with sincere piety and a sound judgment. The 
 Editor of the Christian Observer, alluding to this work, in an obituary notice of its author, speaks 
 of it as a work of " prodigious labour and research, at once exhibiting his varied taleuU and pro- 
 fouud erudition. * 
 
 LIPPINCOTT S EDITION OF 
 
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 The Publishers have spared neither care nor expense in their edition of the Bible ; it is printed 
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 OPINIONS OP THE PRESS. 
 
 "Tn our opinion, the Christian public generally will feel under great obligations to the publisher! 
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 it out. The intrinsic merit of the Bible recommends itself; it needs no tinsel ornament to adorn 
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 sented us a perfectly chaste specimen of the Bible, without note or comment. It appears to be just 
 what is needed in every family the unsophisticated word of God. 
 
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 and most beautiful surface. The publishers seem to have been solicitous to make a perfectly 
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 rily incurred in its publication. It is a standard Bible. 
 "The publishers are Messrs. Lappincott, Gr 
 
 phia." Baptist Record. 
 
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 "A beautiful quarto edition of the Bible, by L, G. & Co. Nothing can exceed the type in clear 
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 M. Mayasint. 
 
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 LIPPINCOTT S EDITIONS OF 
 
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 Baxter s Comprehensive Bible, 
 
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 A Liberal discount made to Booksellers and Agents by the Publishers. 
 
 ENCYCLOP/EDIA OF RELIGIOUS KNOWLEDGE; 
 
 OR, DICTIONARY OF THE BIBLE, THEOLOGY, RELIGIOUS BIOGRAPHY, ALL RELIGIONS, 
 
 ECCLESIASTICAL HISTORY, AND MISSIONS. 
 
 Designed as a complete Book of Reference on all Religious Subjects, and Companion to the Bible; 
 forming a cheap and compact Library of Religious Knowledge. Edited by Rev. J. Newton Brown. 
 Illustrated by wood-cuts, maps, and engravings on copper and steel. In one volume, royal 8ro. 
 Price, $4 00. 
 
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LIPPINCOTT, GRAMBO & CO. S PUBLICATIONS. 
 
 Lippincott s Standard Editions of 
 
 THE BOOK OF COMMON PRAYER, 
 
 IN SIX DIFFERENT SIZES, 
 
 ILLUSTRATED WITH A NUMBER OF STEEL PLATES AND ILLUMINATIONS. 
 
 COMPREHENDING THE MOST VARIED AND SPLENDID ASSORTMENT IN THE 
 
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 The Errors of Modern Infidelity Illustrated and Refuted. 
 
 BY S. WE. SCHMUCKER, A. 1VT. 
 
 In one volume, 12mo. ; cloth. Just published. 
 
 We cannot but regard this work, in whatever light we view it in reference to its design, as one 
 of the most masterly productions of the a?e, and fitted to uproot one of the most fondly cherished 
 and dan?erons of all ancient or modern errors. God must bless such a work, armed with his own 
 truth, and doing fierce and successful battle against black infidelity, which would bring His Majesty 
 and Word down to the tribunal of human reason, for condemnation and annihilation.^. Spectator. 
 
LIPPINCOTT, GEAMBO & CO. S PUBLICATIONS. 
 
 Cbrgi] of Jlmnun: 
 
 CONSISTING OF 
 
 ANECDOTES ILLUSTRATIVE OF THE CHARACTER OF MINISTERS OF RELI 
 GION IN THE UNITED STATES, 
 
 "" BY JOSEPH BELCHER, D. D. t 
 Editor of "The Complete Works of Andrew Fuller," "Robert Hall," &. 
 
 This very interesting and instructive collection of pleasin? and solemn remembrances of many 
 pious men, illustrates the character of the day in which they lived, and defines the men more 
 clearly than very elaborate essays." Baltimore American. 
 
 " We regard the collection as highly interesting:, and judiciously made." Presbyterian 
 
 JOSEPHUS S (FLAVIUS) WORKS, 
 
 FAMILY EDITION. 
 BY THE LATE WXXiLZAlMK WHISTON, A. M. 
 
 FROM THE LAST LONDON EDITION, COMPLETE. 
 
 On volume, beautifully illustrated with Steel Plates, and the only readable edition 
 published in this country. 
 
 As a matter of coarse, every family in our country has a copy of the Holy Bible ; and as the pre 
 sumption is that the greater portion often consult its p.t/res, we take the liberty of saying to all those 
 that do, that the perusal of the writings of Josephus will be found very interesting and instructive. 
 
 All those who wish to possess a beautiful and correct copy of this valuable work, would do well 
 to purchase this edition. It is for sale at all the principal bookstores in the United States, and by 
 country merchants generally in the Southern and Western States. 
 
 Also, the above work in two volumes. 
 
 BURDER S VILLAGE SERMONS; 
 
 Or, 101 Plain and Short Discourses on the Principal Doctrines of the Gospel. 
 
 INTENDED FOR THE USE OF FAMILIES, SUNDAY-SCHOOLS, OR COMPANIES ASSEM 
 BLED FOR RELIGIOUS INSTRUCTION IN COUNTRY VILLAGES, 
 
 BY GEORGE BURDER. 
 To which is added to each Sermon, a Short Prayer, with some General Prayers for Families, 
 
 Schools, &.c., at the end of the work. 
 
 COMPLETE IN ONE VOLUME, OCTAVO. 
 
 These sermons, which are characterized by a beautiful simplicity, the entire absence of contro 
 versy, and a true evangelical spirit, have gone through many and large editions, and been translated 
 iuto several of the continental languages. " They have also been the honoured means not only of 
 converting many individuals, but also of introducing the Gospel into districts, and even into parish 
 churches, where before it was comparatively unknown." 
 44 This work fully deserves the immortality it has attained." 
 
 This is a fine library edition of this invaluable work; and when we say that it should be found in 
 the possession of every family, we only reiterate the sentiments and sincere wishes of all who take 
 deep interest in the eternal welfare of mankind. 
 
 FAMILY PRATERS AND HYMNS, 
 
 ADAPTED TO FAMILY WORSHIP, 
 AND 
 
 TABLES FOR THE REGULAR READING OF THE SCRIPTURES. 
 
 By Rev. S. C. WINCHESTER, A. M., 
 
 Late Pastor of the Sixth Presbyterian Church, Philadelphia ; and the Presbyterian Church at 
 Natchez, Miss. 
 
 One volume, 12m o. 
 
LIPPINCOTT, GBA5IBO & CO. S PUBLICATIONS. 
 
 SPLENDID LIBRARY EDITIONS. 
 
 ILLUSTRATED STANDARD POETS. 
 
 ELEGANTLY PRINTED, ON FINE PAPER, AND UNIFORM IN SIZE AND 
 
 STVLE. 
 
 The following Editions of Standard British Poets are illustrated with numerous Steel 
 Engravings, and may be had in all varieties of binding. 
 
 BYRON S WORKS. 
 
 COMPLETE IN ONE VOLUME, OCTAVO. 
 
 INCLUDING ALL HIS SUPPRESSED AND ATTRIBUTED POEMS; WITH SIX BEAUTIFUL 
 
 ENGRAVINGS. 
 
 This edition has been carefully compared with the recent London edition of Mr. Murray, and 
 made complete by the addition of more than fifty pages of poems heretofore unpublished in Eng 
 land. Among these there are a number that have never appeared in any American edition; and 
 the publishers believe they are warranted in saying that this is the most complete edition of Lord 
 Byron i Poetical Works ever published in the United States. 
 
 icnl &forks of Mrs. 
 
 Complete in one volume, octavo ; with seven beautiful Engravings. 
 
 This is a new and complete edition, with a splendid engraved likeness of Mrs. Hemans, on steel, 
 and contains all the Poems in the last London and American editions. With a Critical Preface by 
 Mr. Thatcher, of Boston. 
 
 "As no work in the English language can be commended with more confidence, it will argue bad 
 taste in a female in this country to be without a complete edition of the writings of one who was 
 an honour to her sex and to humanity, and whose productions, from first to last, contain no syllable 
 calculated to call a blush to the cheek of modesty and virtue. There is, moreover, in Mrs. Hemans s 
 poetry, a moral purity and a religious feeling which commend it, in an especial manner, to the dis 
 criminating reader. No parent or guardian will be under the necessity of imposing restrictions 
 with regard to the free perusal of every production emanating from this gifted woman. There 
 breathes throughout the whole a most eminent exemption from impropriety of thought or diction ; 
 and there is at times a pensiveness of tone, a winning sadness in her more serious compositions, 
 which tells of a soul which has been lifted from the contemplation o[ terrestrial things, to divine 
 communing! with beings of a purer world." 
 
 MILTON, YOUNG, GRAY, BEATTIE, AND COLLINS S 
 POETICAL WORKS. 
 
 COMPLETE IN ONE VOLUME, OCTAVO. 
 WITH SIX BEAUTIFUL ENGRAVINGS. 
 
 Cnmpr unto Cjjnmsim s Tfrim mii ^nrtiral 
 
 COMPLETE IN ONE VOLUME, OCTAVO. 
 
 Including two hundred and fifty Letters, and sundry Poems of Cowper, never before published in 
 
 this country ; and of Thomson a new and interesting Memoir, and upwards of twenty 
 
 new Poems, for the first time printed from his own Manuscripts, taken from 
 
 a late Edition of the Aldine Poets, now publishing in London. 
 WITH SEVEN BEAUTIFUL ENGRAVINGS. 
 
 The distinguished Professor Silliman, speaking of this edition, observes : " I am as much gratified 
 by the elegance and fine taste of your edition, as by the noble tribute of genius and moral excel 
 lence which these delightful authors have left for all future generations ; and Cowper, especially, 
 is not less conspicuous as a true Christian, moralist and teacher, than as a poet of great power and 
 exquisite taste." 
 
LIPPINCOTT, GRAMBO & CO. S PUBLICATIONS. 
 
 THE POETICAL Yi/ORKS OF ROGERS, CAMPBELL/MONTGOMERY, 
 LAMB, AND KIRKE WHITE. 
 
 COMPLETE IN ONB VOLUME, OCTAVO. 
 WITH SIX BEAUTIFUL ENGRAVINGS. 
 
 The beauty, correctness, and convenience of this favourite edition of these standard authors are 
 BO well known, that it is scarcely necessary to add a word in its favour. It is only necessary to say, 
 that the publishers have now issued an illustrated edition, which greatly enhances its former value. 
 The engravings are excellent and well selected. It is the best library edition extant 
 
 CBABBE, HEBEU, AND POLLOK S POETICAL WORKS. 
 
 COMPLETE IN ONE VOLUME, OCTAVO. 
 WITH SIX BEAUTIFUL ENGRAVINGS. 
 
 A writer in the Boston Traveller holds the following language with reference to these valuable- 
 editions : 
 
 " Mr. Editor : I wish, without any idea of puffing, to say a word or two npon the Library of 
 English Poets that is now published at Philadelphia, by Lippincott, Grambo & Co. It is certainly, 
 taking into consideration the elegant manner in which it is printed, and the reasonable price at 
 which it is afforded to purchasers, the best edition of the modern British Poets that has ever been 
 published in this country. Each volume is an octavo of about 600 pages, double columns, stereo 
 typed, and accompanied with fine engravings and biographical sketches ; and most of them are 
 reprinted from Galignani s French edition. As to its value, we need only mention that it contains 
 the entire works of Montgomery, Gray, Beattie, Collins, Byron, Cowper, Thomson, Milton, Young, 
 Rogers, Campbell, Lamb, Hemans, Heber, Kirke White, Crabbe, the Miscellaneous Works of Gold 
 smith, and other masters of the lyre. The publishers are doing a great service by their publication, 
 and their volumes are almost in as great demand as the fashionable novels of the day ; and they 
 deserve to be so : for they are certainly printed in a style superior to that in which we have before 
 had the works of the English Poets." 
 
 No library can be considered complete without ft copy of the above beautiful and cheap editions 
 of the English Poets ; and persons ordering all or any of them, will please say Lippincott, Grainbo 
 & Co. s illustrated editions. 
 
 A COMPLETE 
 
 Sirftnnnrtj of |forfiral denotations: 
 
 COMPRISING THE MOST EXCELLENT AND APPROPRIATE PASSAGES IN 
 THE OLD BRITISH POETS; WITH CHOICE AND COPIOUS SELEC 
 TIONS FROM THE BEST MODERN BRITISH AND 
 
 AMERICAN POETS. 
 
 EDITED BTT SARAH JOSEPHA HALE. 
 As nightingales do upon glow-worms feed, 
 So poets live upon the living light 
 Of Nature and of Beauty. 
 
 BaOey t Ftstvt. 
 
 Beautifully illustrated with Engravings. In one super-royal octavo volume, in various 
 
 bindings. 
 
 The publishers extract, from the many highly complimentary notices of the above valuable and 
 beautiful work, the following : 
 
 " We have at last a volume of Poetical Quotations worthy of the name. It contains nearly sir 
 hundred octavo pases, carefully ami tastefully selected from all the home and foreign authors of 
 celebrity. It is invaluable to a writer, while to the ordinary reader it presents every subject at a 
 glance." Godey s Lady s Book. 
 
 " The plan or idea of Mrs. Halo s work is felicitous. It is one for which her fine taste, her orderly 
 habits of mind, and her lonsr occupation with literature, has given her peculiar facilities; and tho 
 roughly has she accomplished her task in the work before us." Sartatn s Magazine. 
 
 "It is a choice collection of poetical extracts from every English nnd American author worth 
 perusing, from the days of Chaucer to the present time." Washington Union. 
 
 " There is nothing negative about this work ; it is positively good." Evening "Bulletin. 
 
 10 
 
LIPPINCOTT, GRAMBO & CO. S PUBLICATIONS. 
 
 THE DIAMOND EDITION OF BYRON, 
 THE POETICAL WORKS OF LORD BYRON, 
 
 WITH A SKETCH OP HIS LIFE. 
 
 COMPLETE IN ONE NEAT DUODECIMO VOLUME, WITH STEEL PLATES. 
 
 The type of this edition is so perfect, and it is printed with so much care, on fine white paper, 
 that it can be read with as much ease as most of the larger editions. This work is to be had La 
 plain and superb binding:, making a beautiful volume for a gift. 
 
 " The Poetical Works of Lord Byron, complete in one volume published by L , G. & Co., Phila 
 delphia. We hazard nothing: in saying that, take it altogether, this is the most elegant work ever 
 issued from the American press. 
 
 " In a single volume, not larger than an ordinary duodecimo, the publishers have embraced the 
 whole of Lord Byron s Poems, usually printed in ten or twelve volumes; and, what is more remark 
 able, have done it with a type so clear and distinct, that, notwithstanding its necessarily small size, 
 it may be read with the utmost facility, even by failing eyes. The book is stereotyped ; and never 
 have we seen a finer specimen of that art. Everything: about it it perfect the paper, the print 
 ing, the binding, all correspond with each other ; and it is embellished with two fiub engravings, 
 well worthy the companionship in which they aVe placed. 
 
 " This will make a beautiful Christmas present. 
 
 " ^Ve extract the above from Godey s Lady s Book. The notice itself, we are given to understand, 
 is written by Mrs. Hale. 
 
 " We have to add our commendation In favour of this beautiful volume, a copy of which has 
 been sent us by the publishers. The admirers of the noble bard will feel obliged to the enterprise 
 which has prompted the publishers to dare a competition with the numerous editions of his works 
 already in circulation ; and we shall be surprised if this convenient travelling edition does not in a 
 great degroe supersede the use of the large octavo works, which have little advantage in size and 
 openness of type, and are much inferior in the qualities of portability and lightness." 
 
 THE DIAMOND EDITION OF MOORE. 
 
 (CORRESPONDING WITH BYRON.) 
 
 THE POETICAL WORKS~OF THOMAS MOORE, 
 
 COLLECTED BY HIMSELF. 
 
 COMPLETE IN ONH VOLUME. 
 
 This work is published uniform with Byron, from the last London edition, and is th mot com 
 plete printed in the country. 
 
 THE DIAMOND EDITION OF SHAKSPEARE, 
 
 (COMPLETE IN ONE VOLUME,) 
 INCLUDING A SKETCH OF HIS LIFE. 
 
 UNIFORM WITH BYRON AND MOORE. 
 
 THE ABOVE WORKS CAN BE HAD IN BEVEXA.L VARIETIES OF BINDIX8. 
 
 GOLDSMITH S ANIMATED NATURE. 
 
 IN TWO VOLUMES, OCTAVO. 
 BEAUTIFULLY ILLUSTRATED WITH 385 PLATES. 
 
 CONTAINING A HISTORY OF THE EARTH, ANIMALS, BIRDS, AND FISHES; FORMING 
 THE MOST COMPLETE NATURAL HISTORY EVER PUBLISHED. 
 
 This is a work that should be in the library of every family, having been written by one of the 
 most talented authors in the English language. 
 
 " Goldsmith can never be made obsolete while delicate genius, exquisite feeling, fine invention, 
 the most harmonious metre, and the happiest diction, are at all valued." 
 
 BIGLAND S NATURAL HISTORY 
 
 Of Animals, Birds, Fishes, ReJiles, and Insects. Illustrated with numerous and beautiful Engrtr- 
 
 ings. By JOHN BrGLAND, author of a " View of the World," " Letters on 
 
 Universal History," &c. Complete in 1 vol., 12mo. 
 
LIPPINCOTT, GRAMBO & CO. S PUBLICATIONS. 
 
 THE POWER AND PROGRESS OF THE UNITED STATES. 
 THE UNITED STATES; Its Power and Progress. 
 
 BY GUILLAUME TELL POUSSIN, 
 
 LATE MINISTER OF THE REPUBLIC OF FRANCE TO THE UNITED STATES. 
 
 FIRST AMERICAN, FROM THE THIRD PARIS EDITION. 
 
 TRANSLATED FROM THE FRENCH BY EDMOND L. DU BARRY, M. D, 
 SURGEON U. S. NAVY. 
 
 In one large octavo volume. 
 
 SCHOOLCRAFT S GREAT NATIONAL WORK ON THE INDIAN TRIBES OF 
 THE UNITED STATES, 
 
 WITH BEAUTIFUL AND ACCURATE COLOURED ILLUSTRATIONS. 
 
 HISTORICAL AND STATISTICAL INFORMATION 
 
 RESPECTING THC 
 
 HISTORY, CONDITION AND PROSPECTS 
 
 OP TH 
 
 Hnhtan<Krib*0aft|ie ICmUh 
 
 COLLECTED AND PREPARED UNDER THE DIRECTION OF THE BUREAU OF INDIAN 
 AFFAIRS, PER ACT OF MARCH 3, 1S17, 
 
 BY HENRY R. SCHOOZ.CR APT, X.Z..D. 
 
 ILLUSTRATED BY S. EASTMAN, CAPT. TJ. S. A, 
 PUBLISHED BY AUTHORITY OF CONGRES8. 
 
 THE AMERICAN GARDENER S CALENDAR, 
 
 ADAPTED TO THE CLIMATE AND SEASONS OF THE UNITED STATES. 
 
 Containing a complete account of all the work necessary to be done in the Kitchen Garden, Fruit 
 Garden, Orchard, Vineyard, Nursery, Plensure-Ground, Flower Garden, Green-house, Hot-house, 
 and Forcing Frames, for every month in the year ; with ample Practical Directions for performing 
 the name. 
 
 Also, general as well as minute instructions for laying out or erecting each and every of the abort 
 departments, according to modern taste and the most approved plans; the Ornamental Planting of 
 Pleasure Grounds, in the ancient and modern style; the cultivation of Thorn Quicks, and other 
 plants suitable for Live Hedges, with the best methods of making them, <tc. To which are annexed 
 catalogues of Kitchen Garden Plants and Herbs; Aromatic, Pot, and Sweet Herbs; Medicinal 
 Plants, and the most important Grapes, <Vc., used in rural economy; with the soil best adapted to 
 their cultivation. Together with a copious Index to the body of the work. 
 
 BY BERNARD M MAHON. 
 Tenth Edition, greatly improved. In one volume, octavo. 
 
 THE PORTFOLIO OF A SOUTHERN MEDICAL STUDENT. 
 
 BY GEORGE M. WHARTON, M. D. 
 
 WITH NUMEROUS ILLUSTRATION^ BY CROOME. 
 One volume, 12m o. 
 ___ 
 
LIPPINCOTT, GRAMBO & CO. S PUBLICATIONS. 
 
 THE FARMER S AND PLANTER S ENCYCLOP/EDIA, 
 
 $|R /umw s ntift Chute s (gnrtjrlnpieMa nf Jxttral Affairs, 
 
 BY CUTHBERT W. JOHNSON. 
 ADAPTED TO THE UNITED STATES BY GOUVERNEUR EMERSON, 
 
 Illustrated by seventeen beautiful Engravings of Cattle, Horses, Sheep, the varieties of Wheat, 
 Barley, Oats, Grasses, the Weeds of Agriculture, &c. ; besides numerous Engrav 
 ings on wood of the most important implements of Agriculture, <ko. 
 
 This standard work contains the latest and best information upon all subjects connected with 
 farming, and appertaining to the country ; treating of the great crops of grain, hay, cotton, hemp, 
 tobacco, rice, sugar, &c. Ac. ; of horses and mules ; of cattle, with minute particulars relating to 
 cheese and butter-making; of fowls, including a description of capon-making, with drawings of the 
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 structing hives. Long articles on the uses and preparation of bones, lime, guano, and all sorts of 
 animal, mineral, and vegetable substances employed as manures. Descriptions of the most approved 
 ploughs, harrows, threshers, and every other agricultural machine and implement ; of fruit and 
 shade trees, forest trees, and shrubs ; of weeds, and all kinds of flies, and destructive worms and 
 insects, and the best means of getting rid of them ; together with a thousand other matters relating 
 to rural life, about which information is so constantly desired by all residents of the countrj. 
 IN ONE LARGE OCTAVO VOLUME. 
 
 MASON S FARRIER-FARMERS EDITION. 
 
 Price, 62 cents. 
 
 THE PRACTICAL FARRIER, FOR FARMERS: 
 
 COMPRISING A GENERAL DESCRIPTION OF THE NOBLE AMD USEFUL ANIMAL, 
 
 THE HORSE; 
 
 WITH MODES OF MANAGEMENT IN ALL CASES, AND TREATMENT IN DISEA&JL 
 TO WHICH IS ADDED, 
 
 A PRIZE ESSAY ON MULES AND AN APPENDIX, 
 
 Containing Recipes for Diseases of Horses, Oxen, Cows, Calves, Sheep, Dogs, Swine, &c. &c. 
 BY RICHARD MASON, M. D., 
 
 Formerly of Surry County, Virginia. 
 In one volume, 12rno.; bound in cloth, gilt. 
 
 MASON S FARRIER AND STUD-BOOK-NEW EDITION. 
 
 THE GENTLEMAN S NEW POCKET FARRIER: 
 
 COMPRISING A GENERAL DESCRIPTION OP THE NOBLE AND USEFUL ANIMAL, 
 
 j^v THE HORSE; 
 
 WITH MODES OF MANAGEMENT IN ALL CASES, AND TREATMENT IN DISEASE. 
 
 BIT RICHARD MASON, M.D,, 
 
 Formerly of Sarry County, Virginia. 
 
 To which is added, A PRIZE ESSAY ON MULES; and AN APPENDIX, containing Recipes for 
 
 Diseases of Horses, Oxen, Cows, Calves, Shep, Dogs, Swine, <Scc. Ac. ; with Annals 
 
 of the Turf, American Stud- Book, Rules for Training, Racing, <Sto. 
 
 WITH A SUPPLEMENT, 
 
 Comprising sn Essay on Domestic Animals, especially the Horse ; with Remaiks on Treatment and 
 
 Breeding ; together with Trotting and Racing Tables, showing the best time on record at one, 
 
 two, three and four mile heats ; Pedigrees of Winning Horses, since 1839, and of the most 
 
 celebrated Stallions and Mares ; with useful Calvin? and Lambinj Tables. Bj 
 
 J. S. SKINNER, Editor now of the Farmer s Library, New York, &c. Ac. 
 
 13 
 
LIPPINCOTT, GRAMBO & CO. S PUBLICATIONS. 
 
 HINDS S FARRIERY AND STUD-BOOK-NEW EDITION. 
 FARRIERY, 
 
 TAUGHT ON A NEW AND EAST PLAN: 
 
 BEIKQ 
 
 a mlm nn tip Dmm irai Slrritofs nf Ijii 
 
 With Instructions to the Shoeing Smith, Farrier, and Groom ; preceded by a Popular Description of 
 the Animal Functions in Health, and how these are to be restored when disordered. 
 
 BY JOHN HINDS, VETERINARY SURGEON. 
 
 With considerable Additions and Improvements, particularly adapted to this country, 
 
 BY THOMAS M. SMITH, 
 Veterinary Surgeon, and Member of the London Veterinary Medical Society. 
 
 WITH A SUPPLEMENT, BY J. S. SKINNER. 
 
 The publishers have received numerous flattering notices of the great practical value of these 
 worki. The distinguished editor of the American Fanner, speaking of them, observes :" We 
 cannot too highly recommend these books, and therefore advise every owner of a horse to obtain 
 them." # 
 
 "There are receipts in those books that show how Founder may be cured, and the traveller pur 
 sue his journey the next day, by giving a tahlespoonful of alum. This was pot from Dr. P. Thornton, 
 of MontpeIier,Rappahannock county, Virginia, as founded on his own observation in several cases. 
 
 "The constant demand for Mason s and Hinds s Farrier has induced the publishers, Messrs. Lip- 
 
 Ett, Grambo & Co., to put forth new editions, with a Supplement of 100 pages, by J. S. Skinner, 
 We should have sought to render an acceptable service to our agricultural readers, by giving 
 pter from the Supplement, On the Relations between Man and the Domestic Animals, espe 
 cially the Horse, and the Obligations they impose ; or the one on The Form of Animals ; but that 
 either one of them would overrun the space here allotted to such subjects." 
 
 " Lists of Medicines, and other articles which ought to be at hand about every training and livery 
 stable, and every Farmer s and Breeder s establishment, will be found in these valuable works." 
 
 TO CARPENTERS AND MECHANICS, 
 
 Just Published. 
 
 
 A NEW AND IMPROVED EDITION OF 
 
 THE CARPENTER S NEW GUIDE, 
 
 BEING A COMPLETE BOOK OF LINES FOB, 
 
 OARPEXTTRV AND JOIN BUY; 
 
 Treating fully on Practical Geometry, Saffifs Brick and Plaster Groins, Niches of every description, 
 
 Sky-lights, Lines for Roofs and Domes ; with a great variety of Designs for Roofs, 
 
 Trussed Girders, Floors, Domes, Bridges, &c., Angle Bars for Shop 
 
 Fronts, <fcc., and Raking Mouldings. 
 
 AL SO, 
 
 Additional Plans for various Stair-Cases, with the Lines for producing the Fnce and Falling Moulds, 
 never before published, and greatly superior to those given in a former edition of this work. 
 
 BY WILLIAM JOHNSON, ARCHITECT, 
 
 07 PHILADELPHIA. 
 
 The whole founded on true Geometrical Principles; the Theory and Practice well explained and 
 fully exemplified, on eighty-three copper plates, including some Observations and Calculations on 
 the Strength of Timber. 
 
 BY PETER NICHOLSON, 
 
 Author of "The Carpenter and Joiner s Assistant," "The Student s Instructor to the Five 
 Orders," <kc. 
 
 Thirteenth Edition. One volume, 4to., well bound. 
 
LIPPINCOTT, GRAMBO & CO. S PUBLICATIONS. 
 
 A DICTIONARY OF SELECT AND POPULAR QUOTATIONS, 
 
 WHICH ARE IN DAILY USE. 
 TAKEN FROM THE LATIN, FRENCH, GREEK, SPANISH AND ITALIAN LANGUAGES. 
 
 Together with a copious Collection of Law Maxims and Lnw Terms, translated into 
 English, with Illustrations, Historical and Idiomatic. 
 
 NEW AMERICAN EDITION, CORRECTED, WITH ADDITIONS. 
 One volume, 12mo. 
 
 This volume comprises a copious collection of legal and other terms which are in common use, 
 with English translations and historical illustrations ; and we should judge its author had surely 
 been to a great " Feast of Languages," and stole all the scraps. A work of this character should 
 hare an extensive sale, as it entirely obviates a serious difficulty in which most readers are mrolved 
 by the frequent occurrence of Latin, Greek, and French passages, which we suppose are introduced 
 by authors for a mere show of learning a difficulty very perplexing to readers in general This 
 " Dictionary of Quotations," concerning which too much cannot be said in its favour, effectually 
 remoTes the difficulty, and gives the reader an advantage over the author; for we believe a majority 
 are themselves ignorant of the meaning of the terms they employ. Very few truly learned authors 
 will insult their readers by introducing Latin or French quotations in their writings, when "plain 
 English" will do as well ; but we will not enlarge on this point. 
 
 If the book is useful to those unacquainted with other lanfruages, it is no less valuable to the 
 classically educated as a book of reference, and answers all the purposes of a Lexicon indeed, on 
 many accounts, it is better. It eaves the trouble of tumbling over the larger volumes, to which 
 every one, and especially those engaged in the legal profession, are very often subjected. It should 
 hare a place in every library in the country. 
 
 RUSCHENBERGER S NATURAL HISTORY, 
 
 COMPLETE, WITH NEW GLOSSARY. 
 
 (Bbttunts of Ihtnral li 
 
 EMBRACING ZOOLOGY, BOTANY AND GEOLOGY; 
 
 FOR SCHOOLS, COLLEGES AND FAMILIES. 
 
 B7 W. S. W. BUSCHENBSRGER,!*!. D. 
 
 IN TWO VOLUMES. 
 
 WITH NEARLY ONE THOUSAND ILLUSTRATIONS, AND A COPIOUS GLOSSARY. 
 Vol. 1. contains Vertebrate Animal*. VoL II. contains Intervertebrate Animals, Botany, and Geology. 
 
 A Beautiful and Valuable Presentation Book. 
 
 
 
 THE POET S OFFERING. 
 
 EDITED BY MRS. HALE. 
 
 With a Portrait of the Editress, a Splendid Illuminated Title-Page, and Twelve Beautiful Engrav 
 ings by Sartain. Bound in rich Turkey Morocco, and Extra Cloth, Gilt Edge. 
 To those who wish to make a present that will never lose its value, this will be found the most 
 desirable Gift-Book ever published. 
 
 " We commend it to all who desire to present a friend with a volume not only very beautiful, but 
 of solid intrinsic value." WasMnyton Union. 
 
 "A perfect treasury of the thoughts and fancies of the best English and American Poets. The 
 paper and printing are beautiful, and the binding rich, elegant, and substantial ; the most sensible 
 and attractive of all the elegant gift-books we have seen."" Evening Bulletin. 
 
 * The publishers deserve the thanks of the public for so happy a thought, so well executed. The 
 engravings are by the best artists, and the other portions of the work correspond m elegance." 
 Pvbhc Ledger. 
 
 " There is no book of selections so diversified and appropriate within our knowledge." Pcnnsylv n. 
 
 "It is one of the most valuable as well as elegant books ever published in this country." Godfy t 
 Lady s Book. 
 
 " It is the most beautiful and the most useful offering ever bestowed on the public. No individual 
 of literary last* will venture to be without it." The City Item. 
 
 15 
 
LIPPINCOTT, GllAMBO & CO. S PUBLICATIONS. 
 
 THE YOUNG DOMINICAN; 
 OR, THE MYSTERIES OF THE INQUISITION, 
 
 AND OTHER SECRET SOCIETIES OF SPAIN. 
 BY M. V. DE FEREAL. 
 
 WITH HISTORICAL NOTES, BY M, MANUEL DE CUENDIAS, 
 
 TRANSLATED FROM THE FRENCH. 
 ILLUSTRATED WITH TWENTY SPLENDID ENGRAVINGS BY FRENCH ARTISTS, 
 
 One volume, octavo. 
 
 SAY S POLITICAL ECONOMY, 
 
 A TREATISE ON POLITICAL ECONOMY; 
 
 Or, The Production, Distribution and Consumption of Wealth. 
 
 B7 JEA1T BAPTISTS SAY. 
 
 FIFTH AMERICAN EDITION, WITH ADDITIONAL NOTES, 
 BY C. C. BIDDLE, ESQ. 
 
 In one volume, octavo. 
 
 It would be beneficial to oar country if all those who are aspiring: to office, were required by their 
 constituent* to be familiar with the pages of Say. 
 
 The distinguished biographer of the author, in noticing this work, observes : " Happily for science, 
 he commenced that study which forms the basis of his admirable Treatise on Political Economy ; a 
 work whioh*not only improved under his hand with every successive edition, but has been translated 
 into roost of the European languages." 
 
 The Editor of the North American Review, speaking of Say, observes, that ke is tha most 
 popular, and perhaps the most able writer on Political Economy, since the time of Smith." 
 
 LAURENCE STERNE S WORKS, 
 
 WITH A LIFE OF THE AUTHOR: 
 
 WRITTEN BT HIMSELF. 
 
 WITH SEVEN BEAUTIFUL ILLUSTRATIONS, ENGRAVED BY GILBEKT AND GIHON, 
 FROM DESIGNS BY DARLEY. 
 
 One volume, octavo; cloth, gilt. 
 
 To commend or to criticise Sterne s Works, in this age of the world, would be all " wasteful and 
 extravagant excess." Uncle Toby Corporal Trim the Widow Le Fevre Poor Maria the 
 Captive even the Dead Ass, this is all we have to say of Stenie; and in the memory of these 
 characters, histories, and sketches, a thousand follies and worse than follies are forgotten. The 
 volume is a very handsome one. 
 
 THE MEXICAN WAR AND ITS HEROES; 
 
 BEING 
 
 A COMPLETE HISTORY OF THE MEXICAN WAE, 
 
 EMBRACING ALL THE OPERATIONS UNDER GENERALS TAYLOR AND SCOTT. 
 
 WITH A BIOGRAPHY OF THE OFFICERS. 
 
 ALSO, 
 
 AN ACCOUNT OF THE CONQUEST OF CALIFORNIA AND NEW MEXICO, 
 
 Under Gen. Kearny, Cols. Doniphan and Fremont. Together with Numerous Anecdote* of the 
 
 War, and Personal Adventures of the Officers. Illustrated with Accurate 
 
 Portraits, and other Beautiful Engravings. 
 
 In one volume, 12mo. 
 16 
 
LIPPINCOTT, GRAMBO & CO. S PUBLICATIONS. 
 
 NEW AND COMPLETE COOK-BOOK, 
 THE PRACTICAL COOK-BOOK, 
 
 CONTAINING UPWARDS OP 
 
 ONE THOUSAND RECEIPTS, 
 
 Consisting of Directions for Selecting, Preparing, and Cooking all kinds of Meats, Fish. Poultry, and 
 Game; Soups, Broths, Vegetables, ami Salads. Also, tor making all kinds of Plain and 
 Fancy Breads, Pastes, Puddings, Cakes, Creams, Ices, Jellies, Preserves, Marma 
 lades, <kc. <kc. <kc. Together with various Miscellaneous Reoipes, 
 and numerous Preparations for Invalids. 
 
 BY MRS. BLISS. 
 In qne volume, 12mo. 
 
 iitj 3fimijimt ; nr, \)t fttylmm jiiltrt 
 
 BY J. B. JONES, 
 
 AUTHOR OF "WILD WESTERN SCENES," "THE WESTERN MERCHANT," &C. 
 
 ILLUSTRATED WITH TEN ENGRAVINGS. 
 
 In one volume, 12mo. 
 
 EL PUCHERO ; or, A Mixed Dish from Mexico. 
 
 EMBRACING GENERAL SCOTT S CAMPAIGN, WITH SKETCHES OF MILITARY LIFE IN 
 
 FIELD AND CAMP; OF THE CHARACTER OF THE COUNTRY. MANNERS 
 
 AND WAYS OF THE PEOPLE, <kc. 
 
 BY RICHARD M SHERRY, M. D., U. S. N., 
 LATB ACTING SURGEON OF REGIMENT or MARINES. 
 
 In one volume, 12mo. 
 WITH NUMEROUS ILLUSTRATIONS. 
 
 MONEY-BAGS AND TITLES : 
 
 A HIT AT THE FOLLIES OF THE AGE. 
 
 TRANSLATED FROM THE FRENCH OF JULES SANDEAU. 
 
 BY LEONARD MYERS. 
 
 One volume, 12mo. 
 
 u Money-Bags and Titles is quite a remarkable work, amounts to a kindly exposure of the folly 
 of human pride, and also presents at once the evil and the remedy. If good-natured ridicule of 
 the impostures practised by a set of self-styled reformers, who have nothing to lose, and to whom 
 change must be gain if, in short, a delineation of the mistaken ideas which prevent, and the 
 means which conduce to happiness, be traits deserving of commendation, the reader will find 
 much to enlist his attention and win his approbation in the pages of this unpretending, but truly 
 meritorious publication." 
 
 WHAT IS CHURCH HISTORY? 
 
 AVINDICATION OF THE IDEA OF HISTORICAL DEVELOPMENTS, 
 
 BY PHILIP SCHAF. 
 
 TRANSLATED FROM THE GERMAN. 
 In one volume, 12mo. 
 
 ~TT~ 
 
LIPPINCOTT, GRAMBO & CO. S PUBLICATIONS. 
 
 DODD S LECTURES, 
 DISCOURSES TO~YOUNG MEN. 
 
 ILLUSTRATED BY NUMEROUS HIGHLY INTERESTING ANECDOTES. 
 
 BY WILLIAM DODD, LL. D., 
 
 CHAPLAIN IN ORDINARY TO HIS MAJESTY GEORGE THE THIRD. 
 
 FIRST AMERICAN EDITION, WITH ENGRAVINGS. 
 
 One volume, 18mo. 
 
 THE IRIS: 
 
 AN ORIGINAL SOUVENIR. 
 With Contributions from the First Writers in the Country. 
 
 EDITED BY PROF. JOHN S. HART. 
 
 With Splendid Illuminations and Steel Engravings. Bound in Turkey Morocco and rich Papier 
 
 Mache Binding. 
 IN ONE VOLUME, OCTAVO. 
 
 Its contents are entirely original. Among the contributors are names well known in the republic 
 of letters ; such as Mr. Boker, Mr. Stoddard, Prof. Moffat, Edith May, Mrs. Sigourney, Caroline May, 
 Mrs. Kinney, Mrs. Butler, Mrs. Pease, Mrs. Swift, Mr. Van Bibber, Rev. Charles T. Brooks, Mrs. 
 Dorr, Erastus W. Ellsworth, Miss E. W. Barnes, Mrs. Williams, Mary Young, Dr. Gardette, Alice 
 Carey, Phebe Carey, Augusta Browne, Hamilton Browne, Caroline Eustis, Margaret Junkin, Maria 
 J. B. Browne, Miss Starr, Mrs. Brotherson, Kate Campbell, &c. 
 
 OR, HOLY THOUGHTS UPON SACRED SUBJECTS. 
 
 BY CLERGYMEN OF THE EPISCOPAL CHURCH. 
 
 EDITED BY THOMAS WYATT, A.M. 
 
 In one volume, Ii2mo. 
 
 WITH SEVEN BEAUTIFUL STEEL ENGRAVINGS. 
 
 The contents of this work are chiefly by clergymen of the Episcopal Church. Among the con 
 tributors will be found the names of the Right Rev. Bishop Potter, Bishop Hopkins, Bishop Smith, 
 Bishop Johns, and Bishop Doane ; and the Rev. Drs. H. V. D. Johns, Coleman, and Butler; Rev. G. 
 T. Bedell, M Cabe, Ogilsby, <kc. The illustrations are rich and exquisitely wrought engravings upon 
 the following subjects :" Samuel before Eli," "Peter and John healing the Lame Man," "The 
 Resurrection of Christ," " Joseph sold by his Brethren," " The Tables of the Law," " Christ s 
 Agony in the Garden," and " The Flight into Egypt." These subjects, with many others in prose 
 and verse, are ably treated throughout the work. 
 
 HAW-HO-NOO: 
 
 OR, THE RECORDS OF A TOURIST. 
 
 BY CHARLES LAJNTMAN, 
 
 Author of " A Summer in the Wilderness," &c. In one volume, 12mo. 
 " In the present book, Haw-ho-noo. (an Indian name, by the way, for America,) the author has 
 gathered up some of the relics of his former tours, and added to them other interesting matter. It 
 contains a number of carefully written and instructive articles upon the various kinds offish in our 
 country, whose capture affords sport for anglers; reminiscences of unique incidents, manners, and 
 customs in different parts of the country ; and other articles, narrative, descriptive, and sentimental. 
 In a supplement are gathered many curious Indian legends. They are related with great simplicity 
 and clearness, and will be of service hereafter to the poem-makers of America. Many of them are 
 quite beautiful." National Iniclligmcer. 
 
 18 
 
LIPPINCOTT, GRAMBO & CO. S PUBLICATIONS. 
 
 LONZ POWERS; Or, The Regulators. 
 A ROMANCE OF KENTUCKY. 
 
 FOUNDED ON FACTS. 
 BY JA IVIES WEIR, ESQ. 
 
 IN TWO VOLUMES. 
 
 The scenes, characters, and incidents in these volumes have been copied from nature, and from 
 real life. They are represented as taking place at that period in the history of Kentucky, when 
 the Indian, driven, after many a hard-fought field, from his favourite hunting-ground, was succeeded 
 by a rude and unlettered population, interspersed with organized bands of desperadoes, scarcely 
 less savage than the red men they had displaced. The author possesses a vigorous and graphic 
 pen, and has produced a very interesting romance, which gives us a striking portrait of the times 
 he describes. 
 
 THE WESTERN MERCHANT, 
 
 A NARRATIVE, 
 
 Containing useful Instruction for the Western Man of Business, who makes his Purchases in the 
 East. Also, Information for the Eastern Man, whose Customers are in the West. 
 Likewise, Hints for those who design emigrating to the West. De 
 duced from actual experience. 
 
 BY LUKE SHORTFIELD, A WESTERN MERCHANT. 
 
 One volume, 12mo. 
 
 This is a new work, and will be found very interesting to the Country Merchant, <kc. <kc. 
 A sprightly, pleasant book, with a vast amount of information in a very agreeable shape. Busi 
 ness, Love, and Religion are all discussed, and many proper sentiments expressed in regard to each. 
 The " moral" of the work is summed up in the following concluding sentences : " Adhere stead 
 fastly to your business ; adhere steadfastly to your first love ; adhere steadfastly to the church." 
 
 A MANUAL OF POLITENESS, 
 
 COMPRISING THK 
 
 PRINCIPLES OF ETIQUETTE AND RULES OF BEHAVIOUR 
 
 IN GENTEEL SOCIETY, FOR PERSONS OF BOTH SEXES. 
 
 18mo., with Plates. 
 
 Book of Politeness. 
 
 THE GENTLEMAN AND LADY S 
 BOOK OF POLITENESS AND PROPRIETY OF DEPORTMENT, 
 
 DEDICATED TO THE YOUTH OF BOTH SEXES. 
 BY IVEADAIKEE CELNART. 
 
 Translated from the Sixth Paris Edition, Enlarged and Improved. 
 Fifth American Edition. 
 One volume, 18mo. 
 
 THE ANTEDILUVIANS; Or, The World Destroyed. 
 
 A NARRATIVE POEM, IN TEN BOOKS. 
 
 BY JAMES M HENRY, M.D. 
 
 One volume, 18mo. 
 
LIPPINCOTT, GRAMBO & CO. S PUBLICATIONS. 
 
 Bennett s (Rev. John) Letters to a Young Lady, 
 
 ON A VARIETY OF SUBJECTS CALCULATED TO IMPROVE THE HEART, 
 TO FORM THE MANNERS, AND ENLIGHTEN THE UNDERSTANDING. 
 
 " That our daughters may be as polished corners of the temple." 
 
 The publishers sincerely hope (for the happiness of mankind) that a copy of this valuable little 
 work will be found the companion of every young lady, as much of the happiness of every family 
 depends on the proper cultivation of the female mind. 
 
 THE DAUGHTER S OWN BOOK: 
 
 OR, PRACTICAL HOTS PROM A FATHER TO HIS DAUGHTER. 
 
 One volume, 18mo. 
 
 This is one of the most practical and truly valuable treatises on the culture and discipline of the 
 female mind, which has hitherto been published in this country ; and the publishers are very confi 
 dent, from the great demand for this invaluable little work, that ere long it will be found in the 
 library of every young lady. 
 
 THE AMERICAN CHESTERFIELD : 
 
 Or, "Youth s Guide to the Way to Wealth, Honour, and Distinction/ k 18mo.- 
 
 CONTAINING ALSO A COMPLETE TREATISE ON THE ART OF CARVING. 
 
 * We most cordially recommend the American Chesterfield to general attention ; but to young 
 persons particularly, as one of the best works of the kind that has ever been published in thi 
 country. It cannot be too highly appreciated, nor its perusal be unproductive of satisfaction and 
 usefulness." 
 
 SENECA S MORALS. 
 
 BY WAY OF ABSTRACT TO WHICH IS ADDED, A DISCOURSE UNDER 
 
 THE TITLE OF AN AFTER-THOUGHT. 
 BYSIR ROGER L ESTRANGE, KNT. 
 
 A new, fine edition ; one volume, 18mo. 
 A copy of this valuable little work should be found in every family library. 
 
 NEW SONG-BOOK. 
 
 |0utjjtrn nnb %&t stern. 
 
 BEING A CHOICE COLLECTION OF THE MOST FASHIONABLE SONGS, MANY OF WHICH 
 ARE ORIGINAL. 
 
 In one volume, 18mo. 
 
 Great care was taken, in the selection, to admit no song that contained, in the slightest degree, 
 any indelicate or improper allusions; and with great propriety it may claim the title of " The Par 
 lour Song-Book, or Songster." The immortal Shakspeare observes 
 "The man that hath not music in himself, 
 Nor is not moved with concord of sweet sounds, 
 Is fit for treasons, stratagems, and spoils." 
 
 ROBOTHAM S POCKET FRENCH DICTIONARY, 
 
 CAREFULLY REVISED, 
 
 AND THE PRONUNCIATION OF ALL THE DIFFICULT WORDS ADDED. 
 
LIPPINCOTT, GRAMBO & CO. S PUBLICATIONS. 
 
 MECHANICS FOR THE MILLWRIGHT, ENGINEER AND MACHINIST, 
 CIVIL ENGINEER, AND ARCHITECT: 
 
 CONTAINING 
 
 THE PRINCIPLES OF MECHANICS APPLIED TO MACHINERY 
 
 Of American models, Steam-Engines, Wat.er- Works, Navigation, Bridge-building, &c. &c. By 
 
 FREDERICK OVERMAN, 
 Author of " The Manufacture of Iron," and other scientific treatises. 
 
 Illustrated by 150 Engravings. In one large 12mo. volume. 
 
 WILLIAMS S TRAVELLER S AND TOURIST S GUIDE 
 Through the United States, Canada, &c. 
 
 This book will be found replete with information, not only to the traveller, but likewise to the 
 man of business. In its preparation, an entirely new plan has been adopted, which, we are con 
 vinced, needs only a trial to be fully appreciated. 
 
 Among its many valuable features, are tables showing at a glance the distance, fare, and time 
 occupied in travelling from the principal cities to the most important places in the Union ; so that 
 the question frequently asked, without obtaining a satisfactory reply, is here answered in full. 
 Other tables show the distances from New York, <fcc., to domestic and foreign ports, by sea; and 
 also, by way of comparison, from New York and Liverpool to the principal ports beyond and around 
 Cape Horn, <kc., as well as via the Isthmus of Panama. Accompanied by a large and accurate Map 
 of the United States, including a separate Map of California, Oregon, New Mexico and Utah. Also, 
 a Map of the Island of Cuba, and Plan of the City and Harbor of Havana ; and a Map of Niagara 
 River and Falls. 
 
 THE LEGISLATIVE GUIDE: 
 
 Containing directions for conducting business in the House of Representatives ; the Senate of the 
 United States; the Joint Rules of both Houses ; a Synopsis of Jefferson s Manual, and copious 
 Indices ; together with a concise system of Rules of Order,, based on the regulations of the 
 U. S. Congress. Designed to economise time, secure uniformity and despatch in con 
 ducting business in all secular meetings, and also in all religious, political, and 
 Legislative Assemblies. 
 
 BY JOSEPH BARTLETT BURLEIG-H, LL. D. 
 
 In one volume, 12mo. 
 
 This is considered by our Judges and Congressmen as decidedly the best work of the kind extant. 
 Every young man in the country should have a copy of this book. 
 
 THE INITIALS; A Story of Modern Life. 
 
 THREE VOLUMES OF THE LONDON EDITION COMPLETE IN ONE VOLUME 12MO. 
 A new novel, equal to " Jane Eyre." 
 
 WILT) WESTERN SCENES! 
 
 A NARRATIVE OF ADVENTURES IN THE WESTERN WILDERNESS. 
 
 Wherein the Exploits of Daniel Boone, the Great American Pioneer, are particularly described. 
 
 Also, Minute Accounts of Bear. Deer, and Buffalo Hunts Desperate Conflicts with the 
 
 Savages Fishing and Fowling Adventures Encounters with Serpents, <fec. 
 
 By LUKE SHOBTFIELD, Author of "The Western Merchant." 
 
 BEAUTIFULLY ILLUSTRATED. One volume, 12mo. 
 
 POEMS OF THE PLEASURES: 
 
 Consisting of the PLEASURES OF IMAGINATION, by Akenside ; the PLEASURES OF MEMORY, 
 
 by Samuel Rosrers; the PLEASURES OF HOPE, by Campbell; and the PLEASURES OF 
 
 FRIENDSHIP, by M Henry. With a Memoir of each Author, prepared expressly 
 
 for I his work. 18mo. 
 
LIPPINCOTT, GRAMBO & CO. S PUBLICATIONS. 
 
 BALDWIN S PRONOUNCING GAZETTEER. 
 
 A PRONOUNCING GAZETTEER: 
 
 CONTAINING 
 
 TOPOGRAPHICAL, STATISTICAL. AND OTHER INFORMATION, OF ALL THE MORE IM 
 PORTANT PLACES IN THE KNOWN WORLD, FROM THE MOST 
 RECENT AND AUTHENTIC SOURCES. 
 
 BY THOMAS BALDWIN. 
 
 Assisted by several other Gentlemen. 
 
 To which is added an APPENDIX, containing more than TEN THOUSAND ADDITIONAL NAMES, 
 chiefly of the small Towns and Villages, <tc., of the United States and of Mexico. 
 
 NINTH EDITION, WITH A SUPPLEMENT, 
 
 nf near two thousand names, besides those 
 in itself a Complete Vocabulary of Geographic! 
 
 ONE VOLUME 12iIO. PRICE, $1.50. 
 
 Giving the Pronunciation of near two thousand names, besides those pronounced in the Original 
 Work : Forming in itself a Complete Vocabulary of Geographical Pronunciation. 
 
 Jibrart] far tjj* 
 
 Complete in Twelve handsome 18mo. Volumes, bound in Scarlet Cloth. 
 
 1. WOMAN S TRIALS; OR. TALES AND SKETCHES FROM THE LIFE AROUND US. 
 
 2. MARRIED LIFE; ITS SHADOWS AN D SUNSHINE. 
 
 3. THE TWO WIVES ; OR LOST AND WON. 
 
 4. THE WAYS OF PROVIDENCE ; OR, " HE DOETH ALL THINGS WELL." 
 
 5. HOME SCENES AND HOME INFLUENCES. 
 
 6. STORIES FOR YOUNG HOUSEKEEPERS. 
 
 7. LESSONS IN LIFE, FOR ALL WHO WILL READ THEM 
 
 a SEED-TIME AND HARVEST; OR, WHATSOEVER A MAN SOWETH THAT SHALL HE 
 
 9. STORIES FOR PARENTS. 
 
 10. OFF-HAND SKETCHES, A LITTLE DASHED WITH HUMOR. 
 
 11. WORDS FOR THE WISE. 
 
 12. THE TRIED AND THE TEMPTED. 
 
 The above Series are sold together or separate, as each work is complete in itself. No Family should 
 be without a copy of this interesting and instructive Series. Price Thirty-seven and a Half Cents per 
 Volume. 
 
 FIELD S SCRAP BOOK. New Edition. 
 
 litonf nnft ^isnllrmrrai Itrnp 36anL 
 
 Consisting of Tales and Anecdotes Biographical, Historical, Patriotic, Moral, Religions, and Senti 
 mental Pieces, in Prose and Poetry. 
 
 COMPILED BY WILLIAM FIELDS. 
 
 SECOND EDITION, REVISED AND IMPROVED. 
 In one handsome 8vo. Volume. Price, $2.00. 
 
 THE ARKANSAW DOCTOR. 
 
 THE LIFE AND ADVENTURES OF AN ARKANSAW DOCTOR. 
 
 BY DAVID RATTLEIIEAD, M. D. 
 
 " The Man of Scrapes." 
 WITH NUMEROUS ILLUSTRATIONS. PRICE FIFTY CENTS. 
 
 THE HUMA MAN. 
 
 ILLUSTRATED BY THE PRINCIPAL ORGANS. 
 BY JAMES JOHN GARTH WILKINSON, 
 
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 IN ONE VOLUME, 12 MO - PRICE $1 25. 
 
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THI 
 
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