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Republic authorizes mercantile firm to issue money
On this day in 1841, the Republic of Texas Congress authorized the firm
of McKinney, Williams and Company to issue notes for circulation as
money, using for security mortgages on real estate, slaves, and a
sawmill. This desperate measure reflected the history of money in the
republic, where the various issues of currency--including "exchequer
bills," "interest notes," and "red backs"--all were textbook examples of
"fiat money," or paper money not redeemable in specie. The republic
issued a total of $4,095,990 in paper money. Until the approach of
annexation, government-issued currency was typified by Sam Houston's
promissory notes of 1837, called "Star Money" because they were
decorated with a star. Houston printed this money "to avoid the absolute
dissolution of the Government." Measured against United States dollars,
red backs (issued by the Lamar administration in 1839) started with a
value of 37½ cents and fell to two cents before expiring completely.
Other currencies underwent a similar, if less dire, inflation, and
citizens--especially government employees, who were paid in these
currencies--suffered accordingly. Rich in natural resources, poor in
manufactured goods, and chronically depleted of silver and gold (which
had to be paid for imports), the Republic of Texas sorely needed the
economic blessings that came with annexation to the United States.
- Links to Related Handbook of Texas Online Articles
- MONEY OF THE REPUBLIC OF TEXAS
- MCKINNEY, WILLIAMS AND COMPANY
- REPUBLIC OF TEXAS
- DEBT OF THE REPUBLIC OF TEXAS
- HOUSTON, SAMUEL
- LAMAR, MIRABEAU BUONAPARTE
- Other Texas Day by Day Articles for This Date
- Teenage idol Buddy Holly dies in plane crash (1959)
- Coastal brewery serves up a cold one (1896)
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