Texas was perhaps the most fortunate of the Confederate States during the war. Her territory was not a battleground and was free from devastating invasion. That part of her population which was not in the armies was free therefore to follow agriculture and other pursuits unmolested. Proximity to Mexico provided a comparatively safe outlet to a market for cotton and inlet for needed supplies of various kinds. The possession, too, of a large amount of disposable assets in the form of United States bonds obviated the need of an early resort to high taxation or an extensive use of the state's credit. Full advantage of these favoring circumstances or geography and assets could not, however, be taken. Transportation of products to the Mexican frontier proved to be slow, expensive and dangerous, while the United States bonds were only partially productive and served but to stay temporarily the evil day of financial disorder. In the end the financial story of Texas was the same for this period as that of the other Southern States, though the details are less direful. It is one of trust funds violated, of debt accumulated, and of receipts and expenditures, swollen fictitiously by the depreciation of the paper money in which 2they were payable, mounting large to meet a growing desperate situation.
The expenditures of 1861 do not reveal the state of war except those for the Constitutional Convention and for the regiment ordered raised by the convention. Total warrants drawn for these purposes amounted to $79,870.33 of which only $2,139.35 was for the regiment. The total net expenditures for the year were $577,593.51. The total net expenditures for the war period proper, or from August 31, 1861, to June 8, 1865, were $4,863,790.55. 3 The portion of this that was of a military character is $3,180,275.97. This amount does not represent fully, however, the expenditure attributable to the war. To obtain this amount there should be added to military expenditures those for hospital facilities and for the support of the needy families of Texas soldiers. In 1862 and 1863 warrants drawn on account of the hospital fund were $104,493.58, for the soldiers' families, $306,305.74; in 1864 and 1865 the amounts were $107,446.02 and $1,127,814.73 for the respective services,—or a total for the four years of $1,646,060.07. There were refunds of $41,950.77, leaving a net amount of $1,604,109.30. The amount of these warrants that was paid cannot be stated. Since after May 28, 1864, civil appropriations and those for the support of soldiers' families were payable in treasury warrants, it may be assumed safely that the warrants drawn in 1862 and 1863 were paid and were therefore included in the Comptroller's items of expenditures. Because of this element of conjecture, however, no attempt is made to state the absolute amount of expenditures incident to the war, but to rest content with the statement that more than three-fourths of the expenditures were attributable to it.
A part of the military expenditures were chargeable to the Confederate States' government, and for such the state had a claim for refund. The reports do not indicate that there were any such refunds, but at the close of the war the Confederate government was indebted to the state in the sum of $399,751.90 for ordnance, quartermaster, medical, and such stores. 3
At the beginning of the war all expenditures were made through the State Comptroller and the State Treasurer and were pursuant to specific legislative appropriations. In December, 1861, Judah P. Benjamin, Secretary of the Confederate Treasury, proposed to Governor Lubbock the exchange of the United States bonds then in the State Treasury to the credit of the school fund for Confederate bonds. 4 The need of secrecy about such a transaction and the necessity also of some organization to superintend the defence of the state of a more continuous and adaptable character than the legislature led to the creation on January 11, 1862, of the Military Board. 5 This board was known as the Old Board and was composed of the Governor, the Comptroller and the Treasurer. It was reorganized on April 12, 1864, in accordance with the act of December 16, 1863, to be composed of the Governor and two appointees, and was known as the New Board. 6 The duty in general of the boards was to provide for the military defence of the state by securing supplies of arms, ordnance, ammunition and other stores.
The two boards drew from the treasury a total of $1,651,621.85, divided as follows: 7
With these receipts as a basis the boards carried on the varied and complex operations of purchasing, exporting, and selling cotton, of purchasing and importing supplies, of manufacturing arms and munitions, and of working the salt deposits in Van Zandt County.
The Old Board purchased, so far as can be ascertained, 5736 bales of cotton for which $544,438.23 was paid mostly in Confederate notes and 8 per cent State bonds. One hundred and twelve bales were burned or otherwise lost, and 5551 sold for $434,454.38. The New Board purchased 266 bales, 211 of which are accounted for by sale. The disposition of 128 bales of the total purchased by both boards is unaccounted for. Besides these direct operations in cotton, contracts were made with individuals for the export in the name of the board of cotton owned by them. These contracts contemplated some benefit to the state, as for example, the return of supplies which would be subject to purchase by the board. There is little to show, however, that any important amount of supplies was introduced as a result of these private contracts. The direct operations in cotton, though, resulted in the securing of such needed supplies as arms, cartridge boxes, powder flasks, powder, shoes, cotton cards, quinine, etc.
Most important of the funds turned over to the board were the United States 5 per cent bonds belonging to the school fund. On January 13, 1862, an agent of the Confederate States' government received from the Military Board 100 of the bonds of the denomination of $1000 each. In accordance with the plan proposed in Secretary Benjamin's letter, a like amount of 8 per cent Confederate bonds were to be given in exchange. Secretary Benjamin shortly decided, however, that he had no authority to make this exchange, but that he would purchase of the State any arms or munitions of war which might be procured for the bonds. The failure at this time to negotiate the bonds for supplies terminated the whole matter between the State and the Confederate governments, and the bonds were returned to the Military Board. 8
Of the 634 bonds the Old Board received 364 with 3311 interest coupons of $25 each,—a total par value of $546,775.00 These bonds and coupons were sent to Mexico and Europe for disposition, but fear of their repudiation resulted in but few of them being sold. Only 44 bonds and 310 coupons were sold by the Old Board. Their par value was $49,750.00, and they were sold for $38.022.50.
The New Board was responsible for 139 bonds and 633 coupons. Four of the bonds and 22 of the coupons were sold for $4550, and 135 bonds and 611 coupons were turned over to White and Chiles for cotton cards and medicines. The state did not receive the supplies contracted for, as, according to White and Chiles, they were destroyed in transit by disbanded troops. 9 Nineteen bonds and 80 coupons were turned over by Governor Murrah to an agent to be disposed of for medicine and cotton cards. There is no evidence of any such purchase, however, and the person to whom they were alleged to have been given denied that he received them of the agent. 10 The remainder of the bonds to the number of 109 and 959 coupons were returned to the treasury upon the institution of the Provisional Government.
The Old Board erected a state foundry in Austin for the manufacture of cannon, also a factory for the making of percussion caps. The foundry cost, including expenses of operation, $172,725.12; the cap factory, $100,292.29. The disappearance of the military demand for the kind of cannon made at the foundry, and the greater cost of public over private operation of the cap factory, resulted in the abandonment by the New Board of the operation by the State of these enterprises and in their lease to private parties. 11
The boards and their successors returned to the treasury a total of $1,006,279.30. There was returned for the most part in 1864 and in Confederate notes the sum of $543,958.28. In 1865, unused United States bonds and coupons to the amount of $129,975.00 were turned over to the Provisional Government, and during the period from October 13, 1865, to August 13, 1866, $33,205.25 was returned in specie, United States currency, 8 per cent state bonds, and state treasury warrants. In 1876, a net amount of $298,825.22 was recovered by the state on account of United States bonds and coupons of the par value of $357,175.00 entrusted by the board in April, 1862, to Mr. J. W. Swisher for disposition and which were committed by him to English and German bankers for sale. 12
The penitentiary was not a source of expense to the general treasury during this period, but was self-sustaining. The expenditures of the school fund were small, amounting to only $114,544.26 in the four years 1862-1865 as against $119,351.60 in 1861. The heaviest item of civil expenditures was the support of the indigent families of Texas soldiers. 13 The county courts were the agencies of distribution, and beginning in May of 1863 and extending to the close of the war the assistance extended was nominally large but really small on account of the depreciated value of the notes and treasury warrants. After May, 1864, the medium of payment was treasury warrants, but these soon became practically worthless. The ordinary civil expenditures or those for salaries, support of departments and state institutions, were on a moderate scale. Salaries remained unchanged throughout the war period, and their recipients were subject to the hardship of having to meet with the same nominal receipts prices that were steadily increasing by reason of scarcity of products and inflation of the currency.
Texas entered upon the war period in an unsatisfactory financial condition. In 1860 the means for defending the frontier against Indian uprisings were largely provided by the use of the United States bonds belonging to the university fund. Despite the recommendations of the governor no increased taxation was voted at this time. By January 19, 1861, the treasury deficit was $817,827.00, and the revenue which was to come in before the end of the fiscal year was estimated to fall far short of the deficiency. 14 Each subsequent year saw deficiencies, and at the close of the war the amount of treasury warrants outstanding was $2,068,997.90.
Net receipts in 1861 were $509,788.64, and the total net receipts during the war period, 1862-1865, were $8,161,928.58. Roughly, about 40 per cent was from taxes, 8 per cent from sale of bonds, 38 per cent from the penitentiary, and the remainder, 14 per cent, from interest on the bonds in the school fund, the sale of land, land dues, the sale of public property, and fees. The proportion of receipts derived from the sale of bonds does not indicate, however, the extent to which the state used its credit, for it does not show the extent of indebtedness to special funds for assets transferred, or the floating debt.
By the close of the war a complex tax system had been developed consisting of property and poll taxes, salary and occupation taxes.
The ad valorem rate of the general property tax remained, against the counsel of the governor, at 12½ cents in 1861, with an additional 4 cents, collectible in specie, to meet the interest and provide a sinking fund for the $1,000,000.00 loan authorized by the act of April 8, 1861. 15 In 1862 the rate for all purposes was raised to 25 cents, and in 1863 to 50 cents, which was the rate also in 1864. At the above rates the taxes assessed were $465,494.00 in 1861, $700,609.00 in 1862, $1,675,954.00 in 1863, $1,790,959.00 in 1864, —a total of $4,633,016.24. Assessed values showed a decrease in 1861 and 1862, but in 1863 they were $335,190,700.00, and in 1864, $358,101,886.00 as compared with $294,315,659 in 1860. The number of acres of land, of negroes and other objects of assessment changed but little during these years, so that the increase in assessed values was due to higher valuations which were the result mainly of the inflated state of the currency.
The act of April 3, 1861 16 permitted non-residents of the counties to return land for taxation either in the county of their residence or in the county of its location, and the result was, as formerly, that a large amount escaped. Unrendered land amounted to 34,659,321 acres in 1861, 29,320,425 in 1862, 47,854.029 in 1863, 34,970,258 in 1864, and 56,821,220 in 1865. 17 The lands sold to the state for taxes for the years 1861-1864 were 7,100,000 acres. Since from the beginning of statehood to 1861 the total sold was 17,594,229 acres, the forfeitures during the war were extraordinarily large. The total number of acres redeemed during the period 1846-1863 was only 1,065,600. 18
By the act of January 13, 1862, 19 the poll tax was raised from 50 cents to $1.00, and was assessed throughout the war on all male persons over 21 years of age. The assessments were as follows:
An extensive system of occupation taxation was begun by the act of January 13, 1862. 20 Some features of this act were the reimposition of a license charge upon doctors, lawyers, and dentists, —a practice which had been in abeyance since 1848; a tax of $50 upon insurance companies,—which marks the beginning in this state of special taxes upon corporations; and the absence of any occupation taxes upon mercantile establishments other than the regular ad valorem rate upon goods purchased or received for sale. By the act of March 6, 1863, 21 lawyers and doctors were exempted from payment of a license charge, and in order to discourage the conversion of corn into liquor, a tax of $1000 was laid on each still. The still tax was repealed in December, 1863, but was reimposed in November, 1864, as were also the license taxes upon doctors and lawyers. 22
A system of taxes on the sales of distilled spirits, fermented liquors and wines was adopted December 15, 1863. 23 The taxes were payable monthly, and the rates were proportioned to the value per gallon. These taxes were described in the statutes and were popularly known as “income” taxes. By the act of December 16, 1863, those engaged in the sale of merchandise were subject to a tax of 50 cents on each $100 proceeds of sales, and merchandise was subject to no other state taxation. This was known as the “merchandise tax.” Assessors and collectors were required to call once in every three months and get returns of sales under oath. The act of November 15, 1864, replaced the graded liquors income tax by one that levied simply 5 per cent on gross sales, and modified and extended the taxation of gross receipts. The several occupations and professions taxed were classified and different fixed charges and percentage rates applied. Wholesale merchants were subject to a tax of $300 and 1 per cent on gross receipts; retail merchants, druggists, and auctioneers, $100 and 1 per cent. Those keeping a billiard hall or nine or ten pin alley, doing a storage business, and cotton compressing and insurance companies, were subject to a tax of $100 and 2 per cent of gross receipts. Railroad companies were subject to a tax of one-fourth of 1 per cent on their gross receipts; but no special provision was made for the determination of the amount of gross receipts or for the collection of the tax.
Under the amended constitution of 1861, as under the original of 1845, the legislature had the power to lay an income tax. A beginning of income taxation was made in the act of January 13, 1862, which imposed on each person having a fixed annual salary, whether as a public officer or by private contract, 25 cents on each $100 of such salary over $500. 24 The tax was self assessed and no penalties were prescribed for failure of returns. This salary tax was not re-enacted in the act of December 16, 1863, which applied the principle of income or receipts taxation to the merchandise business, as it had been applied to the liquor business in the act of December 15, 1864. It was not until November 15, 1864, that the principle was extended, though it was yet so restricted as to make the tax an occupation tax rather than an income tax in the accepted sense of the term. Dentists and lawyers became subject to a tax of 2 per cent of the gross receipts from their professions, and presidents, directors, conductors, engineers, secretaries and clerks of railroad companies, and doctors to a tax of 1 per cent. Those engaged in agriculture and mechanical pursuits and those in general who enjoyed fixed incomes were not taxed on their income as such. The income tax as thus levied was therefore a partial one.
The financial reports of this period do not classify the receipts from the several taxes, and for the general propery tax and the poll tax one must rest content with the assessments to get an idea of their importance in the tax system. The amount received from license taxes in 1861 was $43,097. No similar statistics are available for 1862 and 1863. In 1864 the tax on sales of merchandise brought in $54,315.76; the liquor receipts tax, $67,423.35; while the license tax on distillers produced $43,883.28, and the taxes on other callings only $13,392.62. More than 62 per cent of the taxes, other than ad valorem, in 1864 were thus obtained from the liquor business. The act of November, 1864, was very productive, the revenue in 1865 on account of it being $308,582.39. The license tax on distillers and other callings contributed $172,279, the merchandise and income tax, $136,303.
The laws imposing the gross receipts taxes especially were not strictly drawn and this fault and the disorganization of conditions generally resulted in evasion and in the imperfect assessment and collection of all taxes. 25 As to the tax on professions, which is the tax nearest to income taxation in the financial history of Texas, Governor Throckmorton later said that its yield was small and that it operated oppressively and unequally. He recommended a minimum exemption with a graduated but moderate rate on the remainder. 26
In estimating the burden of taxation account must be taken of the taxes levied and collected by the Confederate States' government. In the administration of the Confederate taxes there was a chief collector for the state and assessors and collectors for the districts into which the state was divided for purposes of taxation. Texas was one of the two states, Florida being the other, which did not permit their tax officers to serve in the same capacity for the Confederate government. It was also one of the two states, Mississippi being the other, which did not assume their quota of the Confederate direct taxes. 27 Confederate taxation was much heavier and more rigorously collected than state taxes, and amounted for the four years 1861-1864 to the huge sum of $37,486,854.43. Only $26,904.64 of this amount was in specie. 28
The act of February 9, 1861, authorized the receipt of 10 per cent interest warrants in payment of land and the 2 per cent sinking fund of railroad bonds held by the school fund, and the act of January 11, 1862, made all treasury warrants receivable in payment of land. 29 After January 11, 1862, treasury warrants and Confederate notes were receivable for taxes and all other public dues, except for the specie loan tax, and for interest and principal of the railroad loans by the school fund. 30 The act of December 16, 1863, however, made treasury warrants, bonds and interest coupons of the state receivable in payment of railroad indebtedness to the school fund. 31
The great depreciation of Confederate notes led in the spring of 1864 to the enactment that after the last day of June next and until October 31, Confederate notes of the old issue of the denomination of $100 should not be receivable for public dues except at a discount of ⅓ and that no Confederate notes bearing interest should be received after the last day of June. 32 The purpose of this legislation was to compel the funding of the old issue into Confederate bonds and to sustain the value of the new issue.
The specie needed to meet the interest and sinking fund requirements of the $1,000,000 loan issue of 1861 was provided for by a special specie tax. 33 This special tax began to fail in the early part of 1863, and for the year ending August 31, 1864, produced only $1,352.77 in specie. By the act of March 3, 1863, it was provided that the tax might be paid in other funds, and the Military Board was authorized to obtain the specie required for interest. 34 The history of this special tax well illustrates the disappearance of specie from general circulation. Receipts in 1862 on account of it were $36,900.06, all of which was in specie; in 1863, $123,608.09, of which $57,549.18 was in specie; in 1864, $152,369.94, of which $1352.77 was in specie. In 1865 the specie receipts were not derived from taxation, but were provided by the Military Board.
By the act of January 14, 1862, the disbursement of Confederate notes was restricted, except for about $30,000, to the payment of military appropriations. 35 Other appropriations were payable in specie or in treasury warrants. Inasmuch, however, as the revenue was collected principally in notes and to a much larger amount than military expenditures could absorb, the act of March 6, 1863, provided that all appropriations should be payable in notes. 36
In the spring of 1864 the Confederate currency was rated in specie at from 20 to 30 cents on the dollar. 37 The state recognized by the act of May 27, 1864, a depreciation of 33⅓ per cent, and by the act of May 28, 1864, made appropriations for the support of the civil departments of the government and for the indigent families of Texas soldiers payable in treasury warrants. These warrants, however, enjoyed no better credit than the notes had had, and were quoted in the fall of 1864 at 8 and 10 cents on the dollar. 38 The constitutionality of the issue of treasury warrants which would perform some of the functions of money was questioned, but a majority of the senate judiciary committee held that they were not money and were not intended to circulate as money. 39 This was also the opinion of the Supreme Court of the United States in 1899 in the case involving the validity of the payments of warrants to the school fund by the railroad companies. 40
The bulk of receipts during the war period was in Confederate notes and treasury warrants. During the five years 1861-1865, $948,711.34 of treasury warrants was received, distributed as follows:
No distinction was made in the financial reports between Confederate notes and specie until the year beginning September 1, 1862, which would indicate that by that date the disproportion in the amounts of notes had begun to complicate the operations of the treasury. During the three years 1863-1865, specie receipts amounted to only $163,647.37, the most of which was credited to the special loan account and was secured for this account by the Military Board. The specie receipts were distributed as follows:
Receipts of Confederate notes were $957,137.96 in 1863; $3,652,813.91 in 1864, and $1,559,757.88 in 1865—a total of $6,169,709.75. In the Fox table of currency values, the average value of $1 in gold was $5.88 in Confederate notes in 1863; $19.89 in 1864. On the basis of this scale of depreciation the receipts in Confederate notes in 1863 were equivalent to $162,778 in specie; the receipts in 1864 to $183,650 in specie. 41
Besides the excessive amount of Confederate notes in circulation which the receipts of the state and the Confederate government would indicate, there were state treasury warrants, city and county warrants, and the notes of individuals and corporations. The effect of this inflation of the circulating media, together with the scarcity of commodities, was an enormous rise in prices. As early as January, 1862, the currency became redundant, and before the end of the year public meetings were called in various parts of the state to consider the rise in prices. The depreciation of the currency was popularly ascribed to the perversity of “merchants” and “capitalists,” and tariffs of prices and other coercive measures were suggested as remedies, but none were enacted. 42
From the beginning of statehood to 1860 Texas had no public debt other than that inherited from the Republic. The inadequacy of the revenue system and the increase in expenditures due to frontier defence led to a deficit in 1860, one consequence of which was a practical suspension of payment of what remained of the debt of the Republic. There was paid on this debt, however, $8520 in 1861, $1783.80 in 1862, and $20 in 1863. Another result of the deficit was the appearance of a floating debt. The act of February 14, 1860, authorized the issue of 10 per cent interest warrants, when there was not money in the treasury; and the act of March 20, 1861, authorized the issue of $300,000, 10 year, 8 per cent bonds for the purpose of funding the warrants issued for the protection of the frontier from Indian and Mexican depredations. 43 This funding act was repealed January 11, 1862, after $16,000 of warrants had been funded.
The important loan act during the war period was that of April 8, 1861, which authorized a loan of $1,000,000, to bear 8 per cent interest and to run 16 years. 44 A specific tax of 4 cents on the $100 to pay the interest and maintain a sinking fund was also authorized by the act, but it was not until January 11, 1862, that it was provided that this tax should be a specie tax. 45 Under the provisions of this act $917,000 of bonds were issued, $294,000 of which were used in funding state warrants, $28,000 in paying debts contracted under the authority of the Constitutional Convention of 1861, and $595,000 were turned over to the Military Board. Seventeen thousand dollars of the bonds given to the Military Board were returned and $1000 mutilated, leaving a net amount outstanding of $899,000. The net amount for which the Military Board was responsible was $578,000. 46
The act of December 16, 1863, authorized the issue of $2,000,000, 7 per cent bonds, payable 6 to 12 years after the close of the war, for the purchase of cotton. 47 Certificates for these bonds to the amount of $195,190.29 were issued, but only 45 bonds were issued and delivered in redeeming certificates. This debt with interest amounted at the close of the war to $211,130.83. 48
The only other bonds authorized and issued were 6 per cent bonds to fund the treasury warrants received by the school fund for interest and principal payments by the railroads. 49 Of these there was issued a total of $320,367.13, all of which was held by the school fund. 50
The 8 and 7 per cent bonds were disposed of to citizens of the state for cotton, currency, and military equipment and supplies. The cotton purchased was transported to Mexico and either exchanged for military supplies or sold and the proceeds used to purchase the supplies. After the organization of the Military Board it issued a stirring circular address to the people of the state calling upon them to take the bonds at par for their cotton. The cotton growing part of the state was divided into districts and agents were appointed in each to take subscription to the loan in either cotton or money. Upon the purchase of any cotton, or the sale of bonds for money, the agent took a bill of sale and delivery and executed a receipt or certificate to the seller, which certificate entitled the seller to bonds of even date. 51
The interest on the 7 and 8 per cent bonds was payable in specie. Specie interest payments were $6009.61 in 1862, $46,586.11 in 1863, $40,502.90 in 1864, $72,696.61 in 1865. These amounts were paid, though apparently somewhat irregularly, but despite them the value of the bonds fell in 1864 to less than 25 cents on the dollar. 52 The provision in the 8 per cent loan act for a sinking fund was not observed so far as regards a specie fund.
Treasury warrants outstanding at the close of the war amounted to $2,068,997.90, about $180,000 of which were 10 per cent interest warrants. In 1863 and 1864 these had a value in specie of 8 and 10 cents on the dollar. 53 There were at all times in 1863, 1864, and 1865 enough Confederate notes in the treasury to redeem all the outstanding warrants, but the holders held them back with the expectation of ultimately getting something better in payment. 54
The state was indebted to special trust funds to the amount of $1,455,913.86 on account of United States bonds and specie used and for evidences of state indebtedness received in the collection of revenue. The school fund was due $1,137,406.05, the university fund, $283,514.22, and other special funds, $34,892.49. 55
The amount due soldiers and for supplies was estimated at $3,150,000; the unpaid debt of the Republic at $110,613.23; miscellaneous debt at $199,176.76. 56 The total debt was $8,110,832.58. Deducting the debt of the Republic, there remains $8,000,219.35 which represents the debt incurred from 1860 to the close of the war.
The convention of 1866 declared the debt created in aid of the war null and void, this being directed by the fourteenth amendment to the Constitution of the United States. Excessive zeal led it to go beyond this and to repudiate the civil debt contracted between January 28, 1861 and August 5, 1865. 57 The constitution of 1869 went still further and provided that “all unpaid balances, whether of salary, per diem, or monthly allowances due to employees of the state who were in the service thereof on the said 28th day of January, 1861, civil or military, and who gave their aid, countenance or support to the rebellion then inaugurated against the government of the United States or turned their arms against said government” were forfeited. Also, “all the 10 per cent warrants issued for military services, and exchanged during the rebellion, at the treasury, for non-interest warrants” were declared to be fully paid and discharged. 58
Under the above provisions the Reconstruction auditorial boards recognized a debt of $251,048 to be due individuals. In 1876 and 1883-6 the school and university funds received $857,240.71 of the amount to which they appeared creditors at the close of the war. Of the $8,000,219.35 there was, therefore, $1,143,181.26 recognized, leaving the repudiated portion $6,857,038.09.
The amount due the school fund at the close of the war was $1,137,406.65; $766,700 of this was for United States bonds and interest coupons transferred to the Military Board in August and November of 1862; $331,604.84 for state treasury warrants received; $26,927 for specie used, and $12,173.93 for interest on state bonds.
Receipts of the school fund from taxes, land sales, and interest on securities amounted during the four years 1862-1865 to $643,525.81, while expenditures, exclusive of investments, amounted to only $114,544.26. In 1862, $185,520 was loaned to railroad companies. The railroad companies made no interest payments in specie during this period, but in accordance with the act of December 16, 1863, and November 15, 1864, paid in state treasury warrants a total of $320,367.13 for interest and principal of bonds. The state funded the warrants in 6 per cent bonds, and the latter remained of doubtful validity unti 1883 when they were paid. The legality of the payments of the companies in warrants was subsequently contested on the ground (1) that the warrants were issued for the purpose of being circulated as money and so were in violation of the State Constitution; (2) that they were bills of credit emitted by the state and were therefore in violation of the Constitution of the United States; and (3) that the acts under which they were issued and paid were in aid of the Rebellion and were therefore void. The decision of the Supreme Court of the United States was against the state on all three points. 59
In 1876, $297,758.22, out of a total of $357,175 in United States and coupons originally transferred, was recovered by the state and returned to the school fund.
The indebtedness to the university at the close of the war was $283,514.22. This was for United States bonds to the amount of $100,000 and specie from interest and land sales transferred to state revenue account in 1860-1862, and for treasury warrants and Confederate notes received in payment of land sales. Receipts of this fund from land sales during the four years 1862-1865 amounted to $134,183.39. There were no disbursements other than transfers. In 1866, 5 per cent state bonds to the amount of $134,472.26 were placed to the credit of the fund to replace the United States bonds and interest used, the balance of the debt not being recognized. The bonds thus credited remained of doubtful validity until 1883, when they were paid with accumulated interest; $10,300.41 of this old debt of war was also validated and paid in 1883, but without interest.
The effect of the war upon the school and university funds was to strip them of their sources of revenue, and as a result of conditions brought about by the war education in Texas was set back by more than two decades.
On June 8, 1865, the total cash balances on hand amounted to $3,368,510.07. This was made up of $2,908,038.34 in Confederate notes, $445,074.37 in state paper, and $15,397.36 in specie. Only $362,548.11 of the Confederate notes were actually in the treasury, the remainder, $2,535,490.23, were old issues, and had been turned over to the Confederate States' depository to be exchanged for new issues. In addition to the above balance there was in the hands of the Military Board $129,975 in United States bonds and interest coupons. This latter and the specie were the only part of the balance that was of value.
The finances of the war period which secession inaugurated ends June 8, 1865. At this date the pen which traced the ledgers of the fiscal department of the state government stops off shortly and until October 13, 1865, when the work of accounting is again resumed in a new handwriting, a gap of blank pages follow—mute witnesses of the end of a disastrous struggle and of the temporary dissolution of state government. Social disorder attended the breakup of the Confederacy and on the night of June 11, 1865, the state treasury was broken into and looted. There was little of value in it that was negotiable, so that the loss, except for something less than $5,000 in specie, was not serious.
The Tri-Weekly Telegraph under date of July 15, 1864, contains the Fox Table of currency values. It says: “The following table showing the fluctuations in the gold market here (Houston) has been furnished us by Mr. Henry S. Fox, a reliable merchant of this city. One dollar in gold has been worth the following amounts in Confederate treasury notes at the times mentioned:
1861
Sept. 1-30 par
Oct. 1-31 1.05
Nov. 1-30 1.10
Dec. 1-15 1.25
Dec. 15-30 1.50
1862
Jan. 1-Feb. 8 1.50
Feb. 8-Apr. 8 1.75
Apr. 8-20 2.00
Apr. 20-May 12 2.50
May 12-22 2.75
May 22-June 12 3.00
June 12-19 3.25
June 19-Aug. 9 3.50
Aug. 9-Sept. 14 3.75
Sept. 14-Oct. 31 4.00
Nov. 1-30 3.75
Dec. 1-31 4.00
1863
Jan. 1-5 4.00
Jan. 5-18 4.50
Jan. 18-Feb. 9 4.75
Feb. 9-Mch. 19 5.00
Mch. 19-Apr. 5 4.75
Apr. 5-14 5.00
Apr. 14-May 3 5.25
May 3-7 6.00
May 7-17 7.00
May 17-June 20 8.00
June 20-July 4 7.00
July 4-7 8.00
July 7-8 8.50
July 8-10 9.00
July 10-August 6 9.50
Aug. 6-Sept. 9 10.00
Sept. 9-24 11.00
Sept. 24-Oct. 5 12.00
Oct. 5-12 11.00
Oct. 25-Nov. 7 12.00
Nov. 7-13 11.50
Nov. 13-16 12.50
Nov. 16-17 13.25
Nov. 17-20 15.00
Nov. 20-25 15.50
Nov. 25-Dec. 6 16.00
Dec. 6-14 17.50
Dec. 14-16 18.00
Dec. 16-31 19.00
1864
Jan. 1-3 19.00
Jan. 24-31 24.25
Feb. 1-4 24.00
Feb. 16-22 20.00
Feb. 22-Mch. 4 21.00
Mch. 24-Apr. 5 22.75
Apr. 20-May 5 26.00
May 25-31 44.00
June 1-3 43.00
June 30 28.00
July 1 31.00
Comptroller's Ledger, 1861-1865. Archives of Comptroller's Department.
Comptroller's Reports, 1860-1865.
Comptroller's Warrant Register, 1861-1865. Archives of Comptroller's Department.
Executive Records, Nos. 279, 280, 281. Archives of State Department.
Gammel, Laws of Texas, V.
Journals of the House of Representatives, 8th Leg., regular and extra sessions.
Journals of the Senate, 9th regular and extra sessions, and 10th regular session. In manuscript in archives of State Department.
Lubbock, F. R., Six Decades in Texas. (Austin, 1900.)
Miscellaneous papers on Military Affairs, 1861-1865. Archives of State Department, File cases Nos. 54-55.
Ramsdell, C. W., “Texas in the Confederacy,” in The South in the Building of the Nation, III. (New York, 1909.)
Records of the Military Board. Archives of State Department.
Reports of the Supreme Court of the United States, 1868, 1899.
Smith, E. A. The History of the Confederate Treasury.
The Texas Almanac, 1860-1861-1862-1863-1864-1865. Galveston.
The Tri-Weekly Telegraph, 1861-1865. Houston.
The Weekly Southern Intelligencer, 1865. Austin.
2. For annual gross expenditures, see Appendix A, p. 20.
3. Report of Comptroller, 1863-1865, p. 14.
4. MSS. Record of Militry Board, No. 101, p. 5.
5. MSS. Record of Military Board, No. 101, p. 14; Gammel, Laws of Texas, V, 484, 499.
6. Gammel, Laws of Texas, V, 680.
7. Report of Pease and Palm, 1865, p. 1. This published account is condensed. For the full report see Executive Record, No. 281.
8. MSS. Report of Military Board, 1865 File Case No. 55.
9. Texas v. White, 7 Wallace, 706. See also report of Pease and Palm, p. 4.
10. Report of Pease and Palm, p. 4.
11. MSS. Report of Military Board, March, 1865. File Case No. 55.
12. The total of the returned amounts has been deducted from military expenditures.
13. Act of March 5, 1863, Gammel, Laws of Texas, V, 601; Act of December 15, 1863, Ibid., 675.
14. Message of Governor Houston, February 5, 1861. House Journal, 8th Legislature, Extra Session, p. 17.
15. Gammel, Laws of Texas, V, 375.
16. Ibid., V, 369.
17. Report of Acting Provisional Comptroller, 1866.
18. Comptroller's Report, 1868-9, pp. 110-111.
19. Gammel, Laws of Texas, V. 494.
20. Ibid., V, 494.
21. Ibid., V, 613.
22. Act of December 16, 1863, Gammel, Laws of Texas, V, 702; Act of November 15, 1864, Ibid., p. 813.
23. Gammel, Laws of Texas, V, 670.
24. Gammel, Laws of Texas, V, 494.
25. Message of Governor Murrah, October 20, 1864. Executive Record, 280.
26. Message, August 18, 1866. House Journal, 11th Legislature, Regular Session, p. 79.
27. Smith, The History of the Confederate Treasury, 25.
28. Condensed account of G. J. Durham, Collector of Confederate Tax for Texas, in the Weekly Southern Intelligencer, August 11, 1865.
29. Gammel, Laws of Texas, V, 355, 466.
30. Ibid., 481. The Tri-Weekly Telegraph, December 2, 1861, noted that state treasury warrants passed at a discount of from 50 to 60 per cent, and it dissented from Governor I ubbock's recommendation that Confederate notes should be made receivable for public dues. This paper opposed also the funding of state warrants and urged that the best way of making them approximate par was to make them receivable for taxes and other public dues, and advised that to this end taxation should be increased and expenditures decreased. See issues of December 16, 1861, and October 26, 1864.
31. Gammel, Laws of Texas, V, 691; Act of May 28, 1864, Ibid., 767 Act of November 15, 1864, Ibid., 820.
32. Gammel,Laws of Texas, V, 764. Act of May 27, 1864.
33. Ibid., 376.
34. Ibid., 596.
35. Ibid., 496.
36. Ibid., 611; Message of Governor Lubbock, February 5, 1863. Senate Journal, 9th Legislature, Extra Session.
37. Message of Governor Murrah, May 11, 1864. Executive Records, 280.
38. Proclamation of Governor Murrah, September 13, 1864. Executive Records, 280.
39. The Tri-Weekly Telegraph, December 9, 1864.
40. H. &T. C. R. R. Co. v. Texas, 177 U. S., 83.
41. For Fox Tables, see Appendix B, pp. 21-22.
42. The Tri-Weekly Telegraph, August 4, December 10, 1862; January 9, January 23, May 25, 1863.
43. Gammel, Laws of Texas, IV, 1477; Ibid., V, 360; Act of January 11, 1862; Ibid., V, 488.
44. Gammel, Laws of Texas, V, 375.
45. Ibid., V, 481.
46. The following is a statement of the disposition of the bonds held by the Military Board up to January 1, 1863, the only period for which an itemized statement is obtainable:
299 were sold for Confederate money.
3 were sold for Nichols' guns.
3 were sold for sulphur and saltpeter.
20 were paid for the Steamer Bayou City.
21 were paid for alterations and repairs on the steamer and for removing obstructions from Buffalo Bayou and Galveston Bay.
114 were used in the redemption of cotton certificates.
Total, 460.
Par value ..... $460,000.00
Premiums ..... 16,422.60
Total value ..... $476,422.60
MSS. in File Case No. 54, State Department.
47. Gammel, Laws of Texas, V, 663, 683.
48. Report of Pease and Palm, p. 8.
49. Act of December 16, 1863, Gammel, Laws of Texas, V, 691; Act of November 15, 1864, Ibid., V, 820.
50. Comptroller's Report, 1863-1865, p. 7.
51. MSS. Record of Military Board, No. 101. On November 26, 1862, the board opened bids for $100,000 of the 8 per cent bonds. There were bids for $136,000 or 136 bonds. For 23 bonds a premium of 12 per cent was offered, for 25, 10 per cent and for 6, 12¼ per cent. The bids for these 54 bonds were in Confederate money and amounted to $59,995. On the basis of the Fox table of $1 in gold for $3.75 of Confederate notes, the specie value of the bids was equivalent to $15,998.66.
52. Message of Governor Murrah, October 20, 1864. Executive Record, 280.
53. Message of Governor Murrah, October 20, 1864.
54. MSS. report of Pease and Palm, Executive Record, 281, p. 118.
55. MSS. report of Pease and Palm, Executive Record, 281, p. 116.
56. MSS. report of Pease and Palm, in Ibid., pp. 118-119.
57. Gammel, Laws of Texas, V, 887, 900.
58. Art. XII, Sec. 34.
59. H. &T. C. R. R. Co. v. Texas, 177 U. S., 66-103.
How to cite:
Miller, E. T., "THE STATE FINANCES OF TEXAS DURING THE CIVIL WAR ", Volume 014, Number 1, Southwestern Historical Quarterly Online, Page 1 - 23. http://www.tsha.utexas.edu/publications/journals/shq/online/v014/n1/article_2.html
[Accessed Sun Nov 23 12:28:44 CST 2008]
