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 of 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 was one of trust funds violated, of debt accumulated, and of receipts and expenditures, swollen fictitiously by the depreciation of the paper money in which they were payable, mounting large to meet a growing desperate situation.

The only expenditures of 1861 to reveal a state of war were those for the regiment ordered raised by the Constitutional 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. 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.

1 The period of which this is a study extends from August 31, 1860, to June 8, 1865. The fiscal year ending August 31, 1861, has been included not because the finances reflect the war but on account of the legislation which made the initial financial provision for the struggle.

A part of the military expenditures was 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.1

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.2 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 creationon January 11, 1862, of the Military Board.1 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.2 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.

1 Report of the Comptroller, 1863-1865, p. 14. 2MSS. Record of Military Board No. 101, p. 5.

The two boards drew from the treasury a total of $1,651,-621.85, divided as follows :3

In Confederate treasury notes..........

$257,191.90

In specie..........

7,729.95

In state treasury warrants......

25,000.00

In 8 per cent state bonds.........

595,000.00

In United States 5 per cent bonds..........

634,000.00

In coupons of United States bonds.......

132,700.00

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, as far as can be ascertained, 5,736 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 5,551 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 to export their own cotton, but in the name of the board. These contracts promised 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.

1 MSS. Record of Military Board No. 101, p. 14. Laws of 1862, pp. .40, 45.

2 Laws of 1863, p. 26.

3 Report of Pease and Palm, 1865, p. 1. This published account is condensed. For the full report see Executive Record No. 281.

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 $1,000 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.1

Of the 634 bonds the Old Board received 364 with 3,311 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 $4,550, 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.2 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.1 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.

1 MSS. Report of Military Board, 1865; File Case No. 55. 2Texas v. White, 7 Wallace, 706 (1868). See also report of Pease and Palm, p. 4.

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 cessation 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 individuals.2

The boards and their successors returned to the treasury a total of $1,006,279.30. Most of the sum, $543,958.28, was returned in 1864, and in Confederate notes. 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. M. Swisher for disposition and which were committed by him to English and German bankers for sale.3

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.4 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.

1 Report of Pease and Palm, p. 4.

2 MSS. Report of Military Board, March, 1865; File Case No. 55.

3 The total of the returned amount has been deducted from military expenditures.

4 Act of March 5, 1863; Laws of 1863, Called Sess., p. 12. Act of December 15, 1863; Laws of 1863, p. 21.