SONS OF DEWITT COLONY TEXAS
2000-2001, Wallace L. McKeehan, All Rights Reserved.
Index--War of Independence

 

.......The treasurer [of the provisional government] reported on March 1, 1836, that he had received and expended since November 28, 1835, $3,981.85.....Donations....[to the cause]...did not exceed $25,000, much...in kind.......loans amounted....to $100,000.....indebtedness of the government at the end of August, 1836, was estimated....at $11,250,000......notwithstanding the importance of the stake....cost of the revolution was trivial. And one is inclined to marvel....that Texas could have carried on......a successful war.

THE FINANCES OF THE TEXAS REVOLUTION
by Eugene C. Barker
From a reprint of the Political Science Quarterly, Vol. XIX, No. 4 by Ginn & Co., Boston, MA, 1904

One is puzzled to know whence came the revenues of Texas while a part of the Mexican confederacy. The constitution of Coahuila and Texas provided, indeed, that "the taxes of the individuals composing the state shall form its public revenue," and it can be gathered from the laws and decrees of the state that its inhabitants were subject to several sorts of taxes---stamped paper for legal documents, dues on land, an income tax and an excise, not to speak of customs duties. But though the workings of the fiscal system are far from clear, it is certain that numerous exemptions were granted from some of the taxes and that a great deal of liberty was allowed in the payment of others, so that there was surely no considerable income derived from these sources. When the revolution began, therefore, not only was there very little public money in the country, but the machinery of collection was stiff with inaction and poorly adapted to the important work of bringing in quick returns. And added to this, the resources of Texas were not of the sort to be readily converted into the sinews of war.

Under these conditions, then, how were the Texans enabled to establish a government, maintain an army and accomplish their independence? Mr. Henry M. Morfit declared to Secretary Forsyth that the means were derived principally "from the sympathy of their neighbors and friends in the United States and by loans upon the credit of the state," [Morfit to Forsyth, September 4, 1836, in House Executive Document, 24th Cong., 2d Sess., no. 35, p. 16] while Mr. Gouge, in his Fiscal History of Texas [pg. 24] somewhat facetiously remarks that the various expedients of governments for raising funds in such exigencies may be resolved into "taxing, borrowing, begging, selling, and robbing and cheating," and that the Texans apparently determined to try all six. Before investigating this question it will be necessary to outline briefly the political changes in Texas during the revolution.

When hostilities began at Gonzales (October 2, 1835), proclamations had already been issued for the election of delegates to a general consultation, which was to meet at San Felipe on October 16. Until this could assemble, the direction of affairs was assumed by a committee of five, composed of Messrs. William Pettus, Gail Borden, R. R. Royall, Joseph Bryan, and C. B. Stewart. They organized themselves on the 11th into the permanent council and elected Mr. Royall president. Five days later, when the consultation should have convened, it was found that most of the members-elect had joined the army then marching on San Antonio. Since a quorum could not be obtained, an adjournment was taken to November 1 and a number of the members present, upon invitation, united with the permanent council. The council then acted as a sort of executive committee until the consultation was formally organized and relieved them of their duties. After a session of ten days the consultation provided for the organization of a provisional government, consisting of a governor, a lieutenant-governor and a council, and, bequeathing its problems to them, adjourned until the first of March. Before the day of their reassembling, however, there had been developed an almost unanimous desire for separation from Mexico, and new delegates were chosen with plenary powers to devise a permanent government. On the second of March they made a declaration of independence, and on the seventeenth adopted a constitution. Pending the ratification of this by the people, the convention appointed David G. Burnet president ad interim, and adjourned.

In view of these frequent changes one could hardly expect a settled financial policy to be developed. Measures looking toward the raising of revenue were necessarily experimental, and fortunately the revolution was over before it was proved that most of them were failures.  The permanent council was short-lived and lacked authority. The most that it could do was to make an effort to look after the immediate necessities of the few hundred volunteers who had taken the field. For this purpose, on October 14, William Hall was appointed "contractor for the army of the people," and instructed to begin contracting immediately for such things as were needed. He was to give his official receipt for supplies obtained, and upon refusal of parties of the second part to relinquish their goods on such terms, he was authorized to "press into service any valuables that may be necessary to a speedy and prompt cooperation with our forces at headquarters." On the same day the council borrowed $100 from James Cochran, and used it in the transportation of some "artillery" from Columbia to the army. The loan was to be repaid from funds in the hands of J. H. Money, treasurer of the municipality of San Felipe de Austin. Cochran consented to make additional advances on the same security, so that the council, in ordering the next day supplies of coffee, sugar and salt for the army, were able to assure the grocer that they had "some funds." In the end Cochran's loans reached the amount of $280, and this with $58.30 from land dues in the hands of Mr. Gail Borden and an advance of $36 by the president, seems to have been all the money handled by the permanent council [Journal of the Proceedings of the Consultation, II].

On the 20th, the appointment of a committee of five was moved "to inquire into the state of the public funds and, if necessary, report a plan for replenishing them." The committee was forthwith appointed, and recommended that six "public agents" be appointed to cooperate with the committees of safety in each jurisdiction in the collection of dues on land and stamped paper. They were also to negotiate loans whenever possible, and pledge as security therefor the public faith? [Quarterly of the Texas State Historical Association, VII, 267]. On the 22d Borden's powers were strengthened as collector in the jurisdiction of San Felipe, and he was instructed to publish a notice that drafts drawn by captains of companies---presumably for supplies and approved by the president of the council would be accepted in payment thereof. It is likely that this was suggested by the committee.  [On the 27th a more ambitious effort was made to secure funds by the appointment of Thomas F. McKinney to negotiate a loan of $100,000 in New Orleans? [Royall to Austin, October zq, 1835. Austin Papers, No. 20. Royall declared himself skeptical of McKinney's success, in case he accepted the commission, for the reason that sentiment in the United States as a condition of assistance in loans seemed to favor a declaration of independence, while the Texans at this time were determined upon allegiance to the federal constitution of 1824. But he consoled himself with the hope that at any rate volunteers and contributions might be obtained]

But from this undertaking he excused himself on the ground that such a commission would need to be supported by unquestionable authority, which he feared would not be conceded to the permanent council. [McKinney to Royall, October 31, 1835. Archives of Texas, diplomatic correspondence, file 14. no. 1337. If upon its meeting the consultation saw fit to appoint him agent, McKinney said that he would be glad to serve. In the meantime, he thought the immediate necessities of the army could be supplied by the firm of McKinney & Williams and other local merchants].

Before this reply was received the council had merged into the consultation, to which it reported the result of its fortnight's labors; receiving therefor a vote of thanks. The sum of $374.30 had been expended, provision had been made for the efficient collection of the public dues, and supplies were on the way to the army. These consisted of "upwards of a hundred beeves, a considerable quantity of corn meal, and sugar, coffee, bacon, blankets, shoes and tent cloths." [Journal of the Proceedings of tfie Consultation, II, 12. For the paragraph in general, see the journal of the permanent council in the Quarterly of the Texas State Historical Association, vii, 249-278].

The consultation's tenure of power was even briefer than that of the permanent council. It first secured a quorum November 3, and adjourned on the 14th. When the call was issued for the assembly in August, it was expected that the principal work of the delegates would be to consult upon the attitude which Texas should take toward the centralizing measures of Santa Anna. This question, however, the rapid development of events had already determined, and it was quite a different program that was submitted to them. In his inaugural address the chairman, Dr. Branch T. Archer, suggested that they should confine their attention mainly to three things: they should promulgate and publish to the world the reasons why they had taken up arms and the objects for which they were fighting; they should consider the propriety of creating a provisional government; and they should secure the organization of a military system. Money, he said, would of course be needed for this, and agents should be appointed pointed to get it. The first proposal was easily carried out, and the declaration was issued on the 7th; but the second was of greater magnitude, and occupied them throughout their session; while the third they passed on to their successors practically untouched.

In fact, the actual financial affairs of the consultation were scarcely more important than those of the permanent council. On the morning of the 6th, five members were appointed to provide for the necessities of the army, with authority "to borrow money or originate other debts for that purpose," and in the afternoon they reported a loan of $500 obtained from Thomas F. McKinney. Of this, $238 had been expended in paying drafts already drawn on the government, $20 was used in forwarding an express, and a balance of $242 remained in their hands. The following day the consultation declared "that Texas is responsible for the expenses of her armies now in the field, that the public faith of Texas is pledged for the payment of any debts contracted by her agents," and "that she will reward by donations in land all who volunteer their services in her present struggle;" but for practical purposes this meant little more than the expression of a willing spirit to meet her obligations if she were able.

At the same time a windfall arrived in the shape of a contribution from New Orleans. Mr. Edward Hall brought the news on the 6th that a committee in that city had raised $7,000 for the benefit of Texas. Half of it had been employed in equipping and transporting volunteers, but the balance, rapidly growing by other donations, was retained by the committee. Three days later we find the consultation appointing Hall agent for the purchase of war munitions and instructing him to draw on this committee for funds. Patriotic citizens also began to offer loans and securities in the hope that an hypothecation of individual property might prove more tempting to the money lenders than a bare pledge of the public faith. Stephen F. Austin tendered his "whole estate," to be mortgaged as the consultation saw fit; J. W. Fannin presented thirty-six slaves; and Ben Fort Smith offered eleven leagues of land for the same purpose. [Austin to the consultation, November 4, 1853. Archives of Texas, diplomatic correspondence, file 1, no. 6. Fannin to same, November 6, 1835, file 6, no. 559. Smith to same, November 8, 1835, file 18, no. 1708. From a letter of Frost Thorn's to the consultation, dated November r, 1835 (file 18, no. 1753), it would appear that Nacogdoches took the lead in these contributions. He said that $2,800 in cash and twenty-eight horses had been subscribed by the citizens of that jurisdiction, but if this money ever reached the consultation, no acknowledgment of it was made].

On the 13th the house gratefully accepted these proffers, but resolved to make use of them "only when imperiously demanded in the most extreme emergency."  The labors of the consultation practically ended with the enrollment of an ordinance creating a provisional government. By this instrument it was made the duty of the general council "to devise ways and means," and jointly with the governor it was authorized to contract loans "not to exceed one million of dollars," hypothecating the public land and pledging the faith of the country therefor. And they were invested with power "to impose and regulate imposts and tonnage duties, and provide for their collection under such regulations as may be the most expedient." They should appoint a treasurer and clearly define his duties; and finally, all monies due or accruing on lands and all other public revenues were placed at their disposal. As if this were not sufficient latitude, the governor and council were given "power to adopt a system of revenue to meet the exigencies of the state." [Journal of the Proceedings of the Consultation, 7-48, passim]. Upon the provisional government's assumption of power it was felt that the time had at last come for less tentative measures. The problem, as tersely stated by Governor Smith in his first message to the council, was "to call system from chaos"; but, "without funds, without munitions of war, with an army in the field contending against a powerful foe," the outlook did not appear to him particularly bright. As a preliminary step he thought a treasurer and other fiscal officers ought to be appointed? [Journal of the Proceedings of the General Council, 12, 14].

The council agreed with him, and the committee of state and judiciary reported, on November 17

that the immediate appointment of a treasurer to the provisional government, whose duty shall be clearly defined, is now devolving upon this body. Receipts and disbursements of public monies 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 distinguishes the free sons of that country in revolutionary times from which our citizens have descended. [Journal of the Proceedings of the General Council, 19].

Accompanying this report, the committee submitted an ordinance creating a treasury department. It was passed the following day, but was vetoed by the governor because the salary of the treasurer was fixed at $3,000 a year, an exorbitant one, as he thought, with the finances of the state in the condition they then were. Upon further deliberation, the council unanimously sustained his objection, and on the 24th D. C. Barrett proposed a new ordinance, obviating it. By a suspension of the rules this was passed the same day and the governor approved it on the 26th. Besides defining the treasurer's duties, the law directed that disbursements should be made only upon the order of the general council, "approved and signed by the Governor and attested by the Secretary of the Executive." [Journal of the Proceedings of the General Council, 21, 23, 37, 43, 48, 49; Ordinances and Decrees of the Provisional Government, 24-26].

The election of a treasurer, Josiah H. Fletcher, completed the organization of the department, [Journal of the Proceedings of the General Council, 109], but the method of drawing drafts, though a safe one, was a bit cumbersome, and the council passed an ordinance (December 2) providing that an order from the chairman of the finance committee should be a sufficient voucher to the treasurer for disbursements. The chairman was required to report such orders to the house, in order that the amount might be entered upon the journal, but the governor, with some justice, pointed out that this was an inadequate safeguard, and vetoed the bill. The council, however, was determined and passed it over his objection. [Journal of the Proceedings of the General Council, 1112-1113; Ordinances and Decrees, 46-47]

But, perhaps in anticipation of this action, Mr. Millard, chairman of the committee on finance, shrinking either from the responsibility or, more probably, the labor involved, secured the passage of a resolution for the appointment of a committee of public accounts. This was "to receive, audit, and register said accounts," and keep records showing the status of all claims, "whether passed, rejected, or under consideration," and report upon them twice a week to the general council. [Journal of the Proceedings of the General Council, 145].

A fortnight later Mr. Royall, who had been appointed chairman of this committee, sought escape by creating the office of auditor, and his bill, amended to provide for a comptroller also, was passed December 26. The law defining the duties of these officers is a rambling one of twenty-one sections; but in brief it was declared the duty of the auditor to pass upon the validity of all claims, keep the books of the government and, after observing the proper formalities, draw drafts on the treasury to cover audited accounts. After approval by him claims under $4,000 had to be examined independently by the comptroller. In case of disagreement between the two, the auditor might appeal to the decision of the council if it were in session or, in its absence, to the governor. All claims for more than $4,000 he must submit first to the council or governor, and, when passed by them, to the comptroller for his approval---in this case, perhaps, merely formal. All drafts on the treasurer must be signed by the auditor and countersigned by the comptroller, and if the amount were greater than $4,000, they must bear in addition the approval of the governor or council. But the council reserved the right to order "payments on claims not within the provision of this ordinance." Twice a week---on Wednesday and Saturday---to prevent fraud, auditor and comptroller must make to each other reciprocal reports of claims audited and drafts signed, and once a week both were required to report to the general council or the governor. The governor objected to the clause which gave the council power of exempting certain claims from the operation of the law, but the bill was passed unchanged over his veto (December 29). [Journal of the Proceedings of the General Council, 200, 205, 210; Ordinances and Decrees, 99-105]

The appointment of officers to collect, respectively, customs duties and dues on land completed the establishment of the fiscal administrative machinery.   But the provision of revenue was a matter of greater difficulty. The committee on finance estimated on paper an adequate income from sale of the public domain, taxes on land, a tax on slaves, an export duty on cotton, and tonnage and tariff duties; but they were constrained to admit that, although the picture which they presented might be "flattering and exhilarating in the highest degree to the patriot and statesman, . . . yet the urgent, pressing, and unavoidable exigencies and immediate necessities of our state . . . require a fund to which it can immediately recur." To secure this, they could think of no project "possessing in a higher degree all the essential requisites of speedy operation, and combining celerity and certainty in its accomplishment, than that suggested by a loan." [Journal of the Proceedings of the General Council, 61-67]

In the end this really did prove, though none too speedy in its operation, the country's chief means of securing ready money, but the council had no notion of trusting all their ventures to one bottom. To mention their experiments in chronological order: on November 27 an ordinance was approved granting letters of marque to privateers; on December 5 a general law provided for the negotiation of a million-dollar loan; a week later a system of tonnage and tariff duties was declared; on December 36 measures were taken for the efficient collection of land dues; on January 6 the sale of certain public property was ordered by resolution; and on January 20 an issue of treasury notes was authorized. To these sources of revenue must be added finally a number of donations. In discussing these ipeasures donations will be considered first and loans will be postponed till the last.

Most of the donations came from the United States, and, though never very great, as an evidence of good-will they afforded encouragement to the Texans far out of proportion to their intrinsic importance. The contribution of the New Orleans committee during the session of the consultation has already been noticed, but at the same time similar committees were busy in Natchitoches and Mobile. November 15 the council acknowledged the receipt of a letter from D. H. Vail, of the former place, informing them that he had received "in different articles" about $800 for the benefit of Texas, and at the same time news came that in Mobile $2,000 had been raised. [Journal of the Proceedings of the General Council, 8].

On November 30 General Houston presented a gift of $100 from Mr. John Hutchins, of Natchez, Mississippi [Journal of the Proceedings of the General Council, 78], and some two weeks later we find the council taking steps to change a thousand-dollar bank note which, Gouge says, was a contribution from the United States [Journal Proceedings of the General Council, 171; Gouge, Fiscal History of Texas, 32].

In the meantime, commissioners had been dispatched to the United States for the purpose primarily of negotiating a loan, but with instructions among other things to receive donations, and late in February they reported a gift of $500 from three citizens of Nashville. [Austin Papers, N 12].

About the same time Samuel St. John, a rich cotton factor of Mobile, authorized the provisional government to draw on him for $5,000. He had visited Texas, he explained, in the summer of 1832 and had ever since retained a lively interest in her welfare, because of her peculiar facilities for cotton growing [St. John to Governor Smith, February 22, 1835. Archives of Texas, diplomatic correspondence, file 16, no. 1586].

On March 7 the convention passed a resolution of thanks to H. K. W. Hill of Nashville for a gift of $5,000, [Proceedings of the Convention at Washington, in Gammel's Laws of Texas, i 848-849], and on May 20 the citizens of Port Gibson, Mississippi, made a cash donation of $927 [Treasurer's report, August 7, 1836. Archives of Texas, D, file 29, no. 2844]. As late as June 27, a Dr. Williams presented a donation of $650 from the United States, but I have found no reference to other contributions, though it is not unlikely that others were made. The commissioners in their progress through the country appointed numerous local and general agents to solicit volunteers and donations, and the funds collected were employed in equipping those who volunteered [Stewart Newell, agent in Philadelphia, was instructed to use for this purpose all money collected before the middle of June. Austin Papers, N 5. Mr. Henry M. Morfit, writing to Hon. John Forsyth, under date of September 4, 1836 (24th Congress, 2d Session, House Ex. Doc. no. 35, P. 15), says that several individuals have "unostentatiously presented $5,000, while numbers have contributed $1,000 each," but a diligent search through the archives has failed to corroborate this].

With the exceptions noted, this seems to have been the form in which all the contributions mentioned reached the Texans. In Texas itself the wealth of the citizens, as of the state, consisted in land. One is not surprised to learn, therefore, that with two exceptions they subscribed no cash. On November 1 Frost Thorn wrote to inform the consultation that the people of Nacogdoches had pledged in mass meeting the previous day twenty-eight horses and $2,800, [Thorn to General Council, November 1, 1835. Archives of Texas, diplomatic correspondence, file 18, no. 1753], while a few days later San Augustine announced subscriptions of thirteen horses and $400 [Journal of the Proceedings of the General Council, 7]. No record is shown of the receipt of this money by the government, so it is probable that all was expended by the local committees in purchasing ammunition and in supplying volunteers from the United States who passed through east Texas on their way to the army.

In the latter part of March, when loans on satisfactory terms were almost despaired of, President Burnet proposed to several friends a plan to raise funds by selling individual property. Persons who donated land for this purpose were to take a receipt for their gift, and the government, when able, would repay them, either in money or, if the land had not been sold, by a retransfer of the land. James Kerr was the first to manifest his approval of this suggestion by surrendering (March 23) for the disposition of the government four hundred and eighty acres of land in De Witt's colony. The following day Mr. Gail Borden endorsed the plan, and expressed the opinion that a contribution of $100 was worth more than a subscription of $1000. A circular from the office of The Telegraph and Texas Register gave publicity to the proposition, and exhorted the people to sell a small part of their property in order to save the remainder from the enemy. Four and a quarter leagues---including Kerr's gift---were subscribed immediately. [Kerr to Burnet, March 23, 1836. Archives of Texas, diplomatic correspondence, file 24, no. 2369. Borden to same, March 24, 1836, file 22, no. 2157. Circular, file 4, no. 351].

Shortly after this, however, Burnet decided that he had no authority to promise repayment of such advances, though he felt sure that Congress would be quite willing to do so. Accordingly, Retson Morris added a half league unconditionally. [Archives of Texas, diplomatic correspondence, file 22, no. 2180].

Before other contributions were made the battle of San Jacinto had been won, and the people considered their sacrifices no longer necessary. Inasmuch as these land donations were made, nominally at least, in the expectation of repayment, it would perhaps be technically more accurate to call them loans. But the prospect of repayment was so remote that they were doubtless considered by the donors as free-will offerings. Practically it makes little difference how we regard them, for the reason that the government realized nothing from them, and it is doubtful whether formal transfers of title were ever made. They are of significance, nevertheless, as illustrating conditions of the time and the spirit of the people. "Deficient," as they were, says Kennedy, [Texas, ii, 115], 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 moulding bullets and making cartridges.

In granting letters of marque and reprisal the general council, according to Gouge, "tried its hand at robbing," but, as he adds, it could plead in extenuation "the precedents of the best established governments." [Fiscal History of Texas, 27]. At any rate, the matter is of little importance, for if any privateers were actually put in commission nothing was ever heard of them. From the beginning the law was designed to provide defense rather than revenue, and this was soon rendered unnecessary by the acquisition of a regular navy sufficient to meet any naval operations from Mexico. [Journal of the Proceedings of the General Council, 26, 31, 75; Ordinances and Decrees, 23-24, 38; Archives of Texas, diplomatic correspondence, file 25, no. 2414].

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Index--War of Independence
SONS OF DEWITT COLONY TEXAS
2000-2001, Wallace L. McKeehan, All Rights Reserved