In 1880 Texas did not expend out of the general revenue as much as one cent on higher education. There was disbursed, however, out of the university land sales fund and the Agricultural and Mechanical College fund $35,754.99 for the Agricultural and Mechanical College and the Prairie View Normal. In 1915 $1,219,093.91 was expended out of the general revenue and $328,215.57 out of the special funds - a total of $1,547,-309.48 - for higher education.1 This growth in expenditures for higher education has attended the establishment and development of the University of Texas, four normals, and the Girls' Industrial College, and the expansion of the Agricultural and Mechanical College and the Prairie View Normal.

In 1880 there was one active university account upon the books of the treasury and it was called the "University Land Sales Account"; another account called the "University Fund" was inactive and was made up only of the state bonds of doubtful validity, amounting to $134,472.24 Into the university land sales account went the receipts from the sale of university lands and from the interest on bonds. The* receipts from land sales were invested in State of Texas bonds, as required by the constitution (art. 7, sec. 11), while the interest receipts were expended in 1880 for a clerk in the state treasury department, for surveying the university lands, and for the maintenance of the Agricultural and Mechanical College and the Prairie View Normal.

In 1882 the "University Land Sales Account" was succeeded upon the books of the treasury by the "Permanent University Fund" and the "Available University Fund."2 The permanent fund is, in the language of the constitution (art. 7, sec. 11), made up of "all lands and other property heretofore set apart and appropriated for the establishment and maintenance of the University of Texas, together with all the proceeds of sales of the same, heretofore or hereafter to be made, and all grants, donations and appropriations that may hereafter be made by the State of Texas, or from any other source." In 1882 the permanent university fund received from the university land sales account $332,435.66 in State of Texas bonds, a comptroller's certificate of indebtedness for $10,300.41 and $986.61 in cash. The available university fund received from the land sales account $34,464.34 in bonds.

1 The amount given as expended out of the general revenue was the amount of warrants drawn on that fund.

2 The two other funds, the University Fund and the University Fund Expense Account, disappear after 1883.

The constitution requires that the permanent fund shall be invested in State of Texas bonds, but if they should not be obtainable, in United States bonds. In 1889 when the general revenue account was threatened with a deficiency it was enacted that 5 per cent bonds of the state should be sold at par to the permanent university fund, these bonds to be redeemable at the pleasure of the state.1 This measure, passed as it was to provide for an emergency, has not been repealed, though as a standing method of increasing the state debt it is doubtless unconstitutional.2 The permanent fund held in 1915 $429,700 of 3 per cent state bonds and $173,900 of 5 per cent state bonds. The fund could be invested to better advantage than in 3 per cent state bonds. City, county, and school and other special district bonds are issued which bear 5 per cent, 5 1/2 per cent and 6 per cent interest, and if these are acceptable investments for the permanent school fund they should be for all the permanent funds.

The state debt of doubtful validity was validated and ordered paid with accrued interest in 1883.3 The total received by the university funds was $256,272.57, of which $144,772.65 was of the nature of the principal of a debt. The available university fund received of this payment $132,056.16 in 1883 and 1884.

With the exception of the payment of the debt of doubtful validity the history of the permanent university fund since 1880 has been uneventful. From 1880 through 1915 the total received by the fund from sales of land was $291,711.34, and this sum represents, with one exception, the payments on the purchase price of the lands contained in the old endowment of fifty leagues.1 The western lands of the University have not been on the market for sale during this period. In 1881 there were 32,335 acres of the fifty leagues grant unsold and the unpaid balances on the notes given in purchase amounted to $155,000;2 by 1915 all of the fifty leagues were sold and there was $26,-572.77 in land notes.3

1 Laws of 1889, p. 81.

2 Revised Civil Stats., 1911, art. 2652.

3 Acts of 1883, p. 15. House Journal, 17th Leg., Called Sess., p. 27.

The interest on the bonds and other interest-bearing assets of the permanent fund goes into the available university fund and is expended under the direction of the legislature. In 1880 the disposable income amounted to $24,515 and was classified as derived from interest on state bonds.4 In 1915 the available fund received $228,850.32 exclusive of legislative appropriations. $169,057.11 of this amount was derived from lease of lands; $34,855.86 from student fees; $21,586 from interest on state bonds; $1,135.16 from interest on land notes; and $2,216 from interest on rentals past due.5 Until 1897 interest on state bonds was the leading source of income to the available fund, but in that year lease of lands took the lead. Receipts from lease of university lands began in 1887 when they amounted to $451.20.

The available university fund has been drawn upon by the legislature from time to time for appropriations to the Agricultural and Mechanical College and the Prairie View Normal School. From 1880 through 1889 $55,600 was diverted to Prairie View and from 1880 through 1899 $65,000 was appropriated to the Agricultural and Mechanical College. In 1861 and 1862 the state used $11,307.02 of the university fund for which no restitution was made in 1883. So in 1888 when Texas received nearly one million dollars from the United States as indemnity for expenses in protecting the frontier the claims of the University were presented for funds diverted and for losses on account of Confederate notes received in payment of land during the Civil War. Under the guise of a loan which was to be repaid on or before January 1, 1910, the available fund received $125,000 which was stated to be in full satisfaction of all claims of the University for money drawn by the state.1

1 The reports of the comptroller for 1905 and 1906 are wholly erroneous as to the receipts from sale of university lands, and the reports since 1909 do not classify the receipts to the available university fund from interest on land sales, etc. The data for these years have been obtained from the reports of the board of regents.

2 Report of the Board of Regents, 1882, p. 6.

3 See chapter on public lands for a further account of the university lands.

4 There is no information as to the amount of interest on land notes.

5 These statistics were obtained from the manuscript report of the auditor of the main University. They differ from those in the comptroller's report for 1915.

The disbursements of the available university fund from 1882 through 1915, excluding $150,000 received by the fund from the general revenue and the $50,000 of the fund appropriated to the Agricultural and Mechanical College, amounted to $3,-373,896.70. In this same period there was disbursed for the University out of the general revenue fund of the state $4,349,860.99.2 Appropriations out of the general treasury have shown a tendency since 1900 to be more liberal; at the same time they have not grown with the needs of the institution if the reports of the board of regents are to be trusted. In recent years the University has felt keenly the need of more buildings. The constitution (art. 7, sec. 14) prohibits any appropriation of money out of the general revenue for university buildings. This limitation is one of the many archaic financial provisions of the-present constitution. In 1881 it was circumvented by an appropriation under the guise of a loan, but in 1891 an appropriation for a building was made outright. The legislature has since 1891 provided for buildings for the University and the Agricultural and Mechanical College, but the items have been vetoed on constitutional grounds, though the veto has not been consistently applied in the case of either institution and especially in the case of the Agricultural and Mechanical College, which is legally a branch of the University of Texas. In 1913 a constitutional amendment was submitted to the people which proposed to empower the legislature to authorize the issue of bonds for the purpose of purchasing additional grounds and of erecting buildings for the University, but the amendment was unfortunately too plenary in its proposed grant of power to increase debt, though its defeat was actually accomplished by a factional spirit and by the blind "no debt, lighter tax" sentiment.1 The principal of the proposal is incontestably correct, however, and it has been adopted by the state in the case of the penitentiary system.

1 Laws of 1888, p. 19. J. J. Lane, History of Education in Texas, p. 142.

2 This is the amount of warrants drawn. Because of typographical errors in the reports of the comptroller's department one cannot be sure that this amount is correct.