President Houston's first administration extended from October, 1836. to December, 1838. The total expenditures from January 1, 1837, to September' 30, 1838, the close of the fiscal year, were $1,777,363. Civil expenditures for the nine months ending September 30, 1838, were $380,921, and expenditures for the army and navy were $430,570.5

1 The president's house in Houston was a log cabin of two rooms, one of which had a puncheon floor, the other had only Mother Earth. In 1839 the seat of government was removed to Austin, and the president's house there was more in keeping with his rank and salary.

2 Act of December 29, 1836; Gammel, op. cit., vol. 1, p. 1129.

3 Message of the President, June 6, 1837.

4 Message of the President, November 12, 1839.

5 This includes support of the war department, appropriations for Indians, and $64,014 expended by executive order. Report of the Secretary of the Treasury, September 30, 1838.

Until the issue of treasury notes in the fall of 1837, appropriations were met by audited drafts and orders upon agents in the United States who had land scrip to sell. It was this poverty of the treasury during the larger part of Houston's administration that was mainly responsible for keeping down expenditures, and especially those of a military and naval, character.1

The administration of Mirabeau Lamar, Houston's successor, extended from December, 1838, to December, 1841. It was marked by a great increase in expenditures and by the practical bankruptcy of the republic. Appropriations for civil purposes leaped from $192,000 under Houston's last congress to $550,000 under Lamar's first. This was due to no increase in existing salaries, but to additional departmental clerks, to increased contingent expenses, to the requirements of the postal service and to the removal of the seat of government from Houston to Austin.

Appropriations for the army and navy increased from $881,000 by the Second Congress, to $1,523,455 by the Third, and to $1,620,169 by the Fourth. The withdrawal in March, 1839, of the French blockade of Mexico left Mexico free, it was thought, to make an invasion; and though the continuance of the factional fighting in that country favored the security of Texas, the Lamar administration believed in strengthening' the army.2 In 1839 additions were made to the navy also, and though these were paid for in bonds, the manning and maintenance of the ships called for large expenditures out of current funds.3 Lamar's attitude toward the Indians was a hostile one: he favored their expulsion or extermination, and the campaigns in pursuance of this policy resulted in bloody retaliations by the Indians.4

1 The fact that civil expenditures were almost equal to the military and naval is explained by the large demands of the civil list, and by the weakness of the military and naval establishments.

2 Message of November 12, 1839.

3 Expenditures for naval purposes during the first nine months of 1839 were nearly $60,000, and it was estimated that half a million would be required for 1840. Report of the Secretary of the Treasury, November 8, 1839.

4 Message of November 12, 1839. Yoakum, History of Texas, vol. 2, p. 271, may be interpreted as defending Lamar's Indian policy. Houston's more pacific policy, however, appears to have been both more Successful and less costly.

The highest point in the expenditures of the republic wag reached in 1840, when the amount was nearly $2,175,000. The means of payment had been provided by the act of December 29, 1838, which authorized the issue of treasury notes without limit. It is to be expected, therefore, that the year of largest expenditures should be also the year of the largest outstanding circulation of treasury notes.1

A reaction in favor of retrenchment set in immediately. Public opinion, as voiced by the newspapers and the candidates for congress, ascribed the derangement of the finances to extravagance.2 The congress elect, the Fifth, began the work of retrenchment by lowering salaries and abolishing or consolidating offices. The salary of the chief justice was decreased from $5,000 to $3,000.3 The office of secretary of the navy was abolished, and its duties were devolved upon the secretary of war; the office of postmaster-general was abolished, and its duties fell to the secretary of state. Various minor offices also in the treasury, and in the military and naval departments were cut off.4 The decrease in the number of dignitaries thus effected caused the civil list of the republic to suffer a reduced appearance, but it resulted in a saving of about $100,000 per annum.5 The appropriations of the Fifth Congress for civil purposes amounted to about $450,000, as compared with $550,000 by the Third.

The chief reduction in expenditures, however, took place in the army and navy. No appropriation was made for the regular army, and the president was required to put out of commission the vessels of the navy. The appropriation for these branches of public defense amounted to only $211,050, as compared with $1,581,369 appropriated by the Fourth Congress. The will of congress in regard to a reduction in military and naval expenditures was not carried out fully by President Lamar. He did not deem it practicable to retire the navy, and his arbitrary promotion of the visionary Sante Fe expedition increased military expenditures. Lamar had as early as 1839 suggested the expedition to congress, but that body refused its assent. The president then had it undertaken without legislative approval. The expedition resulted disastrously, and while those who engaged in it paid a considerable part of the cost, it was a source of some expense to the treasury.1

1 The estimated outstanding circulation, including treasury bonds, on September 30, 1840, was $3,287,962.

2 Telegraph and Texas Register, December 16, 1840. As early as January 19, 1839, this newspaper employs the fiction of a dialogue between a merchant and a farmer to advocate economy. The merchant advocates a national bank as the means of restoring the solvency of the republic, but the farmer contends that the legislators should awake from their "golden dream of folly," and study retrenchment.

3 Act of December 5, 1840; Gammel, op. cit., vol. 2, p. 553.

4 Act of January 18, 1841; ibid., p. 569.

5 Farewell address of the Speaker of the House; House Journal, 5th Tex. Cong., p. 723.