Richard Coke was inaugurated governor on January 15, 1874, which event marked the political end of the Republican regime and of the Reconstruction in Texas.

Although a tax rate of fifty cents had been imposed since 1871 and bonds had been issued to meet the expense of frontier defence and to cover deficiencies in the ordinary revenues, an empty treasury and a rapidly increasing floating debt confronted the new Democratic administration. There was only $37,137.00 in the treasury available for general purposes, and the net receipts to accrue from taxes by September 1, 1874, were estimated at $481,714.00, while the expenditures were estimated at $1,236,-116.00.1 There were, in addition, claims of school teachers for services rendered prior to July 1, 1873, amounting to over $400,000.00, an unexecuted cash pension law, and a harassing controversy with the International Railroad over a bond subsidy.

The state's financial problem was difficult, and its solution called for intelligence, courage, and patience. Immediate clarification and settlement were not possible, for though legislation could accomplish something, it was indispensable that there should be time for the recuperation of the industrial and commercial forces which had been depressed by the war, the Reconstruction, and the prostrating panic of 1873. Additional taxation as a way out was inexpedient in view of the already unpopular height of the tax rate, and bonds could not be immediately sold except at an almost prohibitive discount. The means of relief to the treasury which were adopted were the stoppage of payment of warrants dated before January 15, 1874, the use of special trust funds, and the issue of bonds. The treasury did not get on an actual cash basis, however, until the spring of 1879. Each year between 1874 and 1879 saw treasury deficits, the state's warrants at a discount, the maintenance of the same high tax rate, an increase in the bonded debt to meet the ordinary expenses of government, and parsimony in expenditures for charitable, educational and other developmental purposes.

1 Message of Governor Coke, February 10, 1874.

Industrially a new era began in 1879, as that was the year when there was generally throughout the country a marked upward movement indicating the completion of industrial recovery from the panic of 1873.1 The population of the state grew from 818,579 in 1870 to 1,591,749 in 1880. This was a percentage of increase during the decade of 94.5 as compared with 35.5 during the preceding decade. Negroes numbered 393,384 in 1880 and constituted 24.7 per cent of the total population as compared with 30.9 per cent in 1870. The population was preponderantly rural, only 8.5 per cent living in towns of 2,500 population and over. The density of population remained small, though there was an increase from 3.1 in 1870 to 6.1 in 1880.

Agriculture engaged 68.8 per cent of the population ten years of age and over employed in all occupations. Agriculture showed a marked improvement in condition in 1880 over 1870. Though the number of farms increased 185 per cent and the acreage in farms increased 97.3 per cent, the percentage increase in the improved acreage was 326.6. A large part of the land area of the state was unoccupied and uncultivated, however, as shown by the fact that the farm area was only 21.6 per cent of the total land area of the state. The vast area of land not in farms was either owned by the state or was privately owned and held as a speculation. The value of farm land and buildings amounted to $170,468,886 in 1880, which was an increase of 254.2 per cent over 1870. Farm implements and machinery showed an increase of 233.1 per cent, and domestic animals, poultry and bees an increase of 155.7 per cent. The value of livestock was $60,307,987 in 1880 as compared with $37,425,794 in 1870.

Agriculture and stockraising were the chief sources of wealth to the state. Mining was negligible, and manufacturing was not advancing in a remarkable way. The number of manufacturing establishments increased only 25 per cent, and the value of the products increased from $11,517,302 to $20,719,928 between 1870 and 1880. The percentage of growth in the value of the products was 79.9, or less than that in population.

1 Noyes, Forty Years of American Finance, p. 66.

Under the liberal land grant policy which was in effect from 1873 to 1882 railroad mileage grew rapidly. The increase between 1870 and 1880 was from 711 miles to 3,244, and that between 1873 and 1882 was from 1,578 to 6,009.

Statistics for the growth of state banking are not available, but those for the national banking system do not show a rapid growth of that system.1 The number of national banks increased from 4 in 1870 to 13 in 1880, and their deposits from $575,000 to $1,579,000.

A new era also in the state's finances began in 1879, due in no small part to the country's prosperity, but also to a vigorous financial policy. The important features of this policy were the refunding and payment of the public debt, the sale of the public lands, changes in the administration of taxes, the adoption of new business taxes, and reduction in expenditures. The policy adopted in 1879 was known as the "pay-as-you-go" policy, and the most striking, and at the same time the most effective, of the measures relating to expenditures which were adopted to institute this policy was the reduction of the school fund's share of the general revenues from the customary one-fourth to one-sixth. The fiscal operations of the state government during the year 1880 evidence the advent of a new era and the final issuance from the financial slough into which the state entered in 1861.

1 The state banks chartered during the Reconstruction period were supposed to report to the office of the secretary of state, but apparently the law was not obeyed, for the reports of the secretary of state contain statements of only a few banks.