The act of February 9, 1861, authorized the receipt of 10 per cent interest warrants in payment of land and the 2 per cent sinking fund of railroad bonds held by the school fund, and the act of January 11, 1862, made all treasury warrants receivable in payment of land.4 After January 11, 1862, treasury warrants and Confederate notes were receivable for taxes and all other public dues, except for the specie loan tax and for interest and principal of the railroad loans by the school fund.5

1 Laws of 1861-1862, p. 22.

2 Laws of 1863, Extra Sess., 9th Leg., p. 11.

3 Laws of 1863, 10th Leg., p. 22. Laws of 1864, 10th Leg., Second Called Sess., p. 3.

4 Laws of 1861, p. 19. Laws of 1862, p. 22.

5 Laws of 1862, p. 37. The Tri-Weekly Telegraph, December 2, 1861, noted that state treasury warrants passed at a discount of from 50 to 60 per cent, and it dissented from Governor Lubbock's recommendation that Confederate notes should be made receivable for public dues. This paper opposed also the funding of state warrants and urged that the best way of making them approximate par was to make them receivable for taxes and other public dues, and advised that to this end taxation should be increased and expenditures decreased. See issues of December 16, 1861, and October 26, 1864.

The act of December 16, 1863, however, made treasury warrants. bonds and interest coupons of the state receivable in payment of railroad indebtedness to the school fund.1

The great depreciation of Confederate notes led in the spring of 1864 to the law which provided that after the last day of June and until October 31, Confederate notes of the old issue of the denomination of $100 should not be receivable for public dues except at a discount of one-third and that no Confederate notes bearing interest should be received after the last day of June.2 The purpose of this legislation was to compel the funding of the old issue into Confederate bonds and to sustain the value of the new issue.

The specie needed to meet the interest and sinking fund requirements of the $1,000,000 loan issue of 1861 was provided for by a special specie tax.3 This special tax began to fail in the early part of 1863, and for the year ending August 31, 1864, produced only $1,352.77 in specie. By the act of March 3, 1863, it was provided that the tax might be paid in other funds, and the Military Board was authorized to obtain the specie required for interest.4 The history of this special tax well illustrates the disappearance of specie from general circulation. Receipts in 1862 on account of it were $36,900.06, all of which was in specie; in 1863, $123,608.09, of which $57,549.18 was in specie; in 1864 $152,369.94, of which $1,352.77 was in specie: In 1865 the specie receipts were not derived from taxation, but were provided by the Military Board.

By the act of January 14, 1862, the disbursement of Confederate notes was restricted, except for about $30,000., to the payment of military appropriations.1 Other appropriations were payable in specie or in treasury warrants. Inasmuch, however, as the revenue was collected principally in notes and to a much larger amount than military expenditures could absorb, the act of March 6, 1863, provided that all appropriations should be payable in notes.2

1 Laws of 1863, p. 37. Act of May 28, 1864; Laws of 1864, Called Sess., p. 9. Act of November 15, 1864; Laws of 1864, Second Called Sess., p. 14.

2 Act of May 27, 1864; Laws of 1864, Called Sess., p. 6.

3 Laws of 1861, p. 39.

4 Laws of 1863, Called Sess., p. 8. .

In the spring of 1864 the Confederate currency was rated in specie at from 20 to 30 cents on the dollar.3 The state recognized by the act of May 27,1864, a depreciation of 33 1/3 per cent, and by the act of May 28, 1864, made appropriations for the support of the civil departments of the government and for the indigent families of Texas soldiers payable in treasury warrants. These warrants, however, enjoyed no better credit than the notes had had, and were quoted in the fall of 1864 at 8 and 10 cents on the dollar.4 The constitutionality of the issue of treasury warrants which would perform some of the functions of money was questioned, but a majority of the senate judiciary committee held that they were not money and were not intended to circulate as money.5 This was also' the opinion of the Supreme Court of the United States in 1899 in the case involving the validity of the payments of warrants to the school fund by the railroad companies.6

The bulk of receipts during the war period was in Confederate notes and treasury warrants. During the five years 1861-1865, $948,711.34 of treasury warrants was received, distributed as follows:

1 Laws of 1862, p. 52.

2 Laws of 1863, Called Sess., p. 23. Message of Governor Lubbock, February 5, 1863.

3 Message of Governor Murrah, May 11, 1864; Executive Record No: 280.

4 Proclamation of Governor Murrab, September 13, 1864; Executive Record No. 280.

5 The Tri-Weekly Telegraph, December 9, 1864.

6 H. & T. C. R. R. Co. v. Texas, 177 U. S., 83 (1899).

No distinction was made in the financial reports between Confederate notes and specie until the year beginning September 1, 1862, which would indicate that by that date the disproportion in the amounts of notes had, begun to complicate the operations of the treasury. During the three years 1863-1865, specie receipts amounted to only $163,647.37, the most of which was credited to the special loan account and was secured for this account by the Military Board. The specie receipts were distributed as follows:

Receipts of Confederate notes were $957,137.96 in 1863; $3,-652,813.91 in 1864, and $1,559,757.88 in 1865 - a total of $6,-169,709.75. In the Fox Table1 of currency values, the average value of $1 in gold was $5.88 in Confederate notes in 1863; $19.89 in 1864. On the basis of this scale of depreciation the receipts in Confederate notes in 1863 were equivalent to $162,-778 in specie; the receipts in 1864 to $183,650 in specie.

Besides the excessive amount of Confederate notes in circulation which receipts of the state and the Confederate government would indicate, there were state treasury warrants, city and county warrants, and the notes of individuals and corporations. The effect of this inflation of the circulating media, together with the scarcity of commodities, was an enormous rise in prices. As early as January, 1862, the currency became redundant, and before the end of the year public meetings were called in various parts of the state to consider the rise in prices. The depreciation of the currency was popularly ascribed to the perversity of " merchants" and "capitalists," and tariffs of prices and other coercive measures were suggested as remedies, but none was enacted.2

1 For Fox Table, see Appendix, table 18.

2 The Tri-Weekly Telegraph, August 4, December 10, 1862; January 9, January 23, May 25, 1863.