It may be asked further, Was the principal of the valid debt promptly paid at maturity? The bonds issued under the act of March 20, 1861, were payable July 1,1871. Because these bonds were issued during the war period, though to fund floating liabilities incurred before the war, they were subject to auditing before their validity could be established. In view of the Reconstruction Acts of Congress, there was no legally constituted body that could finally determine their validity until 1871. By the act of November 13, 1871, appropriation was made for the audited and valid portion of this debt. The bonds issued under the act of April 8, 1861, were due sixteen years from their date. Such of these as were valid and were exchanged for the bonds issued in 1866 were paid at maturity; those valid and which were not exchanged for the bonds of 1866 were either exchanged for bonds authorized by the act of May 2, 1871, or were paid before their maturity.

The beginning of the Reconstruction debt proper was in 1870. By the act of August 5, 1870, the issue of $750,000 of 7 per cent gold bonds, redeemable after twenty years and payable after forty years, was authorized to meet the appropriations made for maintaining ranging companies on the frontier.1 Authority was given also to levy a tax sufficient to pay the interest and provide a sinking fund for the bonds, and the governor was empowered to sell or hypothecate the issues at the best price obtainable, the commission on sale, however, being restricted to not more than 1 per cent. The governor, the comptroller and the treasurer were at loggerheads for a time, the latter officers declining to give their signatures to the engraver on the ground that it would place the credit of the state in the engraver's hands.2 Only three hundred and fifty of the bonds were sold during this period and these in the year 1871 and at an average price of 89.4. The gross amount received was $313,200, which, after deducting commissions, left a net amount of $312,200.1 Of the three hundred and fifty sold, one hundred and seventy-four were exchanged for cash held in the Agricultural and Mechanical College fund, leaving only one hundred and seventy-six disposed of to outsiders. These circumstances attest a difficulty of sale due to lack of faith in the state's credit. The interest on these bonds was met and a sinking fund was established. The sinking fund, however, was not invested in United States bonds, but was used to retire the frontier defence bonds, and up to August 31, 1874, $53,000 of these bonds had been redeemed.

1 Laws of 1870, Called Sess., p. 45. These are known as the frontier defence bonds. 2The San Antonio Daily Herald, September 7, 1870.

Beginning with the fiscal year 1870 there were annual deficiencies in the current revenue, and bond sales were resorted to for the purpose of making ends meet. In May, 1871, $400,000 10 per cent bonds, redeemable in lawful currency of the United States after two years and payable after five years, were authorized to cover, the deficiencies of 1871 and 1872, and in December, 1871, an issue of $2,000,000 7 per cent, twenty year bonds, were authorized for deficiency purposes. There were no restrictions as to the price at which these bonds should be sold, and in the case of the December issue no limit as to the commission that might be paid for sale.2 In May, 1873, $500,000 10 per cent bonds, redeemable after three years and payable after ten years, were authorized for the purpose of funding state warrants.3 There were sold in 1871 and 1872 two hundred and fifty-two of the deficiency bonds authorized by the act of May 2, 1871. At an average price of 93.5 they yielded gross $235,-870.74, but with commissions deducted the net amount received was $229,375.94, and $156,433.47 of this amount was received in state warrants.4 None of the deficiency bonds authorized by the act of December 2, 1871, was sold, and only $89,800 of the 10 per cent funding bonds were issued up to August 31, 1874. In addition to bonds sold, three hundred and fifty of the frontier defence and one hundred of the deficiency bonds were hypothecated with Williams and Guion, of New York, for- $327,074.70.

1 Statement of the Comptroller; House Journal, 16th Leg., First Sess., p. 79.

2 Laws of 1871, p. 106. Laws of 1871, Adj. Sess., p. 63.

3 Laws of 1873, p. 119.

4 House Journal, 16th Leg., First Sess., p. 79.

Excluding $650,000 of debt authorized by the act of March 4, 1874, because it represents a measure of the administration which succeeded the Reconstruction, there was added to the funded debt of the state up to August 31, 1874, a gross amount of $900,900. There was redeemed during the period $57,100 of debt, so that the net addition was $843,800. There was besides a floating debt of $1,574,826.31, making a total debt contracted before January 14, 1874, or the date when the Democratic administration succeeded the radical, of $2,418,626.311 There was also the debt due the school and university funds which was classed as of doubtful validity and which amounted to $809,-311.67.2 The sum of the recognized and the doubtful debt is $3,227,937.98. Deducting $956,321.88, - which is the sum of the debt ascertained by the auditorial boards of 1866 and 1871 ($251,047.84), the debt of doubtful validity with accrued interest due the university fund, and the indebtedness to the school fund under the act of November 15, 1864, - as the amount of pre-reconstruction debt, there remains $2,271,616.10. This latter amount is the debt imputable to Reconstruction. The portion of this which was incurred during the Davis administration is approximately $2,172,262.21.

The debt policy of the reconstructionists is open to sharp criticism. The issue of bonds to meet deficiencies in the revenue when caused by extravagance in expenditures is illegitimate financiering and is to be wholly condemned. The funded debt also existed in five different shapes and was issued under as many different statutes. A debt issued under more uniform provisions would probably have been more inviting to capitalists. Considering, however, the character of the state government at this time and the doubtfulness of state credit generally, the prices at which the bonds were sold were fair.