The history of expenditures to 1861 may be divided into the two periods, 1846-1851 and 1852-1860. Down to 1852 the policy of economy followed during the last years of the republic was continued. Annexation relieved the state of the duties having to do with foreign intercourse, an army, a navy, and a post service, and until 1852 no new duties were undertaken, nor was the scale of performance of the old ones enlarged. The largest items of expense down to 1852 were the judiciary, the legislature, and the administration of the general land office. Together they made up about 60 per cent of the total expenditures. The judiciary had been scantily paid during the republic, but after 1845 salaries were increased. Frequent sessions of the legislature were called for in order to enact the statute laws for the newly organized state, but until 1850 there were only three sessions of about three months each. In 1850 the question arose as to the settlement of the northwest boundary dispute with the United States, and thereafter special sessions multiplied. Though they were of brief duration, the mileage expense was a large item. Legislative expenditures constituted about 12 per cent of the total expenditures of the period. The general land office was the most costly of the departments of general administration, and receipts from lands did not counterbalance the expenditures.

Until 1852 the state was dependent on taxation for revenue, but in 1851 there came a windfall in the form of the five million dollars of United States bonds which were a part of the payment by the United States for the cession of the northwest territory and for the relinquishment by Texas of certain claims against the United States. The first claim upon these bonds was regarded to be that part of the debt of the Republic of Texas which was not subject to payment out of the United States Treasury.1 Payment of this debt was begun in 1852 and continued throughout the period. It constituted by far the largest item of expenditure, being about 23 per cent of the total.

1 Message of Governor Bell, January 13, 1853.

The use to which the remainder of the bonds should he put vexed the public mind and was a good test of the sanity of the early Texans. There was more than four million dollars available. Some advocated its use for internal improvements, others for education, while others believed it should be kept as a fund, the interest from which would be sufficient to meet the ordinary expenses of the state and thus relieve the people from taxation.1 $2,000,000 of the bonds was given to the general school fund, $100,000 to the university fund, and the remainder was used to meet the current expenditures of the state. The taxes that would have been collected for the state purposes were relinquished from 1852 to 1858 to the counties and used by them to pay their debts, to build courthouses and jails, and to meet county expenses for other objects. This relinquishment did not benefit equally all the counties, but, in general, the end sought was attained, and as late as 1879 the bonded debt of Texas counties was only $2,030,907.2 But the use of the bonds in paying the ordinary expenses of the state government - which was necessitated by this relinquishment policy - was very poor financiering, and there is little doubt but that the benefit to-the state would have been greater if the bonds had been used to endow further the school and university funds. On August 31, I860, there was to the credit of the general revenue account only $50,000 of the bonds, and these were a part of the $100,000 borrowed from the university fund. Thus by 1861 not only had all the bonds not reserved for the two trust funds been expended, but those even in one of the trust funds had been borrowed. This occurred during a period when the population and wealth of the state were growing rapidly. Expenditures, while liberal, were not extravagant, and the explanation of the flight of the bonds lies rather in the revenue policy followed.3 After 1853 the salaries of those in the service of the state were increased, but $3,000 for the governor and the supreme court judges, $2,250 for district judges, $1,800 to $2,000 for heads of departments, and $900 to $1,200 for clerks were not unreasonable compensations.1

1 Message of Governor Bell, November 10, 1851.

2 Tenth Census of the United States, vol. 7, p. 756.

3 The Galveston News, January 24, 1854, comments on a tendency to extravagance in expenditures. Sam Houston in a letter of May 1, 1860, published in the State Gazette of July 21, 1860, criticizes the administration of 1858 and 1859 as not having managed the government economically.

An item of extraordinary expense which became important in 1852 and remained so thereafter was frontier defense. The Indians had been comparatively quiet up to that time, but as they were then being pushed farther and farther west, the outposts of the white settlements experienced their resentment. The state maintained mounted troops on the frontier at a heavy expense in order to protect the settlements. The expenditures for this purpose during the four years 1852-1855 amounted to about $95,000, and the claim against the United States for this amount was relinquished in accordance with the act of Congress of February 28, 1855. From 1856 to 1861 over $375,000 was expended for this purpose, and it was on this account that the $100,000 of United States bonds belonging to the university fund was borrowed in 1860. The seriousness of this expense as a drain upon the treasury may be best understood by the fact that it constituted in I860 more than 24 per cent of the expenditures. The Indians were the charges of the United States and that government was financially responsible for them, but Texas was not reimbursed for her expenditures for frontier defense until 1906.

The state penitentiary was the object of increased appropriations from 1852 to 1858. It was enlarged, and as an adjunct to it a factory for the manufacture of cotton and woolen goods was built and equipped in 1854. The policy of leasing the convicts in order to reduce their expense to the state was also considered, but was not adopted.2 The net expense of the institution decreased after the factory got into operation, and during the Civil War the factory was a most important auxiliary of the government.1

1 The governor's salary had been fixed by the constitution at $2,000 for ten years. The increase to $3,000 was made by the act of December 20, 1855; Laws of 1855, p. 13. Act of February 11, 1854, raised salaries of the attorney general, comptroller, treasurer, and other heads; Laws of 1854, p. 77. The salaries of the judges of the supreme and district courts were increased in 1856; Laws of 1856, p. 69. The salaries of chief clerks of the departments were increased in 1858; Laws of 1858, p. 247.

2 Message of Governor Pease, December 23, 1853. Report of the Committee on the Penitentiary; House Journal, 7th Leg., p. 345.