This section is from the book "A Financial History Of Texas", by Edmund Thornton Miller. Also available from Amazon: A Financial History Of Texas.
No system of public schools arose during the period of the republic, but the liberal land grants to education made in 1839 were recognized and continued by the state. The Constitution of 1845 contained the following provisions in regard to education: "The legislature shall, as early as practicable, establish free schools throughout the state, and shall furnish means for their support by taxation on property; and it shall be the duty of the legislature to set apart not less than one-tenth of the annual revenue of the state derivable from taxation as a perpetual fund, which fund shall be appropriated to the support of free public schools; and no law shall ever be made diverting said fund to any other use; and until such time as the legislature shall provide for the establishment of such schools in the several districts of the state, the fund thus created shall remain as a charge against the state passed to the credit of the free common-school fund."2
"All public lands which have been heretofore granted or may hereafter be granted for public schools to the various counties, or other political divisions in this state, shall not be alienated in fee, nor disposed of otherwise than by lease for a term not exceeding twenty years in such manner as the legislature may direct." 3
"No appropriation of money shall be made for a longer term than two years," except for purposes of education.4
The successive acts'levying taxes carried out the constitutional injunction to set aside to the school fund one-tenth of the annual revenue of the state derived from taxation. Also the act of January 16, 1850, provided that counties organized since February 16, 1846, or which might thereafter be organized, should each receive four leagues of land.1 The counties were slow in selecting their lands, and owing to the abundance of land little was derived from the system of lease to which they were restricted.2 A better system of administration of these lands would have been to have made them a part of the school fund and so subject to administration by the state.3 In subsequent legislation relating to the disposition of the public lands the school fund was made the beneficiary. During the three years, 1858-60, $100,960 was received by the fund from the sale of the public lands as authorized in 1858.4
1 For an excellent summary of school legislation see Lane's, "The Educational System of Texas," in Wooten, A Comprehensive History of Texas, vol. 2, pp. 424-431, 439-444.
2 Art. 10, sec. 2.
3 Art 10, sec. 3. Sec. 4 provides that the counties which have not received their lands shall be entitled to receive the same quantity as other counties.
4 Art. 7, sec. 8.
The receipts from one-tenth of the taxes were small, and it would have taken an indefinite length of time for an amount to have accumulated, the income from which would have been worth while to apportion. Few counties had established schools up to 1855, and it was realized that with the existing provisions the establishment of a general system of education would long be. delayed. The indemnity bonds received from the United States provided very opportunely the means for giving some needed assistance. By the act of January 31, 1854, $2,000,000 of the bonds were set aside as a fund to be called a Special School Fund, the interest of which should be distributed for the support of the schools. In 1855 the first distribution was made.
The school fund was made to serve the double purpose of fostering education and promoting internal improvements. The original proposal for giving the $2,000,000 of bonds to the fund was in a bill introduced at the called session of the Fourth Legislature to set aside that amount for investment in railroad bonds for the benefit of the school fund. This bill was defeated, but a similar bill was introduced in the Fifth Legislature which met in November, 1853.5 A majority of the committee on education to which it was referred recommended its indefinite postponement, with the result that the donation to the fund was made without any condition as to its investment.1 The sentiment for internal improvement was too strong' to be resisted, however, and in 1856 the "Loaning Act" was passed.2 The governor, the comptroller and the attorney general were constituted an ex-officio board of school commissioners whose duty it was to loan, under the guise of investment, the 5% United States bonds in the fund to railroad companies incorporated by the state. Every loan was secured by six per cent first mortgage bonds of the road, and each company was required to pay two per cent each year into a sinking fund held in the state treasury. Loans were made to six companies, and the amount of their bonds purchased by the end of 1860 was $1,476,000. Up to the outbreak of the war the conditions of the loans were fully met in regard to interest and sinking fund payments.
1 Laws of 1850, p. 37.
2 As late as 1855 only 954,181 of the 1,753,488 acres to which the 99 counties were entitled had been selected; 38 counties had made no selection. See message of Governor Pease, November 5, 1855; Senate Journal, 6th Leg., p. 15; also message of December 23, 1853.
3 Message of Governor Pease, November 5, 1855; Senate Journal, 6th Leg., p. 15.
4 Laws of 1858, p. 193.
5 House Journal, 5th Leg., p. 195.
From 1855, when the first payment out of the school fund was made, until 1861, a total of $560,015 was apportioned among the counties. This amount is the total of the money expenditures of Texas in behalf of education during the twenty-five years preceding the Civil War. The per capita apportionment was very small, being in 1857 only $1.21 for each child of school age.3 After1857 the amount for apportionment remained fairly uniform, but as the number of those within the school ages increased, the per capita apportionment decreased. Receipts to the fund were largely from the interest on the United States bonds held by the fund. Little was derived from taxation, as the state rate was low; and much less was received from land sales. The United States Census of 1850 reported 347 public schools with 358 teachers, 7,869 pupils, and an annual income of $43,878. All of the income was reported as derived from sources other than taxes or public funds.4 By 1860 there were 1,218 public schools, with 1,274 teachers and 34,611 pupils. The annual income was $414,168, of which $15,847 was reported as derived from taxes, $58,394 from public funds, and $339,927 from other sources.1 There was practically no special taxation for school purposes before the Civil War, the United States Census of 1860 reporting only $1,379 of school taxes.2
1 House Journal, 5th Leg., p. 205. Act of January 31, 1854; Laws of 1854, p. 17.
2 Laws of 1856, Adj. Sess., pp. 31, 57. Laws of 1858, p. 57.
3 Message of Governor Pease, November 2, 1857; House Journal, 7th Leg., p. 29.
4 Seventh Census of the United States. 1850. Pp. 508 and 1020.
Private schools and private support of the public schools were much more important relatively in ante-bellum days in Texas than at present. Thus in 1850 there were 97 academies, with 137 teachers, 3,389 pupils, and an annual income of $39,384. In 1860 the number of academies remained unchanged, but there were 236 teachers, 5,916 pupils, and an annual income of $142,-134. The need of public common school education was very great as was shown by the number of illiterates. In 1850 18.1 per cent of the white population twenty years of age and over was illiterate; in 1860 the per cent illiterate of those over twenty years .of age was 10.1.3 All of the slaves were illiterate, but their illiteracy was not a problem until after the Civil War.
No public expenditures for higher education were made during this period, though endowments were made, and steps were taken toward the establishment of the University of Texas. In 1850 there was authorized a survey of three leagues granted under the act of 1839, because the field notes of former surveys had been lost.4 In 1856 the legislature provided for the survey of the fifty leagues granted to the University by the act of 1839. Alternate sections were sold in lots of 160 acres at public auction to the highest bidder at not less than $3.00 per acre. The sale took place at the county seat of the county in which the land was situated. Purchasers were allowed twenty years in which to complete payment, and unpaid installments bore 8% interest.5
1 Eighth Census of the United States. 1860. Vol. Mortality and Miscellaneous Statistics, p. 505. This classification of receipts by the Census is incorrect, as the report of the state school fund for 1859 shows $31,197.34 received from state taxes and $117,480.90 distributed among the counties.
2 Ibid., p. 511.
3 Seventh Census of the United States. 1850. P. 513. Eighth Census of the United States. 1860. Vol. Mortality and Miscellaneous Statistics, p. 508.
4 Laws of 1850, p. 96.
5 Laws of 1856, Adj. Sess., pp. 71, 87.
The University Act of 1858 provided for the establishment of the University of Texas; appropriated to the fund $100,000 of the indemnity bonds; confirmed the grant of fifty leagues made in 1839; and in addition gave to the University one section in every ten sections reserved for the use of the state under the act of 1854 which provided land grants in aid of railroad construction.1 The bonds remained intact in the fund for two years, when they were diverted to the state revenue account. From interest and from sale of lands $31,087 was derived by this fund down to 1861, and $1,641.45 was expended. The University of Texas, however, was not founded until twenty-five years later. Such higher education as was provided in Texas was supplied by private institutions. There were two so-called colleges in 1850, with seven teachers, 165 students and an annual income of $1,000.2 In 1860 there were 25 institutions which bore the name of college with 107 teachers, 2,416 students, and an annual income of $95,072.3
1 Laws of 1858, p. 148.
2 Seventh Census of the United States. 1850. P. 508. 3Eighth Census. 1860. Vol. Mortality and Miscellaneous Statistics, p. 505.
 
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