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dues, or redeemed with any monies in the Treasury not otherwise appropriated.
Of course, with no money in the treasury, and little prospect of getting any, these notes were practically worthless from the day of their issue.
But from the beginning it was felt that a loan from the United States must be the chief hope of the country for money; and, as we have seen, Thomas F. McKinney refused a commission tendered him by the permanent council on October 27 to negotiate a loan of $100,000. The sentiment of the consultation is revealed in the inaugural address of the chairman: “It will be necessary," he said, “to procure funds in order to establish the contemplated government and to carry on the war in which we are now engaged; it will, therefore, be our duty to elect agents to procure those funds.” Accordingly, two days before adjournment (November 12), B. T. Archer, W. H. Wharton and Stephen F. Austin were appointed commissioners to the United States, with such powers and instructions as the "governor and general council may deem expedient.” 2
The council was strangely dilatory in preparing these instructions. A select committee appointed for that purpose reported, November 21,
that upon considering the matter, they are unable to find any acts of the Convention or of this Council, whereon to base instructions for said agents, or any data which can guide your committee in an opinion of their duties, but from all the information they can obtain, your com-mittee have concluded that the agents should receive their instructions from the Executive; but in order to enable the Governor to give the necessary instructions, an ordinance should first be originated by the Committee of State, and passed and approved, defining in general the powers and duties of the agents. ... But your committee can not advise that the Committee of State be instructed upon this subject with propriety, until the reports of the several committees on the Military, Navy, and Finance have been received and passed."
1 Ordinances and Decrees, 129-130.
Journal of the Proceedings of the Consultation 7, 37.
In view of the fact that the committee took "the liberty,” on account of “the emergency and great press of business," to submit an ordinance empowering Mr. McKinney to borrow $100,000, this report appeared a bit inconsistent. So at least thought Governor Smith, for he pointed out the impropriety of employing agents with duties which might conflict with the powers of the general agents already appointed, and vetoed the bill. But the council without a dissenting vote passed it over his veto and it became effective November 26.' Any confusion which might have ensued was obviated by McKinney's making no effort to carry out the law.
At the end of nearly two weeks the council had passed to its third reading an ordinance to create a loan of a million dollars, but there it seemed likely to stop, when the governor took up the matter thus: “It must be acknowledged by all,” he said in his message of December 4,
that our only succor is expected from the East, where as yet we have not dispatched our agents. Sufficient time has elapsed since the rising of the Convention for them, by this time, to have arrived in the United States. They have called on me in vain day after day, time after time, for their dispatches, ... and they are not yet ready. I say to you, the fate of Texas depends upon their immediate dispatch and success.
Permit me to beg of you a suspension of all other business, until our Foreign Agents are dispatched.
Thus bestirred, the council immediately passed the bill providing for a loan, and the next day passed an ordinance outlining the instructions which the governor should give the commissioners. Both bills were approved on December 5.
For the loan, the governor was required to make out ten bonds of $100,000 each, payable in not less than five nor more than ten years; and with these the commissioners were “by all proper ways and means, by sale or pledge” to secure the loan, “or such part thereof as they can effect, upon the best terms the market affords, not exceeding ten per cent per annum." In case these bonds should not be accepted as sufficient security, the commis
- Journal of the Proceedings of the General Council, 50-53; Ordinances and Decrees, 18.
? Ibid., 97, 103, 104.
sioners were instructed “to pledge or hypothecate the public lands of Texas, and to pledge the public faith” – everything, in fact, that Texas possessed. With this authority, the governor lost no time in issuing commissions to the agents, and their private instructions were ready for them on December 8.? But more than two weeks elapsed again before these gentlemen sailed for New Orleans.
In the meantime, a loan for the use of Texas had already been secured by Mr. Hall from William Brookfield of New Orleans a small one, to be sure, $1,100, but to the Texans it probably seemed an earnest of the success of their agents when these should reach the United States."
On January 10 the commissioners notified Governor Smith that they had arranged for two loans aggregating $250,000. The fact that this could be done in New Orleans, where the Texas situation was so well known, they considered particularly encouraging and of good augury for success in other parts of the United States. It will be seen from their terms that these socalled loans were really nothing more than contracts for the purchase of five hundred thousand acres of land at fifty cents an acre; but the commissioners thought themselves very fortunate to get money on any terms. “In fact, rather than have missed the loan,” they wrote, “we had better have borrowed the money for five years and given them the land in the bargain.” They were of the opinion, moreover, that the loan would increase the interest in Texas; the lenders, they said, had already offered to land in Texas within six weeks five hundred volunteers.
i Ordinances and Decrees, 44, 45, 52-54.
: Austin Papers, N 2. Besides negotiating this loan, they were to make arrangements for fitting out a navy, procure supplies for the army, receive donations and, finally, proceed to Washington and find out the attitude of the government toward Texas. They were to learn whether any interposition might be expected from the United States, or whether “any ulterior move on our part would be more commendable and be calculated to render us more worthy of their favour, or whether by any fair and honorable means Texas can become a member of that Republic.” In short, they were to learn whether, if Texas should declare independence, the United States would immediately recognize it and form an offensive and defensive alliance.
• Hall to Governor and General Council, January 9, 1836 ; Comptroller's department, Letters to Treasurer, vol. i, 11; Journal of the Proceedings of the General Council, 232.
• Austin, Archer and Wharton to Smith, January 10, 1836. Austin Papers, N 15.
The first loan, of $200,000, was subscribed by ten men, four of whom were from Cincinnati, three from Kentucky, two from Virginia, and one from New Orleans. Ten per cent of the amount was paid down; the balance was to be paid upon ratification of the contract by the convention, which had been called for March 1. The amount advanced was to bear eight per cent interest, and the lenders might, if they chose, take land in repayment for this and future instalments at the rate of fifty cents an acre. In case they elected to take land - and all of them intended to the government was to survey and plot it in tracts of six hundred and forty acres each, and they must make their selection within two months after publication of a notice that the lands were ready. Article fifth provided that “no grant or sale of land shall be made by the government of Texas, from and after the date hereof, which shall not contain a full reservation of priority for the location to be made under this loan,” but this was not to apply to vested rights already existing. Article sixth, a little more sweeping, declares that “none of the public lands are to be offered at public or private sale until after the locations hereinbefore provided for shall have been made.” For the faithful performance of this contract, the commissioners pledged “the public lands and faith of the government of Texas," but even after its confirmation the lenders reserved the right of declining to pay the balance.?
The second loan was for $50,000, and seven of the twelve subscribers were residents of New Orleans, while three were from Virginia and two were from Kentucky. This loan was supposed to have been in cash, but Austin for some reason estimated that it would yield them net but $40,000. Gouge, however, who
· From Cincinnati, Thomas D. Carneal subscribed $40,000, Lewis Whiteman, $5,000, Paul Anderson, $5,000, and James F. Erwin, $5,000; from Kentucky, James N. Morrison subscribed $10,000, Robert Triplett, $100,000, and George Hancock, $5,000; from Virginia, William F. Gray and James McCulloch subscribed $10,000 each; and Alfred Penn of New Orleans also subscribed $10,000.
* Dienst Collection, ii, 11. The original MS. contract can be found in the archives of Texas, D, file 29, no. 2828.
The subscribers were: from New Orleans, Gabriel W. Denton, $10,000, Jacob Wilcox, $10,000, James Huie, $5,000, Thomas O. Meux, $2,500, Christopher Adams, Jr., $1,000, and Thomas Banks, $1,000; from Virginia, William F. Ritchie, $8,500, Howard F. Thornton, $1,000 and Jeremiah Morton, $3,000; from Kentucky, James Erwin, $5,000 and Robert Triplett, $2,000.
* Austin to McKinney, January 21 1836. Austin Papers, N 10.
wrote from documents, some of wisich are not now accessible, says that the amount actually received was $45,802. The conditions of this loan were the same as those of the first, except that priority of location was reserved to subscribers to the first, and that the commissioners pledged their personal property for the ratification of this contract by the convention.?
To the lenders this was simply a gigantic land speculation. They bound themselves by mutual agreement not to sell to any outsiders for less than $1.25 an acre, and began forthwith to "boom" Texas lands both by letter and in the public prints." The Texans were at first glad enough to get money on any terms, and such expressions as were made at the time favored prompt ratification of the contracts in order that the remaining instalments might become available. But before the convention met considerable opposition was being manifested to the provision which secured to the lenders prior rights of location. This feeling was so strong in the convention that Mr. Robert Triplett, on behalf of himself and the other stockholders, proposed a compromise relinquishing all such rights in return for certain compensation;^ but the organization of a government occupied the attention of that body until its adjournment, and action upon the matter was referred to the president and his cabinet.
One of the first acts of President Burnet apparently was to ask each member of his cabinet for a written opinion on the subject of ratification. All opposed it, and on April 1 Burnet himself wrote to Triplett and Gray, who were representing the lenders, and summarized their objections. The government, he said, was anxious to preserve the faith of the republic and would make any reasonable sacrifice to do so; it realized the circumstances under which the loans were made and hesitated, therefore, to avail itself of the undoubted legal right to disavow them; but the fifth article would paralyze future land sales; the agents had exceeded their
· Gouge, Fiscal History of Texas, 53.
Dienst Collection, ii, 12. The original MS. contract can be found in the comptroller's department, in file "relating to the $50,000 loan.”
3 Speech of Triplett to the Convention. Comptroller's department, in file “relating to the $200,000 loan.”
• Ibid. 6 These opinions may be found in the archives of Texas, D, file 29, no. 2888.