11, 1862. Legislative action alone was responsible for the possession of the 5 per cent United States bonds by these funds and legislative action was unrestrained by any constitutional provision against recalling them at any time. But even if they should be regarded at the time of issue as a binding, bonded obligation, the failure of the State to acknowledge their validity, as it did the other debt authorized in 1866, throws doubt on their validity after the overthrow of civil government in 1867. Neither the Legislature nor the auditorial board of 1871 took any cognizance of these 5 per cent State bonds, and this appears to have been fatal to their position, for they were in every Comptroller's report after 1870, except that of 1881-2, classed as doubtful or worthless. The passage of the Reconstruction Acts of Congress in 1867 and the consequent overthrow of civil government and the establishment of military government in Texas, threw the State back exactly to where it was at the close of the war in 1865. As the bonded debt due individuals and authorized by the Act of 1866 had to be reviewed to be valid, so it would seem any other bonded debt authorized in 1866 should have been reviewed and validated to be a binding obligation. This was not done for the 5 per cent bonds held by the school and university funds, and they remained of doubtful validity, no interest being paid on them and their date of maturity passing without payment, until 1883. By the Act of February 23, 1883, they were validated and were ordered paid with accrued interest.2

The reports of the Comptroller after 1865 carried also among the debt of doubtful validity the 6 per cent State bonds dated May 13, 1865, and the Comptroller's certificate of indebtedness dated June 8, 1865, the bonds being held by the school fund, and the certificate by the university fund. As has been explained these were specifically declared void as war debts in 1866, and they were not validated until 1883. Their validation and payment under the Act of February 23, 1883, was, so far as legal obligation was concerned, a pure gift under the guise of payment of a debt. The failure of the State up to 1883 to pay the interest or the principal of the above obligations held by the school and

'See Article 10 of the Constitution of 1846 and the amended Constitution of 1861, Gammel, Laws of Texas, V, 24.

'Gammel, Laws of Texas, IX, 321.

university funds was therefore legally justifiable in the light of the history of the obligations.

A question pertinent in the consideration of the charge of repudiation is this: Did the State pay promptly during war time the interest on the bonded indebtedness which the auditorial boards of 1866 and 1871 found to be valid? Since the State had no bonded debt on January 28, 1861, this question is more specifically: Did the State during war time pay the interest on the 8 per cent bonds of March 20, 1861, and the 8 per cent bonds of April 8, 1861? It appears from the report of the auditorial board of 1866 that the interest on the 8 per cent bonds of March 20, 1861, had been paid up to January 1, 1867, and that the interest on the 8 per cent bonds of April 8, 1861, had been paid up to July 1, 1865. The interest on the bonds of April 8, 1861, was payable in specie, and evidence of the payment of it in specie is to be found in the special loan tax accounts.1

Also pertinent is the question: Was the interest on the bonded indebtedness found to be valid by the auditorial boards of 1866 and 1871 paid after the war? It appears from the report of the auditorial board of 1866 that interest on the bonds of March 20, 1861, was paid to January 1, 1867, and that no interest was paid. on the bonds of April 8, 1861, from January 1, 1865, to January 1, 1867. Such of this debt as was found to be valid by the board of 1866 and was funded in the bonds authorized by the Act of November 9, 1866, had no interest paid on it until the passage of the Act of November 13, 1871. The failure to pay interest as it fell due is not chargeable to the dereliction of the State of Texas but to the Congress of the United States. If there had been any bonded debt which antedated the war, there would have been no question as to the obligation of the State to pay interest on it at the time stipulated; but all of the bonded debt of the State was authorized during the war or after January 28, 1861. Therefore, the question as to payment of interest on the valid debt subsequent to the war depends on the date of the establishment of the validity of the debt. Because of the abolition of the civil government and the re-establishment of the military government by the Reconstruction Acts of Congress in March and July of 1867 the

'See Comptroller's ledger, 1861-5, pp. 437-441.

action of Texas in 1866 providing for its ascertainment was nullified, and Texas may be said not to have had any known valid debt until 1871. As soon as the valid debt was determined, payment of accrued interest was promptly made, and interest thereafter on it and on all other debt was always promptly paid.

It may be asked, finally: 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 principal of the bonds issued under the Act of November 9, 1866, and which were due January 1, 1877, was also paid at maturity. Except in the cases described above; namely, the repudiation of the debt incurred in aid of the war, and the delayed payment of the interest and principal of the bonds authorized in 1866 and of the bonds issued to the school and university funds, the State of Texas has always since January 1, 1861, either paid or refunded its bonded debt at maturity, and met the interest charges on the date stipulated in the bonds.

I have to report that, from the 16th of November to the present date, I have been a passenger in the Ship "Ellen Brooks," bound from Liverpool for New Orleans (U. S.) by way of which city I am to proceed to Galveston, Texas, there to enter upon the execution of my duties as Her Britannick Majesty's Consul.

John Bidwell, Esq., etc.

William Kennedy.

No. 1.

My Lord,

ELLIOT TO ABERDEEN2

Galveston January 5th 1843.

With reference to my despatches No. 10 and No. 18 of last year, I have now the honor to transmit to Your Lordship the copy of a note from Mr. Jones, the Secretary of State upon the subject of those communications. Being aware that certain respectable British Merchants here, have duties to pay into the Custom-house in the course of a month, I propose to call upon this Government to let those Gentlemen hold themselves liable to me for the sum of $3840, presenting my acknowledgement to the Custom-house in satisfaction of their duties to that extent. I can hardly doubt that it will be in my power to satisfy the Govern

1F. O., Texas, Vol. 3.

Ibid., Vol. 6.

Jones to Elliot, December 24, 1842. In Garrison, Diplomatic Correspondence of the Republic of Texas, III, 1063-1064; in Am. Hist. Assoc. Report, 1908, II.

ment of the necessity of forthwith adjusting the claim for the "Eliza Russell" by these reasonable means, and indeed I take the liberty to submit to Your Lordship that I perceive no risk in the immediate advance of a sum of £700 to Mr. Joseph Russell1 if Your Lordship shall see fit to recommend such a step to the consideration of the Treasury. The sum of £700 is specified, because that amount would fall so far within the extent appropriated by Congress as to leave sufficient room for deficiency from course of exchange, or by any other mode of remittance that might become necessary arising from the manner that payment may be made.

It has occurred to me, that Your Lordship, taking into consideration the length of time that Mr. Russell has waited for the adjustment of his claim, may desire to afford him some relief, and believing that, that may be safely extended him under the circumstances now stated, I have ventured to offer this suggestion

The detention of the steam boat which conveys these despatches to New Orleans, enables me to forward a note of intelligence this morning received from Houston. It is much to be wished, that these confusedly reported accounts may be exaggerated, but there is certainly reason to apprehend that some sinister event has

occurred.3

I learn that Congress was to separate in the course of the ensuing week, and that no material alteration of the Tariff had been carried.

In other particulars affairs remain in the position reported in my last despatches.

To the Earl of Aberdeen, K. T.

'Owner of the Eliza Russell.

"F. O., Texas, Vol. 6.

Charles Elliot

"This refers to the disastrous Mier expedition of December, 1842. A cutting is enclosed from The Houston Morning Star, January 14, 1843.