MILITARY BOARD OF TEXAS
MILITARY BOARD OF TEXAS. The Eighth Texas Legislature in extra session on April 8, 1861, authorized the issue of $1 million in state bonds of $1,000 each, redeemable in sixteen years at 8 percent interest. The proceeds were for the military defense of Texas and other purposes. The act was amended on January 11, 1862, when the Military Board of Texas was established to sustain foreign trade for civilian and military purposes despite the federal blockade of Gulf ports. The board was to sell or exchange state bonds for supplies and establish foundries and ordnance factories. Because suppliers in Mexico preferred United States bonds to Confederate bonds an agreement was made to exchange United States indemnity bonds owned by Texas for Confederate bonds and allow the Military Board to use the United States bonds for foreign trade. At the time Texas had $800,000 of United States indemnity bonds in its treasury left from the settlement of its boundaries with the United States in 1850. Some of the United States bonds were used in trade with England, and in 1865 some were sold to George W. White of Tennessee and other individuals and companies.
When an attempt was made by these bondholders to obtain payment after the war, the state of Texas filed suit, on February 15, 1867, to prevent it, claiming that the state government under the Confederacy was illegal and therefore the contract between the Military Board and the bond purchasers was null and void. In Texas v. White (1869) the United States Supreme Court agreed. When the attempted sale of Texas bonds failed, the board turned its attention to cotton, which had a ready cash and exchange value abroad and which Texans were asked, and later required, to exchange for state bonds. The board was hampered by lack of appropriations, difficulty in transporting cotton to the Rio Grande, alienation of Mexican officials because of rumors of a French-Confederate alliance after the French intervention in Mexico, a decline in the price of cotton, federal occupation of Brownsville in 1863 and 1864, and competition of the Cotton Bureau of the Trans-Mississippi Department after August 1863. Early in its organization the board decided not to manufacture arms itself but to aid private enterprise so engaged. Foundries were established, and one in Austin did produce two cannons; however, the Confederate Army refused to accept them because of their poor quality. Contracts were made with firms in Waxahachie and Corpus Christi for the manufacture of gunpowder, but one mill blew up and the other was abandoned, so no powder was delivered. A state percussion factory was established that continued in operation until the war ended, producing about a million caps in 1865. As the blockade became increasingly more effective, military supplies formed a smaller proportion of the board's purchases. Some 50,000 hand-carding machines were ordered for use of the women in spinning. These were sold to Texas women for five to ten dollars, well under their actual value, and produced most cloth used for Texans in the Confederate Army. The cannon foundry was leased to a private firm for making and repairing farm implements. The board also fitted out a gunboat, the Bayou City, for travel by Military Board agents. The Bayou City later played a decisive role in the recapture of Galveston. Money was also used to procure salt and to place obstructions in Buffalo Bayou to prevent its use by United States naval vessels.
Despite the favorable report of a legislative investigating committee of 1862–63, the board's activities were widely criticized. Because of increasingly heavy duties the board was reconstituted on its own recommendation; it originally was composed of the governor, the comptroller, and the treasurer, but in December 1863 changed to consist of the governor and two gubernatorial appointees. After the war, A. J. Hamilton appointed a commission to audit the board's accounts. The report declared the original board's records intact, the new board's records confused or destroyed, and large funds and considerable property unaccounted for. None of the property due the state from the board was recoverable, except a few United States bonds held by private individuals.
In 1865, at the request of the Texas attorney general, the records of the Military Board of Texas were audited by the state auditor to determine whether the claims of individuals who held state bonds were eligible for payment. The conclusion was that the proceeds of all bonds were expended directly or indirectly on activities arising from the Civil War and not on usual and proper government activities. They were therefore part of the debts repudiated by Texas as part of the requirements of readmission to the federal Union. The report also stated that all expenditures of the Military Board were proper, thus reversing Governor Hamilton's commission's report.
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The following, adapted from the Chicago Manual of Style, 15th edition, is the preferred citation for this article.Handbook of Texas Online, Julia L. Vivian, "MILITARY BOARD OF TEXAS," accessed February 21, 2020, http://www.tshaonline.org/handbook/online/articles/mdmnd.
Uploaded on June 15, 2010. Published by the Texas State Historical Association.