The Southwestern Historical Quarterly, Volume 52, July 1948 - April, 1949 Page: 294

chre oaey of the Republic of reras
E. T. MILLER
To TEXANS of the period of the Republic money meant
coins and notes. The media of exchange did not include
bank demand deposits, for during the life of the Repub-
lic there was not within its borders an incorporated bank or a
private bank or banker. A number of corporations with banking
privileges were chartered, but not one was able to raise the
amount of specie required by law to be on hand before business
could be started.
Texas at this time was in the pioneer agricultural stage, and
a scarcity of money is a characteristic of such a stage. Imports
exceeded exports, and the adverse trade balance drained out
gold, silver, and other money which was acceptable abroad.
Claims against outsiders which exports or loans or money dona-
tions from abroad gave were converted into merchandise imports,
because goods for personal, productive, and defense uses were
more needed than gold and silver.
Besides the pioneer stage, another factor that is most important
in an explanation of the money and credit trials of the Republic
is that the business and financial conditions in the United States
determined what these conditions were in Texas. The Republic
had hardly been born when the great bank panic and business
crisis of 1837 began in the states. There occurred contemporane-
ously a blow to state credit because of debt repudiation by some
of the states. A condition of business depression lasted in the
United States from 1837 until 1845, or a period practically co-
terminous with the life of the Republic.
The Constitution of the Republic gave the Congress the "power
to coin money, regulate the value thereof and of foreign coins,"
and provided that "nothing but gold and silver coins shall be
made a lawful tender." The Congress enacted that the standard
value of gold and silver coins should be the same as in the United
States. But no coins were ever minted by or for the Republic.
Metallic money was scarce in the United States at this time and