The Southwestern Historical Quarterly, Volume 71, July 1967 - April, 1968

Ashbel Smith on Currency and Finance
in the Republic of Texas
HERBERT T. HOOVER*
ASHBEL SMITH WAS A CLOSE OBSERVER OF THE FINANCIAL AFFAIRS
of the Texas Republic. For one thing, he had private interests
which forced him to keep abreast of economic trends. From his
arrival in 1837 until the economy faltered in 1840, he speculated in
land, not only with his own money, but with that of his friends
as well.
Smith gained further insight because he frequently was an official
in the central government. Immediately after his arrival he was
appointed to the office of Surgeon General of the Texas army. Later,
in 1842-1843, he served as charge d'affaires to England and France;
he became Secretary of State in 1844.' Nearly four decades later United
States Senator Sam Bell Maxey of Paris, Texas, requested Smith's
appraisal of currency and finance in the Republic for use in support
of his stand against greenbackism. Smith responded with the following
recollections:"
During . . . the War of Revolution which severed Texas from Mexico,
to wit A.D. 1835 and 1836, the Revolutionary Authorities of Texas in their
temporary forms of government attempted to gain money by authorizing
the negotiation of Loans and the sale of Land Scrip. The modest sums
of money so raised were subsequently liquidated in part by Compromise
with additional scrip for land and in part they figured in the shape of
accounts for supplies furnished the government; and the latter appeared
as a charge or debt against the Republic, forming a portion of the Public
Debt of Texas. No Bills of Credit or Paper in any form purporting to be
money for circulation were emitted by Texas during that period. The
money then in use in Texas was coin and Louisiana bank notes then at
par with gold and silver, and an occasional United States Bank Note.
After the organization of government under the Constitution, to wit, the
Constitution of the Republic of Texas, 1836, by Act of the first Congress,
*Mr. Hoover is assistant professor of history at the University of South Dakota.
xWilliam Ransom Hogan, The Texas Republic: A Social and Economic History (Nor-
man, 1946), 87-89.
2Harold B. Simpson (ed.), Texas in the War, 1861-1865 (Hillsboro, 1965), loo.
"Ashbel Smith to Hon. S. B. Maxey, October 2o, 1879, Sam Bell Maxey Papers (The
Maxey Home, Paris, Texas). No alterations have been made in the punctuation of this
letter.

Texas State Historical Association. The Southwestern Historical Quarterly, Volume 71, July 1967 - April, 1968. Austin, Texas. The Portal to Texas History. http://texashistory.unt.edu/ark:/67531/metapth117145/. Accessed December 22, 2014.