The Southwestern Historical Quarterly, Volume 35, July 1931 - April, 1932 Page: 9
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Texas and the Southern Pacific Railroad, 1848-1860
ing the Democratic State Convention and a railroad convention
at Huntsville, both on April 21, 1855.
In this letter, soon afterwards published, Governor Pease out-
lines his views which were later called the "State Plan." He
stated that his views on internal improvements had undergone a
radical change during the past year, that the experiment of in-
ducing capitalists to construct railways by grants of public lands
had proven a failure, and that of the thirty-seven applications for
charters granted only one company had come forward to do the
work for which aid had been asked. The only proper method,
he thought, was for the state to construct the roads with its own
credit. He would have the state convert the interest on the $1,-
400,000 of United States bonds then in the state treasury and
the 100,000,000 acres of public lands into an internal improve-
ment fund, and would levy an ad valorem tax of fifteen cents on
the $100; the whole of this would enable them to use the credit
of the state for $13,000,000 and pay interest at six per cent and
a sinking fund over a period of ten years, at the end of which
time the debt would be liquidated. This credit would enable the
state to build eight hundred miles of railroad; and if the invest-
ment earned three per cent four hundred additional miles of road
could be built. The plan was defended on the strength of the
probability that railroads would increase the land values and en-
able them to decrease radically the state taxes because of increased
assessments so that the fifteen-cent special tax would not be bur-
densome. Pease proposed a state convention to amend the Con-
stitution so the fund could be created and put beyond legislative
interference until the plan had time to be worked out.19
The Democratic State Convention and the railroad convention,
functioning as the latter, had heated discussions at Huntsville
on the subject of the state plan and finally adopted it as a policy.
Among the dissenters was Senator Sam Houston. There was
widespread discussion of the question during the campaign,
though Governor Pease tried to keep it in the background. Simul-
taneously with the Texas political campaign Lorenzo Sherwood,
of Galveston, was writing to De Bow's Review a series of articles
in defense of the state plan. He argued that the Tennessee plan
of loans at $10,000 a mile would yet fail; that that state had
19Amerioan Railroad Journal Weekly, May 26, 1855.
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Texas State Historical Association. The Southwestern Historical Quarterly, Volume 35, July 1931 - April, 1932, periodical, 1932; Austin, Texas. (texashistory.unt.edu/ark:/67531/metapth101092/m1/13/: accessed August 18, 2017), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; crediting Texas State Historical Association.