The Southwestern Historical Quarterly, Volume 52, July 1948 - April, 1949 Page: 295
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The Money of the Republic of Texas
it was much scarcer in Texas. Texas immigrants were not wealthy,
and they brought little specie with them. There was a negligible
amount of Mexican silver "hammered dollars" which were a
holdover from the Mexican regime and which were in use along
The notes of state chartered banks constituted in all the states
the principal money, and those of Alabama, Georgia, Louisiana,
Mississippi, and Tennessee were the most commonly found in
Texas. Up to the time of the issue of the promissory notes of the
Republic, in the fall of 1837, there were in use as money not only
the notes of state banks but also "shinplasters," a name popularly
given to notes issued in Texas by private firms and municipal
corporations, in denominations usually of less than one dollar.
The Congress enacted in 1837 that bank notes were not receiv-
able in payment of import duties or of any dues of the Repub-
lic, and it also prohibited the issue or putting into circulation
by any person of any promissory note intended to circulate as
money. These prohibitions had as their purpose the elimination
of state bank and individual notes from competition with notes
of the Republic. However, after the collapse of the red backs in
1840 the people of Texas were in such sore straits for a currency
that the prohibitory laws of 1837 were ignored and state bank
notes and shinplasters again came into extensive use. The cur-
rency stringency also explains why the mercantile firm of McKin-
ney, Williams and Company, of Galveston, was authorized in
1841 to issue $30,000 of its promissory notes as money. Best
known of the bank notes put out by a Texas firm were those of
the Northern Bank of Mississippi at Holly Springs which were
endorsed and reissued by R. and D. G. Mills, of Galveston, and
which were called "Mills' Money." Counterfeits of state bank
notes and notes of failed banks found their way into Texas and
were, as President Sam Houston said in 1842, no "light evils."
The currency that was unstinted in amount and most generally
used until its downfall was that issued by the Republic itself.
The act of June 12, 1837, which authorized an issue of $500,000
of promissory notes, started the Republic on its paper money
career. President Houston said the issue was necessary in order
"to avoid the absolute dissolution of the Government." The first
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Texas State Historical Association. The Southwestern Historical Quarterly, Volume 52, July 1948 - April, 1949, periodical, 1949; Austin, Texas. (texashistory.unt.edu/ark:/67531/metapth101121/m1/304/: accessed August 23, 2017), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; crediting Texas State Historical Association.