The Southwestern Historical Quarterly, Volume 49, July 1945 - April, 1946 Page: 523
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Land Grants to Texas Railroads
for the 63,000,000 acres involved--about fifteen cents an acre.
After settling all of the debts of the Republic, Texas had about
$5,000,000 left. She put $2,000,000 of this fund into what was
called the Special School Fund. Since the railroads were having
difficulty borrowing money to pay for rails, the state offered to
loan them from this fund $6,000 a mile at eight per cent inte--
est, the loan to be made on the completion of twenty-five miles
and the grading of twenty-five miles more. The loan was to be
secured by first mortgage bonds on the railroad. Between 1856
and 1860 loans were made to six railroads. None was able to
repay until after the Civil War. Later five of the railroads
repaid their loans, and the state foreclosed on one. The total
of the loans to the six roads was $1,816,500. Principal and
interest repaid amounted to $4,271,965.08. In all the annals of
finance, public or private, it would be hard to find a loan with
returns to match. Governor Hogg in a speech at Wills Point
on April 22, 1892, said,
With the wreck of war involving the desolation of homes, waste of
fortunes, and repudiation of public and private obligations, there were
few or no securities that survived except these very railroad bonds in
which the School Fund had been invested. There was less loss to the
School Fund from that investment than from any other securities, either
private or public known to the authorities of the state.
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Texas State Historical Association. The Southwestern Historical Quarterly, Volume 49, July 1945 - April, 1946, periodical, 1946; Austin, Texas. (texashistory.unt.edu/ark:/67531/metapth146056/m1/608/: accessed June 25, 2017), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; crediting Texas State Historical Association.