The amount due the school fund at the close of the war was $1,137,406.65. $766,700 of this was for United States bonds and interest coupons transferred to the Military Board in August and November of 1862; $331,604.84 for state treasury warrants received; $26,927 for specie used, and $12,173.93 for interest on state bonds.

Receipts of the school fund from taxes, land sales, and interest on securities amounted during the four years 1862-1865 to $643,-525.81, while expenditures, exclusive of investments, amounted to only $114,544.26. In 1861 loans were made to railroad companies under the act of 1856 to the amount of $190,500, and in 1862 to the amount of $150,000. These loans brought the total loaned to $1,816,500.

The railroad companies made no interest payments in specie during this period, but in accordance with the acts of December 16, 1863, and November 15, 1864, they paid in state treasury warrants a total of $320,367.13 for interest and principal of bonds. The state funded the warrants in 6 per cent bonds, and the latter remained of doubtful validity until 1883 when they were paid. The legality of the payments of the companies in warrants was subsequently contested on the ground (1) that the warrants were issued for the purpose of being circulated as money and so were in violation of the state constitution; (2) that they were bills of credit emitted by the state and were therefore in violation of the Constitution of the United States; and (3) that the acts under which they were issued and paid were in aid of the Rebellion and were therefore void. The decision of the Supreme Court of the United States was against the state on all three points.1

In 1876 $297,758.22, out of a total of $357,175 in United States bonds and coupons originally transferred, was recovered by the state and returned to the school fund.

1 H. & T. C. R. R. Co. v. Texas, 177 U. S., 66-103 (1899).

The indebtedness to the university fund at the close of the war was $283,514.22. This was for United States bonds to the amount of $100,000 and specie from interest and land sales transferred to state revenue account in 1860-1862, and for treasury warrants and Confederate notes received in payment of land sales. Receipts of this fund from land sales during the four years 1862-1865 amounted to $134,183.39. There were no disbursements other than transfers. In 1866 5 per cent state bonds to the amount of $134,472.26 were placed to the credit of the fund to replace the United States bonds and interest used, the balance of the debt not being recognized. The bonds thus credited remained of doubtful validity until 1883, when they were paid with accumulated interest; $10,300.41 of this old debt of war times was also validated and paid in 1883, but without interest.

The effect of the war upon the school and university funds was to strip them of their sources of revenue, and as a result of conditions brought about by the war, education in Texas was set back by more than two decades.