Thetexaseconomy
theTEXASeconomy O’NEIL CENTER FOR GLOBAL MARKETS AND FREEDOM H SMU COX SCHOOL OF BUSINESS H APRIL 2016 Desperate Gamble Transforms Texas: Cotton, Slavery and the Americans
By Richard Alm and Scott Read marauding bands of Indians. In those early years, sparsely exas leads all other states in HISTORY ISSUE: populated settled Texas to defend itself attracting newcomers, welcoming Roots of the Texas Model against the Indian threat. The need to more than 5 million migrants from populate its northern territories led the T 2004 to 2014. So it’s somewhat Mexican government to a desperate ironic that the biggest early challenge was communications costly and cumbersome, gamble—opening its lands to settlers simply getting settlers to move to Texas. and life on the frontier was harsh for the from the United States. It was mostly a matter of geography. few brave souls willing to make their So settlers finally came—first in a The state’s location in the middle of homes in Texas. trickle, then in a torrent. The enticement North America is a great benefit today, In the early 1800s, the vast lands was cheap land and lots of it, perfect for but it was a liability when the Spanish between the Sabine and Rio Grande cultivating cotton. Most Americans who and Mexicans held sway over this land. rivers were home to just 7,000 Spaniards, migrated to Texas came from the southern Tejas, as the Spanish called the area, plus a half-dozen indigenous tribes. states of Alabama, Mississippi and was as far as could be from the power Hunkered down along the San Antonio Louisiana, accelerating the rise of King and population centers near Mexico City, River, the largest Spanish settlement in Cotton as Texas’ first economic engine. In a thousand miles to the south. Texas agonized over immediate threats— addition to a cash crop, the Southerners The distance made trade and getting enough food and fending off brought their peculiar institution of
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slavery, unwittingly condemning a future cotton; geology and geography blessed generation of Texans to fight on the losing Texas with a perfect climate and soil side in the American Civil War. for growing it (see The Texas Economy, In just a few short years, the influx of February 2016). thousands of American migrants shifted Watching American settlers move Texas’ demographics and culture, setting west, reaching the Texas border at the in motion a series of events that would in Sabine River, Spanish-ruled Mexico saw a few decades end Mexican rule and graft new threats to its sparsely populated Texas onto the United States. By altering and weakly defended northern frontier. the identity and culture of Texas, the The initial response was to hunker down early 19th Century’s settlers in a very real and try to keep the onrushing Americans sense laid the foundation for the state’s out of Texas. Mexico barred American economic success in the 21st century. immigrants, although a few illegals trickled across a porous border. Authorities Ripples from far away forbade trade with the United States—a The Industrial Revolution set in motion dictate smugglers routinely flouted. economic forces that would in time send One type of illicit trade proved particularly settlers stampeding into Texas. A series of vexing to the Tejanos. The rapid growth of English inventions in last decades of the the cotton industry in the United States Stephen F. Austin 1700s transformed the textile industry— created ravenous demand for horses and among them, James Hargreaves’ spinning mules for plowing fields and transporting colony of 300 American families in Texas. jenny, Richard Arkwright’s water frame, cotton to market. The Comanche and For his trouble, he’d get title to land and Edmund Cartwright’s power loom. Weaving other tribes were only too willing to meet sell it at a handsome profit. that demand by raiding Texas settlements American settlers differed from Tejanos Cheap land could attract enough and selling the ill-gotten livestock to the in language, religion and customs. Americans to give Texas a Americans over the border. Their loyalty was questionable, and their prosperity rested on slavery, then population big enough to fend off Moses Austin’s big idea illegal in Mexico. Opening the border to the Indians. Cotton farming had Indian plundering wreaked havoc on these Americans made sense only as the Texas settlements, forcing some a last resort to stave off the collapse been devastating Spanish Texas for Spanish residents to retreat to the of Spanish Texas. Desperate times call a decade or so; now, it would be safety of the Spanish territory to the for desperate measures—so authorities south. The beleaguered authorities approved the deal, which made no touted as the region’s salvation. in San Antonio decided that the only mention of slavery. hope for the survival of Spanish Texas On the way back home, a traveling cloth, traditionally done by hand at home, lay in new settlers who could battle the companion robbed and abandoned moved to the new age’s factories, where Indians and provide resources needed Austin along the Trinity River. The steam-powered machines made it cheaper to support troops. unfortunate Austin walked more than a to produce cotton clothing. Texas, a frontier backwater, held hundred miles to Louisiana in the dead Britain’s booming textile mills created no allure for migrants from Mexico, so of winter, arriving weak and sick. He died an insatiable demand for raw cotton. New some Tejanos looked across the eastern in June 1821, and Spanish authorities strains of cotton and Eli Whitney’s cotton border to the American South. The agreed to transfer the colonization grant gin, a machine to separate seeds from global cotton boom had made land there to his son, Stephen F. Austin. fiber, made the crop profitable in the U.S. prohibitively expensive. The Spanish As the younger Austin started settling South. Seeing riches, Americans poured authorities believed cheap land could families along the Brazos and Colorado over the Appalachians, grabbing the land attract enough Americans to give Texas rivers, long-simmering grievances that would in short order become the a population big enough to fend off the sparked a revolt against Spanish rule, states of Louisiana (1812), Mississippi Indian raids. Cotton farming had been and Mexico won its independence in (1817) and Alabama (1819). The cotton devastating Spanish Texas for a decade 1821. The country plunged into several planters brought slaves with them; and or so; now, it would be touted as the years of political turmoil, leaving Austin’s as their acreage expanded, they bought region’s salvation. land grant and the policy of opening more slaves. Among those who saw a future for Texas to American settlers in limbo. By 1820, the United States had American cotton growers in Texas was Austin traveled to Mexico City and surpassed India as the world’s largest Moses Austin, a former Missouri lead the state capital of Saltillo, relentlessly cotton grower and supplied nearly miner facing a mountain of debt. In 1820, lobbying for a new colonization law that half the cotton for Britain’s burgeoning the 56-year-old Austin crossed into Texas, would allow his colony to survive. Anti- textile industry. The mills in Europe and bound for San Antonio to pitch Spanish slavery sentiment ran strong in Mexico, the United States needed still more authorities on a grandiose scheme for a threatening the plans of Austin and his Continued on page 3 H theTEXASeconomy Page 3
Tejano allies. They knew Texas couldn’t THE AGE OF EMPRESASIOS: CARVING UP TEXAS AND SELLING IT lure enough Americans without legal protections for slavery, then the lifeblood of the cotton industry. In the end, Austin got what he wanted—a colonization law that didn’t expressly forbid slavery. The tumult of Mexican politics brought revisions to the laws on colonization and slavery over the next few years, but Texas managed to secure exemptions and keep its slaves. By that time, Cotton was already that Cameron important to Texas economy. Milam With doubts about slavery quelled, the Texas land rush was on, allowing Austin to fill his family’s original quota of Wavell 300 families by 1825. He received four Cameron Leftwich Filisola additional grants over the next five years. Under a succession of colonization laws, Robertson Burnett other empresarios (land agents) followed Austin in securing land grants for their Zavala Woodbury own colonies—Benjamin R. Milam, Green Austin DeWitt, Martín De León, David G. Burnet, Vehlein Sterling C. Robertson, James Power, Milam James Hewetson, John McMullen, James McGloin and Arthur G. Wavell. Austin In their efforts to lure American Dewitt settlers. the empresasios spread the McMullen word about cheap Texas land. They Deleon offered a deal that couldn’t be beat. & McGloin The head of a family could to buy up Power & to 4,605 acres for just 4 cents an acre, with the total of $184 payable over six Hewetson years. By contrast, the U.S. federal government sold public land for $1.25 an acre, with a minimum of 80 acres, payable in advance. So a prospective farmer needed $100 before getting started—a tidy sum in those days. The empresario system no doubt had practical advantages, but it amounted half-century to pacify the Texas hinterlands. other textile-manufacturing centers. to a 19th Century version of crony It wasn’t the just number of newcomers; Before cotton, frontier had centered capitalism. Huge land grants enriched a it was also where they came from. By on subsistence farming. Introducing a handful of well-connected businessmen. offering large tracts of cheap land, Texas cash crop with a global market meant It wasn’t the last time Texas would try to transformed itself into an extension of developing trade routes to connect a solve economic problems by turning to the American South, fueling the rise of a once-isolated region to the rest of the the heavy hand of government. cotton-based economy. world. It meant money flowing into the With cotton, slavery and the economy; the wealth gave a fortunate Texas transformed Americans, Texas took its place in the few the means to buy the world’s luxuries Mexico’s desperate measure achieved world’s first true exercise in globalization. and tilted political power toward the its immediate goals. Wagons loaded with Slaves planted, weeded, picked and interest of the cotton producers. new settlers arrived almost daily. The baled. Their owners sent bulky bales of By 1830, the Texas economy was on state’s population more than tripled to raw cotton by wagon or barge to the new its way—but with heavy baggage. In about 25,000 in the 1920s—and it just kept port of Galveston on the coast, where it embracing cotton, Texas made a deal on rising with each passing year. As more was loaded onto ships bound for New with the devil on slavery. No ethical settlers arrived, the Indian threat began to Orleans. Brokers bought the Texas notion of markets or economic freedom diminish, although it would take another cotton and sent it on to Manchester and can countenance a system that gives
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one individual the right to own another References Stephens, A. Ray. Texas: A Historical and take by force the fruits of his labor. Alm, Richard. “Story of Texas’ Economic Atlas. University of Oklahoma Press, 2010. With so much money at stake, Texans Rise Starts with Geology and Geography.” Torget, Andrew J., Seeds of Empire: followed the lead of the American South The Texas Economy,” February 2016. Cotton, Slavery and the Transformation and developed a willful blindness to the Available at http://www.oneilcenter.org/. of the Texas Borderlands, 1800-1850. evils of slavery, which would fester in the University of North Carolina Press, 2015. decades leading up to the Civil War. Beckert, Sven. Empire of Cotton: A Global In the first decades of the Texas History. Alfred A.. Knopf, 2014. Weber, David J. The Mexican Frontier, economy’s development, we already began Fehrenbach, T.R. Lone Star: A History 1821 – 1846: The American Southwest to see themes that will recur as events of Texas and the Texans. Macmillan Under Mexico. University of New Mexico move forward. In a Schumpeterian way, Publishing Co., 1968. Press, 1982. technology will shape Texas’ economy, Handbook of Texas Online, Arnoldo De Next issue: The Texas Economy will identify starting with the Industrial Revolution’s León, “Mexican Texas.” Available at http:// the key sectors that have contributed the textile innovations. What happens www.tshaonline.org/handbook/online/ most to the state’s economic growth since outside Texas will matter a lot—the new articles/npm01. 1997. The fastest-growing sector may textile technologies led to the cotton surprise many Texans. It isn’t oil and gas. boom in America’s South and the onrush Handbook of Texas Online, Margaret of U.S. settlers into Texas.. Swett Henson, “Anglo-American We see the first of a series of fast- Colonization.” Available at http://www. growing industries that will become tshaonline.org/handbook/online/articles/ Texas’ economic engines. The state uma01. wouldn’t see real diversity until the second half of the 20th Century. We will see that About the Authors economic interests will often trump the principles of freedom and markets. In Richard Alm Scott Reed time, Texans would produce cotton Richard Alm is writer in Native Texan Scott Read, without slavery, but it was inconceivable residence at the William an O’Neil Center student to the new Texans of the 1800s. J. O’Neil Center for Global researcher, is a fourth-year Markets and Freedom JD/MBA student in the Despite the blight of slavery, the great at Southern Methodist joint-degree program of the migration to Texas did set the stage for University’s Cox School Dedman School of Law and one of the decisive events in developing of Business. Cox School of Business. the Texas model of greater economic freedom. An important milestones will be statehood in 1845—an event we’ll cover in the next issue on the state’s economic history.
ABOUT THE TEXAS ECONOMY AND THE O’NEIL CENTER
The Texas Economy is an electronic publication of the William J. The center’s programs promote understanding of how capitalism O’Neil Center for Global Markets and Freedom, a research institute works among the general public, policy makers, business managers in the SMU Cox School of Business. and the next generation of business leaders. To these ends, the The center was founded in 2008 with an initial grant from William O’Neil Center teaches SMU Cox students, conducts economic J. O’Neil, a 1955 SMU business school graduate, and his wife Fay C. research, publishes economic reports, sponsors conferences and O’Neil. Its broad mission is the study of why some economies prosper educates the public through the media and speeches. and others do poorly, focusing on two critical issues for the 21st Century For more information, see our web site at www.oneilcenter.org, economic environment—globalization and economic freedom. e-mail us at [email protected], or call 214-768-4210.