Explain how public debt became an issue prior to the annexation of Texas.(1 point)
Responses
Texas received a charter to open a bank prior to the start of the Texas Revolution, which created more debt for the state.
Texas received a charter to open a bank prior to the start of the Texas Revolution, which created more debt for the state.
Texas started off in debt and continued by taking loans and printing more money to make ends meet.
Texas started off in debt and continued by taking loans and printing more money to make ends meet.
Texas owed Mexico a lot of money for allowing Texas to break free.
Texas owed Mexico a lot of money for allowing Texas to break free.
Texas traded land for money owed with the Compromise of 1850, leaving it with less land to trade to get out of debt.
Texas traded land for money owed with the Compromise of 1850, leaving it with less land to trade to get out of debt.
Public debt became an issue for Texas mainly due to the costs associated with the fight for independence from Mexico, along with the challenges of establishing a stable government and infrastructure. The correct response from the options provided is:
Texas started off in debt and continued by taking loans and printing more money to make ends meet.
When the Republic of Texas won its independence from Mexico in 1836, it was already facing significant financial difficulties. The provisional government issued promissory notes to fund the army and public services, resulting in a rapid increase in public debt. Texas had little access to international credit, so it relied heavily on loans and the issuance of paper money, called "redbacks," which depreciated in value. The lack of a stable currency and rampant inflation exacerbated the debt situation.
Following annexation by the United States in 1845, Texas's debt remained a contentious issue, eventually leading to the Compromise of 1850, where Texas was compensated for relinquishing claims to lands that were disputed with the federal government in exchange for debt relief.
The options regarding Texas receiving a charter to open a bank prior to the Texas Revolution or owing Mexico money for independence are historically inaccurate. The Compromise of 1850 did involve land, but this was after the annexation and was a solution to the issue of public debt rather than a cause.