Texas Loan Agency

In late 1863, Kirby Smith instituted a Cotton Office authorized to purchase half of a planter’s cotton in exchange for Confederate specie certificates. Much of the cost of transporting the cotton to the office’s agents fell on planters, but refusing to sell might allow the Confederacy to simply impress the cotton.

Outrage from planters led Pendleton Murrah to start the Loan Agency, which is described by wooster1985, p. 212, in this way:

Under the plan, a new state organization called the Texas Loan Agency offered to purchase cotton at a fair market price, payable in 7 percent Texas bonds (payable in Texas land warrants rather than depreciated currency). The State Plan also offered owners a way to protect their own cotton from Confederate impressment as the Loan Agency would transport all consigned cotton to the Rio Grande. Since the cotton in transit belonged to the state it was safe from Confederate impressment. Once the cotton reached the border, half would be returned to the owner and the other half would be purchased by the state with the 7 percent bonds.

The plan sparked controversy because it so obviously purchased state out from under the CSA Cotton Office or Bureau, headquartered in Shreveport and headed by Col. W. A. Broadwell. An order by Smith in June 1864 attempted to wrest the cotton market back from the state, sparking further controversy. The next month, however, after a meeting with Smith at Hempstead, Murrah acquiesced in Smith’s new orders, and the Loan Agency’s operations appear to have ended in August 1864 with the transfer of all cotton transactions to the Trans-Mississippi Treasury Department.¹