Two centuries back Texas was a sparsely populated and desolate backwater ~ above the remote frontier of the waning Spanish empire, decades away from joining the emerging country that thrived out of the thirteen British swarms on the eastern shore of phibìc America.

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Today the Texas economy is large, diverse and dynamic, boasting a gun state product (GSP) valued at virtually $925 billion in 2005. If the Lone Star State to be an independent country, the would have the tenth largest national economic situation in the world--just behind Spain and also Canada, and ahead that Brazil, the Republic of Korea, and India--according to data native the civilization Bank.

The really unfolding that the transformation of the Texas economic situation was wholly unpredictable in ~ the start of the 1800s as soon as the are was still a dangerous, desolate and dusty outpost, well beyond the frontier of comprehensive European settlement. Only in the last years of the 19th century walk the potential that the are as one economic and political powerhouse begin to disclose itself. But, the development of the cotton industry, the advance of railroads and the discovery of big quantities that oil were just the an initial of a collection of dramatic changes that would make the Lone Star State the financial powerhouse the is today.

A combination of unexpected bounty in the type of mineral wealth and also other resources, cultivation integration into the national economy of the United states (which chin underwent that is own collection of transformations), the development of the service economy and the high modern technology industry, and also the state"s increasingly crucial geographic place at among the frontiers of one extensive cost-free trade area that consists of Mexico and Canada, have actually all added to the ongoing change of the state.

1800 come Independence:Empresarios and also early settlement

In the beforehand days of exploration and also settlement by the Spanish, Texas represented a vast, unsecured, and also sparsely lived in territory with small immediate financial or politics value. Over practically three centuries from about 1519 (when Spanish explorers first came come Texas) come 1800, the Spanish developed only a few, reasonably small negotiations in the territory. Spain"s armed forces authority over the time was restricted and uneven, sometimes overshadowed by aggressive and an effective indigenous groups like the Apaches and also Comanches.

Vast spaces and also sparse negotiation made any claim to the are tenuous. In 1803, only three years after the French wrested the region of Louisiana native weak Spanish control, they offered it to the united States. The new owners then claimed that the territory"s southwestern border was the Rio Grande (known to Mexicans together the Rio Bravo).

This elevated Spanish concern that the are west the the Sabine River needed to be occupied with Spanish subjects--"facts on the ground," as we to speak today. The limited progress do by the Spanish in populating the Texas region by the an initial decade the the 1800s easily came undone throughout the early struggles for self-reliance from Mexico (1811 come 1813). By the time of Mexico"s ultimate freedom in 1821 the Texas region had even fewer people of Spanish descent than at the turn of the century--probably fewer than 5,000.

During the very first two years of the nineteenth century the people of the region remained quite poor, also by frontier standards. The territory was too huge and under-populated for far-ranging wealth generating business to thrive. The population and the economy was greatly sustained by the Spanish military, which had actually sent garrisons to safeguard the territory from encroaching Anglos and hostile natives.


After freedom a duration of family member tranquility worked out over Texas together the brand-new Mexican government concentrated on developing a constitution, laws and also state-level administration. The region of Texas to be joined with Coahuila to become the state that Coahuila y Tejas.

Meanwhile, immigrant from the united States--mainly indigenous Tennessee--continued come swell the Anglo population. The settlement started by Moses Austin in 1820 and later managed by his son Stephen flourished steadily. Stephen sought and won approval for a regulation under the recently independent Mexican government that advocated the development of settlements by granting large tracts of land to agents that recruited colonists to the territory. This was well-known as the empresario system, and also the agents were referred to as empresarios.

Approximately 30 or more six-year empresario contacts to be awarded start in 1825, offering compensation to the empresarios for approximately 9,000 immigrant families. The empresario contract covered large areas of Texas territory, effectively denying the state government the authority over disposition of these lands because that the six-year duration of the contracts. This empresario contracts stood for the key legal mechanism by which property in the public domain to be put into private hands.

Still, because they noted land to inhabitants at really low cost, and also required the the separation, personal, instance acquirers inhabit and cultivate the land, they had actually a wide democratizing effect. Concentration of soil ownership and land speculation--common in other parts of the frontier in the joined States--was largely missing in Coahuila y Tejas.

The late 1820s and also 1830s were identified by growing political tension despite--and perhaps because of--the deepening economic breakthrough in the territory. The populace of Texas in 1820 was around 7,000, not much better than it was in the an initial years the the century. But, throughout the colonization period after Mexican freedom from Spain (1821-1835) the population of Texas prospered at a substantial rate, if admittedly from a very low base. The non-native populace grew an ext than ten-fold from around 2,000 at the time of Mexican freedom to an estimated 20,000 in 1831.

Population development through immigration mainly from the United states seemed to accelerate in the at an early stage 1830s despite the substantial political turmoil led to by factional battles over political manage of the substantial expanse of territory that comprised the state of Coahuila y Tejas.

By 1834 the Texas populace (including slaves) was estimated at 24,700. Just two years later in 1836--the year the Texas freedom from Mexico--the non-native population was approximated at about 38,470. Including the approximated 14,200 natives lugged the total population to well over 50,000.

Many factors on both political parties of the U.S.-Mexico border--then created by the Sabine river which off the claims of Texas and also Louisiana today--contributed come the considerable growth in the number of colonists native the unified States. Still, it appears that the lot lower expense of land in Texas than in frontier locations of the unified States, merged with the officially land approve system, were significant factors.

Independence & early Statehood: Cotton and slaves


From independence to early on statehood the Texas populace continued come swell, exceeding 212,000 occupants (154,034 whites, 58,161 slaves, and 397 freed african Americans) in the new state’s an initial U.S. Census in 1850.

Most the the brand-new immigrants come from southerly states, especially Tennessee, Virginia and also Georgia. Representatives of this three claims alone created a majority in the constitutional convention that created the state constitution of 1845. Mirroring the Jacksonian political society and farming economic understanding of this settlers, that very first state structure prohibited banking and made the formation of exclusive corporations very difficult.

These southerly immigrants additionally brought with them their preference for and also expertise in growing cotton. Together cotton was a labor extensive crop, southerly immigrants brought increasing numbers of slaves. A census that the state in 1848 reported 42,455 servants in the state. Yet just two years later, the U.S. Census that 1850 counting 58,161 slaves.

In the ten year from 1849 come 1859 production of noodle multiplied much more than sevenfold, from 58,073 bales (each weighing 500 pounds) come 431,645 bales. Together cotton production blossomed, therefore did slavery – one Anglo American institution that had actually previously been just tolerated by mexican authorities, and which to be relatively minimal at the time of independence. The Census the 1860 verified that sixty-four counties had actually 1,000 slaves or more, and all but eight that those counties developed 1,000 bales or more.

Civil battle to civilization War II:"King Cotton," railroads and also oil

From the end of the polite War with the rotate of the century, cotton production continued to increase significantly as a an outcome of several crucial developments. These contained massive immigrant from the deep South and Europe, removed of natives from element cotton-growing areas, the innovation of a brand-new plow that much more easily broke the thick black color sod the the plains, the creation of barbed wire, the extension of railroads, the development of noodle ginning (removal of seed from cotton fibers and also cleaning and baling of the lint), and also perfection of noodle compressing in ~ the side of railroads for simpler shipping.

Clearly, "King Cotton" came to be a main feature the the Texas economy, attracting substantial investment capital, labor power, and technical development. Other sectors within the more comprehensive agricultural sector additionally grew substantially in so late nineteenth century Texas, including ranching, timber, and also corn. Still, cotton was king till the 1920s once it started a decades long decrease in importance caused by the drop in need during the good Depression, the loss of labor power during people War II, the climb of other centers of cotton production abroad, and federal initiatives to host down production to preserve prices.

As the railroads expanded their reach in the late nineteenth century throughout the state to the panhandle and the high levels of west Texas, their affect grew. In ~ first, the mix of more extensive railroad service and also the relocation of noodle compresses native the seaports to rail sidings helped cotton farmers break the strength of the port facility operators. But, hostility and also political competition in between farmers and also ranchers on the one hand and the railroads on the other easily grew.

Because railroads have tendency to be herbal monopolies (in i beg your pardon the substantial cost that investment renders it inefficient to have more than one organization provider in a particular area), they often tended to exercise enormous market strength over their customers--the farmers and also ranchers. The railroads" strength to collection rates was viewed as injurious come farmers and ranchers.

The struggle in between railroads and their customers resulted in the victory of James Stephen Hogg in the gubernatorial choice of 1890. Hogg ran chiefly on a populist communication whose main plank to be the promise to control the railroads. In that same election a proposed amendment come the Texas structure was ratified that permitted the creation of a railroad regulating body that among other things would regulate freight rates. Hogg made the first appointments to the new Texas railroad Commission in 1891. 3 years later on in 1894 the Legislature make those positions elective.

The development of the railroad Commission represented the most significant and direct political clash between competing economic interests since the Civil war pitted slaveholding cotton growers versus northern industrialists. Branch Hogg driven through a collection of laws, known as "Hogg"s Laws," aimed at reining in the railroads, out-of-state corporations, and insurance companies.

As cotton began its long decrease in the early decades of the twenty century, oil began to assume raising prominence. Though commercial oil exploration had delighted in some limited success in the post-Civil war era, the industry did not make significant discoveries until the late 1890s and the very first years of the new century.


As sizable discovery followed sizable discovery, a totally integrated industry began to take it shape, including pipelines and also oil refineries on the Gulf Coast. Then, together Henry Ford and also other manufacturers rotate the auto with the the internal burning engine into things of mass consumption, the Texas oil market came right into its own. By 1929 there was already one auto in the state because that every 4.3 of the virtually six million Texans. Likewise by 1929, the four states the Texas, Oklahoma, Louisiana and Arkansas accounting for around 60 percent of oil manufacturing in the unified States.

The success of the oil and natural gas industry helped diversify the state economy, which until the very first quarter the the century was still overcame by agriculture. The supremacy of that sector by noodle continued, but to a lesser level than in the previously period. Noodle prices had actually tumbled, while new fruits and also vegetables, harvested by raising numbers the migrant mexican workers, thrived in importance. If white and black Texans additionally worked in the itinerant farm labor pool, Mexicans ended up being the backbone that the industry.

Modern Texas Economy:Travel, retail, and also technology

Oil and natural gas production bestowed new economic importance and diversity on the Texas economy. Nevertheless, they just reinforced the state"s reliance on the production of so-called "primary goods"--mining (including oil and also natural gas production), timber, farming and ranching. It would certainly take a human being War, followed by a post-war national economic boom, come really develop a far-reaching base for industrial production, create several transportation hubs in the new air travel industry, and also establish the state as a platform because that high modern technology research and development.

The energy sector is still prominent amongst Texas industries, as are ranching, agriculture, and agriculture related markets like cotton ginning. But other industries such as airlines, travel and also entertainment, and technology (including computers, aerospace, and telecommunications) have actually grown to considerable prominence.

In part these industries have actually enjoyed considerable encouragement and also dollars native the federal government--particularly the aerospace industry. National and even global politics played vital roles here. The eight and room races v Cold War adversary the Soviet Union led to creation of the NASA facility near Houston. In turn, the aerospace industry has spawned growth in related sectors such as telecommunications, details technology, and the airline industry and also travel reservations industries. The airline and also air take trip industry has actually been a particular beneficiary of the fortuitous location of Texas around halfway between the 2 coasts, as well as from the state"s burgeoning and also increasingly urbanized population.

Some that the largest companies operation in the state in other vital industries, such as retail and manufacturing (e.g., CVS Pharmacy, Office Depot, Safeway, Coca-Cola, and International Paper), normally are not headquartered in Texas. Still, these providers represent considerable levels of employment and production. The importance of these out-of-state enterprise in Texas shows the increasingly combined nature the the nationwide economy.

This integration was facilitated in component by the production of the federal government highway system, which to be initiated under 1956 legislation developing the National mechanism of Interstate and Defense Highways, ostensibly for the rapid activity of troops and also materiel for defense that the national territory. The interstate highway system gave a considerable boost to the breakthrough of corporate restaurant chains. The prestige of numerous corporate chain restaurant suppliers (including Church"s, Popeye"s, Chili"s, Red Lobster, and also Luby"s, and others) among the state"s top employers in current years confirms the symbiotic partnership of the dining and also entertainment ar to the national highway system. The size of these corporate restaurant chains also reflects the explode of suburbs and exurbs throughout the state, which was in turn promoted by substantial highways.

The advancement of this emerging socio-economic complex--whose vital components had petroleum, automobiles, highways, suburbanization, and chain retail and restaurants--was reinforced by forces currently operating within the state. The Texas an excellent Roads and Transportation association had already been established in 1932 to encourage public expenditure top top the building and maintenance of roadways in Texas.

As beforehand as 1946--well before President Eisenhower"s press for a national highway system--the great Roads association was crucial in pushing through the 1946 "Good roadways Amendment" come the Texas constitution (see the chapter on the Texas Constitution). This amendment required that three-quarters of all revenue native state gasoline taxes it is in "used because that the sole purpose of obtaining rights of way, constructing, maintaining, and also policing... Public road ways" and also for the administration of traffic security laws.

Although Texas-based suppliers are no so leading in other financial sectors, they carry out represent several of the leading businesses in their industries. The high-technology sector contains such recognizable surname as an individual computer manufacturer Dell computer Corporation (based in ring Rock, Texas), telecommunications huge AT&T (bought in 2005 by Southwestern Bell communications headquartered in mountain Antonio), and chip an equipment Texas tools (Dallas). All three suppliers are amongst the height 100 labor in Texas.


In the sleeve sector numerous of the best employers are headquartered in the Lone Star State. These include: 7-Eleven, Inc. Based in Dallas, J.C. Penney agency (which also owns Eckerd Drug) based in Plano, Radio Shack in fort Worth, and also Winn Dixie additionally based in fort Worth. In the services and also finance sectors 2 Texas based suppliers are significant for being large employers. Administaff is based in Kingwood, while Cullen Frost Bankers claims San Antonio together home.

This quick list that industries and also companies conveys just how large and diverse the economic climate of Texas yes, really is today.


"Texas in the period of mexican Independence." The Handbook of Texas Online. Http://

"Mexican colonization Laws." The Handbook that Texas Online. Http://

"Census and Census Records." The Handbook the Texas Online. Http://

"Anglo American Colonization." The Handbook that Texas Online. Http://

"Antebellum Texas." The Handbook of Texas Online. Http://

"Cotton Culture." The Handbook of Texas Online. Http://

The national Grange,

"Grange." The Handbook of Texas Online. Http://

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"Texas in the 1920s." The Handbook of Texas Online. Http://