The Texas dollar, nicknamed the redback, was the currency of the Republic of Texas. The republic’s president Mirabeau B. Lamar issued the redbacks between 1839 and 1840 to minimize the national debt.
By 1842, the redbacks had devalued through inflation and overprinting and were no longer accepted for payment of taxes. In 1845, Texas became a state and later under the Compromise of 1850, surrendered its claim to the territory of New Mexico. Payment of $10 million for the land enabled Texas to pay off all its debts and redeem the redbacks.
The redback notes were redeemed for U.S. dollars at a rate of about one dollar for 15 redbacks and cut-cancelled to show that they had been redeemed. These notes are highly sought after by collectors. The rare redback notes that were never redeemed or cancelled are even more valuable.