USA > Texas > Tarrant County > Fort Worth > History of Texas : Fort Worth and the Texas northwest edition, Volume II > Part 4
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In his inaugural address Governor Ross said, "Probably no legisla- ture was ever confronted by graver responsibilities. Those who study the public affairs of our state, and consider the want of homogeneity in its population, its industrial pursuits, business enterprises and social sympathies are aware of the fact that it presents questions vastly more complicated and embarrassing than any other state." The first question to engross the attention of the legislature was the election of a United States senator. Sam Bell Maxey, Ex-Governor Ireland, John H. Reagan and A. W. Terrell were candidates. As a result of the thirtieth ballot Reagan was chosen; his choice was regarded as peculiarly a victory for
the people. Of the measures enacted by the Twentieth Legislature, mention should be made of the law prohibiting "dealing in futures in cotton, grain, lard, any kind of meats or agricultural products, or cor- poration stocks." The law regulating the sale and lease of school and other public lands abolished the land board and vested the commissioner of the general land office with the duties pertaining to this important subject. This act greatly increased the power of this officer, and, since the public lands were mostly located in the West, his administration has been of especial interest to those identified with that section. To re- move the complaint that the lease law prevented settlement, agricultural land was not subject to lease and grazing land could only be leased if not in immediate demand for purposes of actual settlement. Agricul- tural land was sold to actual settlers only in quantities ranging from 160 to 640 acres. Grazing land might be purchased in quantities up to four sections. One-fortieth of the purchase price was payable each year. No land could be purchased by corporations. Foreign corporations before beginning business in Texas were required to obtain a permit. Rail- roads were required to give employees thirty days' notice of any intended reduction of wages, to pay promptly to discharged employes the wages due them, and all persons engaged in construction, repair or operation of railroad property were given a prior lien upon such property for wages due. Railroads were required promptly to furnish shippers with cars and to interchange with connecting lines freight and passengers
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without delay or discrimination; consolidation of parallel or competing lines was prohibited ; and a joint resolution required the attorney general at once to institute suit against all railroad companies and others for the forfeiture and recovery of all lands and grants made to them by the state, that had failed to comply with the law or the requirements in their charters to alienate such lands. Among the constitutional amendments submitted was one providing for state prohibition. Indicative of the spirit of the times are the following measures which the House of Rep- resentatives passed, but which the Senate failed to pass: Bills prohibit- ing pooling by railroad officials; prohibiting the watering of stocks and bonds by railroad companies ; prohibiting fire and marine insurance com- panies from entering into combinations to fix rates in Texas, establish- ing a railroad commission, and forbidding the use of free railroad trans- portation by state, district and county officers. Thirty-two members of the legislature, when the failure of these measures became clear, signed a protest against the actions of their colleagues.
The constitutional amendments voted upon August 4, 1887, were defeated. The one relating to prohibition created most excitement. "Its discussion," said Ex-Governor Roberts, "produced the most exciting political contest that had occurred in Texas for a number of years. It enlisted in the canvass not only the habitual politicians, but also citizens of every class, including preachers and women, both white and black. The moral question involved in it stirred up society to its very founda- tion with a greater manifestation of universal feeling and interest than had ever occurred before in Texas. Nor were the exertions for victory confined to public speaking. Those who supposed they had influence exerted it in any way they could. It was not confined to the day of the election, but the work went on day and night for more than three months before. Those in favor of it argued that it was the right and duty of the government as a police regulation to prevent the evil of intoxication with all its destructive consequences. Those opposed to it argued that it was a sumptuary provision that unjustly deprived the citizen of his liberty. Indeed, it may be said that the arguments pro and con were multiform and multitudinous, and neither side of the controversy was convinced by the other. Still, like all other great commotions of society, it left an impression that was not effaced in the struggle. There has been since that time a large increase of local options adopted in counties and pre- cincts in Texas for the discouragement of the use of intoxicants." (Com- prehensive History of Texas, II, 268-69.) The prohibition amendment was defeated by a vote of 129,270 for and 220,627 against it.
Nothing daunted by previous failures, those dissatisfied with Demo- cratic administration in Texas determined to place their own candidates in the field in 1888. The presidential campaign attracted much atten- tion, and much of the criticism stirred up by the conduct of the national Democratic party was used by the Independents in their attacks upon the Democrats of Texas. Prohibitionists, Republicans, Union-labor and Nonpartisans held conventions. Of the four the Nonpartisans, or Inde- pendents, who claimed to represent the farmers, laborers and stockraisers, appeared to be strongest, and they received the support of the other three. The Democratic platform declared for laws restricting freight
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charges of railways and express companies, and to prevent discrimina- tion in charges against any points within the state, for laws defining and suppressing trusts, pools and all illegal combinations in restraint of trade, and for a deep water harbor on the coast of Texas. Ross and Hogg were renominated by acclamation. The campaign "agitated the entire state and stirred its people to the profoundest depths," but the Independents were able to poll only 98,447 votes against the 250,338 cast for Ross.
The Twenty-first Legislature was the first to assemble in the mag- nificent new granite capitol. "The air is full of railroad legislation," reported a newspaper correspondent. "Nobody can tell what it will be except that there will be a commission ; that much has been decided upon, and unless it can be headed off in the Senate a railroad commission will have charge of the transportation of freight in Texas before twelve more moons." Governor Ross had become an active supporter of the measure. A legislative committee of the Farmers' Alliance worked for its passage. The bill passed the House February 21 by a vote of 66 to 25. Popular interest was raised to an extraordinary pitch. The newspapers were filled with interviews and discussions, tending mostly to show why the bill should not become law. It was suggested that a committee be appointed to investigate the working of such commissions in other states. The improvement of a deep harbor on the coast of Texas, it was urged, would regulate freight rates by placing water communication in com- petition with the railways. It was claimed, too, that so important a subject as the creation of a railroad commission should be submitted to a vote of the people. To all this the supporters of the measure replied, "The bill now before the Senate, and that of two years ago, has con- tinually been under discussion in the lodge rooms of Grangers and Farmers' Alliance. The farmers understand this question and nine- tenths of them demand its passage * * * Kill the commission bill and you murder the Democratic party of the state, defeat the promises of the party made from time to time for years." (Senator Claiborne, in Fort Worth Gazette, March 5, 1889.) After exhaustive debate the bill was killed in the Senate, the fourth or fifth on this subject to suffer a like fate.
The chief argument brought against the bill creating a railroad com- mission was the one alleging its unconstitutionality. The constitution commanded the legislature to regulate railroads; it was maintained that the legislature could not delegate this power to a commission. An amendment to the constitution removing this objection was, therefore, submitted to the voters for decision at the next general election. Other important measures enacted by the Twenty-first Legislature required Texas railroads to keep their general offices and their shops at some point on their lines in this state ; another law defined conspiracies against trade by combinations and trusts and prescribed penalties ; a joint resolution provided for a committee, to act with committees appointed by Kansas and other states, to investigate the pork and beef trust, and another reso- lution requested Texas representatives in congress to assist in procuring a deep harbor on the coast of Texas.
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REGULATING RAILROADS
The submission of an amendment to the constitution on the subject of regulating railroads transferred this subject from the legislative halls to the political hustings. While the vote would not be taken until the general election in November, both sides recognized that its fate de- pended largely upon the action of the Democratic state convention. The amendment, therefore, occupied a prominent place in the speeches of the candidates for governor. Hogg in his opening speech championed the amendment ; he showed the urgent need for a commission with power to make and enforce rates. What gave significance to Hogg's endorse- ment above that of the other candidates who favored the amendment was his official record and his personality. When Hogg was nominated attor- ney general he was scarcely known outside of East Texas; after he had been in office six weeks he filed the first of a series of suits that made his name known and respected throughout the country ; when he quit the office of attorney general he left it endowed with a record for service in behalf of the people that has spurred the ambition of each of his suc- cessors. He put out of business about forty "wild cat" fire insurance companies that were operating in this state in violation of the law. He compelled the railroad from Beaumont to Sabine Pass, which had sus- pended operation, to reconstruct and equip its properties and resume business. He enjoined the Texas Traffic Association, a pool that had killed competition among Texas railroads, and brought about its dis- solution. Attempts to revive the combination with headquarters outside of Texas were successfully frustrated. Railroads were compelled to return their general offices and shops to points on their lines within this state, and their control by outside concerns was terminated. The East Line and Red River Railroad was placed in the hands of a receiver for abuses of its charter franchises ; this was the first instance of the state exercising such authority. He sted for and recovered lands from rail- roads that had been obtained for turnouts, sidings and switches. These various proceedings gave him a comprehensive knowledge of the abuses practiced by railroads, and prepared him for advocating effectual meas- ures for correcting them. As no other person in the state could have done, he demolished the stock argument of corporation advocates that the rail- roads should be regulated by law and not by a commission, for he had tried regulating them by law. Hogg was bent on enforcement of the laws; "they are but the commands of the people to their officers." Hc was a man of the people, and they gave him their confidence and support
The Democratic state convention was controlled by delegates in- structed for Hogg and the commission. The amendment was adopted. and the law enacted in 1891 created one of the strongest commissions in existence at that time. Many deemed its powers too radical. "The great defect of our railroad laws generally," said Governor Roberts, "has been the want of adequate and practicable remedies to enforce what is legally required of them." The new Texas commission could not only classify freight and fix the rates for railroads and express companies. but it was specially empowered to enforce the obedience of the railroads. John H. Reagan, United States senator, yielded to the urgent request of
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Governor Hogg to accept the chairmanship of the commission. His action in resigning a high office with a large salary to accept at a smaller salary the much more difficult and burdensome task of inaugurating the new railroad commission was a fine act of patriotism. The commis- sioners organized June 10, 1891, and at once set to work to make equi- table rates. In most cases the rates were reduced below those nominally in force, for it was found that the railroads were allowing rebates and special rates below their published rates. The beneficial results of regu- lation were soon shown by greater activity in intra-state shipments, in the construction of mills and factories within the state and in better prices for farm products.
Those who had opposed the creation of a railroad commission were not inclined to submit to its control without a contest. On April 30, 1892, the Farmers' Loan and Trust Company, of Baltimore, filed suit in the Circuit Court of the United States for the Western District of Texas against the railroad commissioners, etc., for the purpose of restraining them from enforcing the rates established on the International and Great Northern Railroad, because it was claimed these rates were so low that they did not permit the road to earn operating expenses and interest on the bonds and were, therefore, confiscatory. It also attacked the con- stitutionality of the act creating the railroad commission. Similar suits were brought by five other roads. On August 22, 1892, the commission was temporarily enjoined from enforcing its rates on the roads of the plaintiffs. The suit was carried to the Supreme Court of the United States and the constitutionality of the Texas railroad commission law was fully sustained, but the enforcement of the rates already estab- lished was enjoined.
During the year and a half that the work of the commission was at a standstill, the railroads increased their rates, practiced the abuses in which they had formerly indulged and once more demonstrated to the people of Texas the great desirability of adequate railroad regulation.
While the constitutionality of the commission law was pending in the courts, it was assailed from another quarter. Under the ostensible plea that the vigorous enforcement of the laws and the advocacy of new measures for the control of corporate business had crippled business. frightened away capital and checked immigration, the transportation, commercial and financial interests in the Democratic party organized to prevent Hogg's re-election. Judge Clark, who had led the fight against the adoption of the commission amendment, was selected to lead their cause. The supporters of Governor Hogg at once branded the scheme as an attempt to overthrow the commission, and the campaign again was waged on this issue. The Clark forces denied that they planned to abolish the commission, but advocated popular election of commissioners to be "clothed with such constitutional powers as may be requisite for the protection of the people against injustice and extortion." The new Populist party also declared for an elective commission. The friends of the existing law pointed out that the election every two years of a new commission would not only seriously handicap this body, but would be a constant temptation for the railroads to enter into politics. They were willing to make the commission elective, if the terms of the commis-
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sioners were extended to six years and only one commissioner chosen at each biennial election. Hogg was renominated. An amendment to the constitution, extending the term of railroad commissioners to six years, was submitted in 1893 and adopted at the next general election. "There can be but little doubt that the most important results achieved by the state through the work of the railroad commission have been the almost complete abolition of discriminations between persons and places, and of the fluctuations in rates due to competition and rate wars. Steady and uniform rates are far more essential to the business community than low rates, and these two qualities have been secured in larger measure as a result of the commission's work." (Potts' Railroad Transportation in Texas, 172.) The prevention of discrimination was exceedingly dif- ficult, and was accomplished by providing the commission with liberal funds with which to prosecute investigations and suits for violations of law and finally by the passage of an act in 1899 prescribing a penalty of from two to five years in the penitentiary for any railroad official who should be found guilty of granting rebates or unjust discrimina- tions. The most tenacious form of discrimination to succumb was the free pass evil. Denounced for more than twenty-five years, it was not stamped out until the act of 1907 largely suppressed it.
Intimately connected with the subject of fixing freight rates was that of controlling the capitalization of railroads. "Next to the commission," said Governor Hogg, "I regard the regulation of the issuance of stocks and bonds by railway companies as the most important question affect- ing public interests * * The railways of this state * *
* * Have outstanding against them $455,250,744 in stocks and bonds, or an amount [equal to] more than one-half the assessed valuation of all the property within the state, including the railways themselves." He showed that the railroads were rendered for taxation at a valuation of only $63,000,000 or less by $392,000,000 than the amount of their indebtedness. For the past seven years the railroads had increased their obligations on an average of $30,000,000 annually. The railroads claimed a right to earn- ings sufficient to cover all their expenses and interest on their indebted- ness. The courts sustained their contention. The result was that the people of Texas were confronted with the unwelcome prospect of pay- ing the interest on a huge debt created in violation of the constitution for the benefit of railroad manipulators. "If a man attempts to impose an obligation on another in writing without his consent, he is guilty of forgery and subject to imprisonment in the penitentiary * * * What is the difference in principle distinguishing such an act from one where a corporation in fact imposes upon and makes the public pay millions it does not owe?" The enactment of a stock and bond law was an issue in the Hogg-Clark campaign. The platform of 1892 demanded its en- actment. Governor Hogg urged the same upon the legislature that assembled in 1893, saying "fictitious bonds are not capital nor the rep- resentatives of capital; they are the fruits of crime." The law enacted empowered the railroad commission to ascertain the value of every rail- road in the state. The values thus ascertained were to form the basis for all future issues of stocks and bonds, and no other indebtedness secured by lien or mortgage on a company's property could be issued in
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excess of these values. The railroad commission was given ample power to give effect to these provisions, each bond having to pass through its hands and to be registered by the secretary of state to be valid. The fixing of the values of the railroads, of course, forms the crux of this measure. Values increase and decrease ; the railroad commission has adhered to its original valuations. With the advance in values railroads have clamored for revaluations. Since the indebtedness on railroads already built, when the commission's valuations were made, exceeded by far their real value and which the commission had no power to reduce, any increase in their properties has served to establish a more equitable ratio between value and outstanding securities. The stock and bond law "has not only stopped the increase of fictitious stocks and bonds, but has actually resulted in a decrease in the average amount of the outstanding securities per mile of line. This result is worthy of remark in view of the fact that the last twenty years have seen a marked increase of the outstanding capitalization on the other railroads in the United States. The average amount of capital stock per mile of line in Texas has been reduced from $15,000 in 1894, to $8,400 in 1913, or a decrease of more than forty-four per cent. The bonded indebtedness per mile of line has been reduced from $25,700 per mile to $23,200, or a decrease in the mortgage debt of nearly ten per cent. The total amount of both stocks and bonds has been reduced from $40,800 in 1894, to $31,600 in 1913. or a reduction of more than twenty-two per cent." (C. S. Potts, in The Annals of the American Academy of Political and Social Science. May. 1914, p. 164-65.)
Closely related to the effort to control the indebtedness of railroad corporations was the law regulating and restricting the issuance of bonds by counties, cities and towns. A number of counties and cities had con- tested the validity of their bonds; thereby innocent purchasers were sub- jected to expensive and tedious legislation, and stains of fraud were cast upon securities bearing the name of Texas. A law was enacted which provides that bonds can be issued upon following conditions only : the levying of an annual tax sufficient to pay interest and create a sinking fund, rate of interest not to exceed six per cent, and term of the bonds not to exceed forty years. The attorney general must examine each pro- posed issue of bonds to ascertain whether these conditions have been observed, and the comptroller must register the bonds in his office. When these requirements have been observed, the validity of bonds cannot be called in question. A large portion of the permanent school fund is invested in bonds of cities and counties ; but the law was broader in its bearing than securing this fund against loss; careful scrutiny tends to reduce extravagance, undoubted validity made possible a low rate of interest and has gained for Texas securities an enviable reputation in the markets of the world.
LAND OWNERSHIP
"There is a land famine in most of the old world and in many sec- tions of the new. In the natural drift of affairs it may reach Texas within the next generation. Nothing can so readily precipitate it as the land corporation." (Governor Hogg's message to the Twenty-third Legislature.) Land corporations at that time owned about forty million
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acres, or one-fourth of all the land in Texas. An act was passed de- claring the unrestricted ownership of land by private corporations a per- petuity, and therefore prohibited by the constitution. The chartering of land corporations had been prohibited since 1885, but foreign corpora- tions were still permitted to acquire lands in this state. Further acquisi- tion or ownership of land by land corporations was prohibited, except in payment of debts due. The lands then owned were required to be sold within fifteen years, and those that might be acquired in payment of debt must be sold within fifteen years after such acquisition. No corporation is permitted to hold more land than is necessary to enable such corporation to do the business for which it was chartered in this state. Lands in excess of such purposes acquired in the collection of debt or otherwise must be sold in good faith within fifteen years after their acquisition. To enforce this act provision was made for selling the lands of refractory corporations by judicial proceedings. Corpora- tions for the lease, purchase, sale of subdivisions of land within incor- porated towns and cities and their suburbs are not included in the terms of this act.
A second act dealt with the subject of alien ownership of land in this state. It provided that from that time forward no alien or person who is not a resident of the United States shall acquire title to or own any land in this state, except in the ordinary course of justice in the collec- tion of debts. The law did not prohibit the acquiring of liens or the lending of money and the securing of the same upon real estate. Aliens owning land in Texas were permitted to retain possession, but as soon as these lands changed ownership this act became operative. Aliens who acquired land subsequent to the passage of this law were allowed ten years within which to sell the same. In case of failure to sell, provision was made for sale through judicial procedure. The law in its terms applies only to rural property. It expressly permits aliens upon equal terms with all other persons to hold lots or parcels of land in incor- porated towns and cities.
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