Message of Gov. J. S. Hogg to the twenty-third Legislature of Texas. Page: 5 of 28

MESSAGE OF THE GOVERNOR. 5
it all. While the Texas legislature cannot hope to improve the condition of
other States, it has the power to set a wholesome example at home by protecting
the present generation and posterity from this method of confiscation.
There are now within this State about nine thousand miles of railway, rendered
under oath for taxation at $67,000,000. The aggregate stocks and
bonds, as shown by their last official reports under oath, amounted to $465,
000,000. To assert that a very large per cent of these liabilities were
issued in violation of the constitution and laws is but to state a self-evident
proposition. They exceed the assessed valuation of all the rural lands
within the State by $67,000,000. Indeed, they a!mount to over half the
assessed valuation of all the property in Texas including the railways themselves.
This statement is simply made to illustrate, by comparison, what the
people may expect in the future from this growing evil unless ample legislative
remedies are adopted as safeguards for their protection. This question
was presented by message to the first session of the twenty-second legislature,
and again called specially to the attention of the extra session, but
there was no law passed on the subject. While the issue is not new, it
was fully and thoroughly discussed before the people last year; and they, in
the exercise of their sovereign right, adopted the following demand through
their said party platform last August:"14.
We demand a law that will effectually prevent the issuance of fictitious
and watered bonds and stocks by railway companies in this State, believing
that these great enterprises should be conducted upon commercial
principles and not as gambling devices."
Many eminent men have contended in the past that the public should
not interfere with the exercise of this privilege by the corporations; that
it is a matter with which the people have no concern. By this platform
demand it would appear that the people think differently. l'hey certainly
have the right to instruct their Governor and legislators on matters of legislation,
as they are the ones after all who are responsible for the government and its
affairs. Under the constitution, these public highways hav tbeen transfonrmed,
within the last few decades, from plain dirt roads leading to and from the
markets, into the present roads laid in rails and cross-ties anld granted special
privileges by the State government. To them have been delegated the governmental
power of eminent domain and the franchise of collecting tolls, that
may be appropriately called traffic taxes, from the commerce carried by them.
The extent of their authority in the exercise of this privilege has never
gone beyond the power to collect reasonable charges for their service.
They have never liad the right to collect any more for carrying the
commerce of the country than the amount sufficient, after defraying necessary
expenses of maintenance and operation, to pay a leasonable return on the
capital invested in them. It seems that, instead of confining themselves to
the legitimate performance of their functions as cormmnon carriers, tlhe railroad
companies have lost sigilt of their obligations to the public as commercial
agencies, an(d have entered the stock-jobber's market of hazardous speculation.
Instances in this State are common where they have issued both stock and
bonds for speculative purposes in violation of the constitution. 'I'here is no
better way to demonstrate this and to verify the assertion than to examine their
reports to the comptroller annually, made under oath, showing the amount
of receipts from the traffic earnings, and the expenses in operating, improving
and maintaining the several lines, compared with the annual increase of stocks
and bonds. Many instances appear where there is no report of extensions of
the lines, no improvements made beyond what are shown to have been
paid for out of current revenues, no outstanding obligations settled; yet,