Message of Gov. J. S. Hogg to the twenty-third Legislature of Texas. Page: 7 of 28
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MESSAGE OF THE GOVERNOR.
foreign bondholders, through a federal court, have obtained a temporary
injunction suspending the rates fixed by the Railway Commission, upon the
complaint, among other things, that they were not high enough, after paying
the expenses of the roads, to meet the interest upon their bonds, many nillions
of which, with the light of truth shed on then, would appear to be the
depraved offspring of corporate abuse in violation of the express provisions
of the State constitution. By that action the point is sharply, boldly made,
that the traffic rates of this country must be maintained to pay interest on
all the railway bonds. It is material to the public, therefore, that none but
honest bonds, issued in pursuance and within the limits of the constitution
directly, shall be permitted.
To correct this evil and to prevent its continuance, a law embodying
the following features is hereby respectfully recommended to your honorable
1. That under the direction of the Railway Commission, experts shall
examine and report under oath the fair valuation of the railroads in this
State, which when approved by the commission shall be filed in the office of
Secretary of State as the official standard for the issues of bonds and stocks
in the future.
2. That no railway bonds or stocks shall be authorized or executed, except
for a limited amount, for the purposes mentioned in the constitution, and
then only at the railway general office in Texas.
3. That they shall not be negotiated, hypothecated, or sold until after the
Railway Commission shall have given a certificate that they have been issued
within the limit, for the purposes, and in obedience to the provisions of the
constitution and laws, and not then until they have been duly registered by
the Secretary of State in a record kept for that purpose.
4. That all contracts with construction or improvement companies shall be
fair and reasonable and be submitted to the Railway Commission for inspection
and approval before any bonds or stocks over an amount prescribed by
the law shall be authorized.
5. That all railway property placed in the hands of receivers under foreclosure
proceedings, shall be sold to satisfy the debts of the company within
a given time; the purchasers to take the property clear of incumbrances.
6. That the charter of any company violating any provision of the law.
by issuing, hypothecating, or selling fictitious bonds or stocks, or otherwise
illegally incumbering its property, shall be forfeited.
7. That every director, stocknolder, and officer agreeing to or participating
in such illegal act, or who shall divert any bond or stock or the proceeds
thereof from its legal purpose, shall be guilty of and punished for a penal
offense defined in the law.
8. That it shall be the duty of the State, as plaintiff or intervenor, acting
through the attorney-general, or such attorney as the Governor may especially
employ therefor, to enter any court having jurisdiction of the case and to
challenge or contest the validity of such stocks or bonds, and to enforce the
laws with respect to them.
A bill embodying substantially these provisions passed the House at the
special session of the Twenty-second Legislature, but did not pass the Senate.
Since then the fictitious increase of bonds and stocks has continued without
check, and will go on at a lively rate until legislative action is taken. Gathered
around the capitol will be many lobbyists against this measure, who will
try to frighten the people's representatives out of yielding obedience to the
demands of their constituents, upon the pretext and plea, as specious as it is,
that such a course will deter capital from investing in Texas and prevent the
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Hogg, J.S. (James S.). Message of Gov. J. S. Hogg to the twenty-third Legislature of Texas., book, January 12, 1893; Austin, Texas. (texashistory.unt.edu/ark:/67531/metapth5861/m1/7/: accessed August 17, 2017), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; .