APPENDIX A.

MESSAGE OF GOVERNOR HOGG.

EXECUTIVE OFFICE,

AUSTIN, TEXAS, January 11, 1895.

Gentlemen of the Senate and House of Representatives:

A retrospective view of the last four years, taken in the light of the governmental reforms accomplished in obedience to the will of the people during that time, must inspire every patriotic Texian with a sense of felicitation and pride. While your honorable bodies are confronted with inadequate funds upon which to operate the government for the next two years, nevertheless, as faithful officers and loyal citizens, there is doubtless much gratification in the reflection, tested by truth, that extravagance has not caused the condition, nor have the tax-payers borne hardships as a consequence.

In rendering obedience to the constitutional requirements, that at the commencement of each session of the Legislature, and at the close of his term of office, the Governor shall give to the Legislature information by message of the condition of the State; that he shall recommend such measures as may be deemed expedient; that he shall render an account of all public moneys received and paid out by him from any funds subject to his order, with vouchers; and that he shall present estimates of the amount of money required to be raised by taxation for all purposes, I experience much pleasure in the contemplation that the service is to be performed to an intelligent body of men, elected by the people, who can fully appreciate and understand the true condition of the State; and who are committed by the demands of their constituents, expressed through party platforms and at the ballot box, to uphold the measures and policies of, and to support the leading laws inaugurated, promoted, and adopted by my administration.

Briefly stated, the condition of Texas simply is, that recently her foundations, so to speak, have been relaid strongly, securely, to the end that the sovereign people may maintain, control, and operate their governmental affairs at the lightest possible expense for the preservation of their rights and liberties, without menace from any source.

THE LEADING LAWS.

The Railroad Commission Law has been created, and after two long years of perplexing litigation, it has been permanently settled to be constitutional. It is freely admitted to be the strongest and most efficacious law of the kind in any government. Its operation is wise and just to the people and the railways. Its membership is composed of able, incorruptible, experienced men, in full sympathy with public interests, and friends to the policy of the law itself. Under this law, now so efficiently administered, extortionate rates, rebates, and discriminations in trans

portation by the railways of this State are practically at an end, and must continue so during its faithful execution. Home products supply home markets, and thus local traffic has become actively stimulated, to the profit and advantage of the producers and consumers, as well as to the railways themselves. No longer must the sad spectacle of surplus perishable agricultural products be seen to decay without the benefit of a. market. Traffic now, at reasonable rates, can seek the waterways and find cheap transportation to the markets of the world by safe sea-going vessels. Thus commerce becomes unfettered, and is no longer forced to pay tribute to all-rail routes for thousands of miles to water points abroad. Besides having the advantage of reasonable local rates for shipment to and from points within the State, our traffic has the benefit of competition at every central point in Texas by connecting lines that carry it abroad. The material resources of our State can not be longer stifled by arbitrary, discriminating rates against them in favor of non-resident people and industries. With confident expectation we may now look for the location of needed factories at the door of the raw material within the State, where they can thrive in supplying the wants of the people with manufactured articles. The new system has brought about a revoMlution in the management of local railways, and has drawn nearer together in bonds of sympathy to a common understanding the officers of the roads and their employes. This consummation will promote the efficiency of the lines, will maintain good wages among all railway laborers, and will avert the serious calamity of strikes, so menacing in some sections to the tranquility of all citizens. In the reduction of traffic charges alone, the producers, without detriment to the railway companies, will average in savings several million dollars annually. This is accounted for by reason of the fact that the companies are compelled, at the rates and under the regulations of the Commission, to transport to and from points within the State, at the will of the shipper, such local traffic as may be offered. The companies carrying the traffic are entitled to all of the charges, for they escape the necessity of dividing with outside lines. Before the Commission Law was adopted, nearly eighty-five per cent of the Texas traffic was what is termed "interstate commerce;" which means commerce shipped from or into the State across her lines-thus giving to the outside connecting railways a division of the earnings on a mileage basis. For instance, corn and wheat were shipped from Kansas through Texas grain fields to supply our home demands. By this method the home company would get but a small division of the earnings. Now Texas wheat and corn are first in the market, and first to be shipped to supply the wants of our people. As a consequence, Texas railways, as to such traffic, have no division to make with outside companies. This rule applies to everything else shipped to and from points within the State, and as a result the per cent of interstate traffic is being greatly reduced, to the proportionate advantage of local commerce and railways and to home industries.

Looking ahead, only one danger can be seen to threaten the usefulness of the Commission; and, by timely legislative action, this can be measurably avoided. The trouble lurks in the political arena. Should the great powers vested in the Commissioners be diverted from commercial channels into political currents, then the danger must be fully realized by the people. By all means, in so far as is possible, the Commis

sion should be eliminated from politics. As a business institution, its beneficial work must be keenly felt by every material interest in the State. As a political machine, every revolution of it would menace the happiness of the people. By constitutional amendment adopted at the last election the Commissioners are made elective. This is the first unfortunate step taken for the Commission. The people demanded it. They had a right to it. Now they have the privilege, by their own act, to elect the Commissioners. It is in the power of the Legislature, however, to throw safeguards around them, so the evil that must result from their engaging in political elections may be restricted, circumscribed.

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In my first message in 1891 on this subject, warning the Legislature against this danger, and pointing a way out of it, I said: "This can be done by providing that no member of the Commission shall be eligible to any other position of emolument or trust for the period of two years after the expiration of his term as Commissioner. One of the great achievements of the Commission, desirable by all classes, should be the removal of the railways from politics. With the feature of disqualification as suggested, it is not impossible for this result to be fully attained. By this method the biennial political agitations and corrupting influence of corporate power in the elections, always productive of discontent, jealousy and unhappiness among the just people, will be at an end."

Every word of this I repeat now. There is serious danger to result if the Railway Commission is permitted to engage in politics. Their election, with all the legislative restrictions that may be placed around them, will produce much trouble anyway. To permit them to use their powers for political advantage in seeking other offices, will, in time, greatly impair, if not destroy the efficacy of the law. It can not be objectionable to any man in public life, who prefers a fine record to political promotion, to know that the law forbids his becoming a candidate for another office for a named period of years. His answer to the frequent importunities to run for office will be sufficient when he replies that the law forbids it. Thus his great public work will go on undisturbed, to the honor of himself and benefit to the people. The law needs no amendment. A simple act, providing for the election of the Commissioners, in obedience to the late constitutional amendment, and declaring their ineligility to other office for a short period of years, will be sufficient.

That the Commission case is settled, and there is peace between the railways and the people, is a blessing to the whole State; and the law executed clear of political design, on the one hand to prevent the confiscation of the people's property by excessive traffic rates or taxes, and on the other, so as to insure to the railway companies just rates that will afford them a reasonable return upon their investment, will be productive of untold benefit that must in time redound to the prosperity of every legitimate interest within the State.

THE STOCK AND BOND LAW.

As a companion to the Commission Act, the railway "Stock and Bond Law" may be next considered. This law, among other things, defines corporate franchises, provides for making public the value of railroads, and limits the aggregate amount of stock and bonds to be executed by

them to the value of the property to be affected thereby. This rule can not be relaxed except by the consent of the Commission, and then only in case of an emergency, on conclusive proof shown that public interests or the preservation of the property of the company demand it; in which event the stock and bonds in the aggregate may exceed, by consent of the Commission, the value of the road to the limit of fifty per cent. Clearly this law settles the following essential propositions:

1. That except on the conditions of emergency named, no railroad constructed before the act took effect, can reissue bonds or execute new ones in excess of the value of the property as established by the Commission's experts, under the provisions of the law.

2. That no railway company can execute bonds on unfinished road, and must expose to the Commission its property rights and construction contracts to insure fairness to the public in the transaction.

3. That in the construction of new roads, and in the execution of all indebtedness to be secured by lien on the property, good faith to the public and ample security to the creditor are the prime factors that the Commission must jealously guard.

4. That to guarantee good faith and fair dealing in the execution of railway bonds, the penalties inflicted for violations of the law are: first, a forfeiture of the corporation's charter; second, the particular act is made void; third, each director, and the president, secretary and every other official who knowingly takes part in the illegal transaction, is made a felon, and subject to imprisonment in the State penitentiary for the offense.

Before the enactment of this law, it was the custom of railroad companies to add millions upon millions of dollars to their bonded indebtedness annually. For many years the records show an annual increase of from ten to thirty millions of dollars to their interest-bearing bonds, without any corresponding benefit to the property or the public. They were simply issued for speculative purposes, and then floated in the markets of the country as the professed work of good faith. Thus railway securities became so mingled with "wind and water," fraud and rascality, that the best of them were under more or less suspicion. Now such is not the case. Henceforth every such bond will have the stamp of honesty on it. It is a matter of congratulation and free comment, that though the law has been operative for about eighteen months, there have been no bonds issued by old roads since it took effect; and that, for the construction of new roads, the five per cent bonds now being issued under it are in demand at par. Instead of the effect of the law being to prevent the construction of railways, it is a pleasing fact to note that to-day more railroads are being built by reason of it in this State than are being constructed in any other State of the Union under the old sysUnder this law honest investors are saved from legalized robbery, and Texas people are guarded against the most certain, insidious, unjustifiable method of confiscation that was ever concocted or permitted through the abuse of corporate franchises.

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THE MUNICIPAL BOND LAW.

The Legislature two years ago also passed a law limiting the execu tion of county, city, and all classes of municipal bonds to actual public

necessities, so that the spirit of extravagance can no longer be found in them. Before they can be circulated, they must receive the certificate of the Attorney-General to the effect that they are in compliance with law, and then they must be registered in the office of the Comptroller. After being sold, they can not be impeached except for fraud or forgery, and all persons guilty of those two acts, or either of them, in relation to such bonds are punishable by confinement in the penitentiary.

Since the adoption of the law, the rate of interest on bonds executed under it has been reduced, and the securities themselves are purchased sometimes at a premium, and never less than par, for investors know, to a moral certainty, that they will be paid.

At best, the wisdom of the execution of public bonds is, to say the least, doubtful. The excuse for them is often imaginary and untenable. After people issue them, it is right that they should be paid without quibble. Under the new law their appearance in court will be rare indeed, if ever it again occurs. As certainly as they are issued, they will be paid. Additional to this just consummation is the blessing to the people springing from the fact that the inducement to public extravagance is reduced to the minimum. The bonded indebtedness for the future will be light compared to the past, and posterity will be wisely protected against much abuse from that source.

THE ALIEN LAND LAW.

To prevent the system of absentee landlordism which in some countries seems to menance the prosperity of the people, the Legislature in 1892 passed what is known as "the Alien Land Law." This law is effective only as to non-resident aliens who after its passage may acquire title to land in the State. The law does not apply to land owned by aliens at the date of its adoption so long as it is held by them; nor to those who acquire lands and within due time become bona fide inhabitants of the State. It gives all aliens the right of acquiring land or interest therein through the ordinary course of justice in the collection of debts; and authorizes them to loan money upon real estate and to acquire title to it by foreclosure of their lien thereon. It intends, however, that all persons being non-resident aliens-people not residents or citizens of the United States shall sell their real estate when they acquire the title to it by devise, descent, or purchase, within ten years thereafter. Should those who are subject to the provisions of the law not part with their titles within the period named, then it is made the duty of the State's attorney to institute proceedings in the proper court to have the lands sold at public auction, and the proceeds thereof, less the costs, to be deposited with the district clerk, subject to the order of the owner. The law itself is just, reasonable, and liberal, in that it does not attempt to destroy vested rights, nor to prevent the collection of debts, nor to interfere with the the title to land except when the non-resident alien fails or refuses to become a resident or citizen of some State of the Union, or undertakes to hold the title for a period longer than ten years while a non-resident.

Without doubt, while inflicting no injustice upon any person whomsoever, this law will do as much to relieve the citizens of Texas of absentee landlordism as any law that could have well been adopted.