Chapter LI: Appendix: F

PORTION OF A MESSAGE FROM GOVERNOR T.M. CAMPBELL, REFERRING TO RECENTLY ENACTED LAWS AND THEIR ENFORCEMENT

AUSTIN, January 14, 1909.

_To the Senate and House of Representatives_:

As members of the Thirty-first Legislature, you have each voluntarily undertaken an important task. Your duties are important and your responsibilities are serious. You have assembled under favorable conditions. The State Treasury is on a cash basis. The State is generally prosperous, and the people are contented and happy. The law is supreme in Texas, and all the laws are now very generally enforced and obeyed.

There is no substantial reason to doubt that the welfare of the State and the happiness of the people will be promoted by the intelligence of your work, and by your fidelity to the people with whom you made a covenant at the ballot box. You need make no serious mistakes, as the will of the people has been ascertained upon all important matters which demand the attention of the Legislature at this time.

Organized avarice, though in attempted disguise, can hardly be expected to override the popular will. Selfish interests and those seeking special advantages and exclusive privileges will have their ready advocates on every hand, and wholesome legislation heretofore enacted for the protection of the people will doubtless be assailed. A word of caution is therefore offered to the end that the chosen representative of a confiding constituency may be on his guard. It is not unlikely that designing forces have organized and will be maintained at the Capitol which will test the wisdom, integrity and patriotism of this Legislature.

The laws enacted and the reforms wrought under the present administration in behalf of the great masses of the people of Texas have been under fire for nearly two years, and have repeatedly received the emphatic endorsement of the Democratic voters of our State, and have been approved and re-affirmed by the organized Democracy in convention assembled. The platform of the opposition party demanded the repeal or modification of many of these important laws, and that party, its candidates and its platform were repudiated and defeated by about 150,000 majority. Desperate efforts have been employed by sinister agencies to discredit these laws, and to defeat the operation of these reforms, but the people have willed otherwise, and the laws have come to stay. Such changes as may be sought by the friends of the laws to strengthen them, and which may be dictated by experience, may, with propriety, be made, but these laws were demanded by the people; they were enacted by their trusted representatives, and in spirit and substance they should stand.

They are just and right and ought to stand. The result of the recent political contests involving these laws and reforms strikingly demonstrate that the agencies of corrupt and sinister special interests can not dominate and control in Texas. The patriotism of our people and the freedom of speech which obtains in Texas make it certain that her incorruptible electorate can be safely trusted to uphold the public official who keeps the faith and redeems his pledges made to them. Those who have contended that modifications and exceptions in their interest should be made in the laws enacted by the last Legislature might have placed their propositions upon the Democratic primary election ticket, and thus tested them at the ballot box, or they could have uncovered their schemes in the last Democratic convention, and these plans were suggested time and again as open to them. This course was open under the law, but they chose rather to undertake the defeat of candidates who stood for these laws. In this they signally failed in every instance. The State Democratic Convention, following the lead of nearly all the county conventions, endorsed the laws as they stood, and placed the party candidates upon a platform committed to their perpetuation. The enemies of the legislation and reforms enacted by the last Legislature chose to submit their demands for repeal, changes and modifications thereof in the Republican State platform, which of course binds all representatives of that party faith. Democrats are bound by party action, by the verdict rendered at the polls, and by the platform made by its convention.

The Democratic platform declaration with respect to the laws enacted during this administration is as follows:

"We heartily endorse * * * the acts of the Thirtieth Legislature enacted in obedience to platform demands, and we rejoice at the emphatic endorsement given said laws and administration by the Democratic voters of Texas in the recent primary election."

The measures of commanding importance enacted during the present administration are in the interest of justice, equality, good government and decency. They have resulted in no harm or injustice to any man or to any legitimate business enterprise within this State. The truth of this statement has already been demonstrated, and any effort to emasculate, destroy or weaken them would be a fraud upon the people and a betrayal of the Democratic party. These laws became effective in the midst of a great national panic, and Texas has been and is in a better financial and economic condition to-day than any State in the Republic.

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To effect needed reforms and to check evil tendencies, laws were enacted by the last Legislature to the following effect:

1. The keeping of gambling houses and the exhibiting of gambling devices was made a felony.

2. The practice of drinking intoxicating liquors on railroad trains was prohibited.

3. A law passed requiring contests of local option elections to be promptly instituted, and providing that otherwise the legality of such elections should be conclusively presumed.

4. Authority was granted district judges, on proper showing, to prevent by injunction the sale of intoxicating liquors in prohibition communities.

5. A tax of $5,000 was levied on express companies shipping intoxicating liquors into prohibition districts, the effect of which was to take the express companies out of the liquor and saloon business.

6. An effective bucket shop law which prohibits gambling in cotton and other futures, thereby guarding against depression in the prices of the farmers' crops, as a result of unnatural speculative or gambling transactions.

7. To encourage and promote agricultural development, a separate Department of Agriculture was created, and has been organized, and is at this time actively promoting, with the facilities at hand, our agricultural interests.

8. The occupation tax on useful occupations was repealed.

9. A law prohibiting the free-pass evil was enacted.

10. A law against nepotism was passed.

11. Charter fees of corporations were increased in a just and fair amount.

12. The depository law enacted keeps in circulation State funds and the rates of interest secured yields a return largely in excess of the entire expenses of the State Treasurer's office, and provides a handsome yield in interest on county funds heretofore deposited in banks without interest.

13. Laws increasing franchise taxes, and gross-receipts taxes, and securing the listing, rendition and assessment of the railways' intangible values for taxation, were enacted, and their operation has resulted in shifting a large portion of the burden theretofore unjustly borne by the individual property taxpayers to those who had been evading and escaping taxation.

14. A mine inspection law for the protection of laborers engaged in mining business, a law against black-listing, and a law lightening the labors of trainmen, enginemen, and telegraph operators and to protect the public, and other just laws, were passed for the benefit and protection of workingmen.

15. The law known as the "Robertson Insurance Law" having for its object the better protection of the policy-holders in Texas, and to promote investments in our State, was passed. The practical operation of this law is to require the investment of seventy-five per cent. of the Texas reserve of life insurance companies doing business in Texas, in Texas securities, and to require the deposit of such securities in the State Treasury, or other depository designated by the law. It is also provided that the deposit and investment features may be waived by the Commissioner of Insurance upon substantial showing under the terms and conditions of the law.

16. The "Full Rendition Law," as it is called, and the "Automatic Tax Law," having for their respective objects the rendition and assessment of all taxable property at its full value, greater uniformity and the adjustment of the tax rates and tax burdens in keeping with the absolute requirements of the government.

17. A uniform text-book law, providing for the adoption of a uniform system of text-books for all the public free schools of the State was passed.

18. A law prohibiting insolvent corporations from doing business in Texas was enacted.

19. A law prohibiting lobbying, and many other useful laws, were passed in the interest of the people.

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In the administration of the State government during the past two years, an earnest effort has been made by the Executive and all other departments of the public service, to give the people a clean, efficient, and economical government.

That the full measure of our success may be ascertained, and the people more fully informed, the most careful and rigid investigation into the administration of every department of government and into the management of each State institution is invited and suggested. That the laws should be properly enforced upon all alike, no law-abiding man will deny. The Constitution provides that "the Governor shall cause the laws to be faithfully executed," and every means and power that could be appropriately exercised has been brought into requisition to meet this mandate of the Constitution. No one should be strong enough to escape the power of the law, and none too weak to receive its protection.

The mandate of the Constitution is clear and the duty of the Governor, with respect to enforcing the law, is plain, but the Governor's powers are not adequate, and adequate statutory powers as contemplated by the Constitution should be promptly provided by legislation suited to present conditions as well as for future contingencies.

Obedience to all criminal laws should be a condition in liquor dealers' bonds, and jurisdiction for suits for breach thereof should be given to the district courts of Travis County.

The transactions of the Treasury Department are set out in detail in the State Treasurers annual report for the fiscal year ending August 31, 1908. The report, together with the tables accompanying the same, contain much useful information, and it is suggested that an examination of the same will be useful and profitable to the legislators.

At the beginning of this administration, the Comptroller estimated the deficit for the fiscal year ending August 31, 1907, to be approximately $300,000, and possibly more. However, as a result of careful and, we believe, efficient administration, aided by more effective revenue legislation, the deficit was avoided, and the State has been able to meet all of its current obligations for the past two years, and at all times to maintain an adequate working surplus in the State Treasury. Instead of a deficit, as predicted, on August 31, 1907, the State had met all of its obligations, and had a cash balance of $692,612.81 to the credit of the general revenue, and at the close of the fiscal year, August 31, 1908, after paying all claims when presented, the State had to the credit of the general revenue fund a balance of $888,985.61.

This very satisfactory financial condition was secured and has been maintained under the operation of the present tax system without additional tax burdens upon the individual property-tax payers. Interests theretofore escaping and property theretofore unrendered have been required, under the new laws, to contribute more to the support of the government, thereby lessening the burden upon those who were under the old laws bearing more than their just share.

To illustrate: Under the operation of the intangible tax law, $173,698,318 of intangible values of railways and bridge and ferry companies were listed for State and county taxes for the year 1908. The physical values of the railways increased under the new rendition law from $100,166,782, in 1906, to $157,822,790, in 1908. The intangible tax law, and the full rendition law has added to the tax rolls more than $250,000,000 of railway and other corporate values theretofore escaping taxation. The credits of money of banks and bankers and of others than banks and bankers are not now being properly listed for taxation; still there has been a great improvement, as the tax rolls show that they were increased from $42,112,424, in 1906, to $80,717,825, in 1908; an increase of more than 91 per cent. These are prominent illustrations of property values heretofore escaping, which, under the new laws, have contributed to the reduction of the ad valorem tax rate of 20 cents on the one hundred dollars in 1906, to the low rate of 6-1/4 cents on the one hundred dollars in 1908. The average tax rate in the counties throughout the State for 1906 was 55 cents on the one hundred dollars. This average rate of 55 cents was reduced in 1908 to an average rate of 40 cents on the one hundred dollars for county purposes by the operation of the new laws. The individual citizens who have been paying taxes upon their homes and farms at a fair valuation will pay less taxes in 1908 in proportion to value than they have paid for the support of the State government in any year since 1860, and as the receipts from other sources to the credit of general revenue increases, the ad valorem tax rate for State purposes will be reduced in proportion.

Under the operation of the tax laws of the last Legislature, the property values on the tax rolls increased from $1,221,159,869, in 1906, to $2,174,122,480, in 1908. The amount of taxes paid in 1906 on the tax rate of 20 cents on the one hundred dollars, amounted to $2,435,412.92, and in 1908, with the tax rate of 6-1/4 cents, the total tax amounts to $1,358,826.55; an increase in assessed values of $952,935,411, and a reduction of $1,076,586.37 in the total amount of ad valorem State taxes levied for 1908 as compared with 1906, and a much more equitable distribution of the taxes has been secured.

The valuation of property assessed for taxes, the rates and the amounts of State ad valorem taxes for the years 1906, 1907, and 1908, are as follows:

1906--Valuation, $1,221,259,869; rate, 20 cents; amount of taxes, $2,435,412.92.

1907--Valuation, $1,635,297,115; rate, 12-1/2 cents; amount of taxes, $2,040,625.58.

1908--Valuation, $2,174,122,480; rate, 6-1/4 cents; amount of taxes, $1,358,826.55.

Receipts to the credit of the State's general revenue for the year 1906, 1907, and 1908, from special corporation taxes and from all other sources, not including the ad valorem taxes on tangible and intangible values, is shown below; $375,418.94 received from the United States government in 1906 not included:

1906--Amount of receipts $1,826,682.26

1907--Amount of receipts 2,024,434.80

1908--Amount of receipts 2,416,218.46

The county tax rolls for 1906, 1907, and 1908 disclose the gross inequalities obtaining throughout the State prior to the recent tax legislation, and they further show that an earnest effort was made in the large majority of the counties to comply with the laws respecting rendition, assessment and equalization. In a few counties, however, the law was ignored, and the conduct of the tax officials of such counties was little short of unconscionable. These counties received the full benefits of the reductions in the State ad valorem tax rate from 20 cents to 6-1/4 cents, and the State school ad valorem rate from 20 cents to 16-2/3 cents, and received the full benefit of the increase in the apportionment of the available school fund, but by the dereliction and disregard of duty on the part of their trusted tax officials they contributed practically nothing to the increase of values resulting in such general good. This is so manifestly unfair and unjust that an effective remedy should be speedily provided by law. It is inconceivable that the oath of office prescribed by the Constitution, to say nothing of the oath prescribed by the new statute, and to which all tax officials must solemnly subscribe, should be so lightly considered by some men who have been honored with official station. Each county and each citizen and corporation of the State should contribute a just share and no more of the taxes necessary to support the State government and to maintain the public free school system, and no county, citizen or corporation through the dereliction of tax officials should be permitted to share in the benefits of reduced rates, and the increase of school funds when they fail to do their part. They should not be allowed by official dereliction to shift their just share of the taxes to the taxpayers of other counties and communities. It is just to say that the people of some of the counties where the law was disregarded repudiated the derelict tax officials upon their first opportunity.

Article 5124e, of Chapter XI, of the Acts of the First Called Session of the Thirtieth Legislature should be amended so that suits for removal from office may be instituted and prosecuted either in the county of such officer's residence, or in the district courts of Travis County, at the option of the Attorney-General. Laws should also be enacted providing that resignations or expirations of terms of office shall not abate action for removal from office, and the law should further provide that county officers who are removed from office for malfeasance or misfeasance or for any dereliction shall not thereafter hold office in this State until their eligibility is established and restored by act of the Legislature.

In this connection, I invite your attention to the respective annual reports of the State Tax Commissioner and the State Revenue Agent. The data and the difficulties encountered in the laws enforcement, and the suggestions made by these faithful officials, will, I believe, be of much value to the Legislature in improving our system of taxation and in enacting legislation to secure equality and more uniformity in the distribution of its burdens.