Dorough. Witt. Absent-Excused. Parr. The Chair laid before the Sen- Buchanan of Bell. McNealus. ate, on the calendar, S. B. No. 8, A bill to be entitled "An Act creating the Loraine Independent School District in Mitchell and Nolan counties, Texas, providing for a board of trustees; vesting in such board corporate powers, etc., etc." Address of Ex-Senator Townsend. The Chair presented ex-Senator Townsend to the Senate, who exThe committee report that the bill pressed an appreciation of the courbe not printed was adopted. tesy extended him. Message from the House. A messenger from the House presented himself at the bar of the Senate, with the following message: Hall of the House of Representatives. Austin, Texas, May 31, 1920. Hon. W. A. Johnson, President of the Senate. Sir: I am directed by the House to inform the Senate that the House has passed the following bills: H. B. No. 14, A bill to be entitled "An Act creating the Ganado Independent Schood District in Jackson County, Texas, defining its boundaries, etc., and declaring an emergency." H. B. No. 11, A bill to be entitled "An Act defining pipe and gas lines engaged, or to engage, in the transportation, sale, purchase, use or distribution of natural gas; declaring all corporations, persons, partnerships, or associations of persons now engaged, or hereafter to engage in buying, selling, distributing, and transportating natural gas for profit in this State to be public utilities, and making them subject to the provisions of this act; excepting certain companies from the provisions of this act; giving the Railroad Commission of Texas the power to fix and regulate the price of gas and the rates and charges by such public utilities for service; empowering said Commission to make rules and regulations for their conduct, and giving said Commission plenary power to make fair and equitable rules and On motion of Senator Buchanan of Scurry, the constitutional rule requiring bills to be read on three several days was suspended and S. B. No. 17 was put on its third reading and final passage by the following vote: Yeas-26. Alderdice. Floyd. Hopkins. Buchanan of Scurry. Hertzberg. regulations for enforcing the pro- Respectfully submitted, NOEL K. BROWN, Chief Clerk House of Representatives. Senate Bill No. 17. Page. Rector. Smith. Woods. Absent. Buchanan of Bell. McNealus. Parr. Absent-Excused. The bill was read the third time and finally passed by the following vote: On the request of Senator Alderdice. Buchanan of Scurry, Senate Bill No. | Bailey. 17 was, by unanimous consent, taken up, and laid before the Senate: S. B. No. 17, A bill to be entitled "An Act to create the 90th Judicial District; fixing its jurisdiction and the time of holding courts therein; providing for the appointment by the Governor of judge for 90th Judicial District; providing that the district clerk of Stephens County shall be an officer of said judicial district, fixing his compensation for services rendered therein, and providing for the filling of vacancies in the office of district clerk of said county; and providing further, for the transfer of cases from and to the forty-second judicial district court, and from one court to the other, and declaring an emergency." The Senate rule requiring committee reports to lie on the table for one day was suspended by unanimous consent. Bledsoe. Yeas-26. Floyd. Hall. Buchanan of Scurry. Hertzberg. Carlock. Hopkins. Page. Rector. Smith. Strickland. Suiter. Westbrook. Williford. Woods. Absent. The committee report that the bill considered out of its order, by unanibe not printed was adopted. The bill was read second time and passed to engrossment. mous consent, S. B. No. 23, A bill to be entitled "An Act to create the 89th Judicial District in Wichita County, Texas, to resentative Hill, I submit for your conprovide for the terms and the juris-sideration the following subject, to-wit: diction thereof; for the appoint- "An Act to create the Miami Indement of a judge of said district pendent School District in Roberts court; for the transfer of cases from County, Texas." the dockets of this and other courts provided for said county so as to expedite the trial of cases; to provide for a clerk of said court and for the prosecution of criminal cases in said court and by the district attorney of Respectfully submitted, Governor. Governor's Office, Austin, Texas, May 31, 1920. Third Called Session. the 30th Judicial District, and in his To the Thirty-sixth Legislature in absence by the county attorney of Wichita County, and declaring an emergency." The Senate rule requiring committee reports to lie on the table one day was suspended by unanimous Gentlemen: At the request of Senator Buchanan and Representative Biggers, I submit for your consideration the following subject: . Gentlemen: In the spring of 1919, numerous accounts against the Texas State Railroad were brought to my attention by the various creditors of the line. When it occurred to me that unpaid accounts were becoming so general, I thought it advisable to investigate the situation and accordingly requested the Railroad Commission of Texas on July 25th, 1919, to make an audit of the books and accounts of the road. This audit has been practically completed and I take this means of communicating to you the conditions as shown by the investigation made. I am attaching hereto the following exhibits to be printed in your journal: Exhibit A.-My letter to the Railroad Commission July 25th, 1919, requesting that an audit be made. Exhibit B.-Reply from the Commission bearing date of July 31st, 1919. Exhibit C.-Letter from Chairman Mayfield of the Railroad Commission dated September 9th, 1919, to which is attached first report of Auditor Fitzgerald to the Commission. Exhibit D.-Report of Auditor Fitzgerald dated December 3rd, 1919, to which is attached condensed balance sheet general ledger as of October 31, 1919. Exhibit E.-Report of Special Agent R. V. Nichols of the Attorney General's Department bearing date of December 22, 1919. Exhibit F.-Letter from my Secretary to Manager Welborn of the Texas "An Act to create the......Judicial State Railroad dated December 23, District; fixing its jurisdiction and 1919. time of holding Courts therein; etc., and declaring that an emergency exists equiring the immediate passage of this act." Respectfully submitted, W. P. HOBBY, Governor's Office, Austin, Texas, May 31, 1920. Gentlemen: At the request of Rep Exhibit G.-Letter from Commissioner Gilmore of the Railroad Commission dated February 2, 1920, to which is attached Auditor Fitzgerald's report of January 30, 1920. Exhibit H.-Letter from Mr. C. H. Arnold, Auditor of the Prison Commission bearing date of February 23, 1920. Exhibit I.-Report of Auditor Fitzgerald bearing date of February 24, 1920. Exhibit J.-My letter to Attorney General Cureton bearing date of March 3, 1920. Exhibit K.-Letter from the Attorney General bearing date of March 4, 1920. Exhibit L.-Report of Auditor Fitzgerald bearing date of March 5, 1920. I believe the documents above referred to will give you as accurately as possible the conditions existing with respect to the Railroad. Referring back, however, to Exhibit F, namely, letter from my Secretary to Manager Welborn, you will permit me to advise that it specifically refers to vouchers covering pay roll for labor performed by employees of the road and to accounts covering the purchase of cross ties for the use of the road, for which an appropriation was made by the last Legislature. thousand ties have been purchased which were not put in the track, but which were otherwise disposed of, and that the average cost of these ties is 65c per tie, which would amount to probably $6,500.00. As shown by the Exhibits hereto attached, this matter is receiving attention at the hands of the Attorney General, the Board of Prison Commissioners and myself. The discrepancies referred to herein have received attention at the hands of the Grand Jury of Cherokee County, and are, at this time, receiving attention of the Anderson County Grand Jury. In this connection, I desire to invite your attention to the necessity of making appropriations to cover outstanding accounts against the road; which accounts have been or will be These accounts require the approval submitted to your committees by the of the Governor before the warrants Board of Prison Commissioners. can be issued by the Comptroller. In addition to this, I recommend When these discrepancies were discov- that an appropriation be made suffiered I deemed it advisable and to the cient to put the road on a good operatbest interests of the State to withholding basis after which, it is believed by approval of any further accounts until those in charge, it will be self-sustainthe investigation was completed. ing, which will of course make it a more attractive proposition to prospective purchasers. At my request, Auditor Fitzgerald of the Railroad Commission has handed me a memorandum showing in detail shortages in the accounts of the vàrious employees as follows: J. B. Welborn, former D. A. Hulsey, former Au $4,068.17 Respectfully submitted, "A." Governor's Office, Austin, Texas, July 25, 1919. ditor and Agent at Rusk.. 2,586.20 To the Railroad Commission, Austin, R. P. Dean, former ..... 1,163.90 Texas. Gentlemen: I beg to ask that you have the books and accounts of the 400.17 State railroad audited at the earliest time suitable to your convenience. Thanking you for your attention to the matter, I am, Mr. Dean has paid back his shortage to the amount of $411.65, leaving a balance still due the road by him of $752.25. Mr. Lacy has paid in full his shortage of $400.17. In addition to the above shortages in the accounts of former employees, over payment and discrepancies in tie vouchers to the amount of $1,369.68 exist but Auditor Fitzgerald advises that this can be adjusted with R. A. Grogan from whom the ties were purchased. Ties have been purchased from him since the investigation for which payment has not been made. This is due to the fact that the accounts are held in abeyance by me until a satisfactory adjustment can be made of the discrepancies in prior payments. In addition to the above, Mr. Fitzgerald estimates that some five or ten "D." Austin, Texas, December 3, 1919. To the Honorable Railroad Commission, Austin, Texas. edly called Manager Welborn's attention to the matter. It would be desirable to have this report before making the audit, in order that said report may be checked and verified. Gentlemen: Referring to request If this is agreeable and satisfactory made by the Governor that an audit to you, we will arrange accordingly. be made of accounts of the Texas Yours very truly, State Railroad. (Signed) ALLISON MAYFIELD, Copy. Chairman. Railroad Commission of Texas. Austin, Texas, September 8, 1919. To the Honorable Railroad Commission of Texas, Austin, Texas. Gentlemen: Referring to request of the Governor, that an audit be made of the records and accounts of the Texas State Railroad. In accordance therewith, I proceeded to Palestine for that purpose. Mr. Welborn, general manager, was out of the city. Finding that the auditor was located at Rusk, I went there. Investigation developed the fact that the books had not been written up since December 31, 1917, and that it will require sometime to do this, before an up-to-date check can be made. The general books and data pertaining thereto are kept at Rusk by the auditor, while vouchers and disbursement records are kept by the manager at Palestine. An analysis was made of the operating expense accounts from July 1, 1913 (the date the road was taken over from the Penitentiary Commission), to and including December 31, 1917. As soon as the books are written up-to-date, the investigation and check may be resumed and completed, and full statements made thereof. Respectfully, (Signed) W. E. FITZGERALD, Copy. Auditor. As previously advised you, the books and accounts had not been written up since December, 1917, in addition to the general books not being written up, it was found there were many bills not vouchered taken into account; bank balances; station accounts; traffic balances and other current accounts not checked. or The work has now been brought all indebtedness that up to date, could be located has been booked, the various accounts checked to ate, that is to the close of business October 31, 1919. In order to show the exact status of the Texas State Railroad there is submitted herewith a condensed balance sheet of the general ledger as of October 31, 1919, together with detailed exhibit of operations for each year since the line was opened for business. The statements are self explanatory, showing that notwithstanding appropriations made by the Legislature aggregating $284,390.43. the road now has a deficit of $43,939.11, of which there is audited vouchers, pay rolls and traffic balances aggregating $36,689.81 that must be provided for in some way, as the revenues derived from transportation are not sufficient to meet the current expenditures. It has been found that all revenues have not been remitted direct to the State Treasurer as required by law, at the three stations, Palestine, Rusk and Maydelle it has been the practice to make advances to employes and otherwise disburse moneys which should be remitted direct to the State Treasurer. Also money is deposited in local banks, then transferred to a general fund in one bank at Palestine. Drafts on foreign roads for traffic balances are deposited in the Palestine bank and payments for traffic balances due to foreign roads are made through the bank instead of warrants drawn on the Treasurer. All of these transactions require an endless amount of bookkeeping and confusion that could be avoided if a proper system of handling prevailed. The office of the auditor is located |