Railroad Commission of Texas:

An Inventory of Rate Hearing #1573 Transcripts and Exhibits at the Texas State Archives, March-November 1915

Agency History

The Railroad Commission of Texas had its origin in the demands of the shipping public in the late 1880s which insisted that railroads be subject to regulation based on public interest. An advocate for governmental regulation, Attorney General James Stephen Hogg ran for Governor in 1890 with the issue of railroad regulation as the focal point of the campaign. Hogg was elected Governor in the general election and the voters also approved an amendment to Article X, Section 2 of the Texas Constitution that empowered the Legislature to enact statutes creating regulatory agencies. These elections paved the way for the Legislature to enact on April 3, 1891 "An Act to Establish a Railroad Commission of the State of Texas," that later was placed in the Texas Revised Civil Statutes under article 6444 et seq. (House Bills 1, 3, and 58, 22nd Legislature, Regular Session).

The Commission originally consisted of three members appointed by the Governor for three-year terms. Governor Hogg appointed the first three Commissioners in 1891, including John H. Reagan, who resigned as U.S. Senator from Texas to serve as the first Chairman. The Texas Constitution, Article XIX, Section 30 was amended in 1894 to provide for elective six-year overlapping terms for the Commissioners. That same year John H. Reagan was elected and served until his retirement in 1903.

The Texas Railroad Commission was the first regulatory agency created in the State of Texas and originally had jurisdiction over the rates and operations of railroads, terminals, wharves and express companies. The legal focus was on intrastate passenger and freight activities. Interstate jurisdiction fell under the U.S. Interstate Commerce Commission. For the first twenty-five years of its existence, the Railroad Commission was largely concerned with regulating railroads, setting rates, receiving complaints, and making investigations. As other controversies arose where the Legislature deemed that the public interest could best be served by regulation, additional duties were assigned to the Railroad Commission.

The Railroad Commission's authority was broadened beginning in 1917 with the passage of the Pipeline Petroleum Law, Senate Bill 68, 35th Legislature, Regular Session, that declared pipelines to be common carriers like railroads and placed them under the Commission's jurisdiction. This was the first act to designate the Railroad Commission as the agency to administer conservation laws relating to oil and gas.

The Commission's regulatory and enforcement powers in oil and gas were increased by Senate Bill 350 of the 36th Legislature, Regular Session, the Oil and Gas Conservation Law, effective June 18, 1919. This act gave the Railroad Commission jurisdiction to regulate the production of oil and gas. Acting upon this legislation, the Commission adopted in 1919 the first statewide rules regulating the oil and gas industry to promote conservation and safety, including Rule 37. This rule requires minimum distances between wells at drilling sites in order to protect field pressure and correlative rights.

The Gas Utilities Act of 1920, House Bill 11, 36th Legislature, 3rd Called Session, gave the Commission regulatory and rate authority over individuals and businesses producing, transporting, or distributing natural gas in Texas. In 1937, following a large natural gas explosion in a school in New London, Texas, the 45th Legislature passed legislation giving the Railroad Commission the authority to adopt rules and regulations pertaining to the odorization of natural gas or liquefied petroleum gases (House Bill 1017, Regular Session). The passage of the Public Regulatory Act of 1975 (PURA), House Bill 819, 64th Legislature, Regular Session, required certain state regulatory agencies, including the Commission, to set the overall revenues of a utility based on its "cost of service."

Regulation of liquefied petroleum was added to the Commission's responsibilities in 1939 by House Bill 792, 46th Legislature, Regular Session. The legislation authorized the Commission to adopt and enforce safety rules and standards in the storage, handling, transportation, and odorization of butane or LP-gases. Regulation of compressed natural gas was added to the Railroad Commission's responsibilities in 1983 (Senate Bill 617, 68th Legislature, Regular Session).

The Motor Bus Law of 1927, House Bill 50, 40th Legislature, Regular Session, and the Motor Carrier Law of 1929, House Bill 654, 41st Legislature, Regular Session, extended the Commission's regulatory powers to commercial transportation of persons and property on state highways. Motor transportation activities were handled by the Motor Transportation Division. In 1995, following federal deregulation of motor carriers, the 74th Legislature eliminated the Commission's authority to regulate commercial carriers involved in intrastate transport and transferred the remaining responsibilities related to commercial carriers (motor carrier registration, insurance verification, and safety) to the Texas Department of Transportation (Senate Bill 971, Regular Session), and the Department of Public Safety (Senate Bill 3, Regular Session).

The Texas Surface Mining and Reclamation Act of 1975, Senate Bill 55, 64th Legislature, Regular Session, authorized the Commission to regulate the exploration for and surface mining of coal, lignite, and uranium within the state and to oversee the reclamation of lands disturbed by surface mining operations. In 1991, the 72nd Legislature, Regular Session, passed House Bill 451, the Texas Aggregate Quarry and Pit Safety Act, that authorized the Commission to regulate quarry and pit operations.

The Commission's authority over railroads diminished over the latter half of the twentieth century. The Federal Railroad Safety Act of 1970 vested rail safety responsibilities in the Federal Railroad Administration. In 1980, the Federal Staggers Rail Act largely eliminated the Commission's responsibility for setting rates for intrastate railroads. By 1984, the Commission ceased its role in the economic regulation of the Texas rail industry. Regulatory powers over rail safety were granted in 1985 when the 69th Legislature authorized the Commission to implement a rail safety program in conjunction with the Federal Railroad Administration Act of 1970 (Senate Bill 444, 69th Legislature, Regular Session).

The Railroad Commission regulates the oil and gas industry to prevent the waste of resources and to protect property rights and the environment. It oversees hazardous materials pipelines and natural gas pipelines and distribution systems as well as propane, butane, compressed natural gas, and liquefied natural gas. The Commission licenses and conducts seminars for oil and gas dealers and their employees. It also oversees railroad safety and rail planning; surface mining for coal, uranium, and iron ore gravel; and land reclamation when mining is complete.

Railroad regulation was initially overseen by the Main Office, later the Main and Transportation Division, then the Transportation Division. The division charged with rail responsibilities today is the Rail Division. This division is responsible for checking equipment and track, railroad and signal operations, and hazardous material handling; conducting investigations of accidents and complaints concerning railroads; and securing federal funds to improve branch lines and preserve rail service to rural areas. The Division enforces rules aimed at removing obstructions on railroad rights-of-way and operates a crossing safety education program. There are two main sections in this division - Rail Safety and Rail Planning.

Railroad Commission support divisions include the Public Information Office, Personnel, Finance and Administration, Information Technology Services, Intergovernmental Affairs, and the Office of Internal Audit. Three elected Commissioners direct the operations of the agency.

In 1999, the agency had approximately 848 FTE (full-time equivalent) employees. Legal authority for the Railroad Commission is the Texas Constitution, Art. X, Sec. 2 and Art. XVI, Sec. 30; and the Natural Resources Code, Chapter 81.

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Scope and Contents of the Records

These records consist of transcripts and exhibits (including photographs) of railroad rate hearings held by the Railroad Commission of Texas from March to October 1915. The Commission issued Circular 4616 in August 1914 to announce that hearings would be held to consider a request by the major railroads in Texas for an increase in their revenues. The first hearings were held in Dallas in March 1915. The railroads asked for a 15% freight rate increase and submitted the necessary tariff changes and plans to the Commission for statewide distribution. The hearings were reconvened in June to hear the responses of shippers to the proposed freight increases. Hearings were held again in September and once more in October to get the reaction of the Commission staff "as to the reasonableness of the application and the proper action that should govern the Railroad Commission in the application." All of these hearings were designated as Rate Hearing #1573. Actual changes in tariffs and rates are a separate record and are reported in the minutes of the Railroad Commission beginning in January of 1916. (See Railroad Commission of Texas, Minutes, 1891-1996 series.)

There are nineteen bound volumes in this series. Transcripts of actual testimony from the hearings number fifteen. This is almost a complete set of transcripts. Volume 1 from October 1915 is missing.

The four remaining volumes were compiled by Railroad Commission staff as exhibits. Two volumes are valuations of the property of the Gulf, Colorado & Santa Fe Railroad (G,C & SF) and the Houston & Texas Central Railroad (H & TC). One volume is on the value of equipment such as steam locomotives and other cars, with photographs of each type dating 1914-1915, and the second volume lists the real estate and track valuation.

The third exhibit volume contains an audit of nine railroads selected as representative of railroads operating in the state. The audit includes such facts as track mileage, capital stocks and bonds, net operating income, freight and passenger traffic, and abstracts of balance sheets. The figures are as of June 30, 1914. These three volumes were used as evidence in examining the financial status of principal Texas railroads in determining whether the railroads did deserve increased revenues.

The final exhibit volume condensed the June testimony of shippers into brief statements and organized it by commodity. This volume is not a legal brief but a series of testimonies on commodity rates and classifications.

This finding aid describes one series of the Railroad Commission of Texas records. See Railroad Commission of Texas: An Overview of Records for more records series.

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Restrictions

Restrictions on Access

None.

Restrictions on Use

Researchers must wear gloves provided by the Archives when viewing photographs.

Technical Requirements

None.

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Related Material

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Administrative Information

Preferred Citation

(Identify the item), Rate Hearing #1574 transcripts and exhibits, Railroad Commission of Texas. Archives and Information Services Division, Texas State Library and Archives Commission.

Accession Information

Accession number: possibly 1961/005

These records were transferred to the Archives and Information Services Division of the Texas State Library and Archives Commission by the Railroad Commission of Texas on an unknown date, possibly in October 1961.

Processing Information

Described by Paul B. Beck, November 1986

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Detailed Description of the Records

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