Texas Legislature, Senate, Investigation Committee Appointed by Virtue of Senate Simple Resolution No. 96:

An Inventory of the Records at the Texas State Archives, 1935-1936

Agency History

The Texas Legislature's Senate Investigation Committee Appointed by Virtue of Senate Simple Resolution No. 96 was created at the end of the 44th Legislature's Regular Session in 1935. Senate Resolution 96 was introduced by Senator Poage on May 8, 1935 to propose a five member committee which would meet between the 44th and 45th Legislatures for the purpose of investigating "the application of the fee system in Texas,...the apportionment of the available school fund,...tax delinquencies and collections and any and all other matters pertaining to or affecting the revenue of the State government and the expenditures of said taxes, fees, and assessments, and... other affairs and activities of governmental departments... as such activities affect the financial or other welfare of the citizens of Texas." In addition, the group was to "study and investigate the insurance code, practice, and procedure, in this state." The resolution was referred to the Committee on State Affairs whence it came on May 9 with the recommendation that is should not pass, but that it should be replaced by the committee substitute and that neither the original recommendation nor the committee substitute should be printed. On May 11, Senators W.R. Poage, Tom DeBerry, W.B. Collie, Joe L. Hill, and T.J. Holbrook were appointed to the committee. During a meeting shortly after the appointment of the committee the members divided the work of the investigation among themselves. Senator DeBerry took State Departments, Hill took Oil and Gas, Collie took Fee Officers and Law Enforcement, Holbrook took School Funds Public Lands and Investments, and Poage (the Chair) took the Scholastic Census.

At some point the committee also took on/was given the responsibility of investigating matters concerning the management of the Chain Store Bill (House Bill 41, introduced during the Regular Session of the 44th Legislature, 1935). From at least September 30 to October 2, during the 1st Called Session of the 44th Legislature, the committee held hearings and gathered evidence regarding the efforts of chain store lobbyists (including several former Texas Senators) to influence the passage of legislation. Later, during the 1st Called Session, House Bill 18, concerning the licensing of chain stores, passed.

The committee issued its final report to the Regular Session of the 45th Legislature on January 25, 1937, though Senator Poage had, by that time, been elected to Congress and left the state without participating in the drafting of the section on Oil and Gas. The committee stated that it had had insufficient time and resources to adequately investigate the range of subjects assigned to it. The report, therefore, only covered fees, insurance issues, oil and gas topics, venue in Travis County, and the physical condition of the State Capitol Building. The report made no mention of the committee's efforts in regard to the Chain Store Bill.

According to the final report, the Committee (and Senator Hill, in particular), so as not to duplicate the work of other legislative committees, limited its investigation of oil and gas issues to the administration of conservation and confiscation laws and the criticism in regard to certain practices that had arisen in connection with them. The committee was concerned that the line between public and private interests of individuals charged with responsibility in enforcing oil and gas laws had been blurred, if not crossed, resulting in "rank violation of the strict intention of the law," particularly in the examples of Stanley-Sadler, Incorporated and the Texas Petroleum Council. The investigation was, however, unable to produce definitive recommendations, other than the suggestion that the inquiries be continued to ensure that certain conditions might be corrected and certain practices that appeared to be occurring might be stopped.

Senator DeBerry was primarily responsible for the investigation of insurance matters (both life and fire). As a part of the investigation W.G. McColloch was retained by the Committee to investigate/audit the Southland Life Insurance Company. Although McColloch's report was confidential under Texas law, information that could only have come from the report found it's way into the hands of R.R. Robertson and others who filed a lawsuit against Southland Life Insurance Company. The lawsuit was ultimately dismissed, and filers were enjoined from speaking about the case or filing any further suits, but the Committee launched a further investigation to discover the manner in which the report/audit information was leaked. The Committee's final report made no mention of these events, but did make a variety of recommendations, including the need to make public the reports/audits of the financial condition of insurance companies (as they already were in all but two other states) and the need to ensure that "no precaution should be overlooked to protect insurance trust funds from any dishonesty that might be practiced by officers of an insurance company." The Committee also noted concerns in regard to, among other things, interlocking loans, insurance examiners of the Texas Department of Insurance accepting payment for services rendered to private insurance companies, and the Texas Board of Insurance Commissioners.

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Scope and Contents of the Records

Records consist of transcripts, containing testimony and letters, affidavits, legal documents, oil tenders, and statements read into the record, of investigations conducted by the Texas Legislature's Senate Investigation Committee Appointed by Virtue of Senate Simple Resolution No. 96 during 1935 and 1936. The materials provide evidence of the Committee's investigations of oil and gas matters, various insurance issues, and the Chain Store Bill. The oil and gas hearing testimony documents the investigation of possible corruption and conflicts of interest among employees of the Railroad Commission of Texas, violations of oil and gas leases, the transfer and transportation of illegal "hot" oil, the Texas Petroleum Council, and various accounting practices. Testimony taken in regard to insurance matters focuses on the leak of confidential information concerning the Southland Life Insurance Company, a lawsuit filed against the company, and the general practices of the company. Additional issues include potential conflicts of interest among employees of the Texas Department of Insurance and the raising and management of insurance company funds. The Chain Store Bill testimony and letters discuss the lobbyists' methods of influencing, blocking, and/or ensuring the unconstitutionality of proposed legislation which might adversely affect the chain stores in the American Retail Federation.

The records only cover a portion of the entire range of the investigations conducted by the Committee. The transcripts are unpublished and unbound.

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Restrictions

Restrictions on Access

None.

Restrictions on Use

None.

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Related Material

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Administrative Information

Preferred Citation

(Identify the series and cite the item), Records, Investigation Committee Appointed by Virtue of Senate Simple Resolution No. 96, Senate, Texas Legislature. Archives and Information Services Division, Texas State Library and Archives Commission.

Accession Information

Accession numbers: 2000/193, 2003/141

Some of these records were transferred to the Archives and Information Services Division of the Texas State Library and Archives Commission by an unknown agency during the 20th century. An accession number was assigned on August 21, 2000. Other records were transferred to the Archives and Information Services Division of the Texas State Library and Archives Commission from an unknown source in the 20th century and found indexed in the Archives' manuscript holdings. An accession number was assigned on April 3, 2003.

Processing Information

Nancy Enneking, August 2000, April 2003

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Detailed Description of the Collection

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