On Friday, January 13, 1923, during the Regular Session of the 38th Texas Legislature, Representative J. W. Laird proposed House Concurrent Resolution (HCR) 4. The resolution pointed out the deplorable financial condition of the Texas school system (which had forced the closure of many schools after only 4 months) and the fact that the Texas State Text Book Commission had recently let contracts for approximately $1,800,000, and called for an investigation of the text book contracts of 1922 to determine whether or not the contracts were justified. Laird proposed the formation of a joint committee composed of five members of the House Education Committee and three members of the Senate Education Committee. Voting on the resolution was postponed several times, during which period (on January 22) Governor Pat Neff sent a message to the House explaining the recent actions of the Text Book Commission, posing questions for legislative consideration, and expressing support for the honesty and sincerity of the Text Book Commission. HCR 4 was finally adopted by the House on January 25, along with HCR 6, calling the publishers and agents of text books to appear before the committee established by HCR 4 so that they might relate their expenditures during the textbook selection process. Several minor amendments were offered to HCR 4 on January 26, some of which were adopted. The resolution was then sent to the Senate, from which it returned, with amendments, on February 21. The House concurred in the amendments and finally signed the resolution on February 22. On February 23, Representatives P.G. Henderson, H.S. Bonham, R.A. Baldwin, L.E. Price, and John W. Laird (Chair) were appointed to the Text-Book Investigating Committee. Senate appointees were Senators H.L. Darwin, R.S. Bowers, and A.J. Wirtz. The committee began gathering documentary evidence, but, on March 13, with the Legislature's Regular Session coming to an end, Representative Pope offered HCR 35 proposing that the committee continue its work into the vacation between sessions or into the First Called Session of the 38th Legislature (if a supplementary session was called). HCR 35 was adopted.

The (joint) Text-Book Investigating Committee thus continued its work over the interim and into the First Called Session of the 38th Legislature. It held hearings and collected evidence throughout April of 1923 and submitted a majority report, with minority addendum, to the Legislature on May 3. The report found that various publishing houses, agents, and other representatives and employees of textbook publishers and distributors had tried to inappropriately influence the decisions of the Text Book Commission, that the Commission had failed to follow proper procedures, and that, while the committee had found no direct evidence of bribery of or fraud by a Commission member, the Commission had acted in disregard of Texas schoolchildren and taxpayers. As a result, the committee members proposed five conclusions of law, all of which invalidated the contracts made by the Text Book Commission in 1922, and recommended that all relevant officials and the Attorney General cancel the contracts, stop payment, and defend such actions in court if necessary. The minority addendum to the report agreed with the majority but stressed the fundamental honesty of the Text Book Commission, disagreed that the committee had the authority to make conclusions of law, and added several further recommendations - including the repeal or amendment of the free text book law.

The adoption of the report appears to have resulted in some controversy - the Attorney General refused to follow the recommendations of the Text Book Investigating Committee, while the State Superintendent, Comptroller, and Treasurer assured both branches of the Legislature that they would not honor the contracts until they were proven to be legal in the courts. The House thus passed an unnumbered simple resolution (offered by Representative Baldwin on May 14, 1923, also during the First Called Session) creating a committee to engage the services of competent attorneys to defend state officials who failed to honor the contracts.