The Beginnings of the Texas Railroad System. 
55 
mile of improvement will increase the value of the public lands and of individ- 
ual property, and the ability of the State to prosecute the system will increase 
in the same ratio. * * * No system of internal improvements should be 
undertaken requiring an expenditure of money by the State, which would have 
to be supplied by taxation, until it has first been submitted to and received the 
sanction of the people. * * *. 
“Should these views be acceptable to you, I shall interpose no obstacles tp 
such constitutional measures as you may adopt to aid in the construction of 
railroads and in the improvement of our navigable rivers, if they shall seem 
likely to effect those objects * * *.” Journal of the Senate of the State 
of Texas, Sixth Legislature, Austin, 1855, pp. 18-31. 
22 Robert’s “The Political, Legislative and Judicial History of Texas for its 
Fifty Years of Statehood, 1845-1895,” in Scarff’s “A Comprehensive History of 
Texas,” Yol. 2, pp. 21-29. 
23 “Laws of Texas,” Vol. 3, p. 1461. 
24 Senate Journal, Fourth Legislature, Austin, 1851, pp. 31-33. 
^House Journal, Fifth Legislature, Austin, 1853, Part II, pp. 22-25. 
26 “Laws of Texas,” Vol. 4, p. 449. 
V. RAILROAD REGULATION. 
13. Railroad Abuses. 
Though the agitation for public works and the abolition of private 
corporations failed, it was at least accompanied with some important 
results. The first attempts at railroad regulation, and the correction 
of railroad abuses came as a result of this agitation, and it cannot be 
said that the cause of railroads was not benefited thereby. The 
abuses to which reference is had were not unlike some that prevail 
today— abuses which the experience and legislation of three-quarters 
of a century is apparently powerless to check. A fair sample of some 
of these is the following: 
When the Mississippi & Pacific contract was signed, it was agreed 
between the contractors and the Atlantic & Pacific Company that 
they were to be paid $200,000 — to be later increased to $600,000 — in 
Atlantic & Pacific stock. It was claimed by Mr. Lawhon that $20,- 
000,000 of stock would have to be issued under this arrangement in 
order to net the $600,000. And upon this fictitious value the people 
were to pay dividends in the form of exorbitant tariff and passenger 
rates. 1 
The Buffalo Bayou, Brazos & Colorado Company was guilty of 
similar manipulations. After expending the money paid in the form 
of stock, the company resorted to borrowing. Ten per cent bonds 
were issued, $66,000 of which were sold at thirty to sixty cents on 
the dollar. The road when completed to the Colorado cost $1,040,- 
793. 2 One-half the sum nominally expended should have been suf- 
ficient to complete the work. In order to make dividends on the 
stock, and to pay interest on the bonds, rates had to be levied two 
or three times higher than they normally should have been. 3 
