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Bartlett Appears Exclusively in the Texas. Observer A RECRUIT Let those flatter who fear, it is not an American art. JEFFERSON Firm Leadership and a Long Summer and MileJ On the seashore of endless worlds children meet. They build their houses with sand, and they play with empty shells. With withered leaves they weave their boats and smilingly float them on the vast deep. Children have their play on the seashore of worlds. The sea surges up with laughter, and pale gleams the smile of the seabeach. Death-dealing waves sing meaningless ballads to the children, even like a mother while rocking her As long as Texas lasts, the people will be personally indebted to Rep. Bob Eckhardt of Houston. Not often do a people become indebted to a politician. When they elect a man and he serves them, why should they celebrate him?he has only done his duty. But in politics, as in Nv a r, there is performance above and beyond the call of duty. Eckhardt’s strength of principle and legislative skill saved the Gulf beaches for perennial public use. They might have been saved anyway, but without Eckhardt in the legislatureat the time and the place he was neededonly the courts would have done so. First Eckhardt had the idea of legislation to create a prima facie case at law that the people have a right to the beaches. Then he enlisted Gov. Price Daniel, Atty. Gen. Will Wilson, University of Texas Law School Dean Page Keeton and many powerful newspapers. In committee hearings and in floor debates, Eckhardt seemed always to have in mind the political situation. He accepted many piddlingamendments to get the votes of legislators with narrow concerns. Once an issue is settled on the national level, it is settled for good. The people therefore often pay attention. One of the weaknesses of state government is its inability to accomplish reforms which will last very long. The lobby so compromises the legislature, the people are hoodwinked instead of served. Such an issue in Texas is loan shark reform. The people have been excited lately, about saving the beaches, and interested, somewhat, in taxes. A year ago their interest had been focused on the usurers blood-sucking the poor of the state, and reform seemed assured ; the people thereupon lost interest. What has happened? The loan shark lobby entered into liason with a majority of the legislature to trick the people into approving a “reform” which would wind up legalizing usurious rates of 100 or 200 percent. As of right now most voters don’t know this. The loan. sharks said to their political associates : You can’t reform us as long as the Constitution limits our interest rates to 10 percent. ple to approve the legislative setting the interest rates. \(The legislature has called an election on this and don’t tell the people what rate you’re going to legalize in 1961. \(So, by a margin of 7 to 5, the House of Representatives twice refused to pass a law setting up state regulaNow the sharks are ready to convert the public’s amorphous concern to .their own higher profits. “Step 1 : Abolish the 10 percent ceiling on baby’s cradle. The sea plays with children, and pale gleams the smile of the sea-beach. On the seashore of endless worlds children meet. Tempest roams in the pathless sky, ships are wrecks in the trackless water, death is abroad and children play. On the seashore of endless worlds is the great meeting of children. from “On the Seashore,” by Rabindranth Tagore He accepted some seriously limiting amendments from opponents of the legislation because he felt such concessions might influence the votes of wavering members. On every essential point of principle, he fought and won. When opponents of the bill tried to shunt him out of the fight, he refused to be shunted but he accepted advice and often yielded the mike to those fighting beside him. Finally, when the bill was sent to a conference committee 8 to 2 against effective legislation, he “pulled the stops,” using his by then widely acknowledged position of leadership on the issue to bludg -eoii Speaker Carr and recalcitrant Senators into agreement. At this last stage, he yielded his pride of authorship to the Senate side to assure Senate concurrence. The bill that emerged into law is so closely welded that no landowner can fence the people off the beaches. There stretch ahead of the free people into the future miles and miles of sandy beach. This was Bob Eckhardt’s achievement, and for it we cannot call out too much in his praise, nor sing too late into the night of his triumph. interest. Step 2: Since we obviously control the legislature, let them legalize our usury !” The voters have no choice, in self-defense, but to defeat the sky’sthe-limit constitutional amendment and thus tell the legislature : “Pass your regulatory law, and set your maximum interest rates, before you ask us to abolish the state’s only protection against usury. We will trust you when you tell us what you believeand not before.” open up Long enough the people have been kept outside of the rooms where their taxes are being assessed! Everybody knows that legislation is written in “the conference committee.” Especially when the House and Senate cannot agree, this committee becomes the working legislature. All either chamber can do with its report is accept or reject it. Again and again the tax proposals have been sent to conference; again and again the committees have reported out sales taxes instead of gas pipeline taxes. Observer readers know what happened because we asked the people in the conferences, and they told us ; but the average newspaper reader is in the dark about this, , the climax of the legislative process. The legislature should throw open the tax conference committees to the press ! \(The following reprint is for those readers not easily stunned. The subject is the severance beneficiary pipeline tax and the gentleman holding forth is Mr. Sam Wood who this week broke a six month silence on the topic with this front-page editorial column in the Austin Americanii Technical lawyers point out that the severance beneficiary tax is still a production tax:, and it is so described in the tax bills ; however the tax is made payable by the taker under these exclusive contracts, rather than the producer. “Texas now has, and long has had, a direct tax on the producer of natural gas. The present tax on the producer is seven per cent of the market price at the well head. The theory of the “severance beneficiary” tax on the contract purchaser is simple. It is to have part of the state tax load borne by the huge exports of a Texas natural resource, which in some instances is piped to other states and sold to consumers cheaper than to Texas consumers. The same principle underlay the former “gas gathering tax,” which was knocked out by courts as a tax on interstate commerce. The effect of these long-term exclusive contracts, and thus the effect on Texas taxpayers is that the pipelines now have long-term supplies of Texas gas tied down in contracts under which they pay the producer less than 10 cents per 1,000 cubic feet. The average of all Texas gas prices Ronnie Dugger Editor and General Manager Larry Goodwyn, Associate Editor Sarah Payne, Office Manager Published once a week from Austin, Texas. Delivered postage prepaid $4 per annum. Advertising rates available on request. Extra copies 10c each. Quantity prices available on orders. to the producers is little more than 11 cents ; thus the older contracts are much lower. Some of the old contracts are as low as four cents. The pipelines, though, in making contracts now for long-term purchase of California gas are paying as high as 22 to 24 cents. They aren’t hesitating to make those contracts, even though in Texas they are taking the producer’s gas at far less than half that price. They don’t quibble about paying 14 cents more for other gas, but are resisting the Texas effort to collect onehalf cent on the Texas gas they are taking at bargain-basement prices. The loss to Texas producers under those low-price contracts is a loss to the Texas economy and to the taxpayers. Not only that, the purchasers will drain off the gas they can take at abnormally low cost, and thus deplete Texas gas reserves ahead of those elsewhere. In the last analysis, the “severance beneficiary” tax is a tax on those who make the profit out of Texas gas. The latest proposal is to leave the production tax as is and levy a “token” severance beneficiary tax with no fall back on a rate applied to gas by volume instead of the market price. In all fairness, it should be pointed out that pipelines are not the sole “severance beneficiaries.” Some of Texas large industries, utilities, etc., would be tapped under th eseverance beneficiary tax for natural gas that does not leave the state. It is generally agreed about 56 per cent of the gas dedicated by contract is piped out of Texas. 9 7 HOUSTON OFFICE: 1010 Dennis, Mrs. R. D. Randolph. We will serve no group or party but will hew hard to the truth as we find it and the right as we see it. We are dedicated to the whole truth, to human values above all interests, to the rights of man as the foundation of democracy; we will take orders from none but our own conscience, and never will we overlook or misrepresent the truth to serve the interests of the powerful or cater to the ignoble in the human spirit. Sharho Win Aain THE TEXAS OBSERVER eta:Nolo Published by Texas Observer Co., Ltd. EDITORIAL and BUSINESS OFFICE: Entered as second-class matter, April 504 West 24th St., Austin, Texas. Phone 26, 1937, at the Post Office at Austin, GReenwood 7-0746. Texas, under the Act of March 3, 1879. JULY 25, 1959