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A veteran member of the Texas Senate listens intently to testimony during the hearings on taxes this week. Afterwards, the 1.75 million-year-old solon called the House-passed $5 deductible “too modernistic for the likes of us.” Another ‘Citizen-Supported’ Group Powerful Tax-Writing League No Lobby? AUSTIN The privately-financed, business-dominated Texas Research League, one of the most influential organizations in the statewriting the Senate’s tax bill during the regular session and now helping to write the special session’s tax billsis not regulated for lobbying and will not come under Sam Collins’ pending lobby-control bill unless the bill is especially rewritten to include it. The League does not register as a lobby group. It calls itself “A citizen-supported, non-profit, non-political educational corporation engaged in objective, factual research into the operations, programs and problems of Texas government.” Last month the chairman of the League boasted that “Every legislative contact has been initiated by a legislator, never by a League man.” So subtly has the Texas Research League pushed its influence in the capitol that today it is accepted almost as an official state agencya unique acceptance for a group whose executive committee is headed by J. Harold Dunn, board chairman of Shamrock Oil and Gas Corp., and whose vice chairman and chairman of the finance committee is none other than Richard A. Goodson, vice president and general manager of the Southwestern Bell Telephone Company. The Texas Research League spent nearly a quarter of a million dollars last year in advising legislators and businessmen on the conduct of state government, but there is no state law requiring the TRL to make public the source of its incomethat is, no state law that requires the TRL to tell whose financial interests it represents and to what extent. THE FEDERAL Internal Revenue Bureau requires the TRL, as a reputedly non-profit organization, to file an income report, but only the last two pages, dealing in total amounts, are public. The first two pages of the report, which gives a breakdown of the organization’s income, are secret. The Observer this week asked James W. McGrew, research director for the TRL, to disclose the source of the group’s support, but he refused. Periodically the Observer makes this request of the TRL, and always with the same results. Like the Citizens for Sales Tax, the Texas Research League calls itself a “citizen-supported” group On the Texas Research League’s board of directors is citizen Tom Sealy, director of the Citizens for Sales Tax a lobbying group which also has refused to disclose the source of its income, a refusal which prompted the current legislative efforts to tighten the lobby-control law. Collins conceded that the TRL would not be covered by his lobby bill but that “it should be.” Especially on two occasions this week was the League’s influence demonstrated. In the Senate, tax hearings got underway with debate based on statistics supplied by three sources and only three sources the bill’s sponsor, the state comptroller, and the Texas Research League. In the House, Rep. Murray Watson’s bill, reputedly aimed at “studying” the private utilities doing business in Texas, stipulated that the Texas Research League be alerted to stand by with its advice. Thus the state is presented with the strange spectacle of its representatives setting out to investigate the private utilities with the aid of an organization whose vice-chairman, Goodson, is vice president of one of the most powerful utilities in the West, Southwestern Bell; an organization on whose executive committee are these other utilities executives, Lon C. Hill, honorary chairman of the board, Central Power and Light Company, Corpus Christi, and Beeman Fisher, executive vice president, Texas Electric Service Co.; on whose board of directors are these other utilities men: Paul Kayser, president, El Paso Natural Gas Co.; R. S. Nelson, chairman of board and president of Gulf States Utilities Co.; and T. H. Wharton, president of the Houston Lighting and Power Co. ODDLY, Gov. Price Daniel, whose woes have been legion in his effort to sidestep a general sales tax, praises the League for its “valuable service to the State Finance Advisory Commission,” although the League has from the very first worked for the kind of tax which Daniel says he is opposed to. Research Director McGrew sat by the desk of Sen. Wardlow Lane throughout Lane’s push of his general sales tax bill, HB 334, offering advice. Lane at that time told the ‘Observer that he wasn’t trying to hide the fact that the business-controlled League had had a key hand in drafting his bill. The League calls itself a “nonpolitical educational corporation,” and each of its newsletter bulletins to members closes with the statement, “No position in favor of, or in opposition to, the bill is stated or implied. The sole purpose of this summary is educational.” But last month League Chairman Dunn admitted “the deep involvement of our research staff in the hearings and consultations occurring through the 140-day legislatiye session.” He admitted at the same time that during the session his staff was used 140 times by 55 legislators of both Houses; and while he contended that the information supplied by his staff could never be construed as “tax policy opinions or weighted facts,” he made the same claim for a movie widely distributed for the League, a claim that was modified when he went on to say that, however, “it did carry a message: namely, that individual taxpayers in Texas bear a relatively light tax burden compared with other states; that our state taxes on business and industry, on the other hand, have grown and multiplied at a more rapid rate than in most states.” The film carrying that message, Dunn said, “has been shown to more than 350 audiences to date morethan 15,000 people in 92 cities. At least two TV stations have shown itin San Antonio and in Amarillo. A number of companiesincluding Southwestern Bell, DuPont, Texas Electric Service, Monsanto, Texas Eastman, General Telephone, Gulf States ‘Utilities and my own company \(Shamrock OiDhave shown it to large numbers of their employees.” As for the League’s tax-appraisal bulletins, Dunn said these are sent to “many legislators” as well as the governor. It may be significant that even the phrases used by some legislators in dealing with the tax problem are identical to those found in League bulletins. In its report last month, the League called the governor’s suggested “Pennsylvania tax plan” an “upside down tax.” This article was written by McGrew, who had aided Lane in his floor fight. Lane has consistently called the governor’s tax program an “upside down tax.” iMcGrew’s article is aimed partly at proving that Lane’s sales tax bill would fall 26 percent on business, although foes of the measure say that business would suffer only 10 percent of the tax burden. The League discredits the proposed $5 deductible sales tax plan as an oddity. In its latest bulletin, Alvin Burger, executive di THE TEXAS OBSERVER Page 5 July 29, 1961 rector of the League, writes: “This is something entirely new in the whole experience of state taxation. The highest starting point for any existing sales tax is the 31-cent minimum used by Ohio.” The Texas Research League’s 1960 return as filed with the Internal Revenue Bureau shows that its administrative and operating expenses for the year came to $249,117.51, and that it began this year with $181,102.99 still in the bank. This federal report showed that the League’s expenses included salaries of $30,000 for Burger and $15,000 for McGrew, with others on the staff bringing the salary total for the year to $141,885.55, not counting clerical help. Travel and “related expenses” totalled $18,384.40. In the League’s November, 1960, “Analyzes, A Report to League Members,” election results for 1961 were listed. These are among the other directors named in this “citizen-supported” organization: Herman Brown, president of Brown and Root Inc.; B. E. Godfrey, Fort Worth attorney; S. J. Hay, chairman, of the board, Great National Life Insurance Co.; Datus Proper, executive vice president and general manager of Pearl Brewing Co.; Carl Reistle Jr., executive vice president of Humble ‘Oil and Refining Co.; Ben Wooten, president of First National Bank in Dallas. DALLAS Restaurant facilities in major Dallas stores and transportation facilities were integrated this week, but the city’s news media fortuitously chose to ignore the whole thing. A Fort Worth television station made an honest attempt to report the news, but otherwise Dallasites had to wait for wire service reports or catch a few sentences from CBS or NBC news programs. The event took place quietly. Hand-picked Negroes were served at such places as the plush Zodiac Room of Neiman-Marcus and restaurants at Sanger-Harris Department Stores, Titche-Goettinger, Kress, the Texoma Building, and Love Field air terminal. One Fort Worth cameraman reported that he was hustled out of one of the downtown stores by a policeman and a store manager. Apparently the city’s powers wanted to keep the whole affair out of the news and under cover. But there were some extremely ironical twists. ‘On the very day before integration took place, Felix McKnight, executive editor of the Dallas Times-Herald and president of the American Society of Newspaper Editors, told a meeting of the Dallas Advertising League that the nation needed an informed public and a vigorous approach to newspaper reporting. McKnight, as the Herald at that time described him, is “a leading figure in the answer to ‘President Kennedy’s question: ‘Is censorship needed in the U. S. Press?’ ” He led a delegation of editors to a White House meeting on that subject this year. A second meeting is pending. As reported in the TimesHerald, McKnight asked the Ad League, “Is censorship needed in the ‘U. S. Press? Must we inform our people? Must we not kindle the fires of desire to do something about all this?” He has been Also, George W. Armstrong Jr., chairman of the hoard of Texas Steel Co.; D. E. Blackburn, chairman of the board, Victoria Bank and Trust Co.; Lewis Boggus, president of Lewis Boggus Motors, Inc., Harlingen; J. S. Bridwell, president of Bridwell Oil Co., Wichita Falls; Henry English, chairman of the board, Red Ball Motor Freight; Jake Hamon, independent oilman; Edward Harte, vice-president of Corpus Christi Caller Times; Stanley Marcus, president of NeimanMarcus; Fred Nelson, chairman of board, Texas Gulf Sulphur Co. Also W. W. Overton Jr., chairman of the board, Texas Bank and Trust, Dallas; Thomas Ramey, Tyler attorney; Fred Shield, independent oilman; B. S. Sines, executive vice president, Southern Pacific Lines; C. Don Williamson, president WilliamsonDickie Manufacturing Co., Fort Worth; Walter Trout, president of Lufkin Foundry and Machine Co.; H. H. Imray, executive vice president of the Texas Eastman Co., , Longview; Harris Kemper, chairman executive committee, Imperial Sugar Co., Galveston; Charles Meyer, vice president, Sears, Roebuck, Dallas; and Charles Wallace, general counsel, Mobil Oil Company, Dallas. SUCH IS THE NATURE of one of the most powerful “agencies” in Austina Texas phenomenon if ever there was one. B.S. highly critical of the administration’s press policies, and the Times-Herald described his talk as a “call for vigorous news reporting.” On the same subject, the Dallas Morning News editorialized on April 21: “Censoring the news should be stopped. His \(President favorable or constructive matter to no matter at all must be resisted and now. The nation has made its progress and ‘won its wars without the imposition of censorship or the denial of movement to news gatherers” /` However, no “news gatherers” were at the Zodiac Room Wednesday, and what went on that day could hardly be termed “vigorous reporting.” AUSTIN From the July 10 “Congressional Report” of the National Committee for an Effective Congress: ” . . . There is cognizance that right-wing groups, like the John Birch Society, have recently emerged and are finding hospitable climate on campus and in country club, where politics were recently taboo. However informed observers may discount the election of a Goldwater Republican to the Senate from Texas, because of special circumstances in that campaign, his presence is a political fact which tends to confirm the sense that the country is slipping its conceptual moori ngs.” Dallas Irony Observer Notebook