Texas. Legislature. Joint Committee to Investigate the Receivership of the International & Great Northern Railroad.

The Texas Joint Committee to Investigate the Receivership of the International & Great Northern Railroad was created by a concurrent resolution of the 22nd Texas Legislature, Regular Session, approved by the Texas House of Representatives on March 30, 1891 and by the Texas Senate on the following day. The resolution called for the investigation of the case of Jay Gould vs. the International & Great Northern (I&GN) Railroad Company and all the proceedings in the case, which included the receivership of the I&GN.

Railroad financier Jay Gould acquired control of the I&GN in 1879 and leased it then to the Missouri, Kansas, and Texas Railroad Company, which Gould also controlled. In February 1889, Gould filed suit in the District Court of Smith County, Texas against the I&GN for payment of promissory notes. Creditors and parties that had personal injury lawsuits against the I&GN intervened and made counterclaims. While these suits were pending, the I&GN was put into a receivership that lasted three years.

The duration of the receivership, the complexity of the case, the amounts of money involved and the fact that there were several changes in the receivership administration led to charges of inefficiency and overpayment for their services. The railroads were under intense public scrutiny in Texas at this time. James Stephen Hogg had been elected governor in 1890 on a platform of public regulation of railroads and creation of a Railroad Commission, which was enacted in 1891.

The joint committee held hearings in Galveston from June 10 until July 3, 1891. Committee members were Representatives Alexander C. Brietz, Walter Gresham, and Andrew Todd McKinney; and Senators M.M. Crane and H.M. Garwood. The committee heard oral testimony, which was transcribed, and also examined financial and legal documents submitted to them. Upon completion of the investigation, the committee filed a report with the 22nd Legislature explaining the background of the Gould vs. I&GN Railroad case, how the receivership came about, why it lasted so long, and how it was administered. The committee found no official wrongdoing but did have some critical comments on receiverships in general and made recommendations for legislative action to improve the statutes. Eventually, Gould's claims were satisfied in the courts and the I&GN Railroad was reorganized without a change in name or ownership.

(Sources include: the guide survey completed for this material; the Texas Legislative Reference Library web site, and the committee's report, both accessed February 2012.)