The Texas Railroad Commission: Understanding Regulation in America to the Mid-Twentieth Century (review)

Dr. Childs traces the history of the Texas Railroad Commission (TRC) from its founding in 1891 to an indeterminate ending in the post–World War II years. Throughout this era the agency engaged in an interaction with national regulatory commissions that the author labels "pragmatic federalism." In their first three decades the commissioners became co-managers with railroad executives, working with them and shippers to improve service and eliminate rate discriminations. An 1899 law made rebates and discriminations a felony and railway executives accountable, which greatly decreased such violations and eased the TRC's workload. Chairman John H. Reagan's personality and his emphasis on hiring experts helped build a powerful state agency, though chronically undermanned due to legislative parsimony.

In 1917, the legislature first extended the commission's jurisdiction to part of the oil industry—giving the TRC authority to regulate companies transporting oil for other firms. An additional law in 1919 resulted in the TRC gaining some control over oil production. Following the Reagan tradition, Chairman George Butte educated operators in sound policies (especially in conservation), gathered and analyzed statistics, and developed cooperative practices with oil operators. This system was wrecked upon the discovery of the East Texas Field, 1930, and interest group politics took over. In the 1930s the TRC developed its famous reputation for setting oil prices for the world, but Childs demonstrates this control was largely a myth devised by the agency as part of its effort to make Texas oil a "civil religion." Actually the controls were more apparent than real, but Childs's labels are useful in his description of oil regulation.

The author has a firm grasp of TRC history, but can be faulted in a few instances. Childs consults the usual secondary sources regarding the state's political economy in the late nineteenth century, yet in his conclusion agrees with Jay Gould (without saying so) that the economic structure of railroading suggested that monopoly or pooling agreements would develop efficiencies, but that the Texas political culture denied this reality. Perhaps so, but the railroads denied the reality that farmers and workers had valid grievances. For the post-1930s era, he chides some scholars for ignoring the TRC's lack of concern for consumer interests, but ignores some of the usual secondary sources about Texas that were critical of the industry and the commission. Robert Engler and this writer, for instance, years ago drew some of the same conclusions Childs does—not by studying the TRC to be sure, but other sources. It was the refineries, for instance, that determined how much oil would be required every month, not the Commission, and the industry was extremely wasteful. Regarding Texans' efforts to control oil imports after the war, Childs concludes that, "In hindsight much of what the Texans argued about imports made a good deal of sense, but they were unable to persuade Congress and the American presidents otherwise" (p. 261). Actually, hindsight informs this reviewer that if the government had allowed a lot more foreign oil into the country, the opportunity was there to create a Texas or U.S. reserve, conserving a finite, crucial resource for the nation's future needs. Such a project, the very opposite of the industry–TRC approach of draining Texas first, would have been a priceless example of pragmatic federalism.

Dr. Childs has a larger mission than David Prindle in the only other book-length study of the TRC, Petroleum Politics and the Texas Railroad Commission (1981) and Childs has succeeded in ably chronicling and analyzing the complex history of Texas's most important state agency of the twentieth century.