Opinion ID: 2407622
Heading Depth: 1
Heading Rank: 3

Heading: the situation in 1920

Text: In 1920, Texas was not a major producer of natural gas. [7] The Panhandle field had been discovered, but it was developed at that stage mainly for its oil productivity. The gas field in Clay County, east of Wichita Falls, and one in Palo Pinto County were the fields which served North Texas. The development of the pipe line business, as related to the Cox Act, is reflected in the 1924 opinion of the Court of Civil Appeals in Municipal Gas Co. v. Lone Star Gas Co., 259 S.W. 684 at 686, and a later opinion in State v. Lone Star Gas Co., 86 S.W.2d 484. The Municipal Gas petition filed in 1921, just after the passage of the Cox Act, indicates that Lone Star was the owner of the gas producing properties in Clay and Palo Pinto Counties; [8] that Lone Star was building [enlarging] its pipe lines in order to market its gas to many towns in North Texas. That opinion recites that Lone Star bound itself by contract with its distributor corporation to complete the construction of its pipe line . . . so delivery could be made . . . just outside the limits of the towns and cities to be served . . . . It therefore appears that one gas company and its affiliates and its pipe line facilities was the main supplier, if not the only supplier, from the then available gas fields to the cities of North Texas. This condition is reflected in the words of Section 1(3) of the Act: . . . in all cases where such business is in fact the only or practically exclusive agency of supply of natural gas to such utility or municipality. . . . But cities and towns had considerable difficulty in dealing with Lone Star. Apparently that corporation, and its subsidiary corporations, not then regulated, felt free to enter into contracts with cities and towns at the most advantageous price it or they could get, or to not enter into agreements with them at all. The City of Dallas felt particularly aggrieved. It had entered into a contract with Lone Star and its affiliates for gas, but it was unable to obtain a satisfactory renewal agreement because of the price asked. In the hearing before the Senate Committee considering the Cox Act, Mr. Collins [Dallas' City Attorney] stressed the attitude of the pipeline companies, which he said had contracted to supply Dallas for five years, and then gone into other fields where profits were larger, leaving Dallas without gas. Mayor Wozencraft of Dallas outlined the fight made in the city of Dallas to secure better gas service, and told of the suffering of the people in North Texas last winter, due to gas shortage. [9] Governor W. P. Hobby was aware of the urgency of legislation. He sent a message on May 27, 1920, to the third called session of the Legislature. His message submitted the rather comprehensive title to the bill which became the Cox Act. [10] The bill was introduced that same day. [11] The Cox Act as passed is set out in pertinent part below. As indicated, portions of the Act dealing with penalties for discrimination were broken out of the civil statutes and carried in the criminal laws for many years.