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giving authority to the Treasury Department so they could require every gift to a wife to be recorded so they could determine that situation.

Mr. DONWORTH. You see, the question of unconstitutionality runs into the question of unfairness. In order to make this bill constitutional, I think you would have to emasculate it, and in the endeavor to bring in what is necessary to protect us in fairness along the lines I have indicated, you would have to put in administrative features utterly impracticable.

Mr. FREAR. That will be left up to the Treasury Department.
Mr. SHALLENBERGER. We thank you very much.

Mr. FREAR. I thank you very much for the information. I am sorry that I could not get up to the meeting before.

Mr. SHALLENBERGER. We will adjourn until 10 o'clock tomorrow morning.

(Thereupon, at 12:40 p.m., the committee adjourned until tomorrow, May 5, 1934, at 10 a.m.)

COMMUNITY PROPERTY INCOME

SATURDAY, MAY 5, 1934

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE OF THE COMMITTEE ON WAYS AND MEANS,

Washington, D.C. The subcommittee met at 10 a.m., Hon. Ashton C. Shallenberger (chairman) presiding.

Mr. SHALLENBERGER. Gentlemen, the committee will be in order. The first witness to appear will be Mr. Eustis Myres, of Dallas, Tex.

STATEMENT OF EUSTIS MYRES, DALLAS, TEX.

Mr. SHALLENBERGER. Please state your name and whom you represent.

Mr. MYRES. Mr. Chairman and gentlemen of the committee, my name is Eustis Myres, of Dallas, Tex., and I am representing the folks there.

Mr. HILL. Representing whom?

Mr. MYRES. The folks there, and also the Dallas Chamber of Commerce. I represent the taxpayers down there.

I will be very brief in my remarks and they will be directed to the historical basis of the community-property system in Texas. I am rather at a disadvantage in following Mr. Sumners and Judge Donworth before you, and I trust that you gentlemen will bear with me. We have two very distinguished gentlemen from Texas who will present the main points in this case.

I would like to point out to the committee the provisions of the constitution of the republic of Texas and of the State of Texas and call to the attention of the committee the pertinent facts as affect Texas in this community-property situation. Texas was a republic; it was a part of Mexico, and by the fight for independence, as the United States had their fight against Mexico, in 1836 the constitution of the republic of Texas was adopted.

This community-property matter has come into Texas through the Spanish and French laws; it had become a part of the Texas law. On March 17, 1836, there was adopted the following provision of the Constitution of the Republic of Texas:

That inconvenience may arise from the adoption of this constitution and it is declared by this convention that all laws now in force in Texas and not inconsistent with this constitution shall remain in full force until declared void, repealed, altered, or expired by their own limitation.

That was back about 98 years ago.

In 1845, Texas, through a treaty and resolution of the Federal Congress, became a part of the Federal Union, a State of the United States. Article VII, section 19, of the constitution of the State of

Texas, particularly covering the matters of the rights of the husband and the wife, read as follows:

All property, both real and personal, of the wife owned or claimed by her before marriage and that acquired afterwards, by gift, devise, or descent, shall be her separate property, and laws shall be passed more clearly defining the rights of the wife in relation as well to her separate property as to held in common with her husband.

That was provided by the State in convention on August 27, 1845.

The joint resolution of the Congress of the United States on March 1, 1845, approved the constitution of the State of Texas and its laws. Section 1 of that resolution read as follows:

Said State to be formed subject to the adjustment by this Government of all questions of boundary that may arise with other governments and the constitution, with proper evidence of its adoption by the people of Texas, shall be transmitted by the President of the United States to be laid before Congress for final action on or before the 1st day of January 1846.

In 1876 the constitution of Texas was further revised, but the same provision as quoted above, article VII, section 19, of the constitution of the State of Texas was adopted and approved.

We feel in Texas that we are in a peculiar position in this matter of community property. We became a republic, a sovereign state; we had our own system of laws. When the time came that we agreed to become a part of the United States, it was recognized by the United States that the Republic of Texas had certain rights. There was no purchase in connection with the acquisition of Texas. There was no money put out by the United States for the acquisition of Texas, as happened in the Louisiana Purchase and in connection with the other States. We came in and we brought with us our basic laws, our constitution, and our rights were retained and recognized at the time.

Now, since that time, and particularly on April 4, 1917, the Legislature of Texas attempted to make some changes in our laws affecting community property. There was one provision adopted to the effect that the rents and the revenues from the husband's separate property were to be classified as his separate estate and that the rents and revenues from the wife's separate property were to be her separate estate. That matter went into the Supreme Court of Texas in the case of Arnold versus Leonard (114 Tex. 535), and the Supreme Court of Texas held that that provision was unconstitutional as attempting to restrict the rights of the wife or to broaden them in any way. In the case of Arnold versus Leonard it was held that

The only separate property of the wife which is not considered as community property is the increase of lands. Increase of lands means not crops, nor rents, nor other income produced from such lands, but physical accretion to such lands or their appreciation in price when sold.

This matter has been considered in Texas from time to time-this question of community property. While it has been pointed out that we might have some advantages, still, as in this act of the legislature in 1917, when an attempt was made to change our laws, it has been found impossible to do so.

Mr. Hill. It is impossible to do that in Texas by State legislation, in the absence of a constitutional amendment.

Mr. MYRES. Yes, sir. Just there, I have in mind a remark made by Mr. Frear, of your committee, as to what it might mean to the other States in changing their laws and adopting the communityproperty basis. It is not so advantageous to us at all. In fact, when you go in to consider it, we have certain disadvantages which the gentlemen of the other States are exempted from. In Texas, if one should acquire a considerable amount of property, his wife might, that year, or the next year, sue him for divorce. We have no grounds for alimony down there, but with this present vested interest the wife can sue for divorce or bring a proper legal action while the suit is pending to tie up all of the property, and on separation acquire one half of it. That is not true in the other 40 States. I think it is probably true in the eight community-property States, but it is not true in the others.

Mr. SHALLENBERGER. Upon that point, do you mean to say that when the wife sues for divorce and it is granted, the division of property is made; that under your laws she automatically receives one half; or does she have to make any showing as to that

Mr. MYRES. No, sir. Under the laws of Texas she receives one half of the community.

Mr. SHALLENBERGER. And they do not have to have any adjustment of it?

Mr. MYRES. No; and we could not get away from it except where the equities require a different distribution by the court under article 4638.

Mr. SHALLENBERGER. It is a settled rule of law there?

Mr. MYRES. Yes, sir. The other points to be covered will be taken care of by Mr. Hutcheson and Mr. Fulbright for the people of the State of Texas. I thank you gentlemen and appreciate your courtesy.

Mr. SHALLENBERGER. We thank you very much for your statement.

STATEMENT OF CHARLES E. DUNBAR, JR., NEW ORLEANS, LA.,

REPRESENTING THE LOUISIANA COMMUNITY PROPERTY TAXPAYERS COMMITTEE

Mr. SHALLENBERGER. The next witness is Mr. Charles E. Dunbar, Jr., of New Orleans. Mr. Dunbar, we will be glad to hear from you.

Mr. DUNBAR. My name is Charles E. Dunbar, Jr.; I represent the Louisiana Citizens' Committee of Taxpayers.

Mr. SHALLENBERGER. Is that a permanent organization?

Mr. DUNBAR. Well, it has been permanent off and on ever since we have had these troubles.

Mr. SHALLENBERGER. It is not of recent origin?
Mr. DUNBAR. No.

Mr. Hill. May I state here that the committee regrets that Mr. Frear, a member of this committee who, through his questioning of Judge Donworth and others, manifested a very deep interest in certain phases of the discussion taking place, will not be present this morning, apparently, to hear Mr. Dunbar of Louisiana, on the subjects which, I understand, will touch directly upon the questions propounded by Mr. Frear.

Mr. SHALLENBERGER. That is to be regretted.

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