The Texas experiment with prison privatization consisted of a period from 1865 to 1870 when Texas inmates were contracted out as laborers and craftsmen in private industry, followed by an unsuccessful prison lease program from 1871 to 1877 and a successful prison lease program from 1878 to 1883. Abolition of the contract leasing system resulted from brutal inmate abuse, and the prison system reverted to State administration. Later social changes and the prospect of innovative and cost-effective prison management created new enthusiasm for the idea of privatization. The principal issue, however, throughout the 1800s was whether a privatized prison system could be self- sustaining. During both the 1800s and 1900s, issues related to prison privatization focused on cost, quality, accountability, prisoner rights, legal liability exposure, and constitutional issues. As of March 1995, Texas had 26 private corrections facilities with a rated capacity of 12,715 beds and a population of 12,350 inmates. The per diem cost of housing Texas prisoners was about $44 in public facilities and about $35 in privately operated facilities. The author believes that privatization is both efficient and cost-effective and that it reduces prison overcrowding. 23 references, 13 notes, and 1 table