In attempting to determine the cost of probation and the cost of incarceration of adult felons in Texas, it was discovered that there were no comparative figures available. A search of the literature was conducted to determine the proper standards for probation caseload management and to identify problems associated with previous cost studies. In a comparison of physical and economic factors in Texas counties that have probation and those that do not, five relevant factors were determined: population, wages, taxable property, manufacturing value, and total income. The higher the statistics for any of the five factors, the more likely the county was to have probation. Different methods were used to determine the cost to the taxpayer for the operation of the prison system (direct costs) and the costs to the State associated with loss of the breadwinner (indirect costs). Using the California system as a model with some modification, the Texas model determined that, with the State assisting the counties initially, the cost per man per day for probation was 5.22 less than for incarceration. Recommendations for establishing a probation system for adult felons were based on that determination. (Pertinent statistical tables are included in the appendixes.) (AG)