Declaring that he would "rather be governor of Texas than President of the United States," Daniel returned home to run for governor and, upon his nomination in 1956, resigned from the Senate. He was reelected governor in 1958 and 1960. During his tenure 131 out of 151 of his major proposals were enacted into law. He was successful in pushing through a heavy legislative program that ranged from highways to prison reform, water conservation, higher teachers' salaries, and improved care for the mentally impaired. Being a devoted student of history, Daniel worked to establish the Texas State Library and Archives Building, which he virtually designed himself, to house many Texas papers and documents that had been subject to neglect. In 1961, despite his strident objections, he could only watch in his third term as the legislature approved a sales tax after two called special sessions. He allowed the tax to become law without his signature to keep the state from going broke. Much of the electorate blamed him for the sales tax, partly because store clerks developed the practice of ringing up sales and then saying, "Now, let's have a penny for Price."
After losing a bid for an unprecedented fourth term in 1962, Daniel returned to his law practice and took cases in both Liberty and Austin. In 1967, President Lyndon Baines Johnson appointed him to head the Office of Emergency Preparedness in Washington, a post that gave him a position on the National Security Council. In addition, he served as the president's liaison to the governors of the fifty-three states and territories. Daniel was appointed to fill a vacancy on the Texas Supreme Court in 1971 by Governor Preston Smith. He was elected to the court in 1972 and 1979, then retired during his second term. In his eight years on the court, Daniel was most influential in the areas of groundwater law, as well as laws dealing with other minerals such as uranium, oil, and gas. He was a trustee of Baylor University and Baylor College of Medicine, and was awarded an honorary doctorate by his alma mater in 1951. He was president of International Christian Leadership (1956-57), and a leader of the Men's Bible Class of the First Baptist Church in Austin. He was a member of the Sons of the Republic of Texas, the Knights of the Order of San Jacinto, and the Philosophical Society of Texas. In his later years he served as legal council for the Alabama Coushatta Indians and was appointed to the Texas State Library and Archives Commission. Daniel died on August 25, 1988, at which time he had held more offices of public trust than anyone else in Texas history. He was buried on his family ranch in Liberty and survived by his wife, the former Jean Houston Baldwin, a great-great-granddaughter of Sam Houston, and three children: Jean Houston Murph, Houston Lee, and John Baldwin. His eldest son, Marion Price Daniel, Jr., had died on January 19, 1981.
30° 06.065, -094° 45.962
Daniel Family Cemetery