"Tap Line Case" Summary of Crossett Railway  
  Abstracted from "Tap Line Case", published in Decisions of the Interstate Commerce Commission, 23 I.C.C. 277, 23 I.C.C. 549, and in Decisions of the United States Supreme Court, 234 U.S. 1.  

CROSSETT RAILWAY. The mill of the Crossett Lumber Company is at Crossett, Ark., where terminate branch lines of the Rock Island, Iron Mountain, and Arkansas, Louisiana & Gulf Railroads. The lumber company controls, and operates in the interest of its mill, a tap line known as the Crossett Railway connecting with the three trunk lines at Crossett. At the date of the hearing the tap line owned 10 miles of track extending northward, closely paralleling for some distance the rails of the Rock Island; and beyond this track it leased about 5 miles of unincorporated spurs owned by the lumber company. The cost of the tap line, including about 5 miles of so-called terminals in and about the mill and extending to the trunk lines, is stated on the brief at $120,000. The capital stock of the railroad corporation amounts, however, to but $25,000, all of which was issued to the lumber company in 1905, when the tap-line corporation was formed, in exchange for 10 miles of track and equipment. The tap line owns 2 locomotives but no cars; it leases 80 logging cars from the lumber company at an annual rental of $22,500, or an average of more than $280 per car. The original cost of the cars was less than $400 and they are kept in repair by the lumber company. The tap line has no salaried employees excepting its trainmen and trackmen and one car inspector. Its officers receive their entire salary from the lumber company, whose clerks are employed by the tap line for an arbitrary charge of $100 per month, to keep its accounts and perform its clerical services.

The lumber company loads the logs on the cars and hauls them over its private unincorporated spurs to the point of connection with the track that it leases to the tap line; from that point the logs are hauled by the tap line over the leased track and then over the track it owns to the mill, where they are unloaded by the trainmen into the pond. No charge is made by the tap line for this service. The shipments of lumber, for which empty cars are furnished by the trunk lines, are switched by the tap line from the mill to the Iron Mountain, a distance of one-quarter mile, or one-half mile to the Rock Island. The trunk lines allow out of their earnings from 2 to 4-1/2 cents per 100 pounds, which is intended to cover the movement of the logs into the mill and the lumber out. Under a formal con-tract with the Rock Island the tap line has agreed to deliver to that company not less than 50 per cent of its outbound lumber tonnage. About 40 per cent is actually delivered to the Iron Mountain and something less than 10 per cent to the Arkansas, Louisiana & Gulf.

The tap line does not carry passengers, but permits persons to ride on its trains without charge; and for the fiscal year 1910 its annual report to the Commission indicates that its entire traffic, amounting to 252,673 tons, was forest products, of which 95 per cent was supplied by the lumber company, and 5 per cent by other persons, who cut their timber on the lands of the lumber company, as the record indicates. The statement on the annual report, how-ever, does not accord with the record, where it is claimed that 19 carloads of merchandise and the same number of carloads of forest products were handled during the year 1910, in which neither the tap line nor the lumber company had any interest. This outside tonnage is said to have increased to ISO cars during the six months ending December 31, 1910. Mention is made on the record of a small mill at Crossett, owned by the lumber company and leased to another lumber company, which purchases its logs from the Crossett Lumber Company and has them hauled in by the tap line. The impression sought to be made by the tap line on the record is that the timber holdings of the Crossett Lumber Company, which had amounted to over 200,000 acres, were nearly all cut, and that there-fore "the tonnage of the Crossett Lumber Company will disappear by July, 1911." The fact, however, as disclosed by a careful examination of the testimony, is that the lumber company owns or is contemplating acquiring extensive additional timber holdings south of Crossett, which will be reached by proposed extensions of the line in the opposite direction from that now taken. There remains a large quantity of hardwood which is available for cutting on its lands that have been denuded of yellow pine. It threatens on the one hand that if the Commission holds that the tap line is not a common carrier it will remove and take up its rails and withdraw entirely from the railroad business, because without its interstate business it would be most unprofitable. On the other hand it boasts of large plans for future development; one proposition stated on the record being an extension of a few miles to meet the Wilmar & Saline Railroad, another tap line, with which it would then consolidate, making " 54 miles of railway under one management."

Another possibility mentioned is the acquisition of the line by one of the connecting trunk lines.

The reports to the Commission indicate a gross operating revenue for the year 1910 of $71,745.05, and a net operating revenue of $35,593.12. After payment of taxes and paying to the lumber company $5,193.36 for lease of track and $22,500 for lease of equipment, it had a net income for the year of $7,643.51, making a total surplus from its operations to June 30, 1910, of $31,681.46. The officers of the lumber company, through their connection with the tap line, have the benefit of free interstate passes, which they do not hesitate freely to use.

Text and images were digitized and proofread from the original source documents by Murry Hammond. Contact Murry for all corrections, additions, and contributions of new material.