"Tap Line Case" Summary of Gould Southwestern 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.  

GOULD SOUTHWESTERN RAILWAY. The record with respect to the Gould Southwestern Railway Company, and the lumber interests with which it is or has been affiliated, is far from satisfactory. The impression sought to be conveyed is that there is an entire absence of any community of interest between the tap line and any lumber company, but the facts appearing of record and disclosed by our own investigations by no means confirm any such assertion. The officers of the Gould Southwestern are officers of a large lumber manufacturing and selling company at Chicago. The record indicates that previous to 1906 a corporation known as the Estabrook Lumber Company operated a sawmill near Gould, Ark., which was sold or transferred in that year to the Newhouse Mill & Lumber Company. As a facility in the operation of the mill the vendees constructed about 5 miles of track extending southwestwardly from a point known as Bonner, crossing and connecting with the Iron Mountain at Gould, and terminating at another point known as Webber. This track was turned over to a corporation formed by the lumber company and known as the Gould Southwestern Railway Company, having a capital stock of $51,000, which was exchanged for the right of way and distributed among the stockholders of the lumber company. In addition to this stock the tap line is indebted to the lumber company for loans exceeding $100,000. The Newhouse Company, which apparently still controls the Gould Southwestern, claims to have gone out of the lumber business in this county, leasing its mill to one R. L. Muse, and selling its company store. It claims also to have disposed of most of its timber holdings in that vicinity to various parties having no relation to the lumber company or the tap line. In other words, the Newhouse Company is described on the record as in a state of liquidation, having permanently retired from the lumber business. There is nothing on the record to indicate that the product of the mill which the controlling company has leased to Muse is not marketed by the same interests that control the tap line; nor is there a definite statement indicating that the controlling interests do not have timber holdings that will be reached by proposed extensions of the tap line which are referred to on the record.

The track of the Gould Southwestern as in operation at the date of the hearing was laid from Bonner through Gould to Star City, a total distance of 17.6 miles. Its equipment consisted of two locomotives, a combination coach, and a wrecking outfit. It had no freight cars, using for such traffic as it was able to secure the cars furnished by the trunk line. There are two logging trains daily in each direction, operated on regular schedules and carrying from 800 to 1,000 passengers monthly. More than 90 per cent of its tonnage during the period prior to the hearing was forest products, the remainder being cotton, other agricultural products, and general merchandise. Star City is a town of several hundred inhabitants, with a dozen stores, and there are one or two other small villages along the line, the inhabitants depending no doubt largely on the sawmills for their employment. The tap line charges from $5 to $12 per car for hauling logs to the mill, being the regular Arkansas scale. On shipments from the mill operated by Muse, which is within one-eighth of a mile of Gould, joint rates that are the same as the Iron Mountain publishes from its local station at Gould are applied, and an allowance of 2 cents is made therefrom to the tap line. From other points on the tap line an arbitrary of from 2 to 5 cents per 100 pounds is added to the rate published by the Iron Mountain from the junction point; and the tap line receives the entire arbitrary in addition to the 2 cents allowed out of the earnings of the Iron Mountain. In other words, the seven or eight mills along the line that are described as independent pay from 2 to 5 cents per 100 pounds more than the mill leased by the controlling interest to Muse.

In this case no allowance out of the rate may be made, the mill of the controlling company being within a few hundred feet of the trunk line.

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