KENTWOOD & EASTERN RAILWAY. The Kentwood & Eastern Railway Company is owned by the stockholders of the Brooks-Scanlon Lumber Company. The two companies have the same officers, whose salaries, aggregating $20,000 per year, are prorated between the companies in the proportion of their capital stock. The tap line was incorporated in 1905; its capital stock amounts to $100,000; and it is indebted to the lumber company in the sum of $220,000, on which it pays interest.

The lumber company has two mills, both at Kentwood, La., one directly adjacent to the right of way of the Illinois Central Railroad and the other only 400 feet distant therefrom. Both are reached by sidetracks connecting with the Illinois Central.

The tap line has a track about 3 miles in length, extending from Kentwood eastward to a point known as Bolivar Junction, about 2 miles of which it does not own but leases from the lumber company. This track has a third rail, enabling the tap line to operate standard and narrow gauge trains over it. From Bolivar Junction a narrow-gauge track laid with 35 and 40 pound steel and running uphill and down dale extends eastward for over 25 miles, crossing the New Orleans Great. Northern Railroad at Warnerton and terminating at a point known as Hackley. The construction of this track was apparently begun as long ago as 1896 by another lumber company; and it was completed about 1904. Subsequently the Brooks-Scanlon Company purchased the track for the sum of $112,000, as well as the timber and the mill of the former owner, the price paid for the mill being $50,000. It has retained the owner-ship of the track from Bolivar Junction to Hackley, and leases it to the tap line for a rental of $10,000 per annum, plus the taxes. From Bolivar Junction the tap line has another track, referred to as the standard-gauge division, extending southward for a distance of about 23 miles to Foley. This is laid with 56-pound steel and traverses a level country. It was constructed in 1906. The tracks operated by the tap line aggregate over 50 miles in length; but it owns only one-half of the mileage of the main track. It has 4 standard-gauge and 5 narrow-gauge locomotives, 6 passenger cars, 4 cabooses, 48 box cars, 9 work cars, 52 log cars and 182 flat cars; of this number 252 are narrow gauge and 51 standard gauge. The lumber company also has a number of miles of logging tracks connecting with the incorporated line and extending into its timber. It also owns one locomotive and a number of cars. An independent manufacturer, the Bassfield Lumber Company, has a short unincorporated logging road connecting with the tap line about 2 miles west of the junction with the New Orleans Great Northern. There are said to be several small towns or settlements along the tap line, and it has stations at three points, with " pagodas " or sheds to shelter passengers at one or two other points.

It is claimed that there are 32 small sawmills along the line, only one of which has any relation to the Brooks-Scanlon Company, and that their average output is from 15,000 to 40,000 feet of lumber daily. '.There are 6 turpentine stills, 4 of which are owned by the proprietary company, as is admitted, and also 17 cotton gins, together with a number of farms in the vicinity of the tap line. The tap line has a daily train for logs and passengers on the standard-gauge division, and two in each direction daily on the narrow-gauge division; with two such trains between Kent-wood and Bolivar Junction. The passenger revenue for the year 1910 aggregated $13,684.60, and the earnings from mail and express aggregated $2,521.37. Its revenue from freight traffic for the same year amounted to $193,624.41. It handled 281,030 tons of lumber and other forest products, of which about 83 per cent was supplied by the proprietary company. It also moved 7,378 tons of coal inbound, and moved outbound 3,134 tons of agricultural products and 3,043 tons of naval stores. The merchandise and miscellaneous supplies aggregated 6,981 tons. Of all this miscellaneous freight other than forest products a substantial portion was handled for the controlling interests or their employees.

The logs are loaded on the cars by a firm of logging contractors, which constructs and maintains the spurs and delivers the cars at the junction with the incorporated line. The tap line sets up against the lumber company a charge of 22 cents for a haul of 15 miles, and 3 cents for hauls in excess thereof, for the movement of the logs to the mill. The Illinois Central allows a division of from 2-1/2 to 4 cents per 100 pounds out of the rates, which are higher from points on the tap line than from the junction point. The net earnings of the Illinois Central, however, are less than its published rates from Kentwood. The record is not altogether clear respecting the amount of the divisions. But apparently when the lumber moves out over the Illinois Central and the allowances are paid, the tap line refunds to the lumber company the revenue which it has received as a division from the Illinois Central. The practical result seems to be that the lumber company has its logs hauled to the mill free of charge or at very low cost. As heretofore stated, the lumber is taken from the mill by the Illinois Central. None of the lumber from the proprietary mills moves out over the New Orleans Great Northern.

On shipments of lumber moving from the independent mills heretofore referred to, the tap line does not haul the logs but receives from the Illinois Central the same divisions as are paid on the lumber shipped by the Brooks-Scanlon Company. The tap line makes annual reports to the Commission, which show a net surplus on June 30, 1910, of $127,936.04. No dividends have been paid. Seventy-five per cent; of the revenue accrues on the traffic of the lumber company.

One of the mills of the proprietary company is directly on the line of the Illinois Central and the other but 400 feet from it. The service on the products of the mill is performed by the trunk line and not by the tap line. Allowances out of the rate by the Illinois Central to the tap line under such circumstances we would regard as an unlawful concession out of the rate to the proprietary company.