MEMPHIS, DALLAS & GULF RAILROAD. The Memphis, Dallas & Gulf Railroad Company is controlled, through the ownership of practically its entire capital stock, by the stockholders of the Graysonia & Nashville Lumber Company; but the railroad corporation has separate officers who are not employed by the lumber company, with the exception of its traffic manager, who receives no salary from the railroad and is general manager of the lumber company. It was incorporated in 1906 as the Memphis, Paris & Gulf, the corporate name being changed on June 1, 1910, when it took over the operation of two other tap lines known, respectively, as the Antoine Valley Railroad and the Ultima Thule, Arkadelphia & Mississippi Railway. The tracks of the three tap lines that are now consolidated and known as the Memphis, Dallas & Gulf are separate and disconnected, but form a part of a single proposed route. They are shown on the map herewith and may be briefly de-scribed and their history stated as follows:

MEMPHIS PARIS & GULF RAILROAD. The Memphis, Paris & Gulf, prior to 1910, consisted of about 41 miles of track extending in a northwesterly direction from Ashdown, Ark., through Nashville and Tokio to Murfreesboro. It connected with the Kansas City Southern and Frisco at Ashdown, with the Iron Mountain at Nashville, and at Tokio with the Prescott & Northwest-ern, another tap line which is a party to this record. The construction of the track from Ashdown to Nashville was apparently begun early in 1906; but the 15 miles from Nashville to Murfreesboro was not laid until 1908. The Memphis, Paris & Gulf was controlled by the Nashville Lumber Company, which had a large mill on its tracks at Nashville, about one-half mile from the junction with the Iron Mountain. The timber holdings of that company west of Nashville were quite extensive, and it had many miles of logging tracks connecting with the incorporated road at various points.

ANTOINE VALLEY RAILROAD. The Antoine Valley Railroad Company was controlled by the Grayson-McLeod Lumber Company, and was operated in the interest of its mill at Graysonia, Ark. The track connected with the Iron Mountain at that point and extended several miles through the land and timber of the controlling company. We understand that the title to the railroad right of way was vested in the lumber company. The mill was within one-half mile of the Iron Mountain, and the tap line switched the lumber for that distance. It received a division from the trunk line of from 2 to 5 cents per 100 pounds. It did not haul the logs to the mill.

ULTIMA THULE, ARKADELPHIA & MISSISSIPPI RAILWAY. The same interests that owned the Antoine Valley also controlled the Ultima Thule, Arkadelphia & Mississippi Railway, which had about 17 miles of track connecting with the Iron Mountain at Daleville, near Arkadelphia, Ark., and extended eastward to a point known as Fairview. The mill of the Grayson-McLeod interests when in operation several years ago was at Daleville, but it was dismantled and apparently removed to Graysonia when the yellow-pine timber was cut out, the only mills remaining on the Ultima Thule tap line being hardwood mills that are apparently not owned or controlled by the Grayson interests.

In the summer of 1910 the Nashville Lumber Company and the Grayson-McLeod Lumber Company were consolidated as the Graysonia-Nashville Lumber Company, and at the same time the Memphis, Dallas & Gulf took over the operation of the tap lines described. The consolidated tap line as described on the record consisted at the date of the hearing of the three detached sections of track already described, being respectively 41, 6, and 17 miles in length; the intervening gaps are " under construction," as is stated. The owners have in contemplation, as they assert, an extension of the line for about 190 miles southwestward to Dallas, and to the north it has approached within 200 miles of Memphis. It also announces the intention, expressed by most of the tap lines on the record, of building into Hot Springs, Ark.

GLENWOOD, HOT SPRINGS & WESTERN RAILROAD. The Commission is advised that since the hearing the Memphis, Dallas & Gulf has acquired two other properties, one being the logging road of the Clark Lumber Company, known as the Glenwood, Hot Springs & Western Railroad, and extending for 20 miles southward from a point near Hot Springs. It has also purchased the Caddo & Choctaw Railroad, the track and operations of which are hereinbefore described. The intention of the Memphis, Dallas & Gulf in absorbing these two roads is said to be to connect them up with its own line and thus accomplish its desire to get into Hot Springs.

In addition to its officers, the Memphis, Dallas & Gulf claims to have 5 clerks, 10 station agents, 6 train crews, 46 track men, and a number of other employees. It is said that none of its agents are employed by the lumber company. It has station buildings at seven points on its disconnected lines.

The equipment consists of 5 locomotives, 4 passenger cars, 9 freight cars, and 5 other cars. The controlling lumber company itself owns and operates 4 locomotives and about 130 cars. The tap line runs two trains daily in each. direction between Ashdown and Murfreesboro on which passengers are carried; the record does not indicate whether lumber and other freight moves in the same trains. The Prescott & Northwestern apparently runs a single train, carrying passengers, over this tap line under trackage rights between Tokio and Nashville, the Memphis, Dallas & Gulf receiving one-third of the passenger earnings. A single " mixed train " is operated daily over the track formerly known as the Ultima Thule tap line, on which a few passengers are apparently carried. The only service over what was formerly the Antoine Valley is logging trains, which seem to be run irregularly.

The annual report for 1910 indicates a passenger revenue of $24,488.54; express revenue, $1,283.79; and mail, $1,623.30. During the same year the aggregate freight movement was 446,894 tons, of which 177,388 tons were forest products. These figures include the logs hauled by the lumber company itself under trackage rights. The proprietary company supplied 35,202 tons of forest products and about 130,000 tons of logs. Sand and gravel aggregating 250,980 tons were taken from a pit owned by the tap line and sold by it to connecting carriers; about 80 per cent of the inbound coal movement, amounting to 5,272 tons, was consigned to the railroad company itself. Steel rails weighing 204 tons were handled on ac-count of the lumber company for use in its spurs. The outside tonnage included 7,090 tons of lumber for others than the proprietary company, and a small amount of other freight, the total outbound movement of agricultural products being 3,657 tons. The figures given are all for the year ending June 30, 1910, and as the consolidation of the three companies did not take place until June 1 of that year the figures practically relate only to what was formerly the Memphis, Paris & Gulf. The report to the Commission for the fiscal year ending June 30, 1911, during which the entire property was operated by this company, indicates an aggregate freight movement of 167,939 tons, of which forest products comprised 86,966 tons, or about 52 per cent; there were 55,600 tons of sand and gravel and 5,850 tons of coal. The outbound movement of cotton and other products of agriculture amounted to 6,383 tons.

The lumber company has about 30 miles of unincorporated logging tracks connecting with the tap line at various points, particularly at Schaal and Matthews, on the original Memphis, Paris & Gulf. It also has trackage rights for the operation of its logging trains over the tap line to the mill at Nashville, paying therefor a wheelage charge, which was formerly $5 per car, but was reduced to 50 cents per car on June 1, 1910. The lumber company therefore loads the logs on the logging spurs in the woods and hauls them all the way to the mill, paying the tap line 50 cents per car for the privilege of using its tracks. The tap line has never hauled logs for the lumber company, but does so for some independent producers. The tap line switches the empty and loaded cars for lumber movement between the mill at Nashville and the interchange track with the Iron Mountain, a distance of about one-half a mile. In the case of traffic moving out over the Kansas City Southern it hauls the cars a distance of 27 miles to Ashdown. The traffic from the Nashville mill is divided about equally between the two trunk lines, which allow the same divisions, varying from 4 to 61, cents per 100 pounds, out of their rates on yellow-pine lumber.

In view of the extent of the passenger traffic over the Nashville division, the volume of the outside freight traffic over that disconnected part of this tap line is surprisingly small. For the service of the tap line in handling the products of the mill at Nashville the Iron Mountain may allow it out of the rate a switching charge of $2; the connecting carriers at Ashdown may allow it out of the rate divisions not exceeding 2 cents per 100 pounds.

The lumber company also has private logging tracks connecting with the Antoine Valley division of the tap line at Graysonia and Leard. The logs are hauled by the lumber company to the mill at Graysonia in the same way and under the same trackage charge as applies in connection with the mill at Nashville. The tap line switches the lumber from the mill at Graysonia for a distance of about 500 feet to the Iron Mountain, which pays it an allowance of from 4 to 61 cents per 100 pounds. We do not understand from the record that any outside traffic moves over these tracks.

The allowances paid on the movement of lumber from this mill we regard as wholly unlawful under the principles announced in the original report. No allowance at all may properly be paid on the lumber of this mill.

As heretofore stated, the proprietary company has no yellow-pine mill on the so-called Ultima Thule division, but there are several hardwood mills on that track, which have the benefit of the junction-point rate from their mills to certain destinations, but to other territory have to pay an arbitrary over the rate of the trunk line, the additional charge amounting in some cases to as much as 5 cents.

The tap line also interchanges a considerable tonnage of lumber with the Prescott & Northwestern at Tokio. On such traffic received from the other tap line the Memphis, Dallas & Gulf has a division of 2 cents per 100 pounds for the haul over its line.

We have already referred to the acquisition by the Memphis, Dallas & Gulf of the incorporated tap line of the Caddo Lumber Company, known as the Caddo & Choctaw Railroad, and of the unincorporated line of the Clark Lumber Company, named the Glenwood, Hot Springs & Western. The vendors of these properties, by a formal agreement with the Memphis, Dallas & Gulf, reserved to themselves the privilege of operating logging trains over the tracks in question at a charge of 50 cents per carload. This arrangement has apparently become effective; if so, it is unlawful. We do not understand that a shipper may have a preference over other shippers in the use of a line that claims to be a common carrier.