"Tap Line Case" Summary of Saginaw & Ouachita River Railroad  
  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.  

SAGINAW & OUACHITA RIVER RAILROAD. The mill of the Saginaw Lumber Company is on the east bank of the Ouachita River, about two and one-half miles from the line of the Iron Mountain system, which it reaches with its manufactured lumber by means of its incorporated tap line, known as the Saginaw & Ouachita River Railroad Company. The line was constructed some 15 years ago, but was not separately incorporated until 1905, when capital stock of the railroad corporation to the amount of $25,000 was issued to the lumber company in exchange for the railroad property. They constitute one general investment. Near the mill is a town known as Saginaw, with about 250 inhabitants, being largely the employees of the lumber company and their families. The only store is one conducted by the lumber company. There are a few farms so close to the Iron Mountain that they usually haul their products to that system for transportation. The only industry other than the Saginaw Lumber Company that is served by the tap line is a small mill near Saginaw, which manufactures furniture stock. It will therefore be seen that it has very little traffic in which the lumber company has not a direct interest; the record, in fact, shows that approximately 99 per cent of it is furnished by the lumber company. While it carries passengers, the revenues from that source during the fiscal year 1910 were but $329.85, or less than $1 a day. The larger part of this small revenue, we can not doubt, was paid by employees of the lumber company.

The lumber company has an unincorporated logging road which extends from a point on the west bank of the river, opposite the mill, for a distance of about 12 miles into the timber. The logs are brought over this road to the river and floated across to the mill. For the movement of the lumber from the mill to the Iron Mountain, a distance of 2-1/2 miles, the tap line receives an allowance of 3 and 4 cents per 100 pounds out of the joint rates, which are the same from the mill at Saginaw as from the Iron Mountain junction point. The claim is that this division is not intended to and does not in fact cover the movement of the logs into the mill.

The road is apparently operated at a substantial profit, the operating revenues for the year 1910 being $7,915.47, with operating expenses aggregating but $5,726.21. In the year 1910 it declared a dividend of $6,282.32, partly out of surplus.

The equipment consists of one locomotive and a caboose, which is used for passengers, 1. c. 1. freight, and the mail. The necessary cars for shipments of lumber are furnished by the Iron Mountain. There are no station facilities. The employees consist of one train crew and two or three trackmen. The officers of the lumber company are officers also of the tap line and receive and use interstate passes. The clerks of the lumber company act as clerks for the tap line and the tap line credits the lumber company for their services.

Under the ruling in the original report in this proceeding the lumber rate extends from the mill, and the Iron Mountain, upon arranging with the lumber company to perform the service for it, would be entitled to make it a reasonable allowance under section 15. We find on the facts disclosed that the tap line comes within the category of cases outlined in the original report.

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.