TIMPSON & HENDERSON RAILWAY. The mill of the Ragley Lumber Company was built in 1900 at Ragley, Tex., and about 10 miles of track laid to a connection with the Houston East & West Texas and the Texas & Gulf railways at Timpson. The following year the track was incorporated as the Timpson & Northwestern Railway Company. The lumber company retained the ownership of, or constructed, about 12 miles of additional track extending northwest from Ragley into the timber. In August. 1909, a new corporation was formed, known as the Timpson & Henderson Railway Company, about 60 per cent of the stock of which was issued to and is held by the stockholders of the Ragley Lumber Company; about 40 per cent was taken by citizens of Henderson. The new corporation not only took over the track of its predecessor, but also the 12 miles of logging road from Ragley to Pine Hill. The track was extended about 12 miles into Henderson, so that the tap line as in operation at the time of the hearing was 34 miles in length, beginning at Timpson and terminating at Henderson, where a connection is made with the International & Great Northern. In addition to the mill of the Ragley Lumber Company there are two small mills near Pine Hill, and a planing mill at a point known as Long Branch. There are also four small towns or settlements, each having one or more stores, and two of them having banks. Timpson and Henderson, the terminal points, each has a population of 3,000 or 4,000.

In addition to the capital stock, amounting to $250,000, mention should be made of an indebtedness by the tap line to its president, who is also president of the Ragley Lumber Company, of nearly $50,000. The two companies have the same officers.

In addition to the tracks already referred to the lumber company at the time of the hearing had unincorporated logging tracks connecting with the tap line near Pine Hill and extending into the timber. It hauled the logs with its own engines over this track to the incorporated line, and thence under a trackage right for which it paid 25 cents per train-mile, to the mill. The tap line moved the lumber from the mill to the trunk lines, a distance of 10 miles in the case of shipments routed through Timpson, or a distance of 25 miles on traffic moving through Henderson and over the International & Great Northern. It receives a division of from 3 to 4 cents per 100 pounds from the Houston East & West Texas, and from 2 to 3 cents per 100 pounds from the International & Great Northern. The Texas & Gulf is a part of the Santa Fe system, and has made no allowances to this tap line since 1908; it formerly paid 1-1/2 cents per 100 pounds. The statement made on the hearing was that the timber holdings of the lumber company would be entirely cut out within another year. We are now advised that the lumbering operations of this company will be brought to a conclusion within 60 days. We are also advised that one or two other new independent mills have recently been erected in proximity to this tap line, in which neither the Ragley Lumber Company nor any of its stockholders has any interest.

There are also joint class rates with the trunk lines and some commodity rates, out of which the tap line receives, for example, a division of 23 cents per bale on cotton destined to Houston and Galveston when moving through Timpson, and 20 cents through Henderson. In the calendar year 1910 it handled 1,029 carloads of lumber, of which 506 carloads belonged to the controlling lumber company. It also handled 15,274 tons of miscellaneous freight, consisting chiefly of grain and grain products, fertilizer, and cotton. It does not file tariffs with the Commission, but is a party to and con-curs in tariffs issued by the trunk lines naming joint rates to and from points on its track. It runs one " mixed " train daily in each direction on a regular schedule and its receipts for passenger traffic for the calendar year 1910 are said to approximate $11,000.

The Timpson & Henderson makes annual reports and claims to keep its accounts in accordance with the rulings of the Commission.

In this case we hold that the connecting carriers may properly allow a division out of the rate on the products of the mill not exceeding, however, 2 cents per 100 pounds.