"Tap Line Case" Summary of Tremont & Gulf 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.  

TREMONT & GULF RAILWAY. The main line of the Tremont & Gulf Railway extends from a connection with the Vicksburg, Shreveport & Pacific at Tremont, La., southward for a distance of practically 50 miles to Winn-field, La., a town of 4,000 people, with two banks, a number of stores, and several mills and commercial enterprises, where it connects with the Rock Island, Louisiana & Arkansas, and Louisiana Railway & Navigation Company. It is laid with 60-pound steel rails, with a maximum grade of 1 per cent and a maximum curvature of 4°; its bridges are substantial; it is equipped with water tanks, coal chutes; and has telephone and telegraph lines for the dispatching of its trains. It has 6 agency stations, with 4 substantial depot buildings, costing from $200 to $7,000 each; and 30 section houses, 3 scales, a freight warehouse, etc. It also has 1 passenger and 3 freight locomotives; 3 combination coaches and passenger cars; 148 box cars; 50 flat cars, a pile driver, and cabooses; and its equipment has the necessary safety appliances. There are 18 or 20 men employed in its train crews and it has over 100 section or track men. It also has a full set of general officers, including a vice president, general superintendent, and general freight and passenger agent. It has a daily passenger train, consisting of a combination baggage, mail, and express car, and passenger coach, which is scheduled to make the 50 miles from Winnfield to Tremont in a little over two hours. It also operates a freight service as the traffic requires. It reports a passenger revenue of $17,000 for the year 1910. In addition to the town of Winnfield, which is its southern terminus, there are seven or eight small settlements along its line to and from which some traffic is hauled for the public arid at which are located several small independent mills. The country is not well developed agriculturally and there are only occasional shipments of cotton, peanuts, and cattle for the farmers. Out of a total freight movement of 191,374 tons during the fiscal year 1910, 167,270 tons were forest products, of which the major portion was supplied by the mills of the Tremont Lumber Company. It is stated that the shipments of that company average not less than 450 car-loads per month, while the independent mills ship about 95 carloads. For the tap line itself the claim is made that more than 72.6 per cent of its revenue is earned on lumber and merchandise handled for the account of the Tremont Lumber Company, while as much as 27.4 per cent is for other interests.

The Tremont & Gulf Railway also owns and operates a branch line, crossing its main line at a point about 5 miles north of Winn-field, connecting with the Rock Island at Pyburn and running for a distance of about 29 miles eastward to a connection with the Iron Mountain known as Rochelle. It also operates a branch leased from the Tremont Lumber Company and extending from a junction with the Rock Island at Jonesboro about 20 miles eastward to a connection with the tap line at Sykes. There are doubtless logging camps along these branch lines; there is a single small independent sawmill on each branch; but there are neither towns nor settlements; and apparently these branch lines are used primarily for the benefit of the Tremont Lumber Company.

The capital stock of the Tremont & Gulf Railway Company, of which $2,000,000 has been issued, is held by the Southern Investment Company, which also owns the stock of the Tremont Lumber Company, and other lumber industries elsewhere. We find, therefore, an identity of interest between the tap line and the Tremont Lumber Company, which has vast timber holdings along the, tap line, amounting at the date of the hearing to approximately 235,000 acres. The lumber company also, has three large mills at present in operation and two that have ceased running.

The principal mill is located a few hundred feet from the Iron Mountain right of way at Rochelle, on one of the branch lines heretofore mentioned, and about 40 per cent of the total manufactured output of the Tremont Lumber Company is shipped therefrom.

The balance of the output is about evenly divided between its mill at Eros, which is on the main road of the tap line, about 11 miles south of Tremont, and the mill at Jonesboro, from which there is a switching movement to the Rock Island of about 3,000 feet over the branch which the tap line operates under lease from the lumber company. The lumber from each of these mills is not routed over the line of the nearest trunk-line connection, but is distributed among the various trunk lines, the Rock Island getting about 35 per cent of the whole traffic, the Iron Mountain 20 per cent, the V., S. & P. 33-1/3 per cent, and the remainder moving over the Louisiana Railway & Navigation Company from Winnfield. It is said that the average haul over the Tremont & Gulf on the finished lumber is about 26 miles.

In addition to the incorporated line, including, as heretofore stated, 20 miles of branch lines leased from the Tremont Lumber Company, the latter company owns and operates upward of 50 miles of logging road and spurs reaching into its extensive timber tracts. They connect with the incorporated tap line at various points. The lumber company has trackage rights over the railroad, under and by virtue of which it moves logging trains from its various logging spurs in the timber to its several mills. In other words, the incorporated tap line does not haul the logs of the lumber company to its mills; and it made no charge against the lumber company for the trackage rights until after the hearing. It now gets a trackage toll of 35 cents per train-mile. It seems that the understanding had previously been that the incorporated tap line was sufficiently remunerated by its divisions on the manufactured lumber to warrant it in giving away the track-age privilege. In the operation of the private logging spurs and the movement of its log trains over the incorporated line, the lumber company uses 9 or 10 locomotives; it also has more than 100 logging cars.

For the movements of lumber from the various mills to the trunk-line connections the tap line receives an allowance or division of from 2.4 cents to 6 cents per 100 pounds. The lumber is billed as originating at the respective mills, there being no milling-in-transit arrangement, as the logs are brought into the mills by the lumber company itself. An allowance of 6 cents for its average haul of 25 miles yields a revenue of nearly 5 cents a ton-mile. The empty car is furnished by the connecting trunk line.

In spite of the comparative completeness of its equipment and organization it is perfectly apparent that this tap line is a facility of the Tremont Lumber Company. That is the way it has been used. The lumber company freely used its entire trackage to haul its logs without cost until after the hearing, and now enjoys trackage rights at a low toll per train-mile over its total mileage. This we regard as unlawful. We do not understand upon what principle a shipper may use the rails of a line that calls itself a common carrier either free of charge or on terms that are not published and offered to other shippers.

On the brief filed in behalf of this tap line it is said that if it be contended that the tap line is not entitled to a division out of the rate on shipments delivered to the Iron Mountain from the Rochelle mill or on shipments delivered to the Rock Island at Pyburn from the mill at that point it must be remembered that the strategic position of this company is such that five railway lines compete for its traffic. There is no legal reason why a railway line should not sell its traffic to that competitor which gives it the best division. The through rates remaining unchanged, the public is not interested.

This view, however, overlooks every essential element in the controversy. The principal mill of the lumber company is at Rochelle and is within a thousand feet of the Iron Mountain. The mill at Jonesboro is about 3,000 feet from the Rock Island, and the switch track reaching it is the property of the lumber company, the tap line using it under lease. Under these circumstances divisions out. of the rate, amounting in some cases to 6 cents per 100 pounds, on the products of those mills when shipped out over those connections are unlawful rebates. This is less true only in degree of the divisions out of the rate on the products of the other mills. Nothing should be paid by the Iron Mountain on the products of the Rochelle mill or by the Rock Island on the products of the lumber company's mill at Jonesboro in excess of a reasonable switching charge, which we fix at $1.50 a car. On the product of the mill at Eros routed through Tremont a division of 12 cents may be made out of the rate. On the traffic of that mill moved through Sykes to junctions with other trunk lines, a division out of the rate of 2 cents per 100 pounds may be made. On the products of the mill at Jonesboro moved through Sykes to Rochelle or to Tremont or delivered to the Louisiana Railway & Navigation Company at Winnfield, a division of 2 cents may be paid out of the rate. On the products of the mill at Rochelle, delivered to the Rock Island at Winnfield, Pyburn, or Jonesboro, or to the Vicksburg, Shreveport & Pacific at Tremont, a like division may be made out of the rate.

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.