TRINITY VALLEY SOUTHERN RAILROAD. In 1898 the Columbia Lumber Company built 6 miles of track from its mill at Oakhurst, Tex., westward to a connection with the International & Great Northern Railroad at Dodge, Tex. This track was known as the Trinity Valley Railroad until 1901, when the Trinity Valley Southern Railroad Company was incorporated. At that time the Palmetto Lumber Company, having some timber interests in the vicinity, had a sawmill at a point known as Palmetto, within 2 miles of the tap line with which it was connected by a private track. In the year 1909 A, C. Ford, president of the Palmetto Lumber Company, and W. S. Gibbs, a banker at Huntsville, Tex., purchased the timber and mill of the Columbia Lumber Company, together with the railroad property known as the Trinity Valley Southern. Title to the latter was taken by Gibbs, who had no stock in the Palmetto Lumber Company, but held its bonds to the extent of $200,000. It is said that these bonds were liquidated by the Palmetto Lumber Company shortly prior to the hearing in exchange for timber holdings in another part of the state, which it turned over to Gibbs. The mill and timber acquired from the Columbia Lumber Company was taken in the name of the Palmetto Lumber Company. The officers of the Palmetto Lumber Company are officers of the tap line, and the tap line is operated primarily as a facility of the Palmetto Lumber Company. It may be well to add that the record indicates that the lumber company originally purchased its timber holdings from Gibbs. The capital stock, as shown on the annual report to the Commission, is $20,000. The record, however, mentions the capitalization as $200,000.

The mill of the Palmetto Lumber Company is at Oakhurst, a company town with a commissary, 6 miles from the trunk line. The lumber company has unincorporated tracks aggregating in length about 20 miles, connecting with the tap line at various points and extending into the timber. One or more of these tracks run directly from the mill into the timber. The lumber company hauls the logs to the mill with locomotives and cars which it owns and operates. The service performed by the tap line is limited to the movement of lumber, in cars furnished by the trunk line, from the mill to the junction point, Dodge. For this purpose it operates a daily train in each direction, in which there is a combination passenger and baggage car carrying passengers, express matter, and the mails. The tap line has two locomotives, but no freight cars of any description.

The divisions allowed by the trunk line out of the rates on yellow-pine lumber vary from 2 to 5 cents per 100 pounds, being 30 per cent of the total proportion accruing to the International & Great Northern. Out of joint class and commodity rates that are in effect with the trunk line to St. Louis and Kansas City, the tap line receives a division of 10 per cent.

The annual report to the Commission for the year ending June 30, 1910, indicates a movement of 27,288 tons of lumber and forest products, all of which was apparently supplied by the Palmetto Lumber Company. There were 2,964 tons of other freight, of which 210 tons moved outbound, and the remainder came in. Apparently a substantial proportion, if not all, of the inbound tonnage was merchandise and supplies used by the lumber company, its commissary, or its employees. The revenues from passengers for the same year amounted to $1,330, and from mail and express matter, $685.92. There was a small profit from the operation of the road for that year which, added to the surplus from previous years, enabled it to pay a dividend of $2,000 and have a net surplus on June 30, 1910, of $3,311.28.

The officers of the tap line, who are officers also of the lumber company, receive and use free passes over the trunk lines.

We fix 1 cent per 100 pounds as the maximum division that may lawfully be paid out of the rate to this tap line on the products of the mill of the controlling company.