WASHINGTON & CHOCTAW RAILWAY. The E. W. Gates Lumber Company was incorporated in 1904, and acquired a tract of timber and a narrow-gauge logging road about 3 miles in length. The latter was abandoned, and a standard-gauge line was constructed, which now extends from a connection with the Mobile & Ohio Railroad at Yellow Pine, Ala., in a northerly direction for about 22 miles to a point known as Mathews. This track is owned and operated by the Washington & Choctaw Railway Company, which was incorporated in December, 1910, immediately prior to the hearing, with an authorized capital stock of $700,000, of which $200,000 is outstanding, having been issued to the lumber company in exchange for the track and equipment. It is stated that the tap line owes the lumber company about $49,000; it is also said that the cost of the road up to the date of the hearing exceeded $250,000. Beyond Mathews is 4 or 5 miles of track operated by the lumber company in its logging operations; but the steel is furnished by the tap line without charge. The equipment consists of 2 locomotives, 6 box cars, 4 flat cars, and 40 logging cars. There are station structures at one or two points on the line, and also loading tracks.

It is not definitely stated on the record that the lumber company owned the entire capital stock of the tap line, but we infer that the two companies are substantially one in interest. Previous to the incorporation in 1910 the tap line was run as a department of the lumber company, whose charter authorized the conducting of railroad operations.

The sawmill of the lumber company is about a quarter of a mile from the junction with the Mobile & Ohio, but the planing mill is reached directly by the tracks of the trunk line. There are said to be several small towns or settlements along the tap line with populations ranging from 100 to 600, each having one or more stores. It is also claimed that five independent sawmills and eight or nine cotton gins use the facilities of the tap line; and there are many farms along the line. The tonnage statements filed of record relate to a period of 11 months ending December 1, 1910, during which 76,592 tons of freight were handled. The proprietary lumber company shipped 60,000 tons of lumber and forest products, while 13,000 tons of such freight were shipped by others, together with 2,000 tons of crossties, which were apparently cut on the lands of the lumber company. About 800 tons of cotton and cottonseed and about the same quantity of merchandise were handled. The statement is that 80 per cent of the forests products and 20 per cent of the miscellaneous freight were supplied by the proprietary company. The tap line does not carry passengers, mail, or express, but operates one regular logging or freight train daily in each direction, and three other such trains at irregular times.

The logs are hauled by the tap line from the points where they are loaded on the logging spurs to the mill, a charge of 3 cents being set up against the lumber company for this service. Most of the lumber is apparently shipped out in the rough and is switched by the tap line a distance of about a quarter of a mile from the mill to the inter-change track. The shipments of dressed lumber are moved by the trunk line from the loading track at the planing mill. On all lumber shipments of the proprietary company the tap line receives from the Mobile & Ohio a division of 3 cents per 100 pounds, out of the junction-point rates. The same rates and the same allowances apply in connection with the lumber shipped by independent producers.

The tap line filed its first annual report with the Commission for the fiscal year ending June 30, 1911.

In this case we think that any allowance to the tap line on the dressed lumber is unlawful, but a reasonable switching charge of $1.50 a car may lawfully be paid to the tap line for switching the rough lumber from the sawmill to the trunk line.