A-72718, JUNE 9, 1937, 16 COMP. GEN. 1057

A-72718, JUNE 9, 1937, 16 COMP. GEN. 1057

TRANSPORTATION - LAND-GRANT DEDUCTIONS - RAILROADS OPERATING OVER NEW ROUTES ADDITIONAL TO LAND-GRANT ROUTES THE FACT THAT A NON-LAND-GRANT RAILROAD WITH TERMINI ON A LAND-GRANT ROUTE IS CONSTRUCTED NOT IN LIEU OF THE ORIGINAL LAND-GRANT ROUTE, BUT IN ADDITION THERETO, DOES NOT AFFECT THE PRINCIPLE THAT LAND-GRANT RATES CONSTITUTE THE PROPER BASIS OF PAYMENT FOR POSTAL SERVICE RENDERED OVER THE ADDITIONAL ROUTE IN LIEU OF SERVICE OTHERWISE REQUIRED BY THE GOVERNMENT OVER THE ORIGINAL LAND-GRANT ROUTE, BUT FOR SERVICE OVER THE ADDITIONAL ROUTE IN EXCESS OF THAT WHICH WOULD BE REQUIRED OVER THE ORIGINAL ROUTE IN ORDER TO PROVIDE SERVICE ALONG THE ADDITIONAL ROUTE THE CARRIER IS ENTITLED TO PAYMENT OF NON-LAND-GRANT RATES FOR THE ACTUAL DISTANCE COVERED BASED UPON AN ADMINISTRATIVE DETERMINATION OF THE EXTENT OF THE ADDITIONAL SERVICE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE POSTMASTER GENERAL, JUNE 9, 1937:

YOUR LETTER OF APRIL 6, 1937, IS AS FOLLOWS:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 17, 1936, AND SUBSEQUENT LETTER OF AUGUST 15, 1936, A-72718, IN RESPONSE TO MY LETTERS OF MARCH 19 AND JULY 2, 1936, IN WHICH A DECISION WAS RENDERED CONCERNING THE MATTER OF APPLICATION OF THE LAND GRANT RATE FOR PURPOSE OF MAIL PAY TO CERTAIN MILEAGE OF THE NORTHERN PACIFIC RAILWAY BETWEEN TACOMA AND TENINO, WASHINGTON, AND KALAMA, WASHINGTON, AND WILLBRIDGE, OREGON.

IN LINE WITH THIS DECISION IT WAS NOTED THAT SINCE THE CONSTRUCTION OF THE ORIGINAL LAND-AIDED LINE OF THE NORTHERN PACIFIC RAILWAY BETWEEN ASHLAND, WISCONSIN, AND PORTLAND, OREGON, VIA LOGAN, HELENA, AND GARRISON, MONTANA, THIS ROAD HAD ACQUIRED ADDITIONAL TRACKAGE FROM LOGAN, A POINT ON THE ORIGINAL LAND-AIDED LINE VIA BUTTE, MONTANA, TO GARRISON, MONTANA, ANOTHER POINT ON THE ORIGINAL LAND-AIDED LINE, AND ALL SERVICE OVER THIS TRACKAGE WAS STATED AT THE REGULAR OR NON-LAND GRANT RATE OF PAY. THE AUTHORIZATIONS COVERING THE MAIL SERVICE OVER THIS LINE IN EFFECT AT THE TIME OF RECEIPT OF YOUR DECISION OF JUNE 17, 1936, WAS AS FOLLOWS:

"TRAIN 1 WESTBOUND AND TRAIN 2 EASTBOUND, 30 FOOT APARTMENT CAR DAILY BETWEEN MILES CITY, MONTANA, AND SPOKANE, WASHINGTON, VIA LOGAN, BUTTE, AND GARRISON, MONTANA, 759.14 MILES, STATED AT THE LAND GRANT RATE, MILES CITY TO LOGAN, 311.49 MILES, AT THE NON-LAND GRANT RATE BETWEEN LOGAN AND GARRISON VIA BUTTE, 122.41 MILES, AND AT THE LAND GRANT RATE BETWEEN GARRISON AND SPOKANE, 325.24 MILES.

"TRAIN 3 WESTBOUND AND TRAIN 4 EASTBOUND, 30 FOOT APARTMENT CAR DAILY BETWEEN MILES CITY AND SPOKANE VIA LOGAN, HELENA, AND GARRISON, MONTANA,761.23 MILES, ALL AT THE LAND GRANT RATE OF PAY.

"TRAIN 235 WESTBOUND AND 236 EASTBOUND 15 FOOT APARTMENT CAR DAILY BETWEEN BUTTE AND LOGAN, 70.97 MILES, NON-LAND GRANT.

"TRAIN 287 WESTBOUND AND 288 EASTBOUND, 15 FOOT APARTMENT CAR DAILY BETWEEN BUTTE AND GARRISON, 51.44 MILES, NON-LAND GRANT.'

AFTER A CAREFUL READING OF YOUR LETTERS OF JUNE 17 AND AUGUST 15, 1936, DECISION A-72718, AND PREVIOUS DECISIONS REFERRED TO THEREIN, IT WAS BELIEVED BY THIS OFFICE THAT THE SERVICE IN THE THROUGH TRAINS NUMBERED 1 AND 2 BETWEEN MILES CITY AND SPOKANE VIA BUTTE SHOULD BE RESTATED AT THE LAND GRANT RATE FOR THE ENTIRE DISTANCE AND THE AUTHORIZATIONS FOR THESE TRAINS WERE RESTATED ACCORDINGLY ON THE BASIS OF THE ACTUAL TRACK DISTANCE FROM LOGAN VIA BUTTE TO GARRISON, 122.41 MILES, WHICH IS LESS THAN THE DISTANCE VIA HELENA, 124.50 MILES. AS TRAINS 235, 236, 287, AND 288 ARE LOCAL TRAINS AND OPERATE SOLELY ON THE NEWER OR NON-LAND-AIDED PORTION OF THIS LINE BETWEEN BUTTE AND GARRISON AND BUTTE AND LOGAN, IT WAS BELIEVED THE SERVICE OF THOSE TRAINS WAS PROPERLY STATED AT THE REGULAR NON-LAND GRANT RATE AND NO CHANGE WAS MADE IN THE AUTHORIZATIONS ON THOSE TRAINS.

WE ARE NOW IN RECEIPT OF A PROTEST FROM THE NORTHERN PACIFIC RAILWAY COMPANY AGAINST THE ACTION OF THE DEPARTMENT IN RESTATING THE SERVICE IN TRAINS 1 AND 2 AS DESCRIBED, AND THE COMPANY ASKS FURTHER CONSIDERATION ON THE PART OF THIS OFFICE WITH A VIEW TO PERMITTING THE RATE OF PAY HERETOFORE IN EFFECT TO CONTINUE, BUT IT IS BELIEVED THAT THE CONDITIONS WHICH PREVAIL IN THIS INSTANCE SO NEARLY PARALLEL THOSE EXISTING IN THE CASE COVERED BY YOUR DECISION, A-72718, THAT THE ACTION OF THE DEPARTMENT WAS STRICTLY IN ACCORDANCE WITH THAT DECISION.

THE COMPANY NOW REQUESTS THAT THE MATTER BE REFERRED TO YOU FOR ATTENTION AND DECISION, AND I AM SENDING HEREWITH TWO LETTERS FROM THE COMPANY DATED JANUARY 27 AND FEBRUARY 6, 1937, SETTING FORTH THEIR VIEWS IN THE MATTER. IN THE COMPANY'S LETTER OF JANUARY 27 IT IS STATED THAT "* * * ONE PAIR OF OUR THROUGH TRAINS IS ROUTED VIA BUTTE IN THE INTEREST OF BOTH THE PUBLIC AND THE POST OFFICE DEPARTMENT, IN ORDER TO SERVE THE IMPORTANT CITIES OF BUTTE AND ANACONDA, AND TO CONNECT WITH THE OREGON SHORT LINE, AS ALREADY STATED * * *.' WHILE THIS OPERATION DOES IMPROVE THE POSTAL SERVICE FOR BUTTE, AS WELL AS THE OTHER OFFICES IN THAT LOCALITY, THE FACT REMAINS THAT IF THESE TRAINS WERE OPERATED OVER THE ORIGINAL LAND GRANT LINE VIA HELENA, THE SERVICE FOR THAT OFFICE, THE STATE CAPITOL, AS WELL AS THE OTHER OFFICES ALONG THAT PORTION OF THE ROUTE BETWEEN LOGAN AND GARRISON VIA HELENA WOULD BE GREATLY IMPROVED, AND IF THE SERVICE ON THESE TRAINS IS TO BE CONTINUED AT THE NON-LAND GRANT RATE OF PAY, IT WOULD APPEAR TO BE IN CONFLICT WITH YOUR RECENT DECISION COVERING A SIMILAR SITUATION, AS THE COST OF THIS THROUGH SERVICE IS DEFINITELY INCREASED BY THE PRESENT METHOD OF OPERATION.

IN VIEW OF THE PROTEST OF THE NORTHERN PACIFIC RAILWAY COMPANY AGAINST THE ACTION OF THE DEPARTMENT, IT IS RESPECTFULLY REQUESTED THAT YOU REVIEW THE SITUATION HEREIN PRESENTED AND ADVISE THIS OFFICE WHETHER OR NOT THE MAIL PAY FOR SERVICE ON THE THROUGH TRAINS OPERATING OVER THE TRACKAGE BETWEEN LOGAN AND GARRISON VIA BUTTE, WHICH WAS NOT LAND-AIDED BETWEEN THE POINTS NAMED ABOVE, SHOULD BE BASED ON THE LAND GRANT RATE OF PAY. COPIES OF LETTERS DATED DECEMBER 24 AND FEBRUARY 1 ADDRESSED TO THE NORTHERN PACIFIC RAILWAY COMPANY BY THIS OFFICE ON THE SUBJECT PRESENTED ARE ENCLOSED. FOR YOUR INFORMATION I AM ALSO ENCLOSING A DIAGRAM SHOWING THE ORIGINAL LAND AIDED LINE AS WELL AS THE NON-LAND-AIDED PORTION OF THE LINE INVOLVED.

UPON COMPLETION OF THE NORTHERN PACIFIC LINE CONSTRUCTED WITH THE AID OF GRANTS OF LAND PURSUANT TO THE ACT OF JULY 2, 1864, 13 STAT. 365, THE UNITED STATES BECAME ENTITLED TO THE USE THEREOF FOR POSTAL SERVICE, SUBJECT TO SUCH REGULATIONS AS CONGRESS MIGHT IMPOSE RESTRICTING THE CHARGES FOR SUCH GOVERNMENT TRANSPORTATION. BY THE ACT OF JULY 28, 1916, 39 STAT. 426, PAYMENTS TO LAND-GRANT AIDED RAILROADS WERE AUTHORIZED TO BE MADE AT 80 PERCENT OF THE COMPENSATION OTHERWISE AUTHORIZED FOR THE TRANSPORTATION OF THE MAILS. BOTH MILES CITY, MONTANA, AND SPOKANE, WASHINGTON, ARE LOCATED ON THE LAND-GRANT LINE CONSTRUCTED PURSUANT TO THE ACT OF JULY 2, 1864, CITED ABOVE. THE GOVERNMENT IS ENTITLED, THEREFORE, TO THE USE OF SAID LINE FOR THE TRANSPORTATION OF THE MAILS BETWEEN MILES CITY AND SPOKANE AT 80 PERCENT OF THE COMPENSATION OTHERWISE AUTHORIZED. IT IS ALSO SETTLED THAT WHEN A LAND-GRANT RAILROAD USES SUBSTITUTED MILEAGE FOR LAND GRANT MILEAGE, THE SUBSTITUTED MILEAGE IS SUBJECT TO THE SAME LIMITATIONS IN THE MATTER OF CHARGES FOR TRANSPORTATION SERVICE RENDERED THE GOVERNMENT THAT ARE APPLICABLE TO THE ORIGINAL AIDED LINE. SEE UNITED STATES V. NORTHERN PACIFIC RAILWAY COMPANY, 30 FED./2D) 655, REHEARING DENIED 32 FED./2D) 695. SEE, ALSO, IN THIS CONNECTION, IN RELATION TO TRANSPORTATION OF THE MAILS, A-31790, JUNE 13, 1930; A-24142, SEPTEMBER 10, 1928; AND 10 COMP. GEN. 552.

IN CONNECTION WITH THE PRESENT MATTER, THE NORTHERN PACIFIC RAILWAY COMPANY STATES IN LETTER OF JANUARY 27, 1937, THAT THE LINE VIA BUTTE "WAS NOT CONSTRUCTED AS A THROUGH ROUTE TO SUPPLANT EITHER WHOLLY OR PARTLY THE LAND-AIDED ROAD VIA HELENA; " THAT THE BUTTE LINE WAS BUILT TO REACH NEW TERRITORY, PARTICULARLY BUTTE, MONT., AND TO MAKE IMPORTANT CONNECTIONS WITH THE OREGON SHORT LINE RAILROAD; THAT "IT IS A FACT THAT THE 30-FOOT MAIL APARTMENT IN TRAIN 1 DELIVERS FULLY HALF, PROBABLY MORE OF ITS LOAD AT BUTTE--- MAIL DESTINED TO THAT CITY, OTHER TOWNS IN THE VICINITY, AND FOR TRANSFER TO THE OREGON SHORT LINE. IT RELOADS WITH MAIL RECEIVED FROM THE OREGON SHORT LINE CONNECTIONS, AND THAT ORIGINATING AT BUTTE AND OTHER POST OFFICES LOCATED ON THE BUTTE LINE; , THAT "THE SAME IS TRUE, BUT TO A SOMEWHAT LESS DEGREE, WITH TRAIN 2; " THAT THE CARRIER ,MAINTAINS THE LAND AIDED ROUTE VIA HELENA AS A HIGH-CLASS RAILROAD, AND OPERATES IMPORTANT THROUGH MAIL TRAINS, AND ALL THROUGH FREIGHT TRAINS VIA THAT ROUTE; " AND THAT ACCORDINGLY IT IS ,SELF-EVIDENT THAT THE BUTTE LINE WAS NOT CONSTRUCTED AS A LIEU LINE IN ANY RESPECT.'

THE FACT THAT THE BUTTE LINE MAY HAVE BEEN CONSTRUCTED PRIMARILY FOR THE PURPOSES STATED BY THE CARRIER DOES NOT AFFECT THE PRINCIPLE THAT FOR POSTAL SERVICE RENDERED OVER SAID LINE IN LIEU OF SERVICE OTHERWISE REQUIRED BY THE GOVERNMENT OVER THE ORIGINAL LAND-GRANT LINE THROUGH HELENA THE LAND-GRANT RATES CONSTITUTE THE PROPER BASIS OF PAYMENT.

ON THE OTHER HAND WITH RESPECT TO MAIL TRANSPORTATION SERVICE REQUIRED TO AND FROM POINTS ON THE BUTTE LINE, IN EXCESS OF MAIL TRANSPORTATION SERVICE REQUIRED BETWEEEN TWO POINTS BOTH OF WHICH ARE LOCATED ON THE LAND -GRANT LINE WITH TRANSPORTATION OVER THE BUTTE LINE, THERE IS FOR CONSIDERATION THE FACT THAT SUCH SERVICE IS NOT IN LIEU OF SERVICE THAT WOULD BE REQUIRED OVER THE ORIGINAL LAND-GRANT LINE, THE CARRIER URGING IN THIS RESPECT THAT A CONSIDERABLE PORTION OF THE SPACE AUTHORIZED IN TRAINS 1 AND 2 BETWEEN MILES CITY AND SPOKANE IS ACTUALLY USED FOR DELIVERY AND PICK-UP OF MAIL AT BUTTE. TO THE EXTENT THAT THE SPACE AUTHORIZED IN SAID TRAINS IS USED FOR TRANSPORTATION OF MAIL TO AND FROM BUTTE, NECESSITATING THE AUTHORIZATION OF POSTAL SERVICE IN EXCESS OF THAT WHICH WOULD BE REQUIRED OTHERWISE OVER THE ORIGINAL LAND-GRANT LINE, SUCH EXCESS SERVICE FROM THE POINT OF DEPARTURE FROM THE LAND-GRANT LINE TO BUTTE AND VICE VERSA IS NOT IN LIEU OF SERVICE THAT COULD BE REQUIRED OVER THE LAND-GRANT LINE VIA HELENA.

IN THE CIRCUMSTANCES THERE IS SUGGESTED FOR ADMINISTRATIVE CONSIDERATION A DETERMINATION AS TO THE EXTENT, IF ANY, THE SPACE AUTHORIZED IN THE THROUGH TRAINS OVER THE LIEU LINE IS FOR MAIL REQUIREMENTS OF POINTS LOCATED ON THE LIEU LINE IN EXCESS OF THAT WHICH OTHERWISE WOULD BE REQUIRED OVER THE ORIGINAL LAND-GRANT LINE. FOR SUCH EXCESS SPACE OR SERVICE REQUIREMENTS THE CARRIER IS ENTITLED TO PAYMENT ON THE BASIS OF NON-LAND-GRANT RATES FOR THE ACTUAL DISTANCE COVERED.