A-42271, NOVEMBER 17, 1942, 22 COMP. GEN. 471

A-42271: Nov 17, 1942

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COLLECTION OF SUCH OVERPAYMENTS FROM THE CARRIERS WILL BE HELD IN ABEYANCE UNTIL THE PENDING QUESTION OF DIVISION OF SUCH RATES IS DISPOSED OF BY THE INTERSTATE COMMERCE COMMISSION OR BY AGREEMENT BETWEEN THE CARRIERS. THE HERETOFORE OBSERVED DIVISIONS WILL BE APPLIED IN THE SETTLEMENT OF CLAIMS DIRECTLY BY THIS OFFICE. 1942: REFERENCE IS MADE TO YOUR JOINT LETTER DATED SEPTEMBER 12. ALL CARRIERS FOR WHOM THE UNDERSIGNED ARE ACTING WILL ACCEPT AS PERMANENT DIVISIONS THE FOLLOWING BASIS FOR APPLICATION ON U.S. GOVERNMENT FREIGHT SUBJECT TO LAND GRANT DEDUCTIONS AND NO READJUSTMENT OF SETTLEMENTS MADE ON THIS BASIS WILL BE REQUESTED REGARDLESS OF ANY PENDING PROCEEDINGS BEFORE THE INTERSTATE COMMERCE COMMISSION: IN DIVIDING JOINT THRU RATES BETWEEN OFFICIAL AND WESTERN TERRITORIES.

A-42271, NOVEMBER 17, 1942, 22 COMP. GEN. 471

TRANSPORTATION - RATES - DIVISIONS - LAND-GRANT DEDUCTIONS IN THE ABSENCE OF EXTRAORDINARY CIRCUMSTANCES MAKING ACTION TO THE CONTRARY ADVISABLE, WHERE OVERPAYMENTS, DUE TO UNDER-DEDUCTIONS FOR LAND GRANT, FOUND IN THE POST-AUDIT OF DISBURSING OFFICERS' TRANSPORTATION ACCOUNTS PAID ON AND AFTER JUNE 1, 1942, ARISE SOLELY FROM APPLYING--- IN THE DIVISION OF "DOCKET 17000, PART 2," RATES--- DIVISION SHEETS W.T.L. 657-A ( C.F.A.L. 285-A), OR 500-A ( C.F.A.L. 365 A), INSTEAD OF APPLYING DIVISIONS HERETOFORE OBSERVED BY THIS OFFICE, COLLECTION OF SUCH OVERPAYMENTS FROM THE CARRIERS WILL BE HELD IN ABEYANCE UNTIL THE PENDING QUESTION OF DIVISION OF SUCH RATES IS DISPOSED OF BY THE INTERSTATE COMMERCE COMMISSION OR BY AGREEMENT BETWEEN THE CARRIERS. HOWEVER, THE HERETOFORE OBSERVED DIVISIONS WILL BE APPLIED IN THE SETTLEMENT OF CLAIMS DIRECTLY BY THIS OFFICE, AND IN THE AUDIT OF PAYMENTS MADE PRIOR TO JUNE 1, 1942.

ASSISTANT COMPTROLLER GENERAL ELLIOTT TO J. A. FARMAR AND E. MORRIS, NOVEMBER 17, 1942:

REFERENCE IS MADE TO YOUR JOINT LETTER DATED SEPTEMBER 12, 1942, WTL FILE I-369-14, CFA FILE EC-2779, CC: 180-51-1, FORWARDED TO THIS OFFICE BY MR. A. F. CLEVELAND, VICE PRESIDENT OF THE ASSOCIATION OF AMERICAN RAILROADS, ON SEPTEMBER 19, 1942, UNDER HIS FILE 1-113-4. THE JOINT LETTER READS AS FOLLOWS:

THE UNDERSIGNED, J. A. FARMAR ACTING FOR ACCOUNT OF WESTERN RAILROADS AND E. MORRIS ACTING FOR ACCOUNT OF THE CENTRAL FREIGHT ASSOCIATION RAILROADS, RESPECTFULLY REQUEST YOUR FAVORABLE CONSIDERATION AND APPROVAL OF THE FOLLOWING BASIS FOR PERMANENT DIVISIONS TO APPLY ON U.S. GOVERNMENT FREIGHT SUBJECT TO LAND GRANT DEDUCTIONS.

ALL CARRIERS FOR WHOM THE UNDERSIGNED ARE ACTING WILL ACCEPT AS PERMANENT DIVISIONS THE FOLLOWING BASIS FOR APPLICATION ON U.S. GOVERNMENT FREIGHT SUBJECT TO LAND GRANT DEDUCTIONS AND NO READJUSTMENT OF SETTLEMENTS MADE ON THIS BASIS WILL BE REQUESTED REGARDLESS OF ANY PENDING PROCEEDINGS BEFORE THE INTERSTATE COMMERCE COMMISSION:

IN DIVIDING JOINT THRU RATES BETWEEN OFFICIAL AND WESTERN TERRITORIES, AS COVERED BY THE DIVISION SHEETS NAMED BELOW, THE DIVISIONS EAST AND WEST OF THE DIVISIONAL BREAK POINTS, AS NAMED IN SAID SHEETS AND SUPPLEMENTS THERETO, WILL BE APPLIED IN ARRIVING AT THE NET LAND GRANT DEDUCTIONS EAST AND WEST OF THE DIVISIONAL GATEWAYS DURING THE PERIOD SUCH DIVISION SHEETS REMAIN IN EFFECT:

WTL D/S 500-A ( CFAL D/S 365-A) ON CARLOAD TRAFFIC.

CFAL D/S 285-A ( WTL D/S 657-A) ON LESS THAN CARLOAD TRAFFIC.

WTL D/S 855 ( CFAL D/S 381).

NOTES: THE ABOVE DIVISION SHEETS TO BE AMENDED TO PROVIDE THAT THE DIVISIONS NAMED THEREIN WILL APPLY FOR ACCOUNT OF ALL WESTERN AND CENTRAL FREIGHT ASSOCIATION RAILROADS, WITHOUT EXCEPTION, ON U.S. GOVERNMENT FREIGHT SUBJECT TO LAND GRANT DEDUCTIONS.

IN SUPPORT OF THIS REQUEST, WE SUBMIT THE FOLLOWING JUSTIFICATION:

SINCE DECEMBER 3, 1931, THE U.S. GOVERNMENT HAS ARRIVED AT LAND GRANT DEDUCTIONS IN CONNECTION WITH JOINT THRU RATES ON TRAFFIC HEREIN INVOLVED BETWEEN OFFICIAL AND WESTERN TERRITORIES BY SETTING UP AS DIVISIONS, OF THE JOINT THRU RATES, FOR THE WESTERN RAILROADS THEIR FULL LOCAL RATES WEST OF THE MISSISSIPPI RIVER OR OTHER INTERTERRITORIAL GATEWAYS. THIS BASIS IS USED ON BOTH EASTBOUND AND WESTBOUND TRAFFIC.

WHEN THE REVISED CLASS RATES BETWEEN WESTERN TERRITORY, ON THE ONE HAND, AND OFFICIAL TERRITORY, ON THE OTHER, BECAME EFFECTIVE ON DECEMBER 3, 1931, NO AGREEMENT COULD BE REACHED BETWEEN THE WESTERN RAILROADS AND THE CENTRAL FREIGHT ASSOCIATION RAILROADS WITH RESPECT TO DIVISIONS THEREOF, AND FOR A SHORT PERIOD OF TIME THE WESTERN RAILROADS TOOK AS THEIR DIVISIONS OF THE JOINT THRU RATES THEIR FULL LOCAL RATES ON WESTBOUND TRAFFIC AND THE CENTRAL FREIGHT ASSOCIATION RAILROADS TOOK AS THEIR DIVISIONS OF THE JOINT THRU RATES THEIR FULL LOCAL RATES ON EASTBOUND TRAFFIC. EFFECTIVE WITH WAYBILLS TAKEN INTO APRIL 1935 ACCOUNTS, A DIVISION SHEET DESIGNATED AS CFAL D/S 285-A ( WTL D/S 657-A) WAS ISSUED PROVIDING SPECIFIC PERCENTAGE PROPORTIONS EAST AND WEST OF THE INTERTERRITORIAL DIVISIONAL BREAK POINTS. IT IS TRUE THAT THIS DIVISION SHEET WAS OF A TEMPORARY NATURE AND WAS SO INDICATED ON THE TITLE PAGE THEREOF.

EFFECTIVE WITH OCTOBER, 1939 ACCOUNTS, PERMANENT DIVISIONS WERE PUBLISHED IN WTL D/S 500 ( CFAL D/S 365), NOW WTL D/S 500-A ( CFAL D/S 365-A), TO APPLY ON CARLOAD TRAFFIC. AT THE SAME TIME AN AGREEMENT WAS REACHED TO CONTINUE THE APPLICATION OF CFAL D/S 285-A ( WTL D/S 657-A) IN PERMANENT SETTLEMENT ON LESS THAN CARLOAD TRAFFIC. SINCE THAT TIME, THE DIVISIONS NAMED IN THESE TWO DIVISION SHEETS HAVE BEEN APPLIED WITHOUT QUESTION BY ALL CENTRAL FREIGHT ASSOCIATION RAILROADS AND ALL WESTERN RAILROADS, EXCEPT THAT CERTAIN WESTERN RAILROADS HAVE NOT APPLIED WTL D/S 500-A ( CFAL D/S 365-A) ON ALL CARLOAD TRAFFIC.

THE LATTER RAILROADS, HOWEVER, DO APPLY WTL D/S 500-A ( CFAL D/S365 A) ON A LARGE NUMBER OF COMMODITIES AS NAMED IN WTL D/S 855 ( CFAL D/S 381), AND THESE RAILROADS HAVE ALSO NOW SIGNIFIED THEIR WILLINGNESS TO APPLY AS A PERMANENT BASIS OF DIVISIONS THE GENERAL BASIS OF DIVISIONS AS NAMED IN WTL D/S 500-A ( CFAL D/S 365-A) ON ALL CARLOAD GOVERNMENT FREIGHT SUBJECT TO LAND GRANT DEDUCTIONS, AND WILL CONTINUE TO APPLY CFAL D/S 285-A ( WTL D/S 657-A) ON ALL LESS CARLOAD TRAFFIC. IT IS ALSO AGREED THAT NO READJUSTMENTS OF SETTLEMENTS ON THIS BASIS WILL BE MADE BETWEEN THE CARRIERS FOR WHOM THE UNDERSIGNED ARE ACTING AND THE U.S. GOVERNMENT REGARDLESS OF THE OUTCOME OF ANY OF THE PENDING CASES BEFORE THE INTERSTATE COMMERCE COMMISSION.

THE METHOD EMPLOYED BY THE U.S. GOVERNMENT AT THE PRESENT TIME OF DIVIDING JOINT RATES BETWEEN OFFICIAL AND WESTERN TERRITORIES, BY ALLOWING THE WESTERN RAILROADS FULL LOCAL RATES WEST OF THE MISSISSIPPI RIVER OR INTERCHANGE POINTS ON BOTH EASTBOUND AND WESTBOUND TRAFFIC AND BASING LAND GRANT DEDUCTIONS ON THOSE DIVISIONS, IS OBVIOUSLY UNFAIR TO ALL RAILROADS INVOLVED, IN THAT IT INFLATES THE LAND GRANT DEDUCTIONS FAR BEYOND THOSE REFLECTED BY THE ACTUAL EARNINGS OF THE RAILROADS WEST OF THE MISSISSIPPI RIVER OR OTHER INTERCHANGE POINTS.

NOW THAT ALL WESTERN AND CENTRAL FREIGHT ASSOCIATION RAILROADS HAVE AGREED TO THE APPLICATION OF WTL D/S 500-A ( CFAL D/S 365-A), CFAL D/S 285 -A ( WTL D/S 657-A) AND WTL D/S 855 ( CFAL D/S 381, ON U.S. GOVERNMENT FREIGHT SUBJECT TO LAND GRANT DECISIONS, THE CLAIM CANNOT BE MADE THAT THE DIVISIONS NAMED IN THESE SHEETS ARE NOT PERMANENT. IF THE U.S. GOVERNMENT WILL AGREE TO APPLY THE ABOVE NAMED DIVISION SHEETS IN ARRIVING AT THE NET LAND GRANT DEDUCTIONS, APPROPRIATE AMENDMENT OF THESE SHEETS WILL BE MADE TO PROVIDE FOR THE PERMANENT APPLICATION THEREOF, FOR ACCOUNT OF ALL WESTERN AND CENTRAL FREIGHT ASSOCIATION RAILROADS, EFFECTIVE ON A DATE MUTUALLY AGREED UPON BETWEEN THE U.S. GOVERNMENT AND THE UNDERSIGNED.

WE RESPECTFULLY SUBMIT THAT THIS OFFER ON THE PART OF THE WESTERN AND CENTRAL FREIGHT ASSOCIATION RAILROADS WILL MEET ANY OBJECTIONS WHICH MAY BE HELD BY YOUR OFFICE IN REGARD TO THE APPLICATION OF THE DIVISIONS NAMED ABOVE, BECAUSE OF THEIR ALLEGEDLY TEMPORARY CHARACTER, AND IT IS SINCERELY HOPED THAT THIS REQUEST WILL MEET WITH YOUR APPROVAL AND THAT INSTRUCTIONS WILL BE GIVEN TO APPLY THIS BASIS ON U.S. GOVERNMENT FREIGHT SUBJECT TO LAND GRANT DEDUCTIONS.

WITH RESPECT TO COMMERCIAL DIVISIONS FOR RATES PUBLISHED PURSUANT TO DOCKET NO. 17000, PART 2, OF THE INTERSTATE COMMERCE COMMISSION, BEING THE SO-CALLED "REVISED CLASS RATES" WHICH BECAME EFFECTIVE ON DECEMBER 3, 1931, THE INABILITY OF THE CARRIERS AFFECTED TO AGREE UPON A BASIS OF DIVISIONS RESULTED IN THE FILING BY THEM WITH THE INTERSTATE COMMERCE COMMISSION ON DECEMBER 4, 1931, OF A PETITION ASKING THE COMMISSION TO PRESCRIBE EQUITABLE DIVISIONS FOR THESE RATES. APPARENTLY THAT PETITION IS STILL PENDING. IT EARLY APPEARED, HOWEVER, IN CONNECTION WITH CLAIMS FOR THE TRANSPORTATION OF GOVERNMENT PROPERTY, THAT THE CARRIERS INVOLVED HAD ADOPTED A PRACTICE UNDER WHICH THE EASTERN LINES, OR THE WESTERN LINES, AS THE CASE MIGHT BE, RETAINED FOR THEMSELVES, OUT OF CHARGES COLLECTED BY THEM FROM SAID RATES, A PROPORTION COMPUTED ON THE BASIS OF LOCAL RATES FROM THE INTERCHANGE POINT BETWEEN THE EASTERN AND WESTERN CARRIERS TO DESTINATION, REMITTING ONLY THE REMAINDER TO THEIR CONNECTIONS. SEE IN THIS CONNECTION WESTERN TRUNK LINE DIVISION SHEET NO. 657 AND CENTRAL FREIGHT ASSOCIATION DIVISION SHEET NO. 285. UNDER THIS PRACTICE THE AMOUNT OF THE EARNINGS OF THE RESPECTIVE GROUPS OF CARRIERS WAS DEPENDENT UPON, AND VARIED WITH, THE CIRCUMSTANCES OF WHETHER THE CHARGES WERE COLLECTED BY THE ONE OR THE OTHER GROUP. IN THAT SITUATION IT BECAME NECESSARY FOR THIS OFFICE, IN ORDER TO DETERMINE THE AMOUNT OF EARNED DEDUCTIONS FOR LAND GRANT, TO APPLY THE RULE OF LONG STANDING THAT IN INSTANCES OF CONFLICTING DIVISIONS THAT BASIS WILL BE APPLIED WHICH WILL AFFORD THE GOVERNMENT THE GREATEST DEDUCTION. ACCORDINGLY, IN DIVIDING THESE RATES FOR PURPOSES OF DETERMINING LAND-GRANT DEDUCTIONS, WESTERN TRUNK LINE DIVISION SHEET NO. 657 OR CENTRAL FREIGHT ASSOCIATION DIVISION SHEET NO. 285, WAS USED BY THIS OFFICE AS THE APPLICATION OF THIS RULE MIGHT REQUIRE. SEE IN THIS CONNECTION 14 COMP. GEN. 775.

THE PRACTICE OF THE CARRIERS IN THIS RESPECT APPARENTLY WAS CONTINUED FROM DECEMBER, 1931, TO APRIL, 1935, WHEN THERE WAS ISSUED W.T.L. DIVISION SHEET NO. 657-A ( CFA D/S 285A). ORIGINALLY, W.T.L. DIVISION SHEET 657-A, EFFECTIVE IN APRIL, 1935, PUBLISHED " TEMPORARY PERCENTAGES" FOR APPLICATION IN CONNECTION WITH CARLOAD AND LESS THAN CARLOAD RATES. THESE TEMPORARY PERCENTAGES REMAINED IN EFFECT UNTIL OCTOBER, 1939, WHEN SUPPLEMENT 18 TO W.T.L. NO. 657-A BECAME EFFECTIVE AND AMENDED SAID DIVISION SHEET BY ELIMINATING THE WORD " TEMPORARY" FORMERLY APPEARING IN CONNECTION WITH THE WORD " PERCENTAGES.' FURTHER AMENDMENTS WERE MADE BY THE ADDITION OF ITEM NO. 2 PROVIDING IN EFFECT THAT THE DIVISION SHEET WAS APPLICABLE ONLY BETWEEN STATIONS LOCATED ON THE CARRIERS NAMED ON PAGES 2, 3, AND 4 OF SUPPLEMENT NO. 18 AND THE APPLICATION OF THE DIVISION SHEET WAS QUALIFIED SO THAT EFFECTIVE WITH SUPPLEMENT NO. 18 IT COULD BE USED ONLY IN CONNECTION WITH LESS THAN CARLOAD TRAFFIC. CONTEMPORANEOUSLY WITH SUPPLEMENT NO. 18 WESTERN TRUNK LINE DIVISION SHEET NO. 500, ( CFAL 365) WAS ISSUED FOR APPLICATION IN CONNECTION WITH CARLOAD RATES PUBLISHED PURSUANT TO DOCKET 17000, PART 2. HOWEVER, NOT ALL OF THE WESTERN CARRIERS WERE PARTIES TO DIVISION SHEETS 657-A AS SO AMENDED, AND 500, AND, IN THIS CONNECTION, IT IS NOTED THAT ON NOVEMBER 11, 1939, REPRESENTATIVES OF THE CHICAGO, ROCK ISLAND AND PACIFIC RAILWAY, THE MISSOURI PACIFIC RAILROAD, THE CHICAGO GREAT WESTERN RAILROAD, THE MISSOURI - KANSAS - TEXAS RAILROAD, THE ST. LOUIS - SAN FRANCISCO RAILWAY AND THE KANSAS CITY SOUTHERN RAILWAY INFORMED MR. FARMAR THAT THE BASIS SET FORTH IN WESTERN TRUNK LINE DIVISION SHEET NO. 500 WAS NOT ACCEPTABLE AND THAT:

PENDING THE ESTABLISHMENT OF OTHER DIVISIONS, EITHER BY AGREEMENT OR BY ACTION OF THE INTERSTATE COMMERCE COMMISSION, THE ONLY DIVISIONS THEY CAN RECOGNIZE FOR THE APPORTIONMENT OF REVENUE ON TRAFFIC MOVING TO OR FROM THEIR STATIONS OR OVER THEIR LINES AT THE SO-CALLED 17000 AND RELATED RATES ARE THE TEMPORARY DIVISIONS THAT HAVE BEEN IN USE SINCE APRIL 1, 1935, AS PUBLISHED IN CENTRAL FREIGHT ASSOCIATION DIVISION SHEET 285-A ( W.T.L. D/S 657-A). ON THE OTHER HAND, IT APPEARS THAT THE EASTERN CARRIERS, THROUGH MR. E. MORRIS, CHAIRMAN CENTRAL FREIGHT ASSOCIATION, ISSUED " MEMORANDUM "A" " TO DIVISION SHEET 500, SETTING OUT DIVISIONS FOR USE IN CONNECTION WITH THE SO CALLED "NON-CONCURRING CARRIERS" IN W.T.L. 500, WHICH INCLUDES, AMONG OTHERS, THE SIX CARRIERS ABOVE MENTIONED. THE SITUATION APPEARS TO BE, THEREFORE, THAT IF REVENUE IS COLLECTED BY THE "NON- CONCURRING LINES," DIVISION THEREOF WILL BE MADE ON THE BASIS OF TEMPORARY DIVISIONS PUBLISHED IN W.T.L. 657-A, WHILE IF REVENUE IS COLLECTED BY THE "CONCURRING LINES," ON THE EXCEPTED TRAFFIC, DIVISIONS AS SET OUT IN MEMORANDUM "A" WILL BE OBSERVED. INSOFAR AS THESE SIX CARRIERS ARE CONCERNED THE SITUATION DOES NOT APPEAR CHANGED UNDER WESTERN TRUNK LINE DIVISION SHEET 500A ( CFAL D/S 365-A), WHICH CANCELLED W.T.L. NO. 500 ( CFAL NO. 365).

WITH RESPECT TO WESTERN TRUNK LINE DIVISION SHEET NO. 855 ( CFAL 381), EFFECTIVE IN JULY, 1941, IT APPEARS THAT THE NON-CONCURRING CARRIERS IN W.T.L. 500-A JOINED THE EASTERN CARRIERS IN THE ADOPTION OF THE BASIS OF DIVISIONS SET OUT IN W.T.L. 500-A AND MEMORANDUM "A" TO W.T.L. 500, TO THE EXTENT THAT SAID DIVISIONS MAY BE APPLIED IN CONNECTION WITH RATES LISTED SPECIFICALLY IN W.T.L. 855.

THE FOREGOING IS A SUMMARY OF WHAT APPEAR TO BE THE PERTINENT COMMERCIAL DIVISIONS AS SHOWN BY DIVISION SHEETS ON FILE IN THIS OFFICE. HOWEVER, NOTWITHSTANDING THAT DIVISION SHEETS W.T.L. 500-A AND W.T.L. 657-A, PURPORT TO PROVIDE PERMANENT BASES FOR APPORTIONING JOINT REVENUE BETWEEN THE EASTERN CARRIERS AND CERTAIN WESTERN CARRIERS IT IS UNDERSTOOD THAT THE ORIGINAL PETITION OF DECEMBER 4, 1931, IS STILL PENDING BEFORE THE INTERSTATE COMMERCE COMMISSION AND THAT THE SIX ,NON CONCURRING" CARRIERS HAVE FILED FURTHER PROCEEDINGS IN DOCKET NO. 28277, WHICH WAS MET WITH A COUNTER-COMPLAINT BY THE EASTERN CARRIERS IN DOCKET 28589. INSOFAR AS THIS OFFICE HAS BEEN INFORMED, THESE ACTIONS, ALSO, ARE PENDING BEFORE THE COMMISSION. IN VIEW OF THE INDEFINITE STATUS OF THE COMMERCIAL DIVISIONS SINCE APRIL, 1935, AND THE POSSIBLE EFFECT THAT DECISIONS OF THE INTERSTATE COMMERCE COMMISSION IN THE PENDING CASES MAY HAVE UPON THE SO- CALLED PERMANENT DIVISIONS ADOPTED BY SOME OF THE CARRIERS, THIS OFFICE HAS FOUND IT NECESSARY, IN AUDITING AND SETTLING CLAIMS AND ACCOUNTS INVOLVING DOCKET 17000, PART 2, RATES, TO ADHERE TO THE USE OF THAT ONE OF THE TWO BASES OF DIVISIONS APPARENTLY OBSERVED BY THE CARRIERS FROM DECEMBER, 1931, TO APRIL, 1935, WHICH WILL PRODUCE THE LOWEST NET RATE, IN ORDER TO PROTECT THE INTERESTS OF THE UNITED STATES. SEE IN THIS CONNECTION 18 COMP. GEN. 418 AND 19 COMP. GEN. 765. YOUR PRESENT SUBMISSION STATES THAT THE CENTRAL AND THE WESTERN FREIGHT ASSOCIATION'S CARRIERS ,HAVE AGREED TO THE APPLICATION OF W.T.L. D/S 500-A ( CFAL D/S 365-A), CFAL D/S 285-A ( WTL D/S 657-A) AND WTL D/S 855 ( CFAL D/S 381, ON U.S. GOVERNMENT FREIGHT SUBJECT TO LAND GRANT DEDUCTIONS" AND SUGGESTS THAT "IF THE U.S. GOVERNMENT WILL AGREE TO APPLY THE ABOVE-NAMED DIVISION SHEETS IN ARRIVING AT THE NET LAND-GRANT DEDUCTIONS, APPROPRIATE AMENDMENT OF THESE SHEETS WILL BE MADE TO PROVIDE FOR THE PERMANENT APPLICATION THEREOF, FOR ACCOUNT OF ALL WESTERN AND CENTRAL FREIGHT ASSOCIATION RAILROADS" AND "NO READJUSTMENT OF SETTLEMENTS MADE ON THIS BASIS WILL BE REQUESTED REGARDLESS OF ANY PENDING PROCEEDINGS BEFORE THE INTERSTATE COMMERCE COMMISSION.' HOWEVER DESIRABLE IT MIGHT BE FROM THE STANDPOINT OF THE CARRIERS AND THE ACCOUNTING OFFICERS OF THE GOVERNMENT TO ADOPT THE SUGGESTED BASES FOR DIVISIONS, IT DOES NOT APPEAR THAT THE MATTER IS ONE WHICH MAY BE MADE THE SUBJECT OF AGREEMENT BETWEEN THE CARRIERS AND THE ACCOUNTING OFFICERS OF THE GOVERNMENT WITH RESPECT TO DEDUCTIONS FOR LAND GRANT. THE ACT APPROVED JUNE 7, 1924, 43 STAT. 477, 486, PROVIDES THAT:

* * * HEREAFTER PAYMENT SHALL BE MADE AT SUCH RATES AS THE SECRETARY OF WAR SHALL DEEM JUST AND REASONABLE AND SHALL NOT EXCEED 50 PERCENTUM OF THE FULL AMOUNT OF COMPENSATION, COMPUTED ON THE BASIS OF THE TARIFF OR LOWER SPECIAL RATES FOR LIKE TRANSPORTATION PERFORMED FOR THE PUBLIC AT LARGE, FOR THE TRANSPORTATION OF PROPERTY OR TROOPS OF THE UNITED STATES OVER ANY RAILROAD WHICH UNDER LAND-GRANT ACTS WAS AIDED IN ITS CONSTRUCTION * * *. ( ITALICS SUPPLIED.) IT IS APPARENT THAT THE EARNINGS OF A CARRIER "FOR LIKE TRANSPORTATION PERFORMED FOR THE PUBLIC AT LARGE" UNDER A JOINT RATE DOES NOT REST ALONE ON THE "TARIFF OR LOWER SPECIAL RATE" BUT, ALSO, UPON THE COMMERCIAL DIVISION OF THAT RATE. OBVIOUSLY, SO LONG AS THE PROCEEDINGS ABOVE MENTIONED ARE PENDING BEFORE THE INTERSTATE COMMERCE COMMISSION IT CANNOT BE DETERMINED WITH CERTAINTY WHAT WILL BE THE EARNINGS OF INDIVIDUAL PARTICIPATING CARRIERS UNDER JOINT RATES FOR LIKE TRANSPORTATION PERFORMED FOR THE PUBLIC AT LARGE; AND ANY AGREEMENT FOR ADJUSTMENT OTHERWISE WOULD BE UNAUTHORIZED TO THE EXTENT THAT IT MIGHT INVOLVE PAYMENT, FOR SERVICE OVER A LAND-GRANT LINE, OF MORE THAN 50 PERCENT OF THE COMPENSATION TO WHICH SUCH CARRIER WOULD BE ENTITLED FOR SERVICE FOR THE PUBLIC.

IN CONNECTION WITH THE MATTER NOW PRESENTED, HOWEVER, THERE APPEARS PROPERLY FOR CONSIDERATION CERTAIN RECENT LEGISLATION BEARING UPON THE PAYMENT OF BILLS FOR TRANSPORTATION AND THE LIABILITY OF CERTIFYING AND DISBURSING OFFICERS IN CONNECTION THEREWITH. THE TRANSPORTATION ACT OF 1940, TITLE III, PART II, SECTION 322, 54 STAT. 898, 955, PROVIDES:

PAYMENT FOR TRANSPORTATION OF THE UNITED STATES MAIL AND OF PERSONS OR PROPERTY FOR OR ON BEHALF OF THE UNITED STATES BY ANY COMMON CARRIER SUBJECT TO THE INTERSTATE COMMERCE ACT, AS AMENDED, OR THE CIVIL AERONAUTICS ACT OF 1938, SHALL BE MADE UPON PRESENTATION OF BILLS THEREFOR, PRIOR TO AUDIT OR SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE BUT THE RIGHT IS HEREBY RESERVED TO THE UNITED STATES GOVERNMENT TO DEDUCT THE AMOUNT OF ANY OVERPAYMENT TO ANY SUCH CARRIER FROM ANY AMOUNT SUBSEQUENTLY FOUND TO BE DUE SUCH CARRIER.

THE ACT APPROVED JUNE 1, 1942, 56 STAT. 306, PUBLIC LAW 560, AFFORDS CERTAIN RELIEF FOR DISBURSING AND CERTIFYING OFFICERS FROM LIABILITY FOR OVERPAYMENTS FOR TRANSPORTATION AS FOLLOWS:

THAT HEREAFTER NO DISBURSING OR CERTIFYING OFFICER OF THE UNITED STATES SHALL BE HELD LIABLE FOR OVERPAYMENTS MADE FOR TRANSPORTATION FURNISHED ON GOVERNMENT BILLS OF LADING OR TRANSPORTATION REQUESTS WHEN SAID OVERPAYMENTS ARE DUE TO THE USE OF IMPROPER TRANSPORTATION RATES, CLASSIFICATIONS, OR THE FAILURE TO DEDUCT THE PROPER AMOUNT UNDER LAND- GRANT LAWS OR EQUALIZATION AND OTHER AGREEMENTS. THE INESCAPABLE NET RESULT OF THESE STATUTORY PROVISIONS, WHEN CONSIDERED IN CONJUNCTION WITH THE PROVISION, QUOTED ABOVE, FROM THE ACT OF JUNE 7, 1924, WOULD SEEM TO BE THAT WHILE THE PAYMENT OF MORE THAN 50 PERCENT OF THE FULL AMOUNT OF COMPENSATION ACCRUING FOR LIKE TRANSPORTATION FOR THE PUBLIC AT LARGE IS UNAUTHORIZED FOR THE TRANSPORTATION OF PROPERTY SUBJECT TO LAND-GRANT DEDUCTION OVER LINES OF RAILROAD AIDED BY GRANTS OF LAND MADE UPON CONDITIONS ENTITLING THE UNITED STATES TO REDUCED RATES FOR SUCH SERVICE, NEVERTHELESS, IF PAYMENT OF MORE THAN THE AMOUNT SO AUTHORIZED IS MADE AS A RESULT OF THE FAILURE TO DEDUCT THE PROPER AMOUNT FOR LAND GRANT THE DISBURSING OFFICERS AND CERTIFYING OFFICERS INVOLVED SHALL NOT BE HELD LIABLE FOR THE OVERPAYMENT SO RESULTING ON OR AFTER JUNE 1, 1942. PURSUANT TO THE PROVISIONS OF SECTION 322 OF THE TRANSPORTATION ACT OF 1940, SUPRA, THE PAYMENT OF CARRIERS' BILLS NOW ARE CUSTOMARILY MADE BY DISBURSING OFFICERS WITHOUT PRIOR AUDIT OR SETTLEMENT BY THIS OFFICE, AND THE QUESTION AS TO THE NATURE AND EXTENT OF ANY ADMINISTRATIVE EXAMINATION OF SUCH BILLS PRIOR TO PAYMENT WOULD APPEAR TO BE ONE FOR ADMINISTRATIVE DETERMINATION. SEE 20 COMP. GEN. 347. HOWEVER, WHERE IN THE POST-AUDIT OF THE PAID ACCOUNTS BY THIS OFFICE IT IS FOUND THAT AN OVERPAYMENT FOR TRANSPORTATION HAS BEEN MADE DUE TO THE USE OF IMPROPER TRANSPORTATION RATES, CLASSIFICATIONS, OR THE FAILURE TO DEDUCT THE PROPER AMOUNT FOR LAND GRANT, THE EFFECT OF THE ACT OF JUNE 1, 1942, SUPRA, IS, AS STATED ABOVE, TO RELIEVE THE DISBURSING OFFICERS AND CERTIFYING OFFICERS, WITH RESPECT TO THE ACCOUNTS TO WHICH THE ACT PERTAINS, FROM LIABILITY FOR THE OVERPAYMENT SO RESULTING, AND TO MAKE THE RESPONSIBILITY FOR SUCH OVERPAYMENT THE DIRECT LIABILITY OF THE CARRIERS CONCERNED, SUCH OVERPAYMENT TO BE RECOVERED FROM THEM RATHER THAN FROM THE DISBURSING OFFICERS OR CERTIFYING OFFICERS INVOLVED. IN THIS SITUATION, WHEN CONSIDERATION IS GIVEN TO THE FACT THAT THE MATTER OF ESTABLISHING ULTIMATELY THE DIVISIONS TO BE OBSERVED BY THE CARRIERS IN APPORTIONING REVENUE UNDER DOCKET 17000, PART 2, RATES IS STILL UNSETTLED AND IS INVOLVED IN PROCEEDINGS BEFORE THE INTERSTATE COMMERCE COMMISSION FILED FOR THE PURPOSE OF OBTAINING A DETERMINATION BY THAT BODY IN EVENT OF CONTINUED FAILURE OF THE CARRIERS TO AGREE, IT DOES NOT APPEAR THAT, PENDING THE FINAL DISPOSITION OF THE DIVISION QUESTION, THE WITHHOLDING OF ACTION BY THIS OFFICE WITH RESPECT TO OVER-PAYMENTS FOUND SO RESULTING IN PAID ACCOUNTS SUBJECT TO THE ACT OF JUNE 1, 1942, SUPRA, WOULD BE UNWARRANTED IN THE ABSENCE OF SPECIAL CIRCUMSTANCES OR CONDITIONS, SUCH AS AN UNSATISFACTORY FINANCIAL CONDITION OF THE CARRIERS CONCERNED, REQUIRING EARLIER ACTION IN ORDER ADEQUATELY TO PROTECT THE INTERESTS OF THE UNITED STATES.

ACCORDINGLY, IN THE ABSENCE OF EXTRAORDINARY CIRCUMSTANCES LEADING TO THE CONCLUSION THAT ACTION OTHERWISE IS ADVISABLE THIS OFFICE WILL HOLD IN ABEYANCE, UNTIL SUCH TIME AS THE DIVISION QUESTION IS FINALLY DISPOSED OF BY DECISION OF THE INTERSTATE COMMERCE COMMISSION OR BY AGREEMENT BETWEEN THE CARRIERS, THE ADJUSTMENT OF OVERPAYMENTS FOUND IN THE POST- AUDIT OF DISBURSING OFFICERS' TRANSPORTATION ACCOUNTS PAID ON AND AFTER JUNE 1, 1942, WHERE SUCH OVERPAYMENTS ARISE SOLELY FROM THE APPLICATION, IN THE DIVISION OF DOCKET 17000, PART 2, RATES, OF DIVISION SHEETS W.T.L. 657-A OR 500-A, PUBLISHED AS BEING APPLICABLE ON LIKE COMMERCIAL TRAFFIC. IF, HOWEVER, IT BE FOUND IN THE POST-AUDIT OF ACCOUNTS PAID ON AND AFTER JUNE 1, 1942, THAT THE OVERPAYMENT ARISES FROM MATTERS IN ADDITION TO THE DIVISIONS PRESCRIBED IN DIVISION SHEETS W.T.L. 657-A OR 500-A, ADJUSTMENT WILL NOT BE HELD IN ABEYANCE BUT WILL BE EFFECTED ON THE BASIS OF DIVISIONS HERETOFORE OBSERVED BY THIS OFFICE; AND DIVISION SHEETS W.T.L. 657 AND C.F.A. 285 WILL BE APPLIED, ALSO, IN THE SETTLEMENT BY THIS OFFICE OF CLAIMS INVOLVING SAID RATES. LIKEWISE IN THE AUDIT OF PAYMENTS MADE PRIOR TO JUNE 1, 1942, ADJUSTMENTS WILL CONTINUE TO BE MADE ON THE BASIS OF THESE DIVISION SHEETS PENDING FINAL DISPOSITION OF THE QUESTION INVOLVED.

IT WOULD APPEAR THAT THE PROCEDURE THUS INDICATED WILL ACCOMPLISH, AS TO PAYMENTS MADE ON AND AFTER JUNE 1, 1942, IN MAJOR PORTION AND AS FAR AS THE PERTINENT STATUTES WOULD SEEM TO PERMIT, THE PURPOSE WHICH YOUR PROPOSAL APPARENTLY IS INTENDED TO SERVE.