A-46933, JULY 25, 1938, 18 COMP. GEN. 81

A-46933: Jul 25, 1938

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SETTLEMENT WILL BE MADE ON BASIS NOT IN EXCESS OF SUCH LOWEST LAND-GRANT RATE. THE BILLS OF LADING SHOW THAT THE SHIPMENTS WERE DELIVERED TO THE BALTIMORE AND OHIO CHICAGO TERMINAL RAILROAD WITH INSTRUCTIONS TO FORWARD "VIA B. THE CHARGE FOR THIS TRANSPORTATION AS STATED ON BILL 22014 IS IN TOTAL AMOUNT OF $592.36 COMPUTED ON BASIS OF WEIGHT AS OF 468. 000 POUNDS APPARENTLY IS CLAIMED BY THE ASSISTANT COMPTROLLER AS BEING THE RATE NORMALLY APPLICABLE VIA THE ROUTE SHOWN ON THE BILLS OF LADING. 000 POUNDS WAS AVAILABLE FROM THORNTON TO LOUIS VIA ROUTE OVER ILLINOIS CENTRAL RAILWAY TO EDGEWOOD. - * * * TO ACCEPT FOR THE TRANSPORTATION OF PROPERTY SHIPPED FOR ACCOUNT OF THE GOVERNMENT OF THE UNITED STATES AND FOR WHICH THE GOVERNMENT OF THE UNITED STATES IS LAWFULLY ENTITLED TO REDUCED RATES OVER LAND-GRANT ROADS.

A-46933, JULY 25, 1938, 18 COMP. GEN. 81

TRANSPORTATION - LAND-GRANT - ROUTES - EQUALIZATION WHERE SHIPPING OFFICER ROUTES SHIPMENT VIA ROUTE OF EQUALIZING CARRIERS BUT NOT VIA ROUTE AUTHORIZED IN TARIFF NAMING COMMERCIAL RATE YIELDING LOWEST LAND-GRANT RATE AND THE CARRIERS WITHOUT PROTEST ACCEPT AND MOVE THE SHIPMENT VIA THE SPECIFIED ROUTE, SETTLEMENT WILL BE MADE ON BASIS NOT IN EXCESS OF SUCH LOWEST LAND-GRANT RATE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE GENERAL FREIGHT TRAFFIC MANAGER, THE BALTIMORE AND OHIO RAILROAD COMPANY, JULY 25, 1938:

THIS OFFICE HAS GIVEN CONSIDERATION TO CLAIM (BILL 22014) SUBMITTED BY ASSISTANT COMPTROLLER, THE BALTIMORE AND OHIO RAILROAD COMPANY, FOR TRANSPORTATION OF CRUSHED STONE FROM THORNTON, ILLINOIS, TO LOUIS (CLAY COUNTY), ILLINOIS, UNDER BILLS OF LADING ER-158591/3, INCLUSIVE, NOVEMBER 30, DECEMBER 1-3, 1937.

THE BILLS OF LADING SHOW THAT THE SHIPMENTS WERE DELIVERED TO THE BALTIMORE AND OHIO CHICAGO TERMINAL RAILROAD WITH INSTRUCTIONS TO FORWARD "VIA B. AND O.CT. R.R.--- ALTON R.R.--- B. AND O. R.R.' IN ACCORDANCE WITH "U.S. GOVERNMENT ROUTING ORDER NO. ER-3828.'

THE CHARGE FOR THIS TRANSPORTATION AS STATED ON BILL 22014 IS IN TOTAL AMOUNT OF $592.36 COMPUTED ON BASIS OF WEIGHT AS OF 468,300 POUNDS AND COMBINATION OF RATES OF $1.14 PER 2,000 POUNDS FROM THORNTON TO SPRINGFIELD, ILL., $1.39 PER 2,000 POUNDS FROM SPRINGFIELD TO LOUIS. THE COMBINATION THROUGH RATE OF $2.53 PER 2,000 POUNDS APPARENTLY IS CLAIMED BY THE ASSISTANT COMPTROLLER AS BEING THE RATE NORMALLY APPLICABLE VIA THE ROUTE SHOWN ON THE BILLS OF LADING.

IT APPEARS, HOWEVER, THAT UNDER THE PROVISIONS OF ILLINOIS CENTRAL SYSTEM TARIFF NO. 13321-H, I.C.C. NO. 10814, IN EFFECT AT THE TIME OF THESE SHIPMENTS, THROUGH RATE OF $1.13 PER 2,000 POUNDS WAS AVAILABLE FROM THORNTON TO LOUIS VIA ROUTE OVER ILLINOIS CENTRAL RAILWAY TO EDGEWOOD, ILL., THENCE VIA BALTIMORE AND OHIO RAILROAD TO LOUIS; AND THAT UNDER THE PROVISIONS OF THE FORMER CARRIER'S DIVISION SHEET NO. 8407-A, SUPPLEMENT 14, ITEM 72, THIS RATE WOULD BE DIVIDED 60 PERCENT AND 40 PERCENT TO THE RESPECTIVE CARRIERS; THE PROPORTION (60 PERCENT) ACCRUING TO THE ILLINOIS CENTRAL RAILWAY BEING SUBJECT TO DEDUCTION OF 49.132 PERCENT FOR LAND GRANT IN CONNECTION WITH GOVERNMENT TRAFFIC. ON THIS BASIS THE NET RATE WOULD BE 79.6885 CENTS PER 2,000 POUNDS AND THE CHARGE THEREAT FOR 468,300 POUNDS WOULD BE $186.59.

WAR DEPARTMENT (OFFICE OF THE QUARTERMASTER GENERAL) CIRCULAR NO. 3, FEBRUARY 6, 1935, SHOWS THAT THE ALTON RAILROAD AND BALTIMORE AND OHIO RAILROAD HAD ON FILE WITH THE QUARTERMASTER GENERAL OF THE ARMY AT THE TIME OF THESE SHIPMENTS FREIGHT LAND-GRANT EQUALIZATION AGREEMENTS---

* * * TO ACCEPT FOR THE TRANSPORTATION OF PROPERTY SHIPPED FOR ACCOUNT OF THE GOVERNMENT OF THE UNITED STATES AND FOR WHICH THE GOVERNMENT OF THE UNITED STATES IS LAWFULLY ENTITLED TO REDUCED RATES OVER LAND-GRANT ROADS, THE LOWEST NET RATES LAWFULLY AVAILABLE, AS DERIVED THROUGH DEDUCTIONS ACCOUNT OF LAND-GRANT DISTANCE FROM LAWFUL RATES FILED WITH THE INTERSTATE COMMERCE COMMISSION OR THE VARIOUS STATE COMMISSIONS APPLYING FROM POINT OF ORIGIN TO DESTINATION AT TIME OF MOVEMENT.

CONCERNING THE INTERPRETATION OF THESE AGREEMENTS IT APPEARS THAT SEVERAL YEARS PRIOR TO THESE SHIPMENTS THE TREASURY DEPARTMENT (PROCUREMENT DIVISION, FEDERAL TRAFFIC SECTION) ISSUED "TRAFFIC INFORMATION LETTER NO. 2" OF JULY 19, 1934, READING IN PART AS FOLLOWS:

* * * ONE OTHER POINT WHICH HAS BEEN RAISED FROM TIME TO TIME IS * * * WHETHER IN ROUTING VIA AN EQUALIZING ROUTE, IT IS NECESSARY TO USE ROUTES AUTHORIZED IN TARIFF NAMING THE COMMERCIAL RATE UPON WHICH IS BASED THE LOWEST LAND GRANT RATE. IT IS THE PRACTICE OF GOVERNMENT SHIPPING OFFICERS TO USE ROUTES AUTHORIZED BY TARIFF. HOWEVER, IF THROUGH OVERSIGHT OR OTHER REASON A SHIPMENT IS ROUTED VIA EQUALIZING CARRIERS BUT VIA A ROUTE NOT AUTHORIZED BY TARIFF AND CARRIERS ACCEPT AND MOVE THE SHIPMENT VIA THE ROUTE SPECIFIED WITHOUT PROTEST TO SHIPPER OR GOVERNMENT THEY WILL BE EXPECTED TO PROTECT THE LOWEST NET RATE AVAILABLE VIA ANY OTHER ROUTE SINCE THE AGREEMENTS TO EQUALIZE ARE NOT MADE CONTINGENT UPON FORWARDING SHIPMENTS VIA AUTHORIZED TARIFF ROUTES.

IN THIS CONNECTION THE TREASURY DEPARTMENT HAS REPORTED---

IN ANTICIPATION THAT MATTERS OF THIS KIND MIGHT ARISE, CIRCULAR LETTER DATED AUGUST 10, 1934, WAS ADDRESSED TO ALL LAND-GRANT EQUALIZATION CARRIERS. * * * IT IS A MATTER OF RECORD THAT THE INTERPRETATION PLACED UPON THE EQUALIZATION AGREEMENT WAS NOT CONTESTED BY ANY CARRIER. TO THE CONTRARY MANY CARRIERS VOLUNTARILY STATED THEIR CONCURRENCE ALTHOUGH ONLY ADVERSE COMMENT WAS SOLICITED.

THE CIRCULAR LETTER DATED AUGUST 10, 1934, IS ADDRESSED "TO CARRIERS' REPRESENTATIVES" AND READS AS FOLLOWS:

THERE ARE ENCLOSED THREE (3) COPIES OF FEDERAL TRAFFIC SECTION TRAFFIC INFORMATION LETTER NO. 2, IN WHICH THE VARIOUS PARAGRAPHS OF THE STANDARD FREIGHT LAND GRANT EQUALIZATION AGREEMENTS ARE COMMENTED UPON.

THE INTERPRETATION OF THE AGREEMENT FORM CONTAINED IN THIS CIRCULAR HAS BEEN CONCURRED IN BY THE OFFICE OF THE QUARTERMASTER GENERAL, U.S. ARMY, AND REPRESENTS THE CONSENSUS OF OPINION OF THE TRAFFIC AGENCIES OF THE GOVERNMENT. IF THE GOVERNMENT'S INTERPRETATION OF YOUR AGREEMENT DOES NOT MEET WITH THE FULL APPROVAL OF YOUR TRAFFIC OFFICIALS, IT WILL BE APPRECIATED IF THERE WILL BE BROUGHT TO THE ATTENTION OF THIS OFFICE ANY ADVERSE COMMENT SO THAT AN OPPORTUNITY MAY BE AFFORDED TO RECONCILE ANY DIFFERENCES OF OPINION WHICH MAY EXIST.

H. E. COLLINS,

ASSISTANT DIRECTOR OF PROCUREMENT.

PRESUMABLY THE CIRCULAR LETTER DATED AUGUST 10, 1934, AND THE INCLOSURES THEREWITH WERE CONSIDERED BY THE TRAFFIC OFFICIALS OF THE ALTON RAILROAD AND THE BALTIMORE AND OHIO RAILROAD CO., AND THE MATTER SET FORTH IN TRAFFIC INFORMATION LETTER NO. 2, INCLUDING THE EXCERPT THEREFROM QUOTED HEREIN, MET WITH THE "FULL APPROVAL" OF SUCH TRAFFIC OFFICIALS SINCE AS APPEARS FROM THE TREASURY DEPARTMENT'S REPORT "THE INTERPRETATION PLACED UPON THE EQUALIZATION AGREEMENT WAS NOT CONTESTED BY ANY CARRIER.'

THERE IS NOTHING HERE TO NEGATIVE THE ASSUMPTION THAT IN VIEW OF THE SITUATION SET FORTH HEREIN THE CARRIERS PERFORMING THE SERVICES HERE CONCERNED ARE AGREEABLE TO ACCEPTANCE OF THE AMOUNTS COMPUTED ON BASIS OF THE "LOWEST NET RATES LAWFULLY AVAILABLE, AS DERIVED THROUGH DEDUCTIONS ACCOUNT OF LAND-GRANT DISTANCE FROM LAWFUL RATES FILED WITH THE INTERSTATE COMMERCE COMMISSION OR THE VARIOUS STATE COMMISSIONS APPLYING FROM POINT OF ORIGIN TO DESTINATION AT TIME OF MOVEMENT" AND SETTLEMENT OF THE CLAIM PER BILL 22014 WILL BE MADE ACCORDINGLY.

IN ORDER TO AVOID MISUNDERSTANDING AND RESULTANT EXPLANATORY CORRESPONDENCE IN CONNECTION WITH SETTLEMENTS UPON BILLS SUBMITTED BY THE ASSISTANT COMPTROLLER, THE BALTIMORE AND OHIO RAILROAD O., INVOLVING SIMILAR SITUATIONS AS THEY MAY APPEAR, IT WILL BE APPRECIATED IF YOU WILL FURNISH AN AFFIRMATIVE STATEMENT FOR THE RECORDS OF THIS OFFICE TO BE CITED IN SUCH SETTLEMENTS TO THE EFFECT THAT ALLOWANCE IN ACCORDANCE WITH THE QUOTED EXCERPT FROM TRAFFIC INFORMATION LETTER NO. 2 IS FOR ACCEPTANCE AS BEING IN ACCORDANCE WITH THE TERMS OF THE FREIGHT LAND-GRANT EQUALIZATION AGREEMENT OF THIS CARRIER.