A-62459, MAY 29, 1935, 14 COMP. GEN. 863

A-62459: May 29, 1935

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THAT BASIS SHOULD BE APPLIED WHICH WILL RESULT IN THE LOWEST NET CHARGES. IT APPEARS THAT THE $1.13 RATE WAS PUBLISHED PURSUANT TO ORDER OF THE INTERSTATE COMMERCE COMMISSION IN DOCKET NO. 17000. THE LINES IN WESTERN TRUNK LINE TERRITORY APPARENTLY HAVE RETAINED ON WESTBOUND TRAFFIC THE FULL LOCAL RATE FROM THE INTERTERRITORIAL GATEWAY TO DESTINATION AND ON EASTBOUND TRAFFIC THE LINES IN OFFICIAL CLASSIFICATION TERRITORY HAVE FOLLOWED THE SAME PRACTICE. BECAUSE OF GRANTS OF LANDS TO VARIOUS CARRIERS IN RETURN FOR WHICH THE UNITED STATES IS ENTITLED TO HAVE ITS PROPERTY TRANSPORTED BY SUCH CARRIERS AT A REDUCED PERCENTAGE OF THE COMMERCIAL RATES. IT IS ESSENTIAL THAT SUCH CARRIERS' PORTION OF JOINT REVENUE BE KNOWN IN ORDER THAT THE CORRECT CHARGES FOR TRANSPORTATION MAY BE DETERMINED.

A-62459, MAY 29, 1935, 14 COMP. GEN. 863

TRANSPORTATION - RATES - DIVISIONS - LAND-GRANT DEDUCTION WHERE CARRIERS IN A GIVEN LAND-GRANT-AIDED ROUTE APPLY DIFFERENT AND CONFLICTING BASES FOR DIVISION OF COMMERCIAL RATES THERE OVER THE INTERESTS OF THE UNITED STATES DEMAND THAT AS BETWEEN SUCH BASES, THAT BASIS SHOULD BE APPLIED WHICH WILL RESULT IN THE LOWEST NET CHARGES.

DECISION BY COMPTROLLER GENERAL MCCARL, MAY 29, 1935:

THE MINNEAPOLIS AND ST. LOUIS RAILROAD CO. HAS REQUESTED REVIEW OF SETTLEMENT NO. T-93549, DATED MAY 14, 1934, WHICH DISALLOWED $8.80 UPON BILL NO. R-56777 FOR THE TRANSPORTATION OF 2 CARLOADS OF FREIGHT, AUTOMOBILES, 12,811 POUNDS, AND 8,434 POUNDS (SUBJECT TO A MINIMUM WEIGHT OF 10,000 POUNDS) FROM FLINT, MICH., TO OSKALOOSA, IOWA, UNDER BILL OF LADING NO. A-188711, JULY 24, 1933.

THE CARRIER CLAIMED $222.82 BEING THE CHARGE AT $1.13 (PLUS 2 CENTS "EMERGENCY RATE") PER 100 POUNDS LESS $39.50 DEDUCTED FOR LAND GRANT. THE SETTLEMENT ALLOWED $214.02 COMPUTED BY APPLYING THE $1.15 RATE AS OVER A LAND-GRANT-AIDED ROUTE COMPOSED IN PART OF THE PERE MARQUETTE RAILWAY AND DIVIDING THE RATE ON A BASIS WHICH WOULD ALLOW THAT CARRIER ITS LOCAL RATE OF 66 CENTS PER 100 POUNDS (LESS 31.527 PERCENTUM DEDUCTION FOR LAND GRANT) FROM FLINT, MICH., TO MILWAUKEE, WIS.

THE REQUEST FOR REVIEW CLAIMS THE DIFFERENCE OF $8.80 BETWEEN THE AMOUNT ALLOWED AND THE AMOUNT STATED ON BILL R-56777, THE LATTER AMOUNT APPARENTLY BEING COMPUTED BY DIVIDING THE THROUGH RATE ON A BASIS WHICH WOULD ALLOW CARRIERS WEST OF THE MISSISSIPPI RIVER THE RATE THENCE TO OSKALOOSA, THE REMAINDER OF THE THROUGH RATE BEING DIVIDED OVER CHICAGO AND THE SUM OF THE PROPORTIONS FROM CHICAGO TO THE MISSISSIPPI RIVER AND THENCE TO DESTINATION BEING DIVIDED OVER ACKLEY, IOWA.

IT APPEARS THAT THE $1.13 RATE WAS PUBLISHED PURSUANT TO ORDER OF THE INTERSTATE COMMERCE COMMISSION IN DOCKET NO. 17000, PART 2, (SEE 164 I.C.C. 1) PRESCRIBING THROUGH CLASS RATES BETWEEN POINTS IN OFFICIAL CLASSIFICATION TERRITORY AND POINTS IN WESTERN TRUNK LINE TERRITORY. THE INTERESTED CARRIERS COULD NOT REACH AN AGREEMENT AS TO THE DIVISION OF SUCH RATES AND DECEMBER 5, 1931, FILED WITH THE INTERSTATE COMMERCE COMMISSION A PETITION REQUESTING THAT AN INVESTIGATION BE INSTITUTED AND THE JUST, REASONABLE, AND EQUITABLE DIVISIONS CONTEMPLATED BY SECTION 15 (6) OF THE INTERSTATE COMMERCE ACT BE PRESCRIBED VIA ALL RECOGNIZED GATEWAYS ON INTERSTATE TRAFFIC MOVING BETWEEN POINTS IN OFFICIAL CLASSIFICATION TERRITORY, ON THE ONE HAND, AND POINTS IN WESTERN TRUNK LINE TERRITORY, ON THE OTHER. THE PETITION REQUESTED THAT THE COMMISSION'S DECISION, WHEN MADE, BE GIVEN RETROACTIVE EFFECT AS OF THE DATE OF THE FILING OF THE PETITION. PENDING SUCH DETERMINATION OF PERMANENT DIVISIONS, THE LINES IN WESTERN TRUNK LINE TERRITORY APPARENTLY HAVE RETAINED ON WESTBOUND TRAFFIC THE FULL LOCAL RATE FROM THE INTERTERRITORIAL GATEWAY TO DESTINATION AND ON EASTBOUND TRAFFIC THE LINES IN OFFICIAL CLASSIFICATION TERRITORY HAVE FOLLOWED THE SAME PRACTICE.

THE RESULT OF THESE BASES WOULD BE THAT ON UNITED STATES PROPERTY SHIPPED BETWEEN THE SAME POINTS, ONE IN OFFICIAL CLASSIFICATION TERRITORY, THE OTHER IN WESTERN TRUNK LINE TERRITORY, ALTHOUGH THE GROSS RATES AND CHARGES MIGHT BE THE SAME, THE NET RATES AND CHARGES WOULD BE DIFFERENT, DEPENDENT ON THE DIRECTION IN WHICH THE SHIPMENT MOVED, THE DIFFERENCE ARISING SOLELY BECAUSE OF THE CARRIERS' FAILURE TO AGREE UPON A MUTUALLY SATISFACTORY BASIS FOR DIVIDING THE RATES.

BECAUSE OF GRANTS OF LANDS TO VARIOUS CARRIERS IN RETURN FOR WHICH THE UNITED STATES IS ENTITLED TO HAVE ITS PROPERTY TRANSPORTED BY SUCH CARRIERS AT A REDUCED PERCENTAGE OF THE COMMERCIAL RATES, IT IS ESSENTIAL THAT SUCH CARRIERS' PORTION OF JOINT REVENUE BE KNOWN IN ORDER THAT THE CORRECT CHARGES FOR TRANSPORTATION MAY BE DETERMINED; THE REDUCTION IN THE CHARGES TO WHICH THE UNITED STATES IS ENTITLED WITH RESPECT TO SHIPMENTS OF ITS PROPERTY OVER THE LINES AIDED BY GRANTS OF LAND BEING DEPENDENT UPON THE AMOUNT ACCRUING AS COMMERCIAL CHARGES FOR THE HAUL OVER THE AIDED LINES.

THE SITUATION WHICH MAINTAINS IN THE PRESENT MATTER IS THAT WHILE THE GROSS RATES AND CHARGES ARE CAPABLE OF DEFINITE DETERMINATION, THE AMOUNT ACCRUING THEREFROM TO EACH OF THE LINES IN A GIVEN ROUTE, ONE OR MORE OF SUCH LINES HAVING BEEN LAND-AIDED, IS IN DISPUTE AS BETWEEN THE INTERESTED CARRIERS. IN SUCH A SITUATION THE INTERESTS OF THE UNITED STATES DEMAND THAT AS BETWEEN THE TWO BASES OF DIVISION FOR WHICH THE RESPECTIVE CARRIERS CONTEND, THAT BASIS SHOULD BE APPLIED WHICH WILL RESULT IN THE LOWEST NET CHARGES TO THE UNITED STATES. ACCORDINGLY, IN VIEW OF THE STATUS OF THE MATTER OF DIVISIONS OF THE RATES PRESCRIBED IN DOCKET NO. 17000, PART 2, THIS OFFICE HAS ADOPTED THE RULE THAT REGARDLESS OF WHETHER A SHIPMENT MOVES FROM OFFICIAL CLASSIFICATION TERRITORY TO WESTERN TRUNK LINE TERRITORY, OR VICE VERSA, THE BASIS TO BE APPLIED TO COMPUTE THE NET CHARGE IN EACH INSTANCE IS THE BASIS RESULTING IN THE LOWEST NET RATE OR RATES TO THE UNITED STATES. THAT IS TO SAY, IF DIVIDING THE THROUGH RATE BY ALLOWING THE LOCAL RATE BETWEEN THE INTERTERRITORIAL INTERCHANGE POINT AND THE WESTERN TRUNK LINE TERRITORY POINT AS THE WESTERN LINES' PROPORTION MAKES A LOWER NET RATE THAN WOULD BE OBTAINED BY ALLOWING THE LOCAL RATE BETWEEN THE INTERTERRITORIAL INTERCHANGE POINT AND THE OFFICIAL CLASSIFICATION TERRITORY POINT AS THE EASTERN LINES' PROPORTION, SUCH BASIS WILL BE APPLIED. CONVERSELY, IF DIVIDING THE THROUGH RATE BY ALLOWING THE EASTERN LINES THE LOCAL RATE BETWEEN THE INTERTERRITORIAL INTERCHANGE POINT AND THE OFFICIAL CLASSIFICATION TERRITORY POINT MAKES A LOWER NET RATE THAN WOULD BE OBTAINED BY ALLOWING THE WESTERN LINES THE LOCAL RATE BETWEEN THE INTERTERRITORIAL INTERCHANGE POINT AND THE POINT IN WESTERN TRUNK LINE TERRITORY SAID BASIS WILL BE APPLIED.

UPON REVIEW OF THIS SETTLEMENT IT APPEARS THAT AGENT JONES' TARIFF I.C.C. NO. 2462 NAMES THE RATE OF $1.13 (PLUS 2 CENTS "EMERGENCY RATE") PER 100 POUNDS, AS APPLICABLE FROM FLINT, MICH., TO OSKALOOSA, IOWA, AT THE TIME OF SHIPMENT, OVER THE PERE MARQUETTE RAILWAY TO MILWAUKEE, WIS.; CHICAGO AND NORTHWESTERN RAILWAY TO MARSHALLTOWN, IOWA; MINNEAPOLIS AND ST. LOUIS RAILROAD TO OSKALOOSA.

IN ACCORDANCE WITH THE RULE STATED HERETOFORE THE RATE WOULD BE DIVIDED BY ALLOWING THE PERE MARQUETTE RAILWAY ITS SECOND CLASS LOCAL RATE FROM FLINT TO MILWAUKEE (66 CENTS PER 100 POUNDS). THE REMAINDER WOULD BE DIVIDED OVER MARSHALLTOWN, IOWA, IN ACCORDANCE WITH MINNEAPOLIS AND ST. LOUIS PERCENTAGE SHEET NO. 90-A, THAT IS, BY ALLOWING THE CHICAGO AND NORTHWESTERN RAILWAY 67 PERCENT AND THE MINNEAPOLIS AND ST. LOUIS RAILROAD 33 PERCENT. ON THIS BASIS THE NET CHARGE WOULD BE COMPUTED AS FOLLOWS:

TABLE TO MILWAUKEE ----- $150.55 LESS 31.527 PERCENT LAND-GRANT

DEDUCTION ---------------------------- $103.09

MARSHALLTOWN -- 71.83 LESS 9.713 PERCENT LAND-GRANT

DEDUCTION ---------------------------- 64.85

OSKALOOSA ----- 35.38 NET ----------------------------- 35.38

EMERGENCY

CHARGE ------ 4.56 PAY 78.880 PERCENT -------------- 3.60

GROSS CHARGE -- 262.32 NET CHARGE ---------------------- 206.92

ALLOWED IN SETTLEMENT NO. T-93549 ----------------------- 214.02

DUE UNITED STATES ----------------------------------- 7.10

ACCORDINGLY, THE CARRIER SHOULD REMIT $7.10 WITHIN A REASONABLE TIME OR SUBMIT SATISFACTORY REASONS WHY AN EQUIVALENT DEDUCTION SHOULD NOT BE MADE FROM AN OPEN ACCOUNT.