A-69793, APRIL 10, 1936, 15 COMP. GEN. 890

A-69793: Apr 10, 1936

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AIR-MAIL TRANSPORTATION - MILEAGE AND LOAD RATE ADJUSTMENTS WHERE IN CONNECTION WITH AIR MAIL TRANSPORT SERVICE THE NUMBER OF AIR- MILES FLOWN IS LESS THAN THE NUMBER SHOWN IN INTERSTATE COMMERCE COMMISSION ORDER OF MARCH 11. THE MAIL LOADS CARRIED ARE IN EXCESS OF THE POUNDAGE DESIGNATED IN SAID ORDER. THE INCREASE IN RATE BECAUSE OF THE DECREASE IN AIR-MILES FLOWN IS FOR ADDITION TO THE BASE RATE BEFORE COMPUTING THE PERCENTAGE OF THE RATE ALLOWED FOR EXCESS POUNDAGE. THE CARRIER INSISTS THAT THE METHOD OF COMPUTATION USED IN THE VARIOUS SETTLEMENTS IS INCORRECT. AS THE SAME QUESTION IS INVOLVED IN EACH OF THE SETTLEMENTS. THAT COVERING THE MONTH OF JUNE 1935 WILL BE USED AS AN EXAMPLE.

A-69793, APRIL 10, 1936, 15 COMP. GEN. 890

AIR-MAIL TRANSPORTATION - MILEAGE AND LOAD RATE ADJUSTMENTS WHERE IN CONNECTION WITH AIR MAIL TRANSPORT SERVICE THE NUMBER OF AIR- MILES FLOWN IS LESS THAN THE NUMBER SHOWN IN INTERSTATE COMMERCE COMMISSION ORDER OF MARCH 11, 1935, AS THE MILEAGE BASE FOR A PARTICULAR ROUTE, THUS JUSTIFYING AN ADDITION TO THE BASE RATE OF COMPENSATION PER AIRPLANE-MILE SHOWN THEREIN, AND THE MAIL LOADS CARRIED ARE IN EXCESS OF THE POUNDAGE DESIGNATED IN SAID ORDER, THE INCREASE IN RATE BECAUSE OF THE DECREASE IN AIR-MILES FLOWN IS FOR ADDITION TO THE BASE RATE BEFORE COMPUTING THE PERCENTAGE OF THE RATE ALLOWED FOR EXCESS POUNDAGE.

DECISION BY COMPTROLLER GENERAL MCCARL, APRIL 10, 1936:

REVIEW HAS BEEN REQUESTED BY THE TRANS-CONTINENTAL AND WESTERN AIR, INC., OF THE SETTLEMENTS BY THIS OFFICE FOR AIR MAIL TRANSPORT SERVICE SINCE MARCH 1, 1935, ON ROUTE A.M. 2. THE CARRIER INSISTS THAT THE METHOD OF COMPUTATION USED IN THE VARIOUS SETTLEMENTS IS INCORRECT, AND AS THE SAME QUESTION IS INVOLVED IN EACH OF THE SETTLEMENTS, THAT COVERING THE MONTH OF JUNE 1935 WILL BE USED AS AN EXAMPLE.

THE BASE RATE AS SHOWN IN THE I.C.C. ORDER OF MARCH 11, 1935, AIR MAIL DOCKET NO. 1, IS 24 CENTS. THE ACCOUNT SHOWS AN EXCESS OF 52 POUNDS OVER THE 300 POUNDS PER MILE AND A TOTAL MILEAGE OF 461,026 MILES. THE MILEAGE BASE STATED IN THE ORDER OF MARCH 11, 1935, IS 600,000. THEREFORE, AS ONLY 461,026 MILES ARE CONSIDERED AS PAY MILES, THE DIFFERENCE BETWEEN THE BASE OF 600,000 MILES AND 461,026 MILES EQUALS 138,974 MILES WHICH CONSTITUTED A DECREASE OF TWO STEPS IN THE NUMBER OF AIRPLANE-MILES ACTUALLY FLOWN, ENTITLING THE SUBCONTRACTOR TO AN ADDITIONAL 2 CENTS PER MILE ON THE NUMBER OF AIR MILES FLOWN. IN COMPUTING THE RESULT THE SETTLEMENT ADDED THE 10 PERCENT FOR EXCESS POUNDAGE TO THE 24-CENT BASE PAY, GIVING 26.4 CENTS, TO WHICH WAS THEN ADDED THE 2 CENTS FOR THE REDUCTION IN MILEAGE, MAKING 28.4 PER MILE, WHICH MULTIPLIED BY THE NUMBER OF MILES FLOWN TOTALED $130,931.38.

SECTION 3 (A) OF THE AIR MAIL ACT OF JUNE 12, 1934, 48 STAT. 934, FIXES THE MAXIMUM BASE RATE FOR AIR-MAIL SERVICE AT 33 1/3 CENTS PER MILE "FOR TRANSPORTING A MAIL LOAD NOT EXCEEDING 300 POUNDS" AND PROVIDES FOR AN INCREASE IN THE ESTABLISHED BASE RATE FOR EACH ADDITIONAL 100 POUNDS OR FRACTION THEREOF OVER 300. SECTION 6 (A) OF THAT ACT, 48 STAT. 935, AUTHORIZES THE INTERSTATE COMMERCE COMMISSION TO FIX REASONABLE RATES OF COMPENSATION FOR AIR-MAIL SERVICE "WHICH SHALL CONTINUE IN FORCE UNTIL CHANGED BY THE SAID COMMISSION AFTER DUE NOTICE AND HEARING.' PURSUANT TO THE AUTHORITY SO CONFERRED, THE INTERSTATE COMMERCE COMMISSION BY AIR MAIL DOCKET NO. 1 PROMULGATED THE ORDER OF MARCH 11, 1935, PROVIDING AS FOLLOWS:

(THE BASE NAMED FOR EACH ROUTE SHALL BE USED ONLY FOR THE MILEAGE NAMED FOR THAT BASE AND SHALL BE (1) PROGRESSIVELY DECREASED 1 CENT UPON EACH INCREASE IN THE NUMBER OF AIRPLANE MILES ACTUALLY FLOWN WITH MAIL EACH MONTH WHICH EQUALS 10 PERCENT OF THE MILEAGE NAMED FOR THAT BASE, AND (2) PROGRESSIVELY INCREASED 1 CENT UPON EACH DECREASE IN THE NUMBER OF AIRPLANE MILES ACTUALLY FLOWN WITH MAIL EACH MONTH WHICH EQUALS 10 PERCENT OF THE MILEAGE NAMED FOR THAT BASE; PROVIDED, THAT WHERE THE MILEAGE NAMED IN THE TABLE IS SUBSTANTIALLY THE MONTHLY EQUIVALENT OF ONE DAILY ROUND TRIP OVER THE ENTIRE ROUTE, THE BASE NAMED FOR THAT MILEAGE SHALL NOT BE DECREASED UNTIL THE MILES ACTUALLY FLOWN WITH MAIL EACH MONTH EQUAL 180 PERCENT OF THE MILEAGE NAMED, BUT SHALL THEREAFTER BE DECREASED, AS HEREIN PROVIDED, UPON EACH FURTHER INCREASE OF 10 PERCENT IN THE MILEAGE NAMED: PROVIDED, FURTHER, THAT IN NO EVENT SHALL THE RATE FOR ANY ROUTE BE GREATER OR LESS THAN THE BASE NAMED FOR THAT ROUTE BY MORE THAN 5 CENTS.)

CHART

MILEAGE (NUMBER OF

BASE PER AIRPLANE-MILES

ROUTE NO. AIRPLANE- ACTUALLY FLOWN WITH

MILE MAIL EACH MONTH)

CENTS MILES

1 --------------------------- 31 500,000

2 --------------------------- 24 600,000

AND IT IS FURTHER ORDERED, THAT RATES DETERMINED IN ACCORDANCE WITH THE TABLE IN THE LAST PRECEDING PARAGRAPH HEREOF SHALL IN NO EVENT EXCEED THE MAXIMUM RATES PROVIDED BY THE ACT, AND SHALL BE SUBJECT TO THE INCREASES PROVIDED BY THE ACT FOR MAIL LOADS IN EXCESS OF 300 POUNDS.

IT WILL BE NOTED THAT THE FOREGOING ORDER PROVIDES THAT THE RATES "DETERMINED IN ACCORDANCE WITH THE TABLE IN THE LAST PRECEDING PARAGRAPH HEREOF * * * SHALL BE SUBJECT TO THE INCREASES PROVIDED BY THE ACT FOR MAIL LOADS IN EXCESS OF 300 POUNDS.' THE ORDER DOES NOT PROVIDE THAT THE RATES STATED IN THE TABLE SHALL BE SUBJECT TO INCREASE FOR MAIL LOADS IN EXCESS OF 300 POUNDS. ACCORDINGLY, THE BASE RATE OF 24 CENTS FOR 600,000 MAIL-MILES MUST FIRST BE ADJUSTED TO THE MILEAGE FLOWN IN ACCORDANCE WITH THE FORMULA PRESCRIBED IN THE ABOVE ORDER, THAT IS, BY THE ADDITION OF 2 CENTS PER MILE IN THIS PARTICULAR CASE, WHICH ADJUSTED RATE BECOMES THE BASIC RATE FOR A MAIL LOAD NOT EXCEEDING 300 POUNDS, AND WHEN AN ADDITIONAL LOAD IS CARRIED THE PERCENTAGE INCREASE IS FOR COMPUTATION UPON THE ADJUSTED BASIC RATE AND NOT UPON THE RATE STATED IN THE TABLE.

ACCORDINGLY, THE SETTLEMENTS IN WHICH THE PERCENTAGE INCREASE FOR EXCESSIVE LOADS WAS APPLIED TO THE RATE STATED IN THE TABLE RATHER THAN THE ADJUSTED RATE WILL BE RECOMPUTED AND SUCH ADDITIONAL AMOUNTS ALLOWED AS RESULT THEREFROM. UPON REVIEW, THE RESPECTIVE SETTLEMENTS ARE MODIFIED IN ACCORDANCE WITH THE FOREGOING.