A-78009, NOVEMBER 26, 1937, 17 COMP. GEN. 432

A-78009: Nov 26, 1937

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

WOULD HAVE BEEN ENTITLED TO CARLOAD NET LAND-GRANT CHARGES. NOTWITHSTANDING SUCH SHIPPERS ARE WITHOUT THE BENEFITS OF GOVERNMENT LAND-GRANT RATES. 1937: THERE IS FOR CONSIDERATION YOUR CLAIM FOR $5. IS INDICATED AS HAVING BEEN APPROXIMATELY 18. THERE WERE FOUR SHIPMENTS OF WELL-DRILLING MACHINERY. ARE SHOWN. ONE SHIPMENT WAS COMPRISED OF AIR COMPRESSORS. CHARGES WERE CLAIMED ON THE BASIS OF 18. CHARGES WERE ALLOWED ON THE BASIS OF A MINIMUM CARLOAD WEIGHT OF 24. WERE CLAIMED ON BILL I-272 ON THE BASIS OF GROSS CARLOAD RATES APPLIED TO THE MINIMUM CARLOAD WEIGHT OF 24. THE AMOUNTS SO CLAIMED WITH RESPECT TO THESE THREE SHIPMENTS WERE PAID BY WAR DEPARTMENT DISBURSING OFFICER E. CHARGES WERE CLAIMED ON THE WEIGHTS SHOWN ABOVE FOR THE RESPECTIVE SHIPMENTS AND AT RATES STATED APPARENTLY AS FOR LESS-THAN-CARLOAD NET LAND-GRANT RATES.

A-78009, NOVEMBER 26, 1937, 17 COMP. GEN. 432

TRANSPORTATION - FRIEGHT - OTHER THAN REGULAR RAILROAD FREIGHT SHIPMENTS - CARLOAD OR LESS-THAN-CARLOAD NET LAND-GRANT RATES GOVERNMENT SHIPMENTS VIA THE NATIONAL CARLOADING CORPORATION WHICH, HAD THEY BEEN MADE IN REGULAR RAILROAD FREIGHT SERVICE, WOULD HAVE BEEN ENTITLED TO CARLOAD NET LAND-GRANT CHARGES, MAY NOT BE PAID FOR AT LESS THAN-CARLOAD NET LAND-GRANT RATES WHERE THERE HAS BEEN NO SPECIFIC AGREEMENT FOR LESS-THAN-CARLOAD RATES, THE AGREEMENT OF THE CORPORATION TO "PROTECT LAND GRANT PERCENTAGES IN EFFECT" REASONABLY BEING FOR CONSTRUCTION AS A COMPETING WITH RAILROADS FOR GOVERNMENT BUSINESS AND AN OFFERING TO MEET CHARGES ORDINARILY AVAILABLE TO THE GOVERNMENT FOR TRANSPORTATION IN REGULAR FREIGHT SERVICE, PARTICULARLY WHERE THE COST OF SUCH SHIPMENTS, IF PAID FOR ON THE BASIS OF THE LESS-THAN-CARLOAD NET LAND -GRANT RATES CONTENDED FOR BY THE CORPORATION, WOULD BE GREATLY IN EXCESS OF THE COST OF SIMILAR SHIPMENTS BY COMMERCIAL SHIPPERS IN REGULAR RAILROAD FREIGHT SERVICE, NOTWITHSTANDING SUCH SHIPPERS ARE WITHOUT THE BENEFITS OF GOVERNMENT LAND-GRANT RATES.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE NATIONAL CARLOADING CORPORATION, NOVEMBER 26, 1937:

THERE IS FOR CONSIDERATION YOUR CLAIM FOR $5,141.28, IN ADDITION TO TOTAL CHARGES OF $9,744.03 HERETOFORE PAID, FOR THE TRANSPORTATION OF 24 SHIPMENTS OF MACHINERY AND EQUIPMENT FOR THE DIVISION OF GRAZING, DEPARTMENT OF THE INTERIOR, IN AUGUST AND SEPTEMBER 1935.

FIFTEEN OF THE SHIPMENTS CONSISTED OF CATERPILLAR TRACTORS, WITH TRAIL BUILDERS ATTACHED, ONE EACH, THE WEIGHT OF WHICH, WITH DUNNAGE, IS INDICATED AS HAVING BEEN APPROXIMATELY 18,095 POUNDS PER SHIPMENT. THERE WERE FOUR SHIPMENTS OF WELL-DRILLING MACHINERY, TOOLS, AND PARTS, THE WEIGHTS OF TWO OF THE SHIPMENTS BEING SHOWN AS 24,600 POUNDS, ONE AS 24,080 POUNDS, AND ONE AS 12,300 POUNDS. TWO SHIPMENTS OF LEANING-WHEEL GRADERS, WITH 10-INCH BLADE, ARE SHOWN, WITH WEIGHTS OF 19,500 POUNDS AND 20,000 POUNDS, RESPECTIVELY. ONE SHIPMENT WAS COMPRISED OF AIR COMPRESSORS, WEIGHT 11,090 POUNDS. OF THE 2 REMAINING SHIPMENTS, 1 CONSISTED OF 64 FRESNOS, 8 CUBIC-FOOT CAPACITY, WEIGHT 18,848 POUNDS, AND THE OTHER 64 FRESNOS AND 23 DRAG SCRAPERS, TOTAL WEIGHT 16,724 POUNDS.

WITH RESPECT TO 12 OF THE SHIPMENTS OF CATERPILLAR TRACTORS, WITH TRAIL BUILDERS ATTACHED, CHARGES WERE CLAIMED ON THE BASIS OF 18,095 POUNDS PER SHIPMENT AT RATES STATED APPARENTLY AS FOR LESS-THAN-CARLOAD NET LAND- GRANT RATES. IN SETTLEMENTS BY THIS OFFICE, CHARGES WERE ALLOWED ON THE BASIS OF A MINIMUM CARLOAD WEIGHT OF 24,000 POUNDS PER SHIPMENT AT NET LAND-GRANT CARLOAD RATES. CHARGES FOR THREE OF THE SHIPMENTS OF TRACTORS, WITH TRAIL BUILDERS, WERE CLAIMED ON BILL I-272 ON THE BASIS OF GROSS CARLOAD RATES APPLIED TO THE MINIMUM CARLOAD WEIGHT OF 24,000 POUNDS, THE CHARGES SO ACCRUING BEING REDUCED AS UNDER CLAIMANT'S 40-60 RULE. THE AMOUNTS SO CLAIMED WITH RESPECT TO THESE THREE SHIPMENTS WERE PAID BY WAR DEPARTMENT DISBURSING OFFICER E. C. MORTON ON VOUCHER 11627 OF HIS FEBRUARY 1936 ACCOUNTS. CONCERNING THE FOUR SHIPMENTS OF WELL-DRILLING MACHINES AND THE TWO SHIPMENTS OF LEANING-WHEEL GRADERS, CHARGES WERE CLAIMED ON THE WEIGHTS SHOWN ABOVE FOR THE RESPECTIVE SHIPMENTS AND AT RATES STATED APPARENTLY AS FOR LESS-THAN-CARLOAD NET LAND-GRANT RATES, EXCEPT THAT ON THE ONE SHIPMENT OF WELL-DRILLING MACHINES WITH AN INDICATED WEIGHT OF 24,080 POUNDS CHARGES WERE CLAIMED AS FOR 24,600 POUNDS AT AN APPARENT LESS-THAN-CARLOAD NET LAND-GRANT RATE. IN EACH INSTANCE THE CHARGES AS ALLOWED BY THIS OFFICE WERE COMPUTED ON THE BASIS OF THE INDICATED ACTUAL WEIGHT, OR THE MINIMUM CARLOAD WEIGHT IF GREATER THAN THE ACTUAL WEIGHT, AND AT CARLOAD NET LAND-GRANT RATES. FOR THE SHIPMENT OF AIR COMPRESSORS AND THE SHIPMENT OF FRESNOS AND DRAG SCRAPERS THE CHARGES WERE ALLOWED ON THE BASIS OF THE INDICATED ACTUAL WEIGHTS SHOWN ABOVE, THE DIFFERENCE BETWEEN THE CHARGES CLAIMED AND THE CHARGES ALLOWED BEING DUE ONLY TO THE DIFFERENCE IN THE LESS-THAN CARLOAD NET RATES USED. WITH RESPECT TO THE REMAINING SHIPMENT OF FRESNOS, THE CHARGES WERE ALLOWED ON THE BASIS OF THE INDICATED ACTUAL WEIGHT AND IN THE EXACT AMOUNT CLAIMED. THE PRESENT CLAIM FOR AN ADDITIONAL AMOUNT AS TO THIS SHIPMENT IS BASED APPARENTLY ON THE USE OF A SLIGHTLY HIGHER NET LAND-GRANT RATE, THE BASIS FOR WHICH IS NOT SHOWN. THE FOLLOWING TABULATION SHOWS IN DETAIL THE FACTS OF RECORD WITH RESPECT TO THE AMOUNTS ORIGINALLY CLAIMED, THE AMOUNTS PAID, AND THE ADDITIONAL AMOUNTS NOW CLAIMED CONCERNING EACH SHIPMENT.

CHART

TRACTORS AND TRAIL BUILDERS

BILL NO. B/L NO. AMOUNT SETTLEMENT ON AMOUNT ADDITIONAL

CLAIMED VOUCHER NO. PAID AMOUNT

NOW

CLAIMED

I-258 I-487120 $620.98 T-105311 $427.78 $193.20

I-258 I-487107 669.06 T-105311 423.19 245.87

I-258 I-487119 564.82 T-105311 364.32 200.50

I-254 I-487122 645.09 T-105310 427.78 217.31

I-254 I-487123 420.38 T-105310 376.32 44.06

I-270 I-487121 687.05 T-105312 457.85 229.20

I-270 I-487117 377.28 T-105312 272.68 104.60

I-270 I-487114 530.42 T-105312 336.20 194.22

I-274-BI-487113 527.11 T-105313 341.98 185.13

I-304 I-487108 566.50 T-105316 319.23 247.27

G-330 I-487118 478.88 T-105317 278.75 200.13

I-272 I-487110 420.36 VOUCHER 11627 420.36 371.30

I-272 I-487109 416.04 VOUCHER 11627 416.04 400.04

I-272 I-487111 401.53 VOUCHER 11627 401.53 378.36

G-1256 I-487112 551.49 T-109780 336.02 215.47

WELL-DRILLING MACHINES

I-254 I-487369 $928.67 T-105310 $611.46 $317.21

G-354-A I-487367 955.37 T-105319 400.00400.00

I-302-A I-487373 657.26 T-105315 399.55 45.71

G-330 I-487360 1,170.96 T-105317 641.79 399.59

LEANING-WHEEL GRADERS

G-700-A I-481627 $670.41 T-105345 $549.00 $121.41

G-771 I-481636 757.54 T-107191 460.99 296.55

FRESNOS

I-214-A I-487448 $427.08 T-105309 $410.08 $17.00

G-458-A I-487416 300.39 T-105344 300.39 56.70

AIR COMPRESSORS

G-1001-A I-484548 $431.19 T-105346 $370.74 $60.45

IN CONNECTION WITH THE CLAIM FOR THE ADDITIONAL AMOUNTS SHOWN ABOVE, YOU STATE:

WE ARE ENCLOSING OUR CLAIM C-3186 IN THE AMOUNT OF $5,141.28 REPRESENTING OVERCHARGE DUE THIS COMPANY DUE TO ARBITRARY CUT DOWNS ON BILLS RENDERED ON SHIPMENTS MOVING ON BEHALF OF THE DIVISION OF GRAZING, THE BILLS IN QUESTION BEING REDUCED BY YOUR GENERAL ACCOUNTING DEPARTMENT TO THE BASIS OF THE PROTECTION OF THE RAILROAD CARLOAD RATES LESS LAND GRANTS WHEREAS IT IS OUR CONTENTION THAT THE LEGAL BASIS IS THE RAILROAD LESS-THAN- CARLOAD RATE LESS LAND GRANTS HOLDING AS A MAXIMUM THE NATIONAL CARLOADING CONCESSION RATES THAT WERE IN EFFECT ON DATE THESE SHIPMENTS MOVED.

THE RECORD IN CONNECTION WITH THE INSTANT MATTER SHOWS THAT ON JANUARY 9, 1935, THE PROCUREMENT DIVISION, TREASURY DEPARTMENT, INFORMED THE NATIONAL CARLOADING CORPORATION THAT INASMUCH AS THE TARIFFS OF SAID CORPORATION ON FILE WITH THE PROCUREMENT DIVISION INDICATED THAT THE RATES THEREIN WERE SUBJECT TO CHANGE WITHOUT NOTICE THE PROCUREMENT DIVISION WAS UNABLE TO CONSIDER THE SERVICES OF THE NATIONAL CARLOADING CORPORATION IN THE ROUTING OF GOVERNMENT TRAFFIC; THAT IF THE NATIONAL CARLOADING CORPORATION WAS INTERESTED IN GOVERNMENT TRAFFIC IT COULD COMPLY WITH REQUIREMENTS BY AUTHORIZING BY LETTER THE APPLICATION OF NATIONAL CARLOADING CORPORATION RATES ON TRAFFIC MOVING ON GOVERNMENT BILL OF LADING WITH A RESTRICTION TO THE EFFECT THAT SUCH RATES WOULD BE SUBJECT TO CHANGE ON 30 DAYS' NOTICE; AND THAT UNDER THESE CONDITIONS CONSIDERATION WOULD BE GIVEN THE NATIONAL CARLOADING CORPORATION IN THE DISTRIBUTION OF FUTURE TRAFFIC. IT IS INDICATED THAT THE NATIONAL CARLOADING CORPORATION BY LETTER OF JANUARY 14, 1935, INFORMED THE PROCUREMENT DIVISION THAT IN NO CASE WOULD IT INCREASE ITS RATES ON GOVERNMENT MATERIAL ON LESS THAN 30 DAYS' NOTICE OF SUCH INCREASE TO THE PROCUREMENT DIVISION. THE MATTER APPEARS TO HAVE BEEN THE SUBJECT OF FURTHER CORRESPONDENCE WITH THE RESULT THAT UNDER DATE OF FEBRUARY 16, 1935, THE PROCUREMENT DIVISION ISSUED TRAFFIC INFORMATION LETTER NO. 14 ADDRESSED TO TRAFFIC REPRESENTATIVES OF ALL DEPARTMENTS AND ESTABLISHMENTS OF THE GOVERNMENT, STATING THAT IT HAD RECEIVED A LETTER FROM THE NATIONAL CARLOADING CORPORATION, DATED JANUARY 29, 1935, QUOTED THEREIN AS FOLLOWS:

EFFECTIVE IMMEDIATELY, THIS COMPANY WILL HANDLE SHIPMENTS MOVING ON GOVERNMENT BILLS OF LADING, AND PROTECT LAND-GRANT PERCENTAGES IN EFFECT AS FOLLOWS:

1. TO SAN FRANCISCO, OAKLAND, AND LOS ANGELES FROM ALL POINTS IN TRUNK LINE, NEW ENGLAND, AND CENTRAL FREIGHT ASSOCIATION TERRITORIES ON ARTICLES CLASSIFYING 1ST AND 2D CLASS LCL THAT ARE ELIGIBLE FOR LOADING IN OUR PACIFIC COAST CARS.

2. BETWEEN POINTS IN CENTRAL FREIGHT ASSOCIATION, TRUNK LINE, AND NEW ENGLAND TERRITORIES ON CLASSES OF FREIGHT FOR WHICH NATIONAL RATES ARE PROVIDED IN OUR TARIFFS.

IN ADDITION TO THE ABOVE, WE ARE OF COURSE IN POSITION TO HANDLE ALL SHIPMENTS CONSIGNED TO BRANCHES OF THE FEDERAL GOVERNMENT MOVING ON COMMERCIAL BILLS OF LADING, WHERE SUCH SHIPMENTS ARE FULLY PREPAID BY THE SHIPPER. THE ONLY RESTRICTIONS BEING THESE CONTAINED IN OUR TARIFFS COVERING GENERAL MERCHANDISE.

I HOPE YOU WILL FIND IT CONSISTENT TO FAVOR US WITH A SUBSTANTIAL PART OF THE BUSINESS CONTROLLED THROUGH YOUR OFFICE.

FOLLOWING THE QUOTATION OF THE ABOVE LETTER FROM THE NATIONAL CARLOADING CORPORATION, THE TRAFFIC LETTER CONTAINED THE FOLLOWING STATEMENT:

TO DETERMINE JUST WHAT LAND-GRANT PERCENTAGES THE FORWARDING COMPANY WOULD PROTECT, THIS OFFICE REQUESTED ADDITIONAL INFORMATION AND IS INFORMED THAT LAND-GRANT PERCENTAGES ORDINARILY AVAILABLE FROM PUBLISHED RAIL RATES BETWEEN THE POINTS REFERRED TO IN THEIR LETTER OF JANUARY 29, WOULD BE PROTECTED.

PRIOR TO THE MOVEMENTS HERE CONCERNED, MR. W. B. FRY, PURCHASING OFFICER, DEPARTMENT OF THE INTERIOR, WROTE THE NATIONAL CARLOADING CORPORATION, BY LETTER OF JULY 11, 1935, AS FOLLOWS:

WE ARE LISTING BELOW SHIPPING POINTS AS WELL AS DELIVERY POINTS, QUANTITIES AND SHIPPING WEIGHTS OF VARIOUS ITEMS OF EQUIPMENT FOR THE DIVISION OF GRAZING, SHIPPING INSTRUCTIONS FOR WHICH WILL BE ISSUED BY THIS OFFICE IN THE NEAR FUTURE:

CHART

QUANTITY DESCRIPTION F.O.B. DELIVERY SHIPPING DESTINATION

POINT WEIGHT

PER UNIT

POUNDS

2 WELL RIG MACHINE AKRON, OHIO 12,000 CEDAR CITY,

UTAH

1 TRACTOR TRAIL BUILDER PEORIA, ILL. 18,094 DO.

2 GRADER AURORA, ILL. 9,623 DO.

IT IS REQUESTED THAT YOU ADVISE THIS OFFICE AT THE EARLIEST DATE AS TO WHETHER YOU WILL BE IN A POSITION TO HANDLE THESE SHIPMENTS. PLEASE BEAR IN MIND THAT IT MAY BE NECESSARY FOR YOU TO STORE THE SHIPMENTS AT THE DESTINATIONS, INASMUCH AS IT IS QUITE POSSIBLE THAT THE DIVISION OF GRAZING WILL NOT HAVE A REPRESENTATIVE AVAILABLE TO RECEIVE THE SHIPMENTS AT THE DESTINATIONS INDICATED.

THE FOREGOING LETTER LISTED, IN ADDITION TO THE ARTICLES NOTED ABOVE 9 TRACTORS WITH TRAIL BUILDERS, WEIGHT 18,094 POUNDS EACH, AS FOR TRANSPORTATION FROM PEORIA, ILL.; 15 WELL RIG MACHINES, WEIGHT 12,000 POUNDS EACH, FROM AKRON, OHIO; AND 15 GRADERS, WEIGHT 9,623 POUNDS EACH, FROM AURORA, ILL., THE DESTINATIONS BEING SHOWN AS POINTS IN NEVADA, ARIZONA, UTAH, AND COLORADO. LISTED ALSO AS FOR TRANSPORTATION TO VARIOUS DESTINATIONS WERE 17 ROTARY SCRAPERS, WEIGHT 2,700 POUNDS EACH, FROM LOS ANGELES, CALIF.; 18 AIR COMPRESSORS, WEIGHT 5,700 POUNDS EACH, FROM MILWAUKEE, WIS.; NUMEROUS FRESNOS AND SCRAPERS, WITH INDICATED WEIGHTS OF APPROXIMATELY 6,500 POUNDS TO EACH DESTINATION (APPROXIMATELY 13,000 POUNDS TO EACH OF TWO DESTINATIONS) FROM SIDNEY, OHIO, AND 43 CONCRETE MIXERS, WEIGHT 3,000 POUNDS EACH, FROM WATERLOO, IOWA.

THE RECORD DOES NOT SHOW THAT ANY WRITTEN REPLY WAS MADE TO THE ABOVE LETTER. THE CLAIMANT STATES THAT---

ON JULY 20TH, 1935, OUR MR. MOORE AT BALTIMORE TELEPHONED MR. HARRISON, CHIEF CLERK GRAZING DIVISION, THAT WE WOULD UNDERTAKE TO HANDLE THE MOVEMENT OF FREIGHT REFERRED TO IN MR. FRY'S LETTER OF JULY 11TH AND ARRANGE FOR THE SPECIAL HANDLING, STORAGE, ETC., AS DESIRED BY MR. FRY ON THE BASIS OF THE L.C.L. RATES, LESS LAND-GRANT DEDUCTIONS.

AS CONFIRMATION OF THIS TELEPHONE CONVERSATION, WE OFFER COPY OF LETTER TO MR. FRY, WRITTEN BY MR. MOORE ON APRIL 9, 1936, REFERRING TO HIS CONVERSATION. * * *

THE LETTER OF APRIL 9, 1936, REFERRED TO ABOVE, IS AS FOLLOWS:

REFERENCE IS MADE TO CONVERSATIONS REGARDING BILLS RENDERED BY THIS COMPANY COVERING SHIPMENTS HANDLED FOR ACCOUNT OF THE GRAZING DIVISION.

YOUR LETTER OF JULY 11TH, OUTLINING THE VARIOUS MOVEMENTS IN QUESTION WAS ACKNOWLEDGED BY TELEPHONE CONVERSATION WITH MR. HARRISON, AND LATER IN PERSONAL CONFERENCE.

YOU WILL RECALL THAT WE WERE BEING PRESSED FOR AN ANSWER AS TO WHETHER OR NOT WE COULD HANDLE THE POINTS OF DESTINATION INVOLVED, WHICH WERE NOT PUBLISHED IN NATIONAL CARLOADING CORPORATION TARIFFS, AND ALSO AS TO WHETHER OR NOT WE COULD PERFORM THE SPECIAL SERVICE REQUESTED IN THE MATTER OF STORING SHIPMENTS AT DESTINATION, COMMUNICATING WITH CONSIGNEES, ETC. AFTER TELEPHONE CONVERSATION WITH OUR NEW YORK OFFICE WE ADVISED MR. HARRISON BY TELEPHONE THAT WE WOULD UNDERTAKE TO HANDLE THE MOVEMENT AS INSTRUCTED.

IT IS MY UNDERSTANDING, THAT THE ONLY CONTENTION NOW WITH REGARD TO PAYMENT OF THESE BILLS IS THAT THE FINANCE OFFICE OF THE WAR DEPARTMENT IS ENDEAVORING TO REDUCE OUR CHARGES ON A FEW OF THESE BILLS TO THE CARLOAD BASIS, WHEREAS, THIS COMPANY DOES NOT PUBLISH CARLOAD RATES, NOR DO WE SOLICIT CARLOAD BUSINESS. THIS IS FULLY COVERED BY OUR ADVICE, AND TARIFFS ON FILE WITH ALL DEPARTMENTS. ATTACHED IS TRAFFIC INFORMATION LETTER NO. 14, ISSUED BY MR. COLLINS, FEDERAL TRAFFIC SECTION, AND COPY OF OUR TARIFF G-1,000 EFFECTIVE FEBRUARY 1ST, 1935.

YOU WILL NOTE THAT BOTH TARIFF AND INFORMATION LETTER MAKES IT PERFECTLY CLEAR THAT OUR MEDIUM OF TRANSPORTATION IS STRICTLY A LESS THAN-CARLOAD AGENCY.

OBVIOUSLY, WE COULD NOT PROTECT RAILROAD RATES LESS LAND GRANT DEDUCTIONS, AND THEN PAY THE RAIL LINES THE STRAIGHT CARLOAD COMMERCIAL RATE.

FURTHERMORE, THE SPECIAL INSTRUCTIONS CONTAINED IN THE BILLS OF LADING WITH REGARD TO STORING, COMMUNICATIONS, AND SPECIAL HANDLING INCIDENT THERETO, CERTAINLY TAKES THE MOVEMENT OUT OF THE CATEGORY OF CARLOAD SHIPMENTS.

THE INTERIOR DEPARTMENT HAS USED OUR SERVICE AND STORAGE FACILITIES EXTENSIVELY, IN THE HANDLING OF SHIPMENTS FOR THE HOUSING DIVISION, AND ALL CONCERNED ARE FAMILIAR WITH THE FACT THAT OUR MEDIUM PUBLISHES AND SOLICITS ONLY LESS THAN CARLOAD TRAFFIC.

THERE WERE PICK-UPS, LOADING, UNLOADING, STORAGE, AND DELIVERY SERVICES INVOLVED IN THIS MOVEMENT, WHICH IS NOT ACCORDED CARLOAD SHIPMENTS.

I HOPE, THEREFORE, YOU WILL TRANSMIT OUR BILLS WHICH WERE LEFT WITH YOUR DEPARTMENT TO THE FINANCE OFFICE OF THE WAR DEPARTMENT, WITH THE REQUEST THAT THESE BILLS BE APPROVED FOR PAYMENT ON THE BASIS OF THE LESS THAN CARLOAD RATE, LESS LAND-GRANT DEDUCTIONS, WHERE AVAILABLE.

I WILL APPRECIATE YOUR PROMPT HANDLING OF THESE BILLS, AS YOU WILL NOTE THEY HAVE BEEN OUTSTANDING FOR A CONSIDERABLE LENGTH OF TIME.

IT SEEMS NOTEWORTHY THAT THE ABOVE LETTER, THOUGH REFERRING TO ACKNOWLEDGMENT OF THE LETTER OF JULY 11 "BY TELEPHONE CONVERSATION WITH MR. HARRISON" CONTAINS NO DEFINITE STATEMENT THAT IN SAID CONVERSATION IT WAS SPECIFICALLY STIPULATED THAT THE HANDLING OF THE TRAFFIC CONCERNED WOULD BE UNDERTAKEN ONLY ON THE BASIS OF PAYMENT THEREFOR AT NET LAND- GRANT LESS-THAN-CARLOAD RAILROAD RATES. ON THE CONTRARY THE ABOVE LETTER, WHICH WAS WRITTEN APPROXIMATELY 7 MONTHS AFTER THE SERVICE HERE CONCERNED HAD BEEN PERFORMED AND AFTER PAYMENT HAD BEEN MADE IN FEBRUARY 1936 OF ITS BILL I-272, WHICH HAD CLAIMED CHARGES FOR THREE OF THE SHIPMENTS OF TRACTORS WITH TRAIL BUILDERS ON THE BASIS OF NORMAL CARLOAD RATES APPLIED TO THE MINIMUM CARLOAD WEIGHT OF 24,000 POUNDS THE CHARGES SO ACCRUING BEING REDUCED AS UNDER CLAIMANT'S 40-60 RULE, APPEARS TO BE MORE IN THE NATURE OF A PLEA OR ARGUMENT SETTING FORTH WHAT WAS URGED AS REASONS WHY THE CHARGES SHOULD BE COMPUTED ON THE BASIS OF LESS-THAN-CARLOAD RATES, LESS LAND-GRANT DEDUCTIONS, THAN A STATEMENT OF MY EXPLICIT PRIOR AGREEMENT THAT CHARGES WERE TO BE PAID ON SAID BASIS.

THE LETTER OF APRIL 9, 1936, WAS TRANSMITTED TO THE CHIEF OF FINANCE, UNITED STATES ARMY, BY MR. FRY WITH LETTER OF APRIL 17, 1936, WHICH STATED:

THERE ARE RETURNED TO YOU THE FOLLOWING FREIGHT BILLS OF THE NATIONAL CARLOADING CORPORATION: G-330, I-246-A, I-258, G-354-A, I-254, G-456, I- 270, I-274-B, I-214-A, I-304, I-290, G-458-A, G-1001-A, I-302 A, G-700-A. THERE ARE ALSO ENCLOSED COPY OF OFFICE LETTER TO THE NATIONAL CARLOADING CORPORATION DATED JULY 11, 1935, EXPLAINING THE SERVICE WANTED, AND COPY OF A LETTER DATED APRIL 9, FROM THE NATIONAL CARLOADING CORPORATION IN EXPLANATION OF THEIR POSITION ON THIS MOVEMENT.

THIS OFFICE HAS BEEN REQUESTED BY THE DIVISION OF GRAZING TO INFORM YOUR OFFICE OF ANY VERBAL AGREEMENT ENTERED INTO WITH THE NATIONAL CARLOADING CORPORATION REGARDING THE TRANSPORTATION OF THESE AND OTHER SIMILAR SHIPMENTS.

WHEN THE PURCHASE OF THIS MACHINERY AND MATERIAL WAS DECIDED UPON THE NECESSITY OF HAVING IT AT OR NEAR THE VARIOUS DESTINATIONS BEFORE THE ARRIVAL OF THE FIELD FORCE WAS OF UTMOST IMPORTANCE SO THAT THE PERSONNEL SENT TO THE FIELD WOULD NOT BE OBLIGED TO WAIT FOR EQUIPMENT. THE NATIONAL CARLOADING CORPORATION AGREED TO TRANSPORT THIS EQUIPMENT AND HOLD IT IN STORAGE AT OR NEAR DESTINATION UNTIL DELIVERY WAS REQUESTED BY THE FIELD OFFICERS, WHO WERE ADVISED OF THIS ARRANGEMENT. NO AGREEMENT WAS CONTEMPLATED OR MADE WHICH HAD IN MIND RATES LOWER THAN THOSE CARRIED IN THE PUBLISHED TARIFFS OF THE NATIONAL CARLOADING CORPORATION. THE NATIONAL CARLOADING CORPORATION OFFERED A SERVICE THAT APPEARED TO BE BETTER SUITED TO THIS MOVEMENT THAN ANY OTHER METHOD BECAUSE THERE WERE PICK-UPS, LOADINGS, UNLOADINGS, STORAGE, AND DELIVERY IN THESE MOVEMENTS WHICH ARE NOT ACCORDED TO CARLOAD SHIPMENTS.

IT IS OBVIOUS THEY COULD NOT PROTECT THE RAILROAD RATES LESS LAND GRANT DEDUCTIONS AND THEN PAY THE RAIL LINES THE FULL CARLOAD COMMERCIAL RATE. IT IS SUGGESTED THAT THE BILLS BE PAID ON THE BASIS OF RATES PUBLISHED IN THE NATIONAL CARLOADING CORPORATION'S TARIFFS LESS ANY LAND GRANT AVAILABLE BETWEEN POINTS OF ORIGIN AND DESTINATION.

IT WILL BE OBSERVED THAT ACCORDING TO THIS LETTER, THOUGH REQUEST HAD BEEN MADE FOR INFORMATION CONCERNING "ANY VERBAL AGREEMENT ENTERED INTO WITH THE NATIONAL CARLOADING CORPORATION REGARDING THE TRANSPORTATION OF THESE AND OTHER SIMILAR SHIPMENTS," THE ONLY STATEMENT APPEARING THEREIN RELATIVE TO ANY AGREEMENT WAS THAT "NO AGREEMENT WAS CONTEMPLATED OR MADE WHICH HAD IN MIND RATES LOWER THAN THOSE CARRIED IN THE PUBLISHED TARIFFS OF THE NATIONAL CARLOADING CORPORATION.' THIS STATEMENT DOES NOT ESTABLISH OR CONFIRM ANY AGREEMENT THAT PAYMENT SHOULD BE MADE ONLY ON THE BASIS OF LESS-THAN CARLOAD NET LAND-GRANT RATES, AS NOW URGED BY THE CLAIMANT. IT IS TO BE NOTED, ALSO, THAT THE LETTER OF APRIL 9, 1936, FROM THE CLAIMANT HAD REFERRED TO THE DESTINATIONS INVOLVED AS BEING "NOT PUBLISHED IN NATIONAL CARLOADING TARIFFS.'

IN REFERENCE TO THE MATTER OF RATES "CARRIED IN THE PUBLISHED TARIFFS OF THE NATIONAL CARLOADING CORPORATION," REFERRED TO ABOVE, YOU STATE THAT AS A CONSEQUENCE OF A LETTER DATED SEPTEMBER 3, 1935, FROM THE TRANSPORTATION SECTION OF THIS OFFICE, REQUESTING AUTHORITY FOR THE RATES CLAIMED WITH RESPECT TO CERTAIN SHIPMENTS, APPARENTLY NOT DIRECTLY INVOLVED IN THE SETTLEMENTS HERE UNDER CONSIDERATION AND CONCERNING WHICH THE TARIFFS OF THE NATIONAL CARLOADING CORPORATION ON FILE IN THIS OFFICE DID NOT QUOTE RATES, THE MATTER WAS TAKEN UP WITH MR. HAYGHE, CHIEF, FEDERAL TRAFFIC SECTION, WITH THE RESULT THAT A TARIFF TO COVER THE SITUATION WAS ISSUED OCTOBER 15, 1935. SAID TARIFF CAPTIONED FREIGHT TARIFF NO. G-1000 CONTAINING FREIGHT RATES ON GOVERNMENT BUSINESS (SUBJECT TO CHANGE ON 30 DAYS' NOTICE) TO AND FROM ALL POINTS IN THE UNITED STATES, PROVIDES:

ITEM 1. ON LESS THAN CARLOAD SHIPMENTS OF GOVERNMENT PROPERTY, ON WHICH TRANSPORTATION CHARGES ARE PAYABLE AND BORNE BY THE UNITED STATES GOVERNMENT, RECEIVED FOR TRANSPORTATION BY THE NATIONAL CARLOADING CORPORATION, THE PUBLISHED RATES OF THE NATIONAL CARLOADING CORPORATION OR THE LOWEST LESS THAN CARLOAD ALL RAIL RATE, LESS LAND GRANT DEDUCTIONS, IF ANY, WHICHEVER ARE LOWER, WILL BE ACCEPTED AS THE BASIS FOR TRANSPORTATION CHARGES.

ITEM 2. WHERE POINT OF ORIGIN AND/OR DESTINATION IS NOT LISTED IN CURRENT NATIONAL CARLOADING CORPORATION TARIFFS THE LOWEST NET ALL RAIL LESS THAN CARLOAD RATES WILL BE ASSESSED.

ITEM 3. WHERE POINT OF ORIGIN AND/OR DESIGNATION IS LISTED IN NATIONAL CARLOADING CORPORATION TARIFFS, TERMINAL RULES, REGULATIONS AND CHARGES PUBLISHED BY THE NATIONAL CARLOADING CORPORATION WILL APPLY.

ITEM 4. RAIL RATES REFERRED TO IN THIS TARIFF WILL BE SUBJECT TO TARIFFS OF EMERGENCY CHARGES ON FILE WITH THE INTERSTATE COMMERCE COMMISSION, AND NATIONAL CARLOADING CORPORATION RATES WILL BE SUBJECT TO THE FORWARDER'S EMERGENCY CHARGE TARIFFS 100 AND 101.

THE TARIFF SHOWS DATE OF ISSUE AS OCTOBER 15, 1935, FOLLOWED BY THE WORDS "RETROACTIVE TO: FEB. 1ST. 1935.'

IT IS NOT UNDERSTOOD HOW THIS SO-CALLED TARIFF ISSUED IN OCTOBER 1935, OR AFTER THE SHIPMENTS HERE CONCERNED HAD BEEN TRANSPORTED, COULD BE GIVEN RETROACTIVE EFFECT SO AS TO SUPPLY A BASIS OF SETTLEMENT IN DEROGATION OF THE RIGHTS OF THE UNITED STATES OTHERWISE. ASIDE FROM THIS FACT, HOWEVER, IT IS TO BE NOTED THAT THIS TARIFF HAS APPLICATION, ACCORDING TO ITS OWN TERMS,"ON LESS-THAN CARLOAD SHIPMENTS OF GOVERNMENT PROPERTY.' THE WEIGHTS OF THE SHIPMENTS ON WHICH THIS OFFICE APPLIED CARLOAD RATES WERE SUCH THAT THE CHARGES ON THE BASIS OF SHIPMENT AS CARLOADS WOULD BE LESS THAN ON THE BASIS OF SHIPMENT AS IN LESS-THAN-CARLOAD LOTS. THE LETTER OF JULY 11, 1935, SHOWED THE ESTIMATED WEIGHTS OF THE CONTEMPLATED SHIPMENTS AND DID NOT SPECIFY THAT SHIPMENT WAS TO BE MADE IN LESS-THAN-CARLOAD LOTS.

WITH RESPECT TO THE MATTER OF SPECIAL SERVICES ON THE PART OF THE NATIONAL CARLOADING CORPORATION, SAID TO HAVE BEEN INVOLVED IN CONNECTION WITH THESE SHIPMENTS, IT IS NOTED THAT EACH BILL OF LADING BEARS A NOTATION ADDRESSED TO THE NATIONAL CARLOADING CORPORATION TO THE SAME EFFECT AS THAT APPEARING ON BILL OF LADING I-487119, AS FOLLOWS:

PLEASE REQUEST MR. RYAN (THE CONSIGNEE NAMED IN THE BILL OF LADING) TO ADVISE YOU IF THERE WILL BE A GOVERNMENT REPRESENTATIVE AT MONTROSE, COLORADO (THE NAMED DESTINATION), TO RECEIVE THE TRACTOR. IF NOT, IT IS UNDERSTOOD YOU WILL UNLOAD AND STORE THE TRACTOR UNTIL ADVISED BY MR. RYAN TO DELIVER.

IT WILL BE OBSERVED THAT APPARENTLY THE ONLY SPECIAL SERVICE CONTEMPLATED BY THE FOREGOING WAS THAT OF UNLOADING AND STORING THE SHIPMENT AT DESTINATION IN EVENT THE CONSIGNEE NAMED IN THE BILL OF LADING SHOULD NOT BE THERE TO RECEIVE IT. THE ABOVE BILL OF LADING SHOWS THAT THE SHIPMENT IN QUESTION WAS ACCEPTED AT PEORIA, ILL., FOR TRANSPORTATION AUGUST 8, 1935, AND WAS DELIVERED AT MONTROSE, COLO., AUGUST 15, 1935, THE CONSIGNEE'S CERTIFICATE OF DELIVERY BEING ACCOMPLISHED TO SHOW RECEIPT BY "A. D. RYAN BY RICH R. THOMSON" DIRECTLY FROM THE DENVER AND RIO GRANDE WESTERN RAILROAD ON THAT DATE. OBVIOUSLY THERE COULD NOT HAVE BEEN ANY UNUSUAL STORAGE SERVICE AT DESTINATION UNDER THIS BILL OF LADING. EXAMINATION OF THE OTHER BILLS OF LADING LIKEWISE FAILS TO INDICATE THE PROBABILITY OF ANY EXTENDED STORAGE AT DESTINATION. MOREOVER, THE BILLS OF LADING COVERING THE SHIPMENTS OF TRACTORS WITH TRAIL BUILDERS SHOW THAT SAID ARTICLES WERE PURCHASED UNDER A CONTRACT CALLING FOR DELIVERY F.O.B. PEORIA; THE WELL-DRILLING MACHINES UNDER A CONTRACT CALLING FOR DELIVERY F.O.B. AKRON, OHIO; AND THE LEADING WHEEL GRADERS UNDER A CONTRACT CALLING FOR DELIVERY F.O.B. AURORA, ILL. IT WOULD APPEAR, THEREFORE, THAT UNDER THE TERMS OF THE CONTRACTS FOR THE PURCHASE OF THESE ARTICLES THE CONTRACTORS FROM WHOM THEY WERE PURCHASED WERE UNDER OBLIGATION TO LOAD THE ARTICLES AT THE POINT OF SHIPMENT. IT IS NOT APPARENT, THEREFORE, THAT THERE WAS ANY NECESSITY FOR SPECIAL SERVICE BY THE NATIONAL CARLOADING CORPORATION IN CONNECTION WITH THE LOADING OF THESE SHIPMENTS.

EVEN IF THERE WAS ANY SPECIAL SERVICE INVOLVED IN CONNECTION WITH THESE LARGE SHIPMENTS, HOWEVER, THERE IS NOTHING TO ESTABLISH THAT THERE WAS ANY AGREEMENT TO PAY THEREFOR ON THE BASIS OF NET LAND-GRANT LESS-THAN-CARLOAD RATES. CERTAINLY IN THE ABSENCE OF ANY AGREEMENT TO THAT EFFECT IT CANNOT BE ASSUMED THAT THE PURCHASING OFFICER INTENDED SAID BASIS FOR APPLICATION WITH RESPECT TO THE SHIPMENTS OF TRACTORS, WELL RIG MACHINES AND GRADERS, OR THAT HE WOULD HAVE AGREED TO SUCH BASIS IF IT HAD BEEN SUGGESTED BY THE CLAIMANT. IN THIS CONNECTION IT IS WORTHY OF NOTE THAT WITH RESPECT TO THE 21 SHIPMENTS OF THESE ARTICLES THE TOTAL OF THE CHARGES ON THE BASIS OF WHICH THE PRESENT CLAIM IS MADE EXCEEDS BY APPROXIMATELY $3,500 THE TOTAL GROSS CHARGES, EXCLUSIVE OF DEDUCTION FOR LAND GRANT, THAT WOULD HAVE BEEN APPLICABLE HAD THESE SHIPMENTS BEEN MADE IN REGULAR FREIGHT SERVICE AS CARLOADS, ENTITLING EACH SHIPMENT TO THE EXCLUSIVE USE OF A CAR. THAT IS TO SAY, A COMMERCIAL SHIPPER COULD HAVE OBTAINED TRANSPORTATION OF THESE 21 SHIPMENTS AS CARLOADS IN REGULAR FREIGHT SERVICE FOR APPROXIMATELY $3,500 LESS THAN WHAT IS NOW URGED AS THE PROPER TOTAL CHARGE ON THE BASIS OF NET LAND-GRANT LESS-THAN-CARLOAD RATES. WHEN CONSIDERATION IS GIVEN THE FACT THAT THE GOVERNMENT COULD HAVE OBTAINED THE SAME TRANSPORTATION AS CARLOADS IN REGULAR FREIGHT SERVICE AT A LOWER CHARGE THAN AVAILABLE TO COMMERCIAL SHIPPERS, DUE TO THE APPLICATION OF LAND GRANT, THE DISPARITY BETWEEN THE CHARGES AS CLAIMED AND THE CHARGES OTHERWISE AVAILABLE IS ONLY AUGMENTED. THAT THE APPLICATION OF ANY SUCH BASIS WAS INTENDED ON THE PART OF THOSE RESPONSIBLE FOR ENGAGING THE SERVICE SEEMS INCREDIBLE.

THE LETTER OF JANUARY 29, 1935, FROM THE NATIONAL CARLOADING CORPORATION TO THE FEDERAL TRAFFIC SECTION, PROCUREMENT DIVISION, HAD STATED THAT WITH RESPECT TO THE TRAFFIC COVERED THEREBY THE NATIONAL CARLOADING CORPORATION WOULD "PROTECT LAND-GRANT PERCENTAGES IN EFFECT," AND THIS WAS REPORTED BY THE PROCUREMENT DIVISION AS MEANING THAT "LAND-GRANT PERCENTAGES ORDINARILY AVAILABLE FROM PUBLISHED RAIL RATES BETWEEN THE POINTS REFERRED TO IN THEIR LETTER OF JANUARY 29 WOULD BE PROTECTED.' IT WOULD SEEM CLEAR THAT THE PURPOSE OF THE FOREGOING WAS TO COMPETE WITH THE RAILROADS AS TO THE TRAFFIC COVERED BY THE LETTER OF JANUARY 29, 1935, AND THAT ACCORDINGLY THE CLAIMANT WOULD MEET, AS TO SUCH TRAFFIC, THE CHARGES ORDINARILY AVAILABLE TO THE GOVERNMENT FOR TRANSPORTATION IN REGULAR RAILROAD-FREIGHT SERVICE. WHEN, THEREFORE, THE NATIONAL CARLOADING CORPORATION WAS INFORMED THAT SPECIFIC SHIPMENTS WERE CONTEMPLATED WHICH ORDINARILY WOULD MOVE AT CARLOAD CHARGES RATHER THAN AT LESS-THAN-CARLOAD CHARGES IT WOULD APPEAR TO HAVE BEEN UNDER THE NECESSITY OF INFORMING THE INQUIRING GOVERNMENT OFFICIALS THAT IT COULD NOT TRANSPORT THESE SHIPMENTS AT CHARGES ORDINARILY AVAILABLE TO THE GOVERNMENT FOR TRANSPORTATION IN REGULAR FREIGHT SERVICE, IF SUCH WAS IN FACT ITS PURPOSE AND INTENTION. IT IS NOT ESTABLISHED THAT THE PROSPECTIVE SHIPPERS WERE SO INFORMED. ACCORDINGLY, THE CLAIM FOR THE BALANCES NOW ASSERTED TO BE DUE ON THE BASIS OF THE DIFFERENCE BETWEEN CHARGES AT LESS-THAN-CARLOAD NET LAND- GRANT RATES AND CHARGES AT CARLOAD NET LAND-GRANT RATES MUST BE AND IS DISALLOWED. (SEE ALSO IN THIS CONNECTION 27 COMP. DEC. 1043 IN WHICH A SOMEWHAT SIMILAR SITUATION WAS INVOLVED.)