A-99135, NOVEMBER 10, 1938, 18 COMP. GEN. 439

A-99135: Nov 10, 1938

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ARE FOR COMPUTATION UNDER THE APPLICABLE PROVISIONS OF TRANS CONTINENTAL FREIGHT BUREAU DIVISION CIRCULAR NO. 42-C. " FROM WHICH PROPORTION THERE IS FOR DEDUCTION THE TERMINAL ALLOWANCE AND THE MAINE CENTRAL RAILROAD ARBITRARY. THERE BEING NO REQUIREMENT THAT THE ARBITRARY BE BORNE BY LINES WEST OF MANITOWOC AS CONTENDED BY THE CARRIER BUT EVERY INDICATION THAT SUCH BURDEN WAS TO BE BORNE BY THE EASTERN CARRIERS. THIS CLAIM IS COMPUTED IN PART ON BASIS OF DIVISION OF THE 72-CENT RATE WHICH WOULD ALLOW AS PROPORTION EAST OF MANITOWOC 27 1/2 PERCENT OF 90 CENTS (24.8 CENTS) FROM WHICH WOULD BE DEDUCTED 1.5 CENTS TERMINAL AND FROM THE REMAINDER FOR THE LAND GRANT VIA THE ROUTE THROUGH SUSPENSION BRIDGE.

A-99135, NOVEMBER 10, 1938, 18 COMP. GEN. 439

TRANSPORTATION - RATES - DIVISIONS - "ARBITRARY" LIABILITY - TRANSCONTINENTAL SHIPMENTS TRANSPORTATION CHARGES PAYABLE TO THE MAINE CENTRAL RAILROAD CO. AS PROPORTION EAST OF MANITOWOC, WIS., IN CONNECTION WITH SHIPMENTS OF FIR LUMBER TO EASTPORT, MAINE, DURING JANUARY, FEBRUARY, AND MARCH, 1936, ARE FOR COMPUTATION UNDER THE APPLICABLE PROVISIONS OF TRANS CONTINENTAL FREIGHT BUREAU DIVISION CIRCULAR NO. 42-C,"ISSUED IN COMPLIANCE WITH ORDERS OF THE INTERSTATE COMMERCE COMMISSION IN DOCKET NO. 11756 OF MARCH 28, 1922, AND NO. 11756 OF JUNE 14, 1927," FROM WHICH PROPORTION THERE IS FOR DEDUCTION THE TERMINAL ALLOWANCE AND THE MAINE CENTRAL RAILROAD ARBITRARY, WITH DEDUCTION FROM THE REMAINDER FOR LAND GRANT VIA THE ROUTE THROUGH SUSPENSION BRIDGE, N.Y., THERE BEING NO REQUIREMENT THAT THE ARBITRARY BE BORNE BY LINES WEST OF MANITOWOC AS CONTENDED BY THE CARRIER BUT EVERY INDICATION THAT SUCH BURDEN WAS TO BE BORNE BY THE EASTERN CARRIERS.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE MAINE CENTRAL RAILROAD CO., NOVEMBER 10, 1938:

YOUR LETTER DATED SEPTEMBER 23, 1938 (AF MISC.-4-GOVT.) PERTAINS TO CLAIMS OF THE MAINE CENTRAL RAILROAD CO. FOR TRANSPORTATION OF FIR LUMBER FROM VARIOUS POINTS IN THE STATES OF OREGON AND WASHINGTON TO EASTPORT, MAINE, DURING JANUARY, FEBRUARY, AND MARCH 1936, THE APPLICABLE COMMERCIAL RATE IN EACH INSTANCE BEING 72 CENTS PER 100 POUNDS UNDER THE PROVISIONS OF TRANS-CONTINENTAL FREIGHT BUREAU TARIFF NO. 17-N, ISSUED BY H. G. TOLL UNDER I.C.C.NO. 1340.

THE CARRIER PRESENTED 53 BILLS IN TOTAL AMOUNT OF $21,663.68 FOR THIS SERVICE COMPUTED IN PART BY DIVIDING THE 72-CENT RATE ON BASIS WHEREBY THERE WOULD ACCRUE AS PROPORTION EAST OF MANITOWOC, WIS., 10 CENTS "MAINE CENTRAL ARBY.' PLUS 27 1/2 PERCENT OF 90 CENTS (24.75 CENTS) OR A TOTAL OF 34.75 CENTS. FROM THE 24.75-CENT FACTOR THE CARRIER DEDUCTED 1.5 CENT TERMINAL AND FROM THE REMAINDER 15.465 PERCENT OF 38 PERCENT FOR LAND GRANT VIA ROUTE THROUGH SUSPENSION BRIDGE, N. Y.

SETTLEMENT T-109118 DATED JANUARY 22, 1937, ALLOWED $20,038.93 FOR THE SERVICE COMPUTED IN PART ON BASIS OF ALLOWING AS PROPORTION EASTOF MANITOWOC "27 1/2 PERCENT OF 90 CENTS OR 24.8 CENTS; " DEDUCTING THEREFROM "ME.CENT.ARB. OF 10 CENTS AND 1 1/2 CENTS TERM.; " AND FROM THE REMAINDER (13.3 CENTS) MADE THE DEDUCTION OF 15.465 PERCENT OF 38 PERCENT FOR LAND GRANT VIA THE ROUTE THROUGH SUSPENSION BRIDGE.

THE CARRIER CLAIMS $1,424.68 ADDITIONAL STATED AS BEING THE DIFFERENCE BETWEEN TOTAL PAYMENT AS OF $20,043.91 AND CHARGES IN TOTAL AMOUNT OF $21,468.54 SET FORTH ON 53 SUPPLEMENTAL BILLS. THIS CLAIM IS COMPUTED IN PART ON BASIS OF DIVISION OF THE 72-CENT RATE WHICH WOULD ALLOW AS PROPORTION EAST OF MANITOWOC 27 1/2 PERCENT OF 90 CENTS (24.8 CENTS) FROM WHICH WOULD BE DEDUCTED 1.5 CENTS TERMINAL AND FROM THE REMAINDER FOR THE LAND GRANT VIA THE ROUTE THROUGH SUSPENSION BRIDGE; PLUS 8.5 CENTS "MAINE CENTRAL ARBY.' WHICH WOULD BE DEDUCTED FROM THE PROPORTION (47.2 CENTS; 72 CENTS LESS 24.8 CENTS) WEST OF MANITOWOC. THE CARRIER URGES---

THE MAINE CENTRAL RAILROAD COMPANY ARBITRARY OF 8 1/2 CENTS, NOT 10 CENTS AS QUOTED IN B. T. JONES I.C.C. 2486 AND IS CHARGEABLE TOLINES WEST OF MANITOWOC, LINES EAST BEING ENTITLED TO EARNINGS BASED ON 27 1/2 PERCENT OF 90 CENTS LESS L.G. TO SUSPENSION BRIDGE, THE MAINE CENTRAL RAILROAD COMPANY IS ALSO ENTITLED TO ARBITRARY OF 8 1/2 CENTS AUTHORITY AS QUOTED ABOVE. THE FOLLOWING EXPLAINS THE SITUATION:

"WHEN T.C.F.B. RATES WERE FIRST PUBLISHED TO ALL POINTS IN MAINE THEY WERE MADE TO COVER ALL POINTS IN ARBITRARY TERRITORY OUTSIDE OF POINTS COMMON TO BOSTON AND PORTLAND WITHOUT THE CONSENT OF THE TERMINAL CARRIERS INVOLVED, CONSEQUENTLY IT BECAME NECESSARY TO DEDUCT THE EARNINGS EAST OF SUCH COMMON POINTS OUT OF THE PROPORTION DUE THE WESTERN CARRIERS.

"FORMERLY SUCH RATES DIVIDED IN ACCORDANCE WITH T.C.F.B. CIRCULARS 41B AND 42A BY ALLOWING LINES EAST OF CHICAGO 25 PERCENT TO POINTS COMMON TO BOSTON OR PORTLAND, AND TO POINTS NOT COMMON THERETO, THE PUBLISHED ARBITRARIES IN ADDITION WERE ALLOWED AS OUTLINED IN ITEMS 20 AND 21 OF CIRCULAR 41B AND ITEMS 8 AND 9 OF CIRCULAR 42A.

"THE INCREASE OF 27 1/2 PERCENT EAST OF CHICAGO REFLECTED THE AGREEMENT BETWEEN THE CARRIERS IN CONNECTION WITH THE NEW ENGLAND LINES 15 PERCENT CASE UNDER I.C.C. DOCKET 11756 AND DID NOT ALTER THE STATUS OF THE CASE AS STATED ABOVE.

"CURRENT DIVISION SHEETS IN THE 42 AND 62 SERIES DO NOT REFLECT THIS ARBITRARY AND HAVE NOT BEEN ACCEPTED BY OUR TRAFFIC DEPARTMENT INSOFAR AS THEY APPLY TO THIS ARBITRARY TERRITORY.

"I UNDERSTAND THAT MEETINGS HAVE BEEN HELD BY VARIOUS FREIGHT ASSOCIATIONS TO CONSIDER THIS SUBJECT BUT ACCORDING TO THE LATEST ADVICES FROM B. AND M. TRAFFIC DEPARTMENT NO DEFINITE BASIS HAS BEEN AGREED UPON AND I AM INSTRUCTED TO CONTINUE BASING MY SETTLEMENT AS OUTLINED HEREIN.'

"T.C.F.B. CIRCULAR 41B" DOES NOT APPEAR TO BE PERTINENT HERE AND THE CIRCULAR NUMBERED 42A WAS CANCELED BY TRANS-CONTINENTAL FREIGHT BUREAU DIVISION CIRCULAR NO. 42-B ISSUED OCTOBER 2, 1926.

IT DOES NOT APPEAR "WHEN T.C.F.B. RATES WERE FIRST PUBLISHED TO ALL POINTS IN MAINE" BUT PRESUMABLY IT WAS PRIOR TO OCTOBER 2, 1926. SO FAR AS FREIGHT TARIFF NO. 17-N (ISSUED SEPTEMBER 15, 1934) AND RATES NAMED THEREIN ARE CONCERNED THERE IS NOTHING TO INDICATE THAT SUCH RATES WHEN TO POINTS "IN ARBITRARY TERRITORY" WERE PUBLISHED OTHER THAN WITH THE FULL CONSENT OF THE MAINE CENTRAL RAILROAD CO. SEE IN THIS CONNECTION TARIFF PAGES A-7, 45 (ITEM 1), 75 (ITEM 40), 115 (ITEM 88), 155 (RATE BASIS NOS. 1 AND 2) ETC.

CENTRAL FREIGHT ASSOCIATION TARIFF BUREAU, FREIGHT TARIFF NO. 470, ISSUED BY B. T. JONES UNDER I.C.C. NO. 2486, NAMES "BASES FOR RATES" TO POINTS IN VARIOUS STATES INCLUDING MAINE AND PROVIDES FOR APPLICATION TO EASTPORT, MAINE, OF SAME RATES AS TO ROCKLAND, MAINE,"PLUS ARBITRARIES SHOWN IN NOTE 32.' UNDER THE PROVISIONS OF NOTE 32 AN ARBITRARY OF 10 CENTS PER 100 POUNDS (TARIFF SUPPLEMENT 25 EXCEPT AS PROVIDED IN TARIFF SUPPLEMENT 53) WOULD BE FOR ADDITION TO THE ROCKLAND RATE ON "LUMBER, COMMON" BUT THE NOTE DID NOT PROVIDE FOR ADDITION OF ANY ARBITRARY ON SHIPMENTS (AS HERE) OF "LUMBER, NATIVE WOOD * * * EXCEEDING 1/16-INCH IN THICKNESS; " AND IN ANY EVENT TARIFF NO. 470 IS APPLICABLE---

* * * ONLY IN CONNECTION WITH TARIFFS OF INITIAL CARRIERS, PARTIES HERETO, PUBLISHING RATES TO BASING POINTS (ROCKLAND) SHOWN IN TARIFF, AS AMENDED, AND IN WHICH REFERENCE IS GIVEN TO THIS ISSUE AS CONTAINING LIST OF POINTS TAKING SUCH BASING POINT RATES OR ARBITRARIES HIGHER.

TARIFF NO. 17-N NAMES THE 72-CENT RATE AS BEING APPLICABLE TO ALL POINTS IN MAINE EXCEPT "TO OR VIA POINTS ON THE BANGOR AND AROOSTOCK R.R.' AND DOES NOT REFER TO TARIFF NO. 470. ACCORDINGLY IT APPEARS THAT THE PROVISIONS OF THE LATTER TARIFF NEITHER SUPPORT THE CLAIMED ARBITRARY NOR ARE PERTINENT HERE.

THE QUESTION OF DIVISIONS OF JOINT FREIGHT RATES "BETWEEN POINTS IN NEW ENGLAND * * * (ON LINES OF THE MAINE CENTRAL RAILROAD) AND ALL OTHER POINTS IN THE UNITED STATES" WAS CONSIDERED BY THE INTERSTATE COMMERCE COMMISSION IN NEW ENGLAND DIVISIONS (DOCKET NO. 11756), 66 I.C.C. 196, DECIDED JANUARY 30, 1922, AND THE FINDING WAS---

* * * THAT THE DIVISIONS * * * WILL FOR THE FUTURE BE UNJUST, UNREASONABLE, AND INEQUITABLE TO THE EXTENT THAT COMPLAINANTS' (MAINE CENTRAL RAILROAD COMPANY ET AL.) DIVISIONS * * * SHALL BE LESS THAN 115 PERCENT OF THEIR PRESENT DIVISIONS, EXCEPT IN CASES WHERE THEIR PRESENT DIVISIONS ARE GREATER THAN THE DIVISIONS ACCRUING TO DEFENDANTS (CARRIERS GENERALLY OTHER THAN NEW ENGLAND CARRIERS), IN WHICH CASES THE AFORESAID DIVISIONS WILL FOR THE FUTURE BE UNJUST, UNREASONABLE, AND INEQUITABLE TO THE EXTENT THAT COMPLAINANTS' DIVISIONS SHALL BE LESS THAN THEIR PRESENT DIVISIONS PLUS 15 PERCENT OF THE DIVISIONS NOW ACCRUING TO DEFENDANTS.

IN THIS CONNECTION THE INTERSTATE COMMERCE COMMISSION ISSUED ITS AMENDED ORDER OF MARCH 28, 1922---

THAT OF THE JOINT CLASS RATES AND OF THE JOINT COMMODITY RATES WHICH ARE DIVIDED ON THE SAME BASES AS ARE APPLIED TO SAID JOINT CLASS RATES * * * BETWEEN POINTS ON DEFENDANTS' LINES, * * * AND POINTS ON COMPLAINANTS' LINES * * *, COMPLAINANTS SHALL RECEIVE, ON AND AFTER APRIL 1, 1922, * * * NOT LESS THAN 115 PERCENT OF THEIR PRESENT DIVISIONS, EXCEPT IN CASES WHERE THEIR PRESENT DIVISIONS * * * ARE GREATER THAN THE DIVISIONS NOW ACCRUING TO DEFENDANTS * * *, IN WHICH CASES COMPLAINANTS SHALL RECEIVE * * * DIVISIONS WHICH SHALL BE NOT LESS THAN:

(1) * * * THEIR PRESENT DIVISIONS PLUS 15 PERCENT OF THE PRESENT DIVISIONS ACCRUING TO SUCH DEFENDANTS.

IN NEW ENGLAND DIVISIONS, 85 I.C.C. 482, DECIDED JANUARY 5, 1924, THE INTERSTATE COMMERCE COMMISSION UPON PETITION FILED BY MANY OF THE DEFENDANT CARRIERS FOR INTERPRETATION OF THE TERM ,PRESENT DIVISIONS" SAID:

A CARRIER'S DIVISION OF A JOINT RATE IS THE SHARE OF THE JOINT RATE, OR OF THE REVENUE ACCRUING UNDER THE RATE, WHICH IT RECEIVES FOR PERFORMING A PART OF THE SERVICE COVERED BY THE RATE. * * * HENCE, THE TOTAL AMOUNT OF REVENUE ACCRUING TO ALL COMPLAINANTS COMBINED AS THEIR SHARE OF A GIVEN JOINT RATE, AFTER TAKING INTO ACCOUNT ALL ARBITRARIES, ALLOWANCES, AND OTHER ADDITIONS OR DEDUCTIONS, MUST BE CONSIDERED IN DETERMINING WHETHER COMPLAINANTS' DIVISIONS "ARE GREATER THAN THE DIVISIONS NOW ACCRUING TO DEFENDANTS" FOR THE PURPOSE OF DECIDING WHETHER THE 15 PERCENT BY WHICH THE DIVISIONS WERE CHANGED SHALL BE COMPUTED UPON THE DEFENDANTS' SHARE OR UPON COMPLAINANTS' SHARE.

THE PERCENTAGE CHANGES PRESCRIBED BY THE ORDER APPLY TO AMOUNTS INCLUDING TERMINAL ALLOWANCES AND ARBITRARIES DEDUCTED BEFORE PRORATING, FOR THE REASONS GIVEN * * *.

IT APPEARS THEREFORE THAT THE 15 PERCENT INCREASE REFERRED TO BY THE CARRIER HERE WAS BASED UPON THE ENTIRE PORTION (INCLUDING TERMINAL ALLOWANCE AND ARBITRARY) RECEIVED BY THE NEW ENGLAND CARRIERS OUT OF A GIVEN JOINT RATE; AND CONCERNING THE QUESTION AS TO WHICH OF THE CARRIERS WEST OF NEW ENGLAND WAS TO STAND THE DEDUCTION OF TERMINAL ALLOWANCES AND ARBITRARIES, THERE IS FOR CONSIDERATION THE FURTHER REPORT IN THIS MATTER IN NEW ENGLAND DIVISIONS (DOCKET 11756), 126 I.C.C. 579, DECIDED JUNE 14, 1927. IN THIS LATER PROCEEDING THE COMPLAINANT NEW ENGLAND CARRIERS SOUGHT FURTHER INCREASES IN DIVISIONS TO WIT:

JOINT RATES ON TRANSCONTINENTAL TRAFFIC TO BE DIVIDED SO AS TO YIELD 33.3 PERCENT IN THE CARRIERS EAST OF CHICAGO * * *. THIS 33.3 PERCENT * * * TO BE DIVIDED SO AS TO YIELD THE EASTERN CARRIERS WEST OF THE NEW ENGLAND GATEWAYS PROPORTIONS BASED ON 27.5 PERCENT * * * OF THE JOINT RATE, THE BALANCE OF THE 33.3 PERCENT TO ACCRUE TO COMPLAINANTS IN PROPORTION TO THEIR PRESENT DIVISIONS * * *.

IT IS TO BE NOTED PARTICULARLY THAT IN THE LATER CONSIDERATION THERE WAS CONSIDERED ALSO THE PETITION OF THE WESTERN AND MOUNTAIN PACIFIC DEFENDANTS "TO CONFINE THE OPERATION OF THE AMENDED ORDER (OF MARCH 28, 1922) TO THE EASTERN GROUP" THAT IS "THAT THE CONTRIBUTIONS TO THE NEW ENGLAND INCREASE BE CONFINED TO DEFENDANTS IN THE EASTERN GROUP.' THE REPORT OF JUNE 14, 1927, SHOWS THAT---

IN 1922, AFTER SOME YEARS OF CONTROVERSY AND NEGOTIATIONS, THE OFFICIAL TERRITORY LINES AGREED TO ACCEPT 27.5 OF THE TRANSCONTINENTAL JOINT RATES EAST OF CHICAGO * * * BOTH TO AND FROM ATLANTIC SEABOARD TERRITORY OTHER THAN NEW ENGLAND. THE BOSTON AND ALBANY AGREED TO THIS BASIS TO AND FROM NEW ENGLAND, BUT THE OTHER NEW ENGLAND ROADS DID NOT AGREE AND ARE HERE SEEKING 33.3 PERCENT EAST OF CHICAGO. OF THIS PERCENTAGE, THEIR PROPOSAL IS THAT THE (EASTERN) LINES OUTSIDE OF NEW ENGLAND RECEIVE ONLY SUCH AMOUNT AS THEY WOULD RECEIVE IF 27.5 PERCENT WERE DIVIDED ON THE SAME BASIS AS THE LOCAL RATES BETWEEN CHICAGO AND BOSTON, THE BALANCE OF THE 33.3 PERCENT TO ACCRUE TO THE NEW ENGLAND LINES. * * *

THE DIVISION PERCENTAGES ABOVE STATED DO NOT TAKE INTO ACCOUNT THE 15 PERCENT INCREASE IN THE NEW ENGLAND DIVISIONS UNDER OUR AMENDED ORDER * *

IN THIS CONNECTION THE COMMISSION SAID (PAGE 608/---

* * * AS WE UNDERSTAND IT, * * * THE WESTERN CARRIERS * * * ASK ONLY THAT THE BURDEN OF THE INCREASE BE CONFINED TO THE EASTERN DEFENDANTS. THIS INVOLVES THE QUESTION AS TO WHAT THE PRIMARY DIVISIONS OF THE JOINT RATES SHOULD BE EAST AND WEST OF CHICAGO * * *. THE RECORD BEFORE US IS, IN OUR JUDGMENT, INADEQUATE FOR THE DETERMINATION OF THIS IMPORTANT ISSUE. THE FACT STANDS OUT, HOWEVER, THAT IN THE CASE OF TRANSCONTINENTAL RATES THE WESTERN AND THE EASTERN LINES, WITH THE EXCEPTION OF THE NEW ENGLAND COMPLAINANTS, HAVE AGREED UPON A DIVISION OF 27.5 PERCENT EAST OF CHICAGO * * *. RELATED PERCENTAGES HAVE BEEN AGREED UPON EAST OF THE OTHER BORDER GATEWAYS. FOR THE PURPOSES OF THIS CASE, THEREFORE, THESE PRIMARY DIVISIONS OF THE JOINT RATES MAY BE TAKEN AS FAIR AND REASONABLE, WITHOUT PREJUDICE TO THE RIGHTS OF BOTH GROUPS OF CARRIERS TO BRING THIS ISSUE BEFORE US FOR DETERMINATION IN ANOTHER PROCEEDING UPON A MORE ADEQUATE RECORD. THIS WILL GIVE THE EASTERN LINES * * * 27.5 PERCENT OF THE TRANSCONTINENTAL JOINT RATES FOR THEIR HAUL EAST OF CHICAGO * * * OUT OF WHICH THE INCREASED DIVISIONS OF THE NEW ENGLAND COMPLAINANTS ARE TO BE PAID, AND WILL LEAVE TO THE WESTERN LINES * * * 72.5 PERCENT WEST OF CHICAGO * * * OUT OF WHICH NO CONTRIBUTION IS TO BE MADE TO THE NEW ENGLAND LINES.

IN CONCLUSION THE COMMISSION STATED ITS FINDINGS IN PART AS FOLLOWS:

2. WE FIND THAT IN THE CASE OF THE TRANSCONTINENTAL JOINT RATES COVERED BY OUR ORDER HEREIN OF MARCH 28, 1922, THE JUST, REASONABLE, AND EQUITABLE DIVISIONS OF THE DEFENDANTS IN THE WESTERN DISTRICT WILL FOR THE FUTURE BE 72.5 PERCENT WEST OF CHICAGO, ILL., AND THE RELATED PERCENTAGES WEST OF THE OTHER GATEWAYS WITH THE EASTERN DEFENDANTS WHICH ARE NOW IN EFFECT ON TRANSCONTINENTAL TRAFFIC TO AND FROM ATLANTIC SEABOARD TERRITORY OTHER THAN NEW ENGLAND * * * THERE IS NOTHING IN THE REPORT OF JUNE 14, 1927, TO INDICATE THAT THE LINES WEST OF CHICAGO OR MANITOWOC WERE TO STAND THE BURDEN OF ANY ARBITRARY OR TERMINAL ALLOWANCES TO THE NEW ENGLAND LINES. ON THE CONTRARY, THE REPORT SEEMS TO INDICATE PLAINLY ENOUGH THAT SUCH BURDEN WAS TO BE BORNE BY THE DEFENDANT CARRIERS EAST OF THOSE POINTS; AND SUBSEQUENTLY (JANUARY 25, 1928) TRANS-CONTINENTAL FREIGHT BUREAU DIVISION CIRCULAR NO. 42-C, BEARING THE STATEMENT "/CANCELS T.C.F.B. DIVISION CIRCULAR NO. 42-B)," WAS ISSUED BY H. G. TOLL, AGENT, AS SHOWING--- AGREED DIVISIONS--- APPLYING BETWEEN--- * * * PACIFIC COAST TERMINALS AND INTERIOR POINTS IN * * * WASHINGTON, OREGON, * * * AND EASTERN COMMON POINTS (DESCRIBED HEREIN) VIA LINES OF * * * NORTHERN PACIFIC RAILWAY * * *--- IN CONNECTION WITH--- CARRIERS PARTICIPATING IN TARIFFS OF TRANS- CONTINENTAL FREIGHT BUREAU * * * NAMING THROUGH RATES FROM AND TO THE TERRITORIES HEREIN DESCRIBED.

TARIFF NO. 17-N (PAGE A-7) SHOWS THE MAIN CENTRAL RAILROAD CO. AS PARTICIPATING IN RATES NAMED THEREIN AND DIVISION CIRCULAR NO. 42-C (P. 4, ITEM 66) SHOWS "TERRITORIAL DESCRIPTION" FOR "NEW ENGLAND TERRITORY" AS---

ALL POINTS IN STATES OF CONNECTICUT, MAINE, MASSACHUSETTS, NEW HAMPSHIRE, RHODE ISLAND, AND VERMONT, LOCATED ON THE FOLLOWING LINES:

* * * BOSTON AND MAINE R.R. * * * MAINE CENTRAL R.R. CO. * * * NEW YORK, NEW HAVEN AND HARTFORD R.R.CO.

THE ITEM 66 ,TERRITORIAL DESCRIPTION" "APPLIES ONLY WHEN SPECIFIC REFERENCE IS MADE HERETO" AND IN THIS CONNECTION ITEM 67 OF DIVISION CIRCULAR NO. 42-C PROVIDES---

IN DIVISION OF THROUGH RATES FROM OR TO POINTS IN NEW ENGLAND TERRITORY (ITEM NO. 66 HEREOF) THE FOLLOWING PROPORTIONS WILL BE ALLOWED LINES EAST OF THE JUNCTION POINTS NAMED. (CHICAGO AND MANITOWOC.)

THE PROPORTIONS SO NAMED SHOW (ITEM 67) "27 1/2 PERCENT" "TO OR FROM POINTS IN NEW ENGLAND TERRITORY DESCRIBED IN ITEM 66 HEREOF"SUBJECT TO THE PROVISION THAT (ITEM 5-B, SUPPLEMENT 5/---

THE PROPORTION ALLOWED THE LINES EAST * * * WILL NOT BE LESS THAN THE ESTABLISHED PERCENTAGE PROPORTION (27 1/2 PERCENT) OF * * * MINIMUM THROUGH RATE * * * (OF 90 CENTS) EXCEPT * * *.

THAT (ITEM 11/---

* * * THE LOCAL, JOINT, OR PROPORTIONAL RATES (CLASS OR COMMODITY, WHICHEVER IS LOWER) CURRENT ON DATE OF SHIPMENT SHALL IN ALL CASES BE THE MAXIMUM PROPORTION TO LINES EITHER EAST OR WEST OF THE JUNCTION POINT * *

AND IT IS TO BE NOTED DIVISION CIRCULAR NO. 42-C SHOWS THAT ITEMS 11, 66, AND 67 WERE "ISSUED IN COMPLIANCE WITH ORDERS OF THE INTERSTATE COMMERCE COMMISSION IN DOCKET NO. 11756 OF MARCH 28, 1922, AND NO. 11756 OF JUNE 14, 1927. MUST BE MAINTAINED UNTIL FURTHER ORDER OF THE INTERSTATE COMMERCE COMMISSION.'

THUS THE PROVISIONS OF DIVISION CIRCULAR NO. 42-C DO NOT SUPPORT IN CONNECTION WITH THE TRAFFIC HERE CONCERNED THE BASIS APPLIED BY THE CARRIER TO COMPUTE THE NET CHARGES CLAIMED EITHER ON ITS ORIGINAL BILLS OR ON ITS SUPPLEMENTAL BILLS, AND THE RECORD OTHERWISE AFFORDS NO SUPPORT FOR EITHER BASIS.

DIVISION CIRCULAR NO. 42-C WAS FILED IN THIS OFFICE SHORTLY AFTER ITS ISSUANCE AS SHOWING WITHOUT LIMITATION OTHER THAN AS EXPRESSLY STATED THEREIN BASES FOR DIVISION OF RATES ON TRANSCONTINENTAL TRAFFIC, FOR USE IN THE DETERMINATION OF THE NET LAND-GRANT DEDUCTIONS TO WHICH THE UNITED STATES IS ENTITLED FOR THE TRANSPORTATION OF ITS PROPERTY VIA ROUTES THROUGH THE SPECIFIED DIVISION POINTS; AND UPON THE PRESENT RECORD NO REASON APPEARS WHY, IN THE CASE OF THESE SHIPMENTS MADE APPROXIMATELY 8 YEARS LATER, THE PROVISIONS OF THIS DIVISION CIRCULAR SHOULD NOT BE APPLIED IN ACCORDANCE WITH THEIR TERMS.

THE PROPORTION EAST OF MANITOWOC DETERMINED UNDER THE PROVISIONS OF DIVISION CIRCULAR NO. 42-C APPARENTLY IS FOR DIVISION IN ACCORDANCE WITH THE PROVISIONS OF NEW YORK CENTRAL LINES PERCENTAGE ISSUE NO. 2156-B (PERE MARQUETTE PERCENTAGE NO. 2436) AS AMENDED. IT IS NOTED SUPPLEMENTS 12 TO 15, INCLUSIVE, OF THIS PUBLICATION SHOW "FILE REF. * * * ME.CENT. 50-280- 3," INDICATING THAT DIVISION BASES THERE SET FORTH WERE AGREED TO BY THE MAINE CENTRAL RAILROAD CO.; AND THESE SUPPLEMENTS FURTHER SHOW THAT THE PERCENTAGES NAMED THEREIN REFLECT THE 15 PERCENT INCREASE TO THE NEW ENGLAND CARRIERS UNDER I.C.C. DOCKET NO. 11756. PERCENTAGE ISSUE NO. 2156 -B, AS AMENDED, SHOWS "CUSTOMARY EASTERN TERMINALS AS SHOWN IN EAST-BOUND BILLING INSTRUCTIONS, TO BE DEDUCTED BEFORE PRORATING.' THE "EAST-BOUND BILLING INSTRUCTIONS" FOR USE IN THIS CONNECTION APPARENTLY ARE THOSE EMBODIED IN NEW YORK CENTRAL FAST FREIGHT LINES EAST-BOUND RATE BASES AND BILLING INSTRUCTIONS NO. 2 (AGENT CHARLES COUGHLIN'S I.C.C.NO. 2) WHICH SHOWS THAT WHERE THROUGH RATES ARE NOT IN EFFECT RATES TO EASTPORT, MAINE, ARE TO BE CONSTRUCTED ON BASIS OF "ROCKLAND RATES * * * PLUS ARBITRARIES" WHICH "ARE IN ADDITION TO ROCKLAND RATES AND APPLY FROM WASHINGTON JCT., ME.' THE ARBITRARY NAMED FOR "LUMBER, COMMON" IS 8 1/2 CENTS PER 100 POUNDS AND THE PROVISIONS FOR DIVISION AS SET FORTH IN BILLING INSTRUCTIONS NO. 2 ARE THAT THERE ARE FOR APPLICATION "ELLSWORTH PERCENTS, PLUS ARBITRARIES" AND "DEDUCT 1 CENT PER 100 LBS. TERMINAL FROM THROUGH RATE BEFORE PRORATING AND SHOW SEPARATELY ON WAYBILL FOR ME.CENT.R.R.; ALSO SHOW SEPARATELY ON WAYBILL ARBITRARIES * * * FOR ME.CENT.R.R. FROM WASHINGTON JCT., ME.'

PERCENTAGE ISSUE NO. 2156-B (SUPPLEMENT 13, ISSUED SEPTEMBER 5, 1929) SHOWS MANITOWOC-ELLSWORTH DIVISIONS TO BE 38 PERCENT TO P.M.R.R. TO SUSPENSION BRIDGE, N.Y., REMAINDER (62 PERCENT) TO CONNECTING CARRIERS EAST OF SUSPENSION BRIDGE; AND "THIS SUPP. REFLECTS THE 15 PERCENT INCREASE TO THE NEW ENGLAND LINES PER I.C.C. DOCKET NO. 11756.'

UPON THIS RECORD IT APPEARS THAT FOR THE PURPOSE OF COMPUTING THE APPLICABLE NET CHARGES FOR THE SERVICE HERE CONCERNED THE PROPORTION EAST OF MANITOWOC IS FOR DETERMINATION IN ACCORDANCE WITH ITEMS 5-B, 11,66, AND 67 OF DIVISION CIRCULAR NO. 42-C; THAT FROM THIS PROPORTION SHOULD BE DEDUCTED 1 CENT (NOT 1.5 CENT) TERMINAL ALLOWANCE AND AT MOST 8.5 CENTS (NOT 10 CENTS) MAINE CENTRAL RAILROAD ARBITRARY; AND FROM THE REMAINDER THE DEDUCTION FOR LAND GRANT VIA THE ROUTE THROUGH SUSPENSION BRIDGE. THE SETTLEMENT WILL BE REVISED ACCORDINGLY, TAKING INTO CONSIDERATION THAT AS TO THREE OF THE SHIPMENTS (REFERRED TO IN YOUR LETTER DATED MAY 5, 1937, AF MISC.-4-GOVT.) THE POINT OF SHIPMENT IS NOW SHOWN TO HAVE BEEN LENTZ JUNCTION RATHER THAN PORTLAND, OREG., AS INDICATED ON THE ORIGINAL RECORD. WHEN THE COMPUTATION SHALL HAVE BEEN COMPLETED THE CARRIER WILL BE ADVISED AS TO THE APPLICABLE NET CHARGE FOR THIS TRANSPORTATION.