B-103106, FEB. 3, 1956

B-103106: Feb 3, 1956

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TO ERIE RAILROAD COMPANY: REFERENCE IS MADE TO YOUR FILE 77-11380-8/44 REQUESTING FURTHER CONSIDERATION OF YOUR CLAIM FOR ADDITIONAL FREIGHT CHARGES FOR THE TRANSPORTATION OF "CLOTHING NOIBN (JACKETS FIELD OD). WAS SURRENDERED. IS WHETHER BILLING COVERING AN INBOUND SHIPMENT OF WOOLEN CLOTHING CAN BE SURRENDERED FOR CREDIT AGAINST AN OUTBOUND SHIPMENT FROM OGDEN. - AS FAR AS PRESERVING THE IDENTITY OF THE INBOUND COMMODITY ON WHICH BILLING IS SURRENDERED FOR CREDIT IS CONCERNED. - THAN MAY HAVE BEEN REQUIRED UNDER THE TARIFFS PUBLISHING TRANSIT RULES WHICH WERE INVOLVED IN THE SITUATIONS DISCUSSED IN THE INTERSTATE COMMERCE COMMISSION DECISIONS REFERRED TO BY YOU. ONE OF THE PRIMARY OBJECTS OF ANY POLICING RULE GOVERNING THE APPLICATION OF TRANSIT PRIVILEGES IS TO PROTECT THE INTEGRITY OF THE THROUGH RATE.

B-103106, FEB. 3, 1956

TO ERIE RAILROAD COMPANY:

REFERENCE IS MADE TO YOUR FILE 77-11380-8/44 REQUESTING FURTHER CONSIDERATION OF YOUR CLAIM FOR ADDITIONAL FREIGHT CHARGES FOR THE TRANSPORTATION OF "CLOTHING NOIBN (JACKETS FIELD OD)," SHIPPED FROM OGDEN, UTAH, TO BROOKLYN, NEW YORK, FOR EXPORT, UNDER BILL OF LADING WV-5134771 IN AUGUST 1944, IN CONNECTION WITH WHICH INBOUND TONNAGE CREDIT COVERING "CLOTHING WOOL NOIBN," FROM LYOTH, CALIFORNIA, WAS SURRENDERED. THE CONTROVERSY, AS PRESENTED BY YOUR CLAIM, IS WHETHER BILLING COVERING AN INBOUND SHIPMENT OF WOOLEN CLOTHING CAN BE SURRENDERED FOR CREDIT AGAINST AN OUTBOUND SHIPMENT FROM OGDEN, UTAH, CONSISTING OF A DIFFERENT KIND OF CLOTHING,UNDER THE RULES AUTHORIZING THE TRANSIT PRIVILEGE SET FORTH IN ASSOCIATION OF AMERICAN RAILROADS, SECTION 22, QUOTATION NO. 16-E.

AS STATED IN THE PREVIOUS CONSIDERATIONS OF THIS CLAIM, DATED SEPTEMBER 17, 1951, AND FEBRUARY 2, 1954, B-103106, QUOTATION NO. 16-E REQUIRES ONLY THAT THE OUTBOUND SHIPMENT BE OF THE SAME QUANTITY AND CHARACTER OF TRAFFIC AS HANDED INBOUND. SEE, IN THIS CONNECTION, ITEM 14 OF THE QUOTATION. THE TERM "CHARACTER OF TRAFFIC" SEEMS TO SET FORTH A LESS STRINGENT REQUIREMENT--- AS FAR AS PRESERVING THE IDENTITY OF THE INBOUND COMMODITY ON WHICH BILLING IS SURRENDERED FOR CREDIT IS CONCERNED--- THAN MAY HAVE BEEN REQUIRED UNDER THE TARIFFS PUBLISHING TRANSIT RULES WHICH WERE INVOLVED IN THE SITUATIONS DISCUSSED IN THE INTERSTATE COMMERCE COMMISSION DECISIONS REFERRED TO BY YOU.

ONE OF THE PRIMARY OBJECTS OF ANY POLICING RULE GOVERNING THE APPLICATION OF TRANSIT PRIVILEGES IS TO PROTECT THE INTEGRITY OF THE THROUGH RATE, AND TO PREVENT SITUATIONS WHEREBY THE REQUIREMENTS OF THE LAW OR THE TARIFF MAY BE EVADED. NATIONAL CASKET COMPANY ET AL. V. SOUTHERN RAILWAY COMPANY, 31 I.C.C. 686. IN OTHER WORDS, THERE CAN BE NO DISPUTING THE PROPOSITION THAT A TRANSIT OPERATOR CANNOT SURRENDER INBOUND TONNAGE ON ARTICLES THAT ARE UNRELATED FROM A RATE STANDPOINT TO THOSE COMPRISING THE OUTBOUND SHIPMENT. IN THE INSTANT CASE, WOOLEN CLOTHING FROM LYOTH, CALIFORNIA, TO BROOKLYN, NEW YORK, TAKES EXACTLY THE SAME RATE AS COTTON CLOTHING WITH WOOL LINING. IF A SHIPMENT OF EACH KIND OF CLOTHING HAD MOVED DIRECTLY FROM LYOTH, CALIFORNIA, TO BROOKLYN, NEW YORK, WITHOUT STOPPING IN TRANSIT AT OGDEN, UTAH, THE RATES WOULD HAVE BEEN THE SAME ON BOTH SHIPMENTS. THUS, IT SEEMS CLEAR THAT THE OUTBOUNDSHIPMENT FROM OGDEN, UTAH, WAS OF THE SAME CHARACTER OF TRAFFIC AS THE SHIPMENT INBOUND.

YOUR CONTENTION SEEMS TO BE THAT THE SHIPMENT COVERED BY THE INBOUND BILLING MUST BE IDENTICAL WITH THE OUTBOUND SHIPMENT. HOWEVER, IT DOES NOT SEEM THAT THE TERM "SAME CHARACTER OF TRAFFIC" REQUIRES THAT CONSTRUCTION. IF IT WAS INTENDED THAT THE GOVERNMENT WAS TO BE GRANTED THE TRANSIT PRIVILEGES ONLY WHEN THE IDENTICAL COMMODITY WAS SHIPPED OUTBOUND, THE WORDING OF ITEM 14 OF THE QUOTATION COULD HAVE SO INDICATED. SEE, FOR EXAMPLE, FREIGHT TARIFF NO. T-1-A. W. S. CURLETT, AGENT, I.C.C. NO. A-765, EFFECTIVE NOVEMBER 25, 1942, ITEM 8 THEREOF, WHICH READS:

"* * * THE COMMODITY OR COMMODITIES FORWARDED FROM THE TRANSIT POINT MUST BE THE IDENTICAL COMMODITY OR COMMODITIES ORIGINALLY CONSIGNED THERETO FOR SUBSEQUENT RESHIPMENT. * * *"

IT HAS BEEN NOTED THAT IN SOME INSTANCES TRANSIT TARIFFS ON FILE WITH THE INTERSTATE COMMERCE COMMISSION DO NOT REQUIRE THAT BILLING ON THE SAME OR IDENTICAL COMMODITY BE SURRENDERED ON THE OUTBOUND SHIPMENT. FOR EXAMPLE, ERIE RAILROAD COMPANY LOCAL FREIGHT TARIFF NO. 1418-D, I.C.C. NO. A-7590, PROVIDING RULES GOVERNING THE STOPPING AND STORAGE IN TRANSIT OF BUTTER, OLEOMARGARINE, CHEESE, EGGS, FROZEN CREAM FAT, AND DRESSED POULTRY AT POINTS ON YOUR LINE MERELY REQUIRES, IN RULE 11, THAT:

"THE IN-BOUND FREIGHT BILLS MATCHED AGAINST OUT-BOUND SHIPMENTS MUST BE REPRESENTATIVE OF THE COMMODITIES SHIPPED UNDER THE RULES PROVIDED HEREIN.'

RULE 12 STATES THAT IT IS NOT PERMISSIBLE TO MAKE ANY SUBSTITUTIONS THAT WILL IMPAIR THE INTEGRITY OF THE THROUGH RATE.

ON THE BASIS OF THE FOREGOING, IT SEEMS CLEAR THAT IT IS A RECOGNIZED TRANSIT PRACTICE TO PERMIT THE SURRENDER OF BILLING ON COMMODITIES WHICH ARE NOT IDENTICAL WITH THOSE COVERED BY THE OUTBOUND BILLING SO LONG AS NO UNLAWFUL ADVANTAGE IS GAINED THEREBY. SEE, ALSO, IN THIS CONNECTION, ITEM 65 OF ERIE RAILROAD COMPANY FREIGHT TARIFF 1734, I.C.C. A-7837, WHICH READS:

"IT IS NOT EXPECTED THAT THE IDENTITY OF EACH COMMODITY WILL BE PRESERVED, BUT IT WILL NOT BE PERMISSIBLE TO MAKE ANY SUBSTITUTION OF ONE KIND OF COMMODITY FOR ANOTHER FROM A DIFFERENT RATE TERRITORY WHEREBY THE INTEGRITY OF THE THROUGH RATE IS IMPAIRED.'

CONCERNING WHETHER OR NOT THE TONNAGE FROM LYOTH, CALIFORNIA, TO OGDEN, UTAH, INVOLVED IN THIS CASE HAD EVER BEEN SHIPPED UNDER TRANSIT OR OTHERWISE DISPOSED OF, ITEM 15 OF QUOTATION NO. 16-E PROVIDES FOR THE KEEPING OF RECORDS, BOTH BY THE GOVERNMENT AND THE CARRIER OR THE WESTERN WEIGHING AND INSPECTION BUREAU, THAT SEEM ADEQUATE TO INSURE THE PROPER APPLICATION OF TONNAGE CREDIT. IN KEEPING WITH THIS REQUIREMENT, THERE WAS ISSUED AGAINST GOVERNMENT BILL OF LADING NO. WT 5604540, UNDER WHICH THE SHIPMENT FROM LYOTH, CALIFORNIA, WAS RECEIVED AT OGDEN, UTAH, A "T.C. FORM NO. 213" RECORDING THE SHIPMENT FOR TONNAGE CREDITS.

THIS RECORD SHOWS THAT ON AUGUST 3, 1944, 23,249 POUNDS OF THE TONNAGE CREDIT WAS APPLIED TO THE SHIPMENT FROM OGDEN, UTAH, ON BILL OF LADING NO. WV 5134771. ON DECEMBER 4, 1944, THE FORM WAS STAMPED "TRANSIT AUTHORIZED ACCOUNT OF SETTLEMENT" BY THE WESTERN WEIGHING AND INSPECTION BUREAU. THEREFORE, IT SEEMS EVIDENT THAT THE INSPECTION BUREAU AT OGDEN, UTAH, EXAMINED THE RECORDS FIVE MONTHS AFTER THE MOVEMENT AND AUTHORIZED THIS APPLICATION OF TONNAGE CREDIT. IT IS NOTED, MOREOVER, THAT THE INSPECTION BUREAU CORRECTION ISSUED JANUARY 11, 1947, WHICH IS THE BASIS FOR YOUR SUPPLEMENTAL BILL, RAISES NO QUESTION AS TO THE VALIDITY OF THE TRANSIT RECORDS THAT ASSERTS THAT THE INBOUND SHIPMENT WAS NOT REPRESENTATIVE OF THE OUTBOUND SHIPMENT, WHICH POINT HAS BEEN DISCUSSED ABOVE.