B-125195, OCT. 24, 1956

B-125195, OCT. 24, 1956

TO ACCOUNTING DEPARTMENT, CANADIAN NATIONAL RAILWAYS:

CONSIDERATION HAS BEEN GIVEN TO THE VARIOUS PROTESTS MADE BY THE CHICAGO, BURLINGTON AND QUINCY RAILROAD COMPANY AND THE GREAT NORTHERN RAILWAY COMPANY TO THE AUDIT ACTION TAKEN BY OUR TRANSPORTATION DIVISION ON YOUR BILL U 18116. THE CANADIAN NATIONAL RAILWAYS, AS PAYEE-CARRIER, WAS REQUESTED TO REFUND THE OVERPAYMENT DISCLOSED IN OUR AUDIT; THE UNITED STATES LINES, PARTICIPANTS IN THE LINE-HAUL SERVICE, APPARENTLY RESISTED INTERLINE ADJUSTMENTS TO ACCOUNT FOR THE OVERPAYMENT. OUR RECORD INDICATES THAT AFTER YOU HAD COMMUNICATED TO YOUR CONNECTIONS THE RESULTS OF YOUR NEGOTIATIONS WITH OUR TRANSPORTATION DIVISION, THESE CARRIERS SUBMITTED THEIR OWN PROTESTS.

THE PROTESTS FROM THE UNITED STATES CARRIERS POSE TWO QUESTIONS: (1) THE PROPER CLASSIFICATION RATING TO BE ACCORDED COMMODITIES BILLED AS "BOMBS, INCENDIARY 100 LB M 47 A2 (MP) W/O BURSTERS, FUZES AND ARMING WIRE; " AND (2) THE CORRECTNESS OF A COMBINATION RATE FROM LADORA, COLORADO, TO WATSON ISLAND (PRINCE RUPERT), BRITISH COLUMBIA, CONSTRUCTED OVER BENKELMAN, NEBRASKA, IN VIEW OF THE RESTRICTION CONTAINED IN ITEM 25 (A) OF TRANSCONTINENTAL FREIGHT BUREAU NORTH COAST TERRITORIAL DIRECTORY 40- SERIES. APPARENTLY THE PROTESTANTS ARE AWARE THAT NO ANSWER CAN BE GIVEN TO THE FIRST QUESTION AT THIS TIME, SINCE IT IS NOW BEFORE THE UNITED STATES SUPREME COURT IN UNITED STATES V. WESTERN PACIFIC RAILWAY COMPANY, NO. 18, PENDING DECISION.

YOUR BILL U 18116 WAS SUBMITTED TO COLLECT CHARGES OF $28,979.94 (CANADIAN FUNDS) FOR THE TRANSPORTATION, IN JULY 1945, OF FIVE CARLOADS OF MATERIAL DESCRIBED AS "BOMBS, INCENDIARY 100 LB M 47 A2 (MP) W/O BURSTERS, FUZES AND ARMING WIRE," FROM THE DESERET CHEMICAL WARFARE DEPOT, LADORA, COLORADO, TO THE PORT TRANSPORTATION OFFICER, WATSON ISLAND BACK-UP DEPOT, WATSON ISLAND, B.C., VIA "CB AND Q ON CN.' AMERICAN FUNDS OF $26,345.40 WERE PAID BY ARMY DISBURSING OFFICER M. B. HALE ON VOUCHER 549510 OF HIS DECEMBER 1945 ACCOUNT. THEREAFTER, IN THE AUDIT HERE, IT WAS DETERMINED THAT YOU HAD BEEN OVERPAID $5,394.25 (CANADIAN FUNDS), DETERMINED BY USE OF THE FIRST-CLASS RATE FROM DUNCAN,TEXAS, LADORA BEING CONSIDERED INTERMEDIATE FROM DUNCAN. ON JULY 10, 1947, YOU WERE REQUESTED TO REFUND THIS AMOUNT. ON FEBRUARY 25, 1952, THE AUDIT BASIS WAS REVISED TO REFLECT WEIGHT CORRECTIONS FURNISHED US BY THE DEPARTMENT OF THE ARMY. AT THE SAME TIME, IT WAS DETERMINED THAT THE SHIPMENTS WERE PROPERLY RATED AT FIFTH CLASS, SINCE THEY CONSISTED OF INCOMPLETE BOMBS, AND YOU WERE REQUESTED TO REFUND THE RESULTING OVERPAYMENT OF $17,861.50 (CANADIAN FUNDS). RECONSIDERATION OF THE RATE USED, IN THE LIGHT OF YOUR OBJECTIONS, LED TO THE CONCLUSION THAT THE FIFTH-CLASS RATE PUBLISHED FROM DUNCAN, TEXAS, TO PRINCE RUPERT, IN TRANSCONTINENTAL FREIGHT BUREAU TARIFF 38 G, COULD NOT BE APPLIED FROM LADORA AS AN INTERMEDIATE POINT. ACCORDINGLY, THE AUDIT BASIS WAS AGAIN REVISED, THIS TIME BASED UPON A COMBINATION OF FIFTH-CLASS RATES TO AND BEYOND BENKELMAN, NEBRASKA, 45 CENTS PER 100 POUNDS TO BENKELMAN, PUBLISHED IN WESTERN TRUNK LINES TARIFF 231-A, AND $2.60 PER 100 POUNDS BEYOND, NAMED IN ITEM 1315, TRANSCONTINENTAL FREIGHT BUREAU TARIFF 38-G, LESS APPROPRIATE LAND GRANT DEDUCTIONS. ON JUNE 9, 1953, YOU WERE ASKED TO REFUND THE OVERPAYMENT SO DETERMINED, $17,033.86 (CANADIAN FUNDS). THE PROTESTS EMBRACING THE UNITED STATES CARRIERS' OBJECTIONS TO THE BENKELMAN COMBINATION FOLLOWED.

ITEM 1315, TARIFF 38-G, PUBLISHES ALL-RAIL CLASS RATES TO PRINCE RUPERT, BRITISH COLUMBIA, FROM POINTS ASSIGNED TO VARIOUS LETTERED RATE GROUPS IN NORTH COAST TERRITORIAL DIRECTORY 40-SERIES. LADORA, COLORADO, IS IN GROUP J TERRITORY, BUT ITEM 1315 DOES NOT PROVIDE RATES CONSTRUCTED OVER A GROUP G POINT, BENKELMAN, NEBRASKA, SINCE ITEM 1315 DOES PUBLISH RATES FROM GROUP G TERRITORY. THE OBJECTIONS OF THE TERRITORIAL DIRECTORY 40- SERIES, ENTITLED "APPLICATION OF RATES FROM OR TO GROUPS G, I, J, OR N POINTS," WHICH PROVIDES:

"RATES IN CONNECTION WITH CN (LINES PORT ARTHUR, ARMSTRONG, ONT., AND WEST THEREOF) AND THE DW AND P DO NO APPLY FROM OR TO POINTS TAKING GROUP G OR I RATES IN NEBRASKA, OTHER THAN POINTS ON THE CRI AND P.'

THE UNITED STATES CARRIERS APPARENTLY INTERPRETED THIS ITEM AS RESTRICTING THE APPLICATION OF RATES FROM OR TO THE DESCRIBED POINTS WHEN VIA EITHER THE CANADIAN NATIONAL (WESTERN LINES) OR THE DULUTH, WINNIPEG AND PACIFIC R. COMPANY. THE PLAIN MEANING OF THE ITEM, HOWEVER, IS TO RESTRICT THE APPLICATION OF RATES WHEN BOTH OF THE NAMED CARRIERS ARE INCLUDED IN THE ROUTING--- WHEN "IN CONNECTION WITH CN * * * AND THE DW AND P * * *.' THE CONJUNCTION "AND" IS A CONNECTIVE; IT DOES NOT EXPRESS AN ALTERNATIVE, AS DOES "OR.' THIS IS MADE ABUNDANTLY CLEAR BY REFERENCE TO RULE 46, CONSOLIDATED FREIGHT CLASSIFICATION NO. 16, TO WHICH TARIFF 38 -G IS SUBJECT. RULE 46 EXPLAINS THE MEANING OF "AND" AND "OR" THUS: " "AND" IS USED TO COUPLE THE TERMS BETWEEN WHICH IT APPEARS; ,OR" PROVIDES FOR ALTERNATION OR USE OF EITHER OR BOTH OF THE TERMS BETWEEN WHICH IT APPEARS.' SEE, IN THIS CONNECTION OUR DECISIONS OF JULY 25, 1949, AND FEBRUARY 16, 1951, B-49479; TO YOU, WHICH CONSIDERED THE SAME PROBLEM WITH RESPECT TO ITEM 25 (B) OF TERRITORIAL DIRECTORY 40-SERIES. COPIES OF THESE DECISIONS ARE ENCLOSED FOR READY REFERENCE. SEE ALSO IN THIS CONNECTION MICHIGAN PUBLIC SERVICE CO. V. CHEBOYGAN, 37 N.W.2D 116, 129.

THE AUDIT ACTION REFLECTED ON GENERAL ACCOUNTING OFFICE FORM 1003 DATED JUNE 9, 1953, WAS CONSISTENT WITH THE FOREGOING, AND IS SUSTAINED. WILL BE APPLIED IN ARRIVING AT THE FINAL DISPOSITION OF THIS CASE.