B-130332, FEB. 28, 1957

B-130332, FEB. 28, 1957

TO MR. F. N. JOHNSON, AUDITOR OF RECEIPTS, GULF, MOBILE AND OHIO RAILROAD COMPANY:

CONSIDERATION HAS BEEN GIVEN YOUR REQUEST FOR REVIEW OF THE CERTIFICATE OF SETTLEMENT DATED DECEMBER 15, 1952, WHICH DISALLOWED YOUR CLAIM FOR $105.31 ADDITIONAL CHARGES ALLEGED TO BE DUE FOR THE TRANSPORTATION OF 12 CARLOADS OF EMPTY PROJECTILES FROM MCKEESPORT, PENNSYLVANIA, TO ELWOOD, ILLINOIS, DURING 1942.

YOUR ORIGINAL BILL FOR CHARGES WAS PRESENTED ON A NET PAY OF 95.17 PERCENT, BASED ON A LAND-GRANT FORMULA WHICH ALLOCATED 13.8 PERCENT OF THE REVENUE EAST OF CHICAGO TO THE ILLINOIS CENTRAL RAILROAD. IN YOUR PRESENT SUBMISSION YOU CONTEND, IN EFFECT, THAT SINCE THE ILLINOIS CENTRAL RAILROAD IS NOT SHOWN IN THE TARIFF ROUTE, THE LAND-GRANT MILEAGE OF THE ILLINOIS CENTRAL RAILROAD FROM KANKAKEE TO CHICAGO SHOULD BE INCLUDED WITHIN THE MILEAGE OF THE NEW YORK CENTRAL RAILROAD (BIG FOUR), FORMERLY CLEVELAND, CINCINNATI, CHICAGO AND ST. LOUIS RAILWAY, FOR THE PURPOSE OF DETERMINING THE LAND-GRANT DEDUCTION FROM THE REVENUE OF THAT CARRIER FOR THE HAUL FROM COLUMBUS, OHIO, TO CHICAGO. THE LATTER BASIS, YOU ALLEGE, WOULD RESULT IN A TOTAL DEDUCTION OF 3.218 PERCENT, OR A NET PAY OF 96.782 PERCENT.

YOUR CONTENTION AS TO THE ROUTE OVER WHICH THE RATE IS APPLICABLE IS NOT DISPUTED BY THIS OFFICE. ACCORDING TO THE APPLICABLE TARIFF, THE FREIGHT WOULD BE IN POSSESSION OF THE "BIG FOUR" FROM COLUMBUS TO CHICAGO, EVEN THOUGH THAT ROAD, BY THE TERMS OF AN AGREEMENT WITH THE ILLINOIS CENTRAL RAILROAD COMPANY, USES THE ILLINOIS CENTRAL TRACKS FROM KANKAKEE TO CHICAGO. TO ARRIVE AT THE 7.184 PERCENT LAND-GRANT DEDUCTION WHICH YOU CONTEND IS APPLICABLE, THE COMPUTATION OF LAND GRANT MILEAGE NECESSARILY WOULD BE MADE ON THE PREMISE THAT THE BIG FOUR IS THE LAND-AIDED CARRIER OVER THE APPLICABLE ROUTE. HOWEVER, SUCH IS NOT THE FACT. THE BIG FOUR, IN ORDER TO RENDER SERVICE FROM COLUMBUS TO CHICAGO, USES THE TRACKS OF THE ILLINOIS CENTRAL RAILROAD COMPANY'S LAND-AIDED LINE FROM KANKAKEE TO CHICAGO. 28 I.C.C. VALUATION REPORTS 198. IN ORDER TO DETERMINE THE AMOUNT OF REVENUE EARNED OVER SUCH LAND-GRANTLINE, THE PROPORTION FROM COLUMBUS TO CHICAGO MUST BE DIVIDED BETWEEN THE ILLINOIS CENTRAL AND THE BIG FOUR. THE TITLE PAGE OF ILLINOIS CENTRAL RAILROAD COMPANY DIVISION SHEET NO. 12941-A READS, IN PART:

"THE PERCENTAGES HEREIN ARE REPRODUCED FROM C.C.C. AND ST.L. PERCENTAGE SHEET NO. P-2110, I.C.R.R. DS 12687 AND ARE FOR I.C.-C.C.C. AND ST.L. CONTRACT TRAFFIC.'

IT IS PROVIDED FURTHER THAT THE ILLINOIS CENTRAL RAILROAD SHALL RECEIVE 22 PERCENT OF THE RATE ACCRUING BETWEEN COLUMBUS AND CHICAGO. THE REVENUE EAST OF CHICAGO DIVIDES OVER COLUMBUS BY ALLOWING THE BALTIMORE AND OHIO 35.9 PERCENT AND THE BIG FOUR 64.1 PERCENT, AS PER CENTRAL STATES DESPATCH 102, AND THE ILLINOIS CENTRAL ACTUALLY RECEIVES 14.1 (22 TIMES 64.1) PERCENT OF THE REVENUE ACCRUING EAST OF CHICAGO, RATHER THAN 13.8 PERCENT SHOWN IN YOUR BILL. IN THIS SITUATION IT IS CLEAR THAT, ON TRAFFIC TRANSPORTED BY THE BIG FOUR FROM COLUMBUS TO CHICAGO, A PORTION OF THE EARNINGS FOR THAT SERVICE ACCRUES TO THE ILLINOIS CENTRAL RAILROAD BECAUSE OF THE USE OF THE TRACKS OF THAT CARRIER BETWEEN KANKAKEE AND CHICAGO. THESE TRACKS WERE AIDED IN CONSTRUCTION BY GRANTS OF LAND WHICH WERE CONDITIONED UPON THE APPLICATION OF LAND-GRANT DEDUCTION TO THE CHARGES OR EARNINGS ACCRUING FOR THE TRANSPORTATION OF GOVERNMENT PROPERTY OVER THOSE TRACKS. AS TO THE SERVICE AVAILABLE BY THE BIG FOUR FROM COLUMBUS TO CHICAGO THERE CAN BE NO QUESTION BUT THAT THE THROUGH RATE, DIVIDED OVER CHICAGO, CONSTITUTES BOTH THE LEGAL AND THE LAWFUL RATE FOR USE ON SUCH THROUGH SHIPMENT. SEE, IN THIS CONNECTION, DECISION TO YOU DATED JANUARY 25, 1955, B-121396, COVERING YOUR BILL NO. 15543-A-42.

IT HAS BEEN HELD CONSISTENTLY IN SITUATIONS INVOLVING THE USE BY A CARRIER OF ANOTHER CARRIER'S LAND-AIDED LINE THAT THE REDUCTION EXACTED BY THE GOVERNMENT IN RETURN FOR THE LAND-GRANT TO THE BUILDING RAILROAD ATTACHES TO ALL TRACKS AND TO ALL COMPANIES OPERATING THERE OVER. SEE ASTORIA AND COLUMBIA RIVER RAILROAD V. UNITED STATES, 41 C.CLS. 284; CHICAGO, ST. PAUL, MINNEAPOLIS AND OMAHA RAILWAY COMPANY V. UNITED STATES, 217 U.S. 180.

ACCORDINGLY, SINCE THE BASIS ALLOWING THE ILLINOIS CENTRAL RAILROAD 13.8 PERCENT OF THE REVENUE EAST OF CHICAGO IS SUBSTANTIALLY CORRECT, THE SETTLEMENT IS SUSTAINED.