B-132807, AUG. 23, 1957

B-132807: Aug 23, 1957

Additional Materials:

Contact:

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

 

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

THE MISSOURI PACIFIC CLAIMED AND WAS PAID $2. WHEN THE CHARGES WERE AUDITED. THE SHIPMENT WAS AUDITED AS A LOCAL MOVEMENT. THE ALLOWABLE CHARGES WERE DETERMINED ON A NONTRANSIT BASIS. WAS REQUESTED TO REFUND AN OVERPAYMENT OF $337.28. THE OVERPAYMENT WAS BASED ON AN AGGREGATE OF THE INTERMEDIATE RATES FROM REYNOLDS TO AVONDALE CONSTRUCTED OVER DANVILLE. ALLEGED THAT THE RATE FACTOR USED BEYOND DANVILLE WAS INAPPLICABLE AS A BASIS FOR CHARGES ON THIS SHIPMENT BECAUSE THE TARIFF CONTAINING THE RATE FACTOR PRECLUDED ITS USE ON TRANSITED SHIPMENTS. WE WERE UNABLE TO VERIFY YOUR ALLEGATION AND THE OVERPAYMENT ACTION WAS SUSTAINED. THE OVERPAYMENT WAS COLLECTED IN SEPTEMBER 1955 BY DEDUCTION FROM AMOUNTS OTHERWISE DUE THE MISSOURI PACIFIC RAILROAD COMPANY ON ITS BILL 77366-A.

B-132807, AUG. 23, 1957

TO AUDITOR FREIGHT TRAFFIC, MISSOURI PACIFIC RAILROAD COMPANY:

CONSIDERATION HAS BEEN GIVEN YOUR REQUEST, PER FILE 2-GR-29445, FOR A REVIEW OF THE SETTLEMENT DATED JUNE 12, 1956, TK-616816, WHICH DISALLOWED YOUR CLAIM, PER SUPPLEMENTAL BILL S-29445-A, FOR $220.07. THE CLAIM REPRESENTS ADDITIONAL TRANSPORTATION CHARGES ALLEGED TO BE DUE FOR THE TRANSPORTATION OF A CARLOAD OF EXPLOSIVE BOMBS WEIGHING 91,560 POUNDS WHICH MOVED DURING FEBRUARY 1944 FROM REYNOLDS, PENNSYLVANIA, TO AVONDALE, COLORADO, UNDER GOVERNMENT BILL OF LADING WT-262791.

ORIGINALLY, THE MISSOURI PACIFIC CLAIMED AND WAS PAID $2,025.81 FOR THIS TRANSPORTATION BASED ON A COMMERCIAL RATE OF 278 CENTS PER HUNDRED POUNDS, REDUCED BY LAND-GRANT DEDUCTIONS TO A NET RATE OF 221.255 CENTS PER HUNDRED POUNDS. WHEN THE CHARGES WERE AUDITED, WE HAD NO INFORMATION HERE TO INDICATE THAT THIS SHIPMENT, OR ANY PORTION THEREOF, HAD BEEN ACCORDED STORAGE IN TRANSIT PRIVILEGES. THUS, THE SHIPMENT WAS AUDITED AS A LOCAL MOVEMENT, THE ALLOWABLE CHARGES WERE DETERMINED ON A NONTRANSIT BASIS, AND THE MISSOURI PACIFIC, AS THE FINAL DESTINATION CARRIER THEN OF RECORD, WAS REQUESTED TO REFUND AN OVERPAYMENT OF $337.28. THE OVERPAYMENT WAS BASED ON AN AGGREGATE OF THE INTERMEDIATE RATES FROM REYNOLDS TO AVONDALE CONSTRUCTED OVER DANVILLE, ILLINOIS, A COMBINATION OF RATES WHICH YIELDED A THROUGH COMMERCIAL RATE OF 242 CENTS PER HUNDRED POUNDS, REDUCED BY LAND -GRANT DEDUCTIONS TO A THROUGH NET RATE OF 184.418 CENTS PER HUNDRED POUNDS. YOUR LETTER OF JANUARY 18, 1955, FILE 8-GP-29445, IN PROTEST OF THE AUDIT ACTION, ALLEGED THAT THE RATE FACTOR USED BEYOND DANVILLE WAS INAPPLICABLE AS A BASIS FOR CHARGES ON THIS SHIPMENT BECAUSE THE TARIFF CONTAINING THE RATE FACTOR PRECLUDED ITS USE ON TRANSITED SHIPMENTS; BUT, WHILE STATING THAT A STORAGE IN TRANSIT PRIVILEGE HAD BEEN UTILIZED AT AVONDALE, COLORADO, YOU DID NOT FURNISH ANY INFORMATION AS TO THE SYMBOL AND NUMBER OF THE GOVERNMENT BILL OF LADING COVERING THE OUTBOUND MOVEMENT OR AS TO THE SHIPMENT'S SUBSEQUENT EXPORTATION. IN THE ABSENCE OF SUCH INFORMATION, WE WERE UNABLE TO VERIFY YOUR ALLEGATION AND THE OVERPAYMENT ACTION WAS SUSTAINED. SINCE WE RECEIVED NO REFUND OR FURTHER ADVICE FROM YOU CONCERNING THE SHIPMENT, THE OVERPAYMENT WAS COLLECTED IN SEPTEMBER 1955 BY DEDUCTION FROM AMOUNTS OTHERWISE DUE THE MISSOURI PACIFIC RAILROAD COMPANY ON ITS BILL 77366-A.

THEREAFTER, WE RECEIVED YOUR CLAIM, PER SUPPLEMENTAL BILL S-29445-A, FOR $220.07. INFORMATION SUBMITTED WITH THE CLAIM, SUBSEQUENTLY VERIFIED BY OUR TRANSPORTATION DIVISION, SHOWED THAT OF THE 91,560 POUNDS OF EXPLOSIVE BOMBS MOVED INTO AVONDALE, COLORADO, 59,740 POUNDS HAD BEEN ACCORDED STORAGE IN TRANSIT PRIVILEGES AT AVONDALE, HAD BEEN RESHIPPED TO ARMY POINT, CALIFORNIA, AND FROM THAT SECOND STORAGE POINT HAD BEEN MOVED OUTBOUND TO RICHMOND, CALIFORNIA, THE PORT FROM WHICH IT WAS EXPORTED. THE OUTBOUND SHIPMENT WAS MADE UNDER BILL OF LADING WV-5021223, DATED MAY 19, 1944, AND CHARGES FOR THIS TRANSPORTATION SERVICE WERE PAID TO THE SOUTHERN PACIFIC RAILROAD COMPANY ON ITS BILL F-418036, MAY 1944. THE SHIPMENT WAS COVERED BY EXPORT CERTIFICATE NO. 325438, DATED OCTOBER 2, 1944. THE BALANCE OF THE LADING, WEIGHING 31,820 POUNDS, HAD NOT BEEN ACCORDED STORAGE IN TRANSIT PRIVILEGES AT AVONDALE AND ITS AVAILABILITY FOR TRANSIT HAD BEEN CANCELED, APPARENTLY BECAUSE OF THE EXPIRATION OF THE TIME LIMIT SPECIFIED FOR THE APPLICATION OF THE TRANSIT PRIVILEGE. YOU REPORTED THAT THIS CANCELED TONNAGE SUBSEQUENTLY HAD BEEN SHIPPED TO HOG ISLAND, PENNSYLVANIA.

YOU ARE NOT NOW CLAIMING ANY ADDITIONAL REVENUE ON THE NONTRANSITED PORTION OF THE TONNAGE. THE $220.07 WHICH IS CLAIMED REPRESENTS ADDITIONAL REVENUE ALLEGED TO BE DUE ON THE TRANSITED PORTION, I.E., THE 59,740 POUNDS OF EXPLOSIVE BOMBS EXPORTED THROUGH THE PORT OF RICHMOND, CALIFORNIA. THE DEDUCTION OF $337.28 WAS MADE DURING SEPTEMBER 1955 BECAUSE AT THAT TIME, FROM ALL THAT APPEARED IN OUR RECORD, THE MISSOURI PACIFIC WAS THE FINAL DESTINATION CARRIER ON THE SHIPMENT, AND IN YOUR PROTEST OF THE OVERPAYMENT ACTION YOU DID NOT FURNISH INFORMATION WHICH WOULD HAVE ENABLED US TO DETERMINE THAT TRANSIT PRIVILEGES HAD BEEN UTILIZED. CONSEQUENTLY, YOUR STATUS NOW AS A CLAIMANT IS ONLY THAT OF THE INBOUND CARRIER ON A TRANSITED SHIPMENT.

THERE IS FOR CONSIDERATION ASSOCIATION OF AMERICAN RAILROADS CIRCULAR LETTER OF DECEMBER 1, 1949, FILE 215-17, SIGNED BY E. H. BUNNELL, VICE PRESIDENT, WHICH IS DIRECTED TO RAILROAD CHIEF AND FREIGHT ACCOUNTING OFFICERS. THAT LETTER PROVIDES IN PARAGRAPH 3, AS FOLLOWS:

"SHOULD THE GENERAL ACCOUNTING OFFICE, IN ACCORDANCE WITH THE RECORDS OF THAT OFFICE, RENDER A FORM 1003 ON AN INBOUND MOVEMENT TO A TRANSIT STATION AND THE CARRIER'S RECORDS DISCLOSE THAT THE SHIPMENT ACTUALLY WENT FORWARD FROM THE TRANSIT STATION UNDER TRANSIT ARRANGEMENTS, THE FORM 1003 SHOULD BE RETURNED PROMPTLY TO THE GENERAL ACCOUNTING OFFICE DECLINED, GIVING THE SYMBOL AND NUMBER OF THE GOVERNMENT BILL OF LADING FOR THE OUTBOUND MOVEMENT. THE GENERAL ACCOUNTING OFFICE THEN WILL WITHDRAW THE FORM 1003 AND PROCEED IN ACCORDANCE WITH PARAGRAPHS 1 AND 2 ABOVE.'

PARAGRAPH 2 (A) OF THE LETTER PROVIDES:

"THE GENERAL ACCOUNTING OFFICE GENERALLY, WILL MAKE ALL ADJUSTMENTS WITH THE DESTINATION CARRIER EITHER THROUGH A FORM 1003 NOTICE OF OVERPAYMENT TO SUCH CARRIER OR SETTLEMENT OF SUPPLEMENTAL BILL PRESENTED BY SUCH CARRIER REGARDLESS OF THE CONSTRUCTION OF THE THROUGH RATES. THERE WILL BE EXCEPTIONS, HOWEVER, TO THIS GENERAL PROCEDURE, SUCH AS WHERE SOME PORTIONS OF A MOVEMENT, ORIGIN TO FINAL DESTINATION, ARE NOT SUBJECT TO TRANSIT ARRANGEMENTS. ANY ADJUSTMENTS OF CHARGES IN CONNECTION WITH SUCH PORTIONS, WILL BE MADE WITH THE INDIVIDUAL CARRIERS INVOLVED.'

HAD YOU FURNISHED THE INFORMATION REQUIRED BY PARAGRAPH 3 OF THE CIRCULAR LETTER AT THE TIME OF YOUR PROTEST OF THE OVERPAYMENT ACTION, IT IS PROBABLE THAT THE OVERPAYMENT NOTICE WOULD HAVE BEEN WITHDRAWN AND ANY NECESSARY ADJUSTMENTS MADE IN THE AUDIT OF THE CHARGES PAID TO THE SOUTHERN PACIFIC RAILROAD FOR THE THROUGH TRANSIT MOVEMENT. HOWEVER, SINCE THE AMOUNT NOW CLAIMED REPRESENTS REVENUE THAT MAY BE DUE YOU AS THE INBOUND CARRIER ON A TRANSITED SHIPMENT, WE WOULD NOT BE JUSTIFIED IN PAYING YOU AND THEREBY PREJUDICING RIGHTS ACCRUING EITHER TO THE GOVERNMENT OR TO THE FINAL DESTINATION CARRIER IN THE SETTLEMENT OF THE CHARGES ON THE THROUGH TRANSIT MOVEMENT. ANY ADJUSTMENT OF REVENUES THAT NOW MAY BE MADE ON THIS SHIPMENT FALLS WITHIN THE PROVISIONS OF PARAGRAPH 2 (A) OF THE CIRCULAR LETTER. WE NOTE, PARENTHETICALLY, THAT THE EXCEPTION IN PARAGRAPH 2 (A) APPARENTLY CONTEMPLATES SITUATIONS WHERE, IN THE AUDIT OF A THROUGH TRANSIT MOVEMENT, IT IS DETERMINED THAT A PORTION OF THE MOVEMENT WAS NOT SUBJECTED TO TRANSIT ARRANGEMENTS.

IN THE CIRCUMSTANCES, IT IS SUGGESTED THAT YOU SEEK THIS ADJUSTMENT OF THE CHARGES THROUGH THE SOUTHERN PACIFIC RAILROAD COMPANY, AS THE FINAL DESTINATION CARRIER, SINCE PARAGRAPH 2 (A) OF THE CITED CIRCULAR LETTER OF DECEMBER 1, 1949, SEEMS TO CONTEMPLATE THE ADJUSTMENT OF THROUGH TRANSIT CHARGES IN A SITUATION SUCH AS THIS BEING MADE BETWEEN THE GOVERNMENT AND THE FINAL DESTINATION CARRIER, EITHER THROUGH A FORM 1003 OR A SUPPLEMENTAL BILL, AND ANY ADDITIONAL ADJUSTMENT OF THE THROUGH REVENUE BETWEEN THE INTERESTED CARRIERS BEING MADE THROUGH INTERLINE SETTLEMENT CHANNELS.

FOR THE REASONS GIVEN ABOVE, THE DISALLOWANCE OF YOUR CLAIM, PER SUPPLEMENTAL BILL S-29445-A, WAS PROPER AND IS, THEREFORE, SUSTAINED.