B-134049, MAY 2, 1958

B-134049: May 2, 1958

Additional Materials:

Contact:

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

 

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

TO CENTRAL OF GEORGIA RAILWAY COMPANY: REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 7. THE PROPERTY (STEEL BILLETS) INVOLVED IN THE SHIPMENTS COVERED BY THE SPECIFIED BILLS WAS LEND-LEASE PROPERTY PROCURED UNDER LEND-LEASE SUB- REQUISITION NOS. THE ONLY QUESTION INVOLVED IS WHETHER THE MATERIAL SHIPPED CONSISTED OF "MILITARY OR NAVAL PROPERTY OF THE UNITED STATES MOVING FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE" TO WHICH. LAND-GRANT RATES ARE APPLICABLE. OUR SETTLEMENTS OF YOUR BILLS WERE BASED ON THE DETERMINATION THAT THE ENTIRE WEIGHT OF EACH SHIPMENT CONSISTED OF MILITARY PROPERTY MOVING FOR MILITARY USE. UK-15857-T18 WERE INTENDED FOR USE BY THE "ARMY AND NAVY.'. SINCE THE INFORMATION ON THIS SUB-REQUISITION SHOWS THAT THE MATERIAL WAS MOVING SOLELY FOR USE BY THE ARMED FORCES IT FOLLOWS THAT IT CONSISTED OF MILITARY PROPERTY MOVING FOR MILITARY USE.

B-134049, MAY 2, 1958

TO CENTRAL OF GEORGIA RAILWAY COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 7, 1957, FILE N-25981-G A, REQUESTING REVIEW OF OUR SETTLEMENT DISALLOWING YOUR CLAIM ON BILL NO. 25981, AND TO YOUR LETTERS OF OCTOBER 17, 1957, FILES N-25764-G-A AND N- 26446-G-A, REGARDING OUR SETTLEMENT DISALLOWING YOUR CLAIMS ON BILLS NOS. 25764 AND 26446.

THE PROPERTY (STEEL BILLETS) INVOLVED IN THE SHIPMENTS COVERED BY THE SPECIFIED BILLS WAS LEND-LEASE PROPERTY PROCURED UNDER LEND-LEASE SUB- REQUISITION NOS. UK-15857-T18 AND UK-16712-SERIES AND MOVED FROM EMERYVILLE AND OAKLAND, CALIFORNIA, TO SAVANNAH, GEORGIA, IN 1943. THE ONLY QUESTION INVOLVED IS WHETHER THE MATERIAL SHIPPED CONSISTED OF "MILITARY OR NAVAL PROPERTY OF THE UNITED STATES MOVING FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE" TO WHICH, UNDER SECTION 321 (A) OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 898, 954, LAND-GRANT RATES ARE APPLICABLE. OUR SETTLEMENTS OF YOUR BILLS WERE BASED ON THE DETERMINATION THAT THE ENTIRE WEIGHT OF EACH SHIPMENT CONSISTED OF MILITARY PROPERTY MOVING FOR MILITARY USE.

THE SUPPLIES PROCURED UNDER SUB-REQUISITION NO. UK-15857-T18 WERE INTENDED FOR USE BY THE "ARMY AND NAVY.' SINCE THE INFORMATION ON THIS SUB-REQUISITION SHOWS THAT THE MATERIAL WAS MOVING SOLELY FOR USE BY THE ARMED FORCES IT FOLLOWS THAT IT CONSISTED OF MILITARY PROPERTY MOVING FOR MILITARY USE. THE RECORD SHOWS THAT THE SUPPLIES PROCURED UNDER THE SUB- REQUISITIONS IN THE UK-16712-SERIES WERE INTENDED FOR USE BY THE "ARMY, NAVY, AIR AND OTHER GOVERNMENT AGENCIES.' OUR VIEWS IN THIS CLASS OF CLAIMS ARE SET OUT IN OUR DECISION B-132866, B 132772, DATED DECEMBER 2, 1957 (COPY ENCLOSED FOR YOUR READY REFERENCE), INVOLVING SHIPMENTS OF LEND -LEASE PROPERTY UNDER SIMILAR REQUISITIONS IN WHICH IT WAS CONCLUDED THAT SUCH SHIPMENTS CONSISTED WHOLLY OF MILITARY PROPERTY MOVING FOR MILITARY USE WITHIN THE PURVIEW OF THE CITED SECTION 321 (A) OF THE TRANSPORTATION ACT OF 1940.

IN SUPPORT OF YOUR CLAIM YOU ASSERT IN YOUR LETTER OF OCTOBER 7, 1957, THAT THE FACT SOME OF THE SHIPMENTS, UPON ARRIVAL AT SAVANNAH, GEORGIA, WERE REFUSED BECAUSE THE MATERIAL WAS FOUND TO BE DEFECTIVE ORSUB- STANDARD,"HAD THE EFFECT OF TERMINATING AND CANCELLING THE LEND LEASE REQUISITIONS APPLYING TO THESE SHIPMENTS" AND THAT THE WORDING OF THE REQUISITIONS AS TO THE MILITARY USE OF THE MATERIALS AT THE TIME OF SHIPMENT SHOULD NOT, THEREFORE, BE TAKEN INTO CONSIDERATION. REGARDING, SUCH ASSERTION, IT WAS HELD IN NORTHERN PACIFIC RAILWAY CO. V. UNITED STATES, 101 F.SUPP. 29, THAT SHIPMENTS IN 1944 AND 1945 OF MILITARY AND NAVAL PROPERTY OF THE UNITED STATES, CONSISTING OF QUARTERMASTER OR ORDNANCE MATERIAL RETURNED FROM OVERSEAS, TO SALVAGE AND REHABILITATING CENTERS FOR INSPECTION BY MILITARY AND NAVAL OFFICIALS TO DETERMINE WHETHER IT SHOULD BE REHABILITATED AND RECONSIGNED FOR MILITARY PURPOSES WERE ENTITLED TO A MILITARY CHARACTERIZATION, ALTHOUGH PART OF THE MATERIAL THUS SHIPPED WAS DISCARDED AFTER INSPECTION FOR CIVILIAN USE AND SOLD AS WAR SURPLUS. SUCH HOLDING WAS BASED ON THE FACT THAT THE "USE" CONTEMPLATED "AT THE TIME AND DURING SHIPMENT OF THESE GOODS WAS NOT A CIVILIAN USE.' IN THAT CONNECTION THE COURT SAID (101 F.SUPP. 29, 30) THAT---

"* * * THE SHIPMENTS WERE MADE AND COMPLETED BEFORE ANY DECISION WAS MADE AS TO THE ULTIMATE USE OF THE GOODS. FOR AUGHT ANYONE KNEW AT THE TIME OF THE SHIPMENTS, ALL OF THE MATERIAL MIGHT BE ALLOCATED FOR FUTURE MILITARY PURPOSES. THAT THE PROPERTY, THEREFORE WAS IN MILITARY USE AT OR DURING THE SHIPMENT, AS THAT TERM IS USUALLY UNDERSTOOD, SEEMS CLEAR. THESE GOODS NEVER LOST THEIR MILITARY STATUS DURING SHIPMENT.'

IT WAS ALSO HELD IN SONKEN-GALAMBA CORP. V. UNION PACIFIC RAILROAD CO., 145 F.2D 808, THAT THE NATURE AND CHARACTER OF A SHIPMENT AT THE TIME TENDERED DETERMINES ITS STATUS FOR RATE PURPOSES.

THE RECORD REASONABLY ESTABLISHES THAT THE SHIPMENTS INVOLVED WERE MOVING FOR A "MILITARY OR NAVAL USE," REQUIRING APPLICATION OF LAND GRANT RATES AT THE TIME THEY WERE TENDERED FOR SHIPMENT AT OAKLAND AND EMERYVILLE, CALIFORNIA, AND THEY NEVER LOST THEIR MILITARY STATUS DURING SHIPMENT TO SAVANNAH. UNDER THE CIRCUMSTANCES, OUR SETTLEMENTS OF THE BILLS IN QUESTION WERE PROPER AND ARE SUSTAINED.