B-137640, SEP. 17, 1959

B-137640, SEP. 17, 1959

TO THE CENTRAL OF GEORGIA RAILWAY COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 18, 1959, FILE N-3852 G-A, WITH ENCLOSURE, REQUESTING FURTHER CONSIDERATION OF YOUR CLAIM, PER SUPPLEMENTAL BILL NO. N-3852-A-G-R-1413, FOR ADDITIONAL FREIGHT CHARGES ALLEGED TO BE DUE FOR THE TRANSPORTATION OF 70,000 POUNDS OF DRIED BEANS, PROCURED UNDER LEND-LEASE REQUISITION NO. UK-1415, AND MOVED UNDER GOVERNMENT BILL OF LADING NO. A-2519206, DATED JUNE 24, 1941.

YOUR CLAIM ARISES FROM A GOVERNMENT BILL OF LADING ISSUED BY THE COMMODITY CREDIT CORPORATION TO COVER A SHIPMENT OF DRIED BEANS, WHICH MOVED ON JUNE 24, 1941, FROM KIMBERLY, IDAHO, TO SAVANNAH, GEORGIA, FOR EXPORT TO GREAT BRITAIN UNDER THE LEND-LEASE ACT OF MARCH 11, 1941, 55 STAT. 31. THIS SHIPMENT OF DRIED BEANS WAS PROCURED BY REQUISITION NO. UK -1415, WHICH SHOWS, UNDER SECTION 20, THE INTENDED USE AS "VARIOUS.' THE REQUISITION, UNDER SECTION 5, PROVIDES THAT THE DRIED BEANS WERE INTENDED FOR DISTRIBUTION BY THE MINISTRY OF FOOD TO SERVICE AND CIVILIAN CONSUMERS, INCLUDING DISTRIBUTION THROUGH ORDINARY COMMERCIAL CHANNELS.

THE CHARGE CLAIMED AND PAID FOR THIS SHIPMENT, INITIALLY, WAS ON THE BASIS OF THE FULL COMMERCIAL TARIFF RATE. IN OUR AUDIT OF THE PAYMENT VOUCHER, THE CHARGE FOR THIS SHIPMENT WAS ADJUSTED TO THE APPLICABLE NET LAND-GRANT RATE AND THE OVERPAYMENT OF $45.45 WAS DEDUCTED FROM AMOUNTS OTHERWISE DUE.

YOU CONTEND THAT NO CONSIDERATION WAS GIVEN YOUR LETTER OF JUNE 30, 1958, IN WHICH IT WAS ASSERTED THAT THE SHIPMENT MOVED JUNE 24, 1941, THAT THE UNITED STATES DID NOT ENTER WORLD WAR II UNTIL DECEMBER 8, 1941, AND THAT THE SHIPMENT WAS NOT MILITARY OR NAVAL PROPERTY OF THE UNITED STATES WITHIN THE SCOPE OF THE TRANSPORTATION ACT OF 1940. ALSO, YOU STATE THAT YOU UNDERSTAND THE ISSUE INVOLVED IN THIS CASE IS NOT BEFORE THE COURT OF CLAIMS IN BALTIMORE AND OHIO RAILROAD COMPANY V. UNITED STATES, C.CLS. NO. 131-56.

YOUR LETTER OF JUNE 30, 1958, ADDRESSED TO OUR TRANSPORTATION DIVISION WAS THE SUBJECT OF THE REPLY DATED AUGUST 15, 1958, OF THAT DIVISION, AND SINCE THE QUESTION RAISED THEREIN WAS NOT REPEATED IN YOUR LETTER OF OCTOBER 3, 1958, IT WAS NOT SPECIFICALLY CONSIDERED IN OUR LETTER OF FEBRUARY 3, 1959.

IT IS TRUE THAT THE UNITED STATES DECLARED WAR ON JAPAN ON DECEMBER 8, 1941. HOWEVER, AS YOU KNOW, LAND-GRANT RATES DURING THE PERIOD INVOLVED WERE NOT SOLELY APPLICABLE TO SUPPLIES MOVING FOR USE IN THE WAR BUT "ALL MILITARY OR NAVAL PROPERTY OF THE UNITED STATES MOVING FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE.' GREAT BRITAIN DECLARED WAR ON GERMANY ON SEPTEMBER 3, 1939. THE LEND-LEASE ACT OF MARCH 11, 1941, WAS CREATED TO PROMOTE THE DEFENSE OF THE UNITED STATES. IT SEEMS CLEAR THAT THIS SHIPMENT, ALONG WITH SIMILAR SHIPMENTS OF FOODSTUFFS, WAS EXPORTED TO GREAT BRITAIN, ONE OF OUR ALLIES, IN THE INTEREST OF OUR NATIONAL DEFENSE AND THAT AT LEAST A PORTION OF THE SHIPMENT WAS TO BE USED TO FEED SERVICE PERSONNEL WHICH IS CLEARLY A MILITARY USE. SEE SOUTHERN PACIFIC COMPANY V. UNITED STATES, 107 C.CLS. 167.

THE PRIMARY ISSUE, WHETHER SHIPMENTS OF THIS TYPE WERE "MILITARY OR NAVAL PROPERTY OF THE UNITED STATES MOVING FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE" AND THE EXTENT TO WHICH IT PROPERLY MAY BE SO CONSIDERED WITHIN THE MEANING OF SECTION 321 (A) OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 898, IS NOW PENDING BEFORE THE COURT OF CLAIMS IN BALTIMORE AND OHIO RAILROAD COMPANY V. UNITED STATES, C.CLS. 131-56, AND INVOLVES MANY UNITED KINGDOM FOODSTUFF REQUISITIONS, IN WHICH THE LANGUAGE USED IS SUBSTANTIALLY SIMILAR TO THAT USED IN REQUISITION UK-1415. FURTHERMORE, THE CASE INVOLVES VARIOUS LEND-LEASE SHIPMENTS THAT MOVED PRIOR TO, AS WELL AS AFTER, DECEMBER 8, 1941.

LAND-GRANT DEDUCTIONS ON LEND-LEASE SHIPMENTS MADE BY THE COMMODITY CREDIT CORPORATION HAVE BEEN DISCUSSED IN NEGOTIATIONS BETWEEN REPRESENTATIVES OF OUR OFFICE, THE DEPARTMENT OF JUSTICE AND A SPECIAL JOINT ACCOUNTING LAW COMMITTEE APPOINTED BY THE ACCOUNTING DIVISION AND LAW COMMITTEE OF THE ASSOCIATION OF AMERICAN RAILROADS. A TENTATIVE PROPOSAL OF THE ASSOCIATION OF AMERICAN RAILROADS FOR SETTLEMENT OF LAND- GRANT DEDUCTIONS ON COMMODITY CREDIT CORPORATION LEND-LEASE SHIPMENTS, EXCEPT THE SO-CALLED RUSSIAN REQUISITIONS, IS PRESENTLY BEING CONSIDERED BY THE GOVERNMENT. IF SUCH SETTLEMENT IS ACCEPTED BY THE PARTIES CONCERNED AND YOU FEEL, BASED THEREON, THAT ADDITIONAL AMOUNTS ARE DUE YOU WE WILL BE PLEASED, AT YOUR REQUEST, TO THEN CONSIDER YOUR SUPPLEMENTAL CLAIM ON THESE SHIPMENTS. ON THE OTHER HAND, YOU MAY WISH TO HOLD THE RESUBMISSION OF THIS CLAIM IN ABEYANCE PENDING A DETERMINATION OF THE ISSUE IN THE CITED COURT OF CLAIMS CASE, ASSUMING THAT ISSUE COMES TO A DECISION AND THE CASE, SO FAR AS THE ISSUED RAISED BY YOU IS CONCERNED, IS NOT DISMISSED UNDER THE PROPOSAL OF THE ASSOCIATION OF AMERICAN RAILROADS.