B-139798, AUG. 28, 1959

B-139798: Aug 28, 1959

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: FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 28. ON COMMERCIAL BILLS OF LADING WHICH WERE SUBSEQUENTLY CONVERTED TO GOVERNMENT BILLS OF LADING AT DESTINATION. ALL SHIPMENTS WERE DELIVERED TO THE CONSIGNEE. THE ORIGINAL CHARGES CLAIMED AND PAID ON THESE SHIPMENTS WERE COMPUTED ON THE BASIS OF FULL COMMERCIAL TARIFF RATES. THE CHARGES FOR THESE SHIPMENTS WERE ADJUSTED TO THE APPLICABLE NET LAND-GRANT RATES. YOU CONTEND THAT ANHYDROUS AMMONIA IS A FERTILIZER AND THAT THE 10 SHIPMENTS HERE INVOLVED SHOULD HAVE BEEN SUBJECT TO COMMERCIAL RATES AND ARE NOT ENTITLED TO LAND-GRANT RATES. SINCE THE ANHYDROUS AMMONIA WAS FOR CIVILIAN USE AS A FERTILIZER AND NOT FOR MILITARY USE IN THE MANUFACTURE OF AMMUNITIONS FOR THE ARMED FORCES.

B-139798, AUG. 28, 1959

TO CENTRAL OF GEORGIA RAILWAY COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 28, 1959, FILE N 10016-G- L, REQUESTING REVIEW OF OUR SETTLEMENT DISALLOWING YOUR CLAIM FOR $452.19 ON SUPPLEMENT BILL NO. N-5-10016-B-C-R-697-2, COVERING SHIPMENTS OF ANHYDROUS AMMONIA, DURING JUNE 1942, FROM BELLE, WEST VIRGINIA, TO TALLACOOSA, ALABAMA, ON COMMERCIAL BILLS OF LADING WHICH WERE SUBSEQUENTLY CONVERTED TO GOVERNMENT BILLS OF LADING AT DESTINATION. ALL SHIPMENTS WERE DELIVERED TO THE CONSIGNEE, THE COMMANDING OFFICER, ALABAMA ORDNANCE WORKS, SYLACAUGA, ALABAMA.

THE ORIGINAL CHARGES CLAIMED AND PAID ON THESE SHIPMENTS WERE COMPUTED ON THE BASIS OF FULL COMMERCIAL TARIFF RATES. IN OUR AUDIT OF THE PAID VOUCHERS, THE CHARGES FOR THESE SHIPMENTS WERE ADJUSTED TO THE APPLICABLE NET LAND-GRANT RATES.

YOU CONTEND THAT ANHYDROUS AMMONIA IS A FERTILIZER AND THAT THE 10 SHIPMENTS HERE INVOLVED SHOULD HAVE BEEN SUBJECT TO COMMERCIAL RATES AND ARE NOT ENTITLED TO LAND-GRANT RATES, SINCE THE ANHYDROUS AMMONIA WAS FOR CIVILIAN USE AS A FERTILIZER AND NOT FOR MILITARY USE IN THE MANUFACTURE OF AMMUNITIONS FOR THE ARMED FORCES.

THE PRIMARY QUESTION HERE INVOLVED IS WHETHER THE 10 ANHYDROUS AMMONIA SHIPMENTS WERE "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. 585, 954, LAND-GRANT RATES ARE APPLICABLE.

THE USE TO WHICH THE PROPERTY IS TO BE PUT IS THE CONTROLLING TEST OF ITS MILITARY OR NAVAL CHARACTER IN DETERMINING WHETHER LAND-GRANT RATES WOULD APPLY. NORTHERN PACIFIC R. CO. V. UNITED STATES, 350 U.S. 248, 254. PROPERTY MOVES "FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE," WITHIN THE MEANING OF SEC. 321 (A), IF THAT WAS THE INTENDED USE AT THE TIME THE SHIPMENT WAS MADE. UNITED STATES V. SPOKANE, PORTLAND AND SEATTLE RY.CO., 261 F.2D 681. IT IS THE RELATION OF THE SHIPMENT TO THE MILITARY OR NAVAL EFFORT THAT IS CONTROLLING UNDER SEC. 321 (A). NORTHERN PACIFIC R. CO. V. UNITED STATES, 330 U.S. 248.

IT APPEARS THAT THE ANHYDROUS AMMONIA WAS GOVERNMENT PROPERTY AT THE TIME IT WAS TENDERED FOR SHIPMENT BY THE DU PONT COMPANY, SINCE ALL OF THE MATERIAL WAS TRANSPORTED IN TANK CARS OWNED BY THE UNITED STATES GOVERNMENT. ANHYDROUS AMMONIA IS A COMPRESSED CORROSIVE GAS USED IN THE MANUFACTURE OF MUNITIONS AND WAS CONSIGNED TO THE COMMANDING OFFICER, ALABAMA ORDNANCE WORKS, A GOVERNMENT-OWNED FACILITY, DURING TIME OF WAR, JUNE 1942, FOR USE IN THE MANUFACTURE OF AMMUNITION. THERE SEEMS TO BE NO VALID BASIS FOR YOUR CONTENTION THAT THE SHIPMENTS OF ANHYDROUS AMMONIA WERE USED AS A FERTILIZER FOR CIVILIAN USE AND WERE NOT ENTITLED TO LAND- GRANT RATES. IT IS NOTED THAT THE FERTILIZER RATE FROM BELLE, WEST VIRGINIA, TO TALLACOOSA, ALABAMA, AT THE TIME THESE SHIPMENTS WERE MADE, WAS A BASE RATE OF $5.65 PER TON OF 2,000 POUNDS AS PUBLISHED IN TRUCK LINE TARIFF NO. 104-C, AGENT W. S. CURLETT'S I.C.C. A-774, PLUS X-148 INCREASE OF THREE PERCENT OR $5.82 PER NET TON AND NOT $11.32 PER TON, THE RATE PAID FOR THESE 10 SHIPMENTS, LESS THE LAND-GRANT RATES. IT SEEMS APPARENT THAT ANHYDROUS AMMONIA WAS NOT CONSIDERED TO BE A FERTILIZER AS SUCH, SINCE THE SPECIFIC COMMODITY RATE PUBLISHED IN TARIFF 4590 WAS 94 1/2 PERCENT HIGHER THAN THE APPLICABLE RATE ON FERTILIZER FROM BELLE, WEST VIRGINIA, TO TALLACOOSA, ALABAMA.

IN THE CIRCUMSTANCES, WE CONCLUDE THAT LAND-GRANT RATES ARE APPLICABLE TO THESE 10 SHIPMENTS OF ANHYDROUS AMMONIA, SINCE IT WAS GOVERNMENT PROPERTY AND MOVED "FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE" WITHIN THE MEANING OF SECTION 321 (A) OF THE TRANSPORTATION ACT OF 1940, FOR USE IN THE MANUFACTURE OF AMMUNITION FOR THE ARMED FORCES AT THE GOVERNMENT-OWNED FACILITY, ALABAMA ORDNANCE WORKS, TALLACOOSA, ALABAMA.

ACCORDINGLY, THE SETTLEMENT DISALLOWING YOUR CLAIM WAS PROPER AND IS SUSTAINED.