B-142701, JUL. 22, 1960

B-142701: Jul 22, 1960

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TO CENTRAL OF GEORGIA RAILWAY COMPANY: REFERENCE IS MADE TO YOUR TWO LETTERS OF APRIL 22. TO COVER SHIPMENTS OF LUMBER WHICH WERE MOVED DURING JANUARY 1945 AND MARCH 1944. BSC/21588 OR REQUISITION NO. 13373 WHICH WERE THE SERIAL NUMBERS ASSIGNED TO THE REQUISITIONS FOR DEFENSE ARTICLES UNDER WHICH THE LUMBER SHIPPED WAS PROCURED BY THE BRITISH MINISTRY OF SUPPLY MISSION. 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. SETTLEMENT OF THE TRANSPORTATION CHARGES WAS MADE ON THE BASIS THAT THE ENTIRE WEIGHT OF EACH SHIPMENT CONSISTED OF MILITARY PROPERTY MOVING FOR MILITARY USE.

B-142701, JUL. 22, 1960

TO CENTRAL OF GEORGIA RAILWAY COMPANY:

REFERENCE IS MADE TO YOUR TWO LETTERS OF APRIL 22, 1960, FILE NOS. N- 34111-G-A AND N-28325-G-A, IN WHICH YOU REQUEST A REVIEW OF OUR SETTLEMENT CERTIFICATE OF FEBRUARY 15, 1960, WHICH DISALLOWED YOUR CLAIM (TK-631653) FOR $35.31 ON BILL NO. N-34111-B-G-R-2124 AND OF OUR SETTLEMENT CERTIFICATE OF JUNE 11, 1954, WHICH DISALLOWED YOUR CLAIM (TK-700800, FORMERLY 934426) FOR $108.88 ON BILL NO. 28325-B FOR ADDITIONAL TRANSPORTATION CHARGES.

THESE CLAIMS ARISE FROM GOVERNMENT BILLS OF LADING ISSUED BY THE UNITED STATES TREASURY DEPARTMENT, PROCUREMENT DIVISION, TO COVER SHIPMENTS OF LUMBER WHICH WERE MOVED DURING JANUARY 1945 AND MARCH 1944, TO SAVANNAH, GEORGIA, FOR EXPORT TO GREAT BRITAIN UNDER THE LEND LEASE ACT OF MARCH 11, 1941, 55 STAT. 31, 22 U.S.C. 411. EACH BILL OF LADING CONTAINS REFERENCE TO EITHER REQUISITION NO. BSC/21588 OR REQUISITION NO. 13373 WHICH WERE THE SERIAL NUMBERS ASSIGNED TO THE REQUISITIONS FOR DEFENSE ARTICLES UNDER WHICH THE LUMBER SHIPPED WAS PROCURED BY THE BRITISH MINISTRY OF SUPPLY MISSION. 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 TRANSPORATION ACT OF 1940, 54 STAT. 898, 954, 49 U.S.C. 1940 ED., 65, LAND-GRANT RATES ARE APPLICABLE. SETTLEMENT OF THE TRANSPORTATION CHARGES WAS MADE ON THE BASIS THAT THE ENTIRE WEIGHT OF EACH SHIPMENT CONSISTED OF MILITARY PROPERTY MOVING FOR MILITARY USE.

YOU CLAIM, IN EFFECT, THAT WE WERE IN ERROR IN MAKING LAND-GRANT DEDUCTION IN THAT THE END USE OF THE INVOLVED SHIPMENTS WAS 100 PERCENT CIVIL AND THEREFORE THE FULL COMMERCIAL RATES ARE PROPERLY APPLICABLE TO THE TRANSPORTATION CONCERNED. TO SUPPORT THIS CONTENTION, YOU CITE SECTION 5J OF REQUISITION NO. BSC/21588 AND SECTION 5G OF REQUISITION NO. 13373 BOTH OF WHICH READ AS FOLLOWS:

"THE TIMBER IS FOR THE MINISTRY OF SUPPLY NATIONAL STOCK WHICH IS HELD IN CUSTODY BY FIRMS ON BEHALF OF THE MINISTRY. ON A LICENSE BEING ISSUED THE FIRM IS AUTHORIZED TO SELL THE TIMBER TO A CONSUMER AT THE FIXED PRICES LAID DOWN BY THE MINISTRY. THE FIRM THEN PAYS TO THE MINISTRY THE VALUE OF THE TIMBER LESS AN APPROVED SELLING COMMISSION.'

THIS PROVISION APPEARS TO PERTAIN TO THE MANNER OF DISTRIBUTING THE MATERIALS FOR ULTIMATE USE AND MERELY DESCRIBES THE MEANS SELECTED BY THE MINISTRY OF SUPPLY TO EFFECT THE USE OF THE PROPERTY FOR THE MILITARY NEEDS SHOWN ELSEWHERE IN THE REQUISITIONS. THE FIRMS HOLDING CUSTODY OF THE PROPERTY WERE SIMPLY ACTING AS AGENTS FOR THE MINISTRY AND, FOR SUCH SERVICES, WERE TO RECEIVE COMPENSATION AS APPROVED BY THE MINISTRY.

MOREOVER, IN DETERMINING THE APPLICABILITY OF LAND-GRANT RATES, THE PROPERTY MOVES FOR ,MILITARY OR NAVAL AND NOT FOR CIVIL USE" IF THAT WAS THE INTENDED USE AT THE TIME THE SHIPMENT WAS MADE AND THE ACTUAL USE IS IMMATERIAL. SEE UNITED STATES V. SPOKANE, PORTLAND AND SEATTLE RY.CO., 261 F.2D 681. THE TEST FOR THE INTENDED USE OF THE PROPERTY FOR "MILITARY OR NAVAL AND NOT FOR CIVIL USE" IS EXPRESSED IN NORTHERN PACIFIC R.CO. V. UNITED STATES, 330 U.S. 248, 254, AS FOLLOWS:

"* * * MILITARY OR NAVAL USE INCLUDES ALL PROPERTY CONSUMED BY THE ARMED FORCES OR BY THEIR ADJUNCTS, ALL PROPERTY WHICH THEY USE TO FURTHER THEIR PROJECTS, ALL PROPERTY WHICH SERVES THEIR MANY NEEDS OR WANTS IN TRAINING OR PREPARATION FOR WAR, COMBAT, IN MAINTAINING THEM AT HOME OR ABROAD, IN THEIR OCCUPATION AFTER VICTORY IS WON. IT IS THE RELATION OF THE SHIPMENT TO THE MILITARY OR NAVAL EFFORT THAT IS CONTROLLING UNDER SEC. 321 (A).'

THE LUMBER WAS REQUISITIONED IN MAY 1944 AND SEPTEMBER 1942, AND THE SUBJECT SHIPMENTS MOVED JANUARY 1945 AND MARCH 1944, FOR MOVEMENT TO GREAT BRITAIN AT WHICH TIMES THE WAR THERE HAD NOT ABATED. REQUISITION NO. BSC/21588 WHICH COVERS THE SHIPMENTS UNDER CLAIM TK-631653 INDICATES THAT THE INTENDED "USE" TO BE MADE OF THE LUMBER WAS FOR THE "ARMY AND AIR FORCES" AND FURTHER STATES THAT--- "THIS MATERIAL IS TO BE CONSUMED ENTIRELY FOR MULTI-AIRLINE ARMS FOR THE COMBINED U.S.A. AND U.K. ARMED FORCES, SIGNAL OPERATIONS.' REQUISITION NO. 13373 WHICH COVERS THE SHIPMENTS UNDER CLAIM TK-700800 (934426) INDICATES THAT THE INTENDED "USE" TO BE MADE OF THE LUMBER WAS FOR THE "ARMY, NAVY, AND AIR" AND FURTHER THAT--- "THE SUPPLY IS WHOLLY REQUIRED FOR THE FORCES * * *.' SINCE THE INTENDED USE FOR ALL THE SHIPMENTS, AS REFLECTED IN THE PERTINENT LEND- LEASE REQUISITIONS, WAS FOR THE ARMY, AIR, OR NAVAL FORCES, THE SUBJECT PROPERTY WAS ENTITLED TO A MILITARY CHARACTERIZATION FOR LAND-GRANT PURPOSES.

YOU ALSO STATE THAT SECTION 5B OF REQUISITION NO. BSC/21588 DISCLOSES THAT THE MATERIAL WAS REQUISITIONED FOR ACCOUNT OF THE "FEDERAL ECONOMIC ADMINISTRATION" AND THAT THIS INDICATES THAT THE CHARACTER OF THE MATERIAL WAS CIVIL IN NATURE. IT IS BELIEVED THAT YOU REFER TO THE FOREIGN ECONOMIC ADMINISTRATION AS THAT IS THE AGENCY REFERRED TO IN SECTION 5B. THE FOREIGN ECONOMIC ADMINISTRATION WAS ESTABLISHED WITHIN THE OFFICE OF EMERGENCY MANAGEMENT BY EXECUTIVE ORDER TO UNIFY AND CONSOLIDATE GOVERNMENTAL ACTIVITIES RELATING TO FOREIGN ECONOMIC AFFAIRS. E.C. 9380, SEPTEMBER 25, 1943, 8 F.R. 13081. THIS ORDER TRANSFERRED TO AND CONSOLIDATED IN THE ADMINISTRATION ALL THE FUNCTIONS, POWERS AND DUTIES OF THE OFFICE OF LEND-LEASE ADMINISTRATOR. IT SEEMS OBVIOUS THAT THE FOREIGN ECONOMIC ADMINISTRATION HANDLED BOTH MILITARY AND CIVIL LEND-LEASE PROPERTY AND THAT THE MERE REFERENCE THERETO IN THE REQUISITION DOES NOT ESTABLISH THAT THE MATERIALS HERE COVERED WERE NOT FOR MILITARY USE AS OTHERWISE SHOWN IN THE REQUISITIONS. ACCORDINGLY, OUR SETTLEMENTS OF THE INVOLVED CLAIMS ARE PROPER AND THE DISALLOWANCES ARE SUSTAINED.