B-15321, MAY 28, 1941, 20 COMP. GEN. 822

B-15321, MAY 28, 1941, 20 COMP. GEN. 822

TRANSPORTATION - LAND-GRANT - DEDUCTIONS - COAST GUARD PROPERTY PROPERTY OF THE COAST GUARD MAY BE REGARDED AS BEING TRANSPORTED FOR MILITARY PURPOSES, AND SO SUBJECT TO LAND-GRANT DEDUCTIONS UNDER SECTION 321 OF THE TRANSPORTATION ACT OF 1940, ONLY WHEN THE TRANSPORTATION IS INCIDENT TO TRAINING HAVING FOR ITS PRINCIPAL PURPOSE PREPARATION FOR THE PERFORMANCE BY THE COAST GUARD OF ITS DUTIES AS PART OF THE NAVY AS DISTINGUISHED FROM PREPARATION FOR THE PERFORMANCE OF THE DUTIES NORMALLY REQUIRED OF IT WHILE OPERATING UNDER THE TREASURY DEPARTMENT.

ASSISTANT COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE TREASURY, MAY 28, 1941:

THERE HAS BEEN CONSIDERED YOUR LETTER OF FEBRUARY 28, 1941, AS FOLLOWS:

SECTION 321 OF THE TRANSPORTATION ACT OF 1940, APPROVED SEPTEMBER 18, 1940 ( PUBLIC, NO. 785, 76TH CONGRESS), PROVIDES, IN PART, THAT:

"* * * THE FULL APPLICABLE COMMERCIAL RATES, FARES, OR CHARGES SHALL BE PAID FOR TRANSPORTATION BY ANY COMMON CARRIER SUBJECT TO SUCH ACT OF ANY PERSONS OR PROPERTY FOR THE UNITED STATES, OR ON ITS BEHALF, EXCEPT THAT THE FOREGOING PROVISION SHALL NOT APPLY TO THE TRANSPORTATION OF MILITARY OR NAVAL PROPERTY OF THE UNITED STATES MOVING FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE, OR TO THE TRANSPORTATION OF MEMBERS OF THE MILITARY OR NAVAL FORCES OF THE UNITED STATES (OR OF PROPERTY OF SUCH MEMBERS) WHEN SUCH MEMBERS ARE TRAVELING ON OFFICIAL DUTY. * * *"

IN YOUR DECISION TO THE SECRETARY OF WAR DATED NOVEMBER 1, 1940, 20 COMP. GEN. 237, IT WAS HELD THAT THE TRANSPORTATION ACT OF 1940 DID NOT CONFER THE BENEFIT OF LAND-GRANT RATES UPON ANY TRAFFIC NOT THERETOFORE ENTITLED TO THE BENEFIT OF SUCH RATES WHICH, UNDER THE LAND-GRANT STATUTES, IS RESTRICTED TO "THE TRANSPORTATION OF PROPERTY OR TROOPS OF THE UNITED STATES,"

IN LOUISVILLE AND NASHVILLE RAILROAD COMPANY V. THE UNITED STATES (1922), 258 U.S. 374, THE SUPREME COURT HELD THAT PERSONNEL OF THE COAST GUARD WERE NOT "TROOPS" WITHIN THE MEANING OF THE LAND-GRANT ACTS THERE CONSTRUED. HOWEVER, THERE APPEARS NO QUESTION REGARDING THE FACT THAT PROPERTY OF THE COAST GUARD, BEING PROPERTY OF THE UNITED STATES, WAS ENTITLED TO THE BENEFIT OF THE LAND-GRANT RATES PRIOR TO THE ENACTMENT OF THE TRANSPORTATION ACT OF 1940. THE QUESTION NOW PRESENTED AND UPON WHICH YOUR DECISION IS REQUESTED IS WHETHER, UNDER THE PROVISIONS OF SECTION 321 OF THAT ACT, PROPERTY OF THE COAST GUARD IS "MILITARY" PROPERTY AND, IF TRANSPORTED FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE, IS ENTITLED TO THE BENEFIT OF THE LAND-GRANT RATES WHERE APPLICABLE.

THE ACT OF JANUARY 28, 1915 ( U.S.C. TITLE 14, SEC. 1), WHICH CREATED THE COAST GUARD, PROVIDES THAT IT SHALL CONSTITUTE A PART OF THE MILITARY FORCES OF THE UNITED STATES AND SHALL OPERATE UNDER THE TREASURY DEPARTMENT IN TIME OF PEACE AND OPERATE AS A PART OF THE NAVY, SUBJECT TO THE ORDERS OF THE SECRETARY OF THE NAVY, IN TIME OF WAR OR WHEN THE PRESIDENT SHALL SO DIRECT. THE EFFECT OF THIS LANGUAGE, IN THE DEPARTMENT'S OPINION, PLACES THE COAST GUARD IN THE CATEGORY OF BEING A PART OF THE MILITARY FORCES OF THE UNITED STATES AT ALL TIMES, WHETHER OPERATING UNDER THE TREASURY DEPARTMENT IN TIME OF PEACE OR AS A PART OF THE NAVY IN TIME OF WAR. ( SEE 32 OP. ATTY. GEN. 185-191.)

THE COAST GUARD IS AN ORGANIZATION ESSENTIALLY MILITARY IN CHARACTER; ITS OFFICER PERSONNEL NORMALLY ENTER THE SERVICE BY APPOINTMENT AFTER GRADUATION FROM THE COAST GUARD ACADEMY, AN INSTITUTION COMPARABLE WITH THE MILITARY AND NAVAL ACADEMIES; THE ENLISTED PERSONNEL OF THE COAST GUARD ENTER INTO ENLISTMENT CONTRACTS IN LIKE MANNER AS OBTAINS IN THE CASE OF THE OTHER MILITARY SERVICES; COAST GUARD PERSONNEL, WITH CERTAIN MINOR EXCEPTIONS, RECEIVE THE SAME PAY AND ALLOWANCES AS APPLY BY LAW TO THE ARMY, NAVY, AND MARINE CORPS; ITS OFFICERS AND ENLISTED MEN HOLD THE SAME RELATIVE RANKS, GRADES, AND RATINGS AS OFFICERS AND ENLISTED MEN OF THE NAVY; THEY ARE COVERED BY THE SAME OR SIMILAR RETIREMENT AND PENSION SYSTEMS; AND MILITARY DISCIPLINE AND TRIAL FOR MILITARY OFFENSES BY COURT MARTIAL APPLY TO PERSONNEL OF THE COAST GUARD IN LIKE MANNER AS IN THE CASE OF THE OTHER MILITARY SERVICES.

THESE CIRCUMSTANCES CLEARLY REVEAL THAT NOT ONLY IS THE COAST GUARD A MILITARY SERVICE IN POINT OF LAW, BUT AS A MATTER OF FACT AS WELL. ALSO IS BELIEVED CLEAR THAT AS THE COAST GUARD IS A MILITARY SERVICE, ITS PROPERTY FOR THE MOST PART MUST BE CHARACTERIZED AS MILITARY WITHIN THE PURVIEW OF SECTION 321 OF THE TRANSPORTATION ACT OF 1940. IN THIS CONNECTION, REFERENCE IS MADE TO YOUR DECISION OF NOVEMBER 25, 1940, TO THE SECRETARY OF WAR, B-13422, WHEREIN IT WAS SAID:

"WHILE, IN VIEW OF THE USUAL DEFINITION OF THE WORD "MILITARY" AS MEANING " ANYTHING PERTAINING TO WAR OR TO THE ARMY" ( BOUVIER'S LAW DICTIONARY, VOL. 2, P. 2209) AND AS " PERTAINING TO WAR OR TO THE ARMY; CONCERNED WITH WAR" (40 CORPUS JURIS 658), IT DOES NOT APPEAR NECESSARY TO CONSIDER THE APPLICATION OF THE TERM "MILITARY OR NAVAL PROPERTY" AS COMPREHENDING MERELY MUNITIONS OF WAR, THE BROAD SCOPE GIVEN THE APPLICATION OF THE LATTER TERM, AS INDICATED ABOVE, WOULD SEEM TO JUSTIFY MUCH LATITUDE IN THE APPLICATION OF THE TERMS EMPLOYED IN THE STATUTE HERE CONCERNED IN DESIGNATING THE KIND OF PROPERTY TO WHICH THE PROVISIONS OF THE LAND-GRANT STATUTES, REQUIRING REDUCED RATES, SHOULD CONTINUE TO APPLY.'

AS THE COAST GUARD BY LAW CONSTITUTES A PART OF THE MILITARY FORCES OF THE UNITED STATES AND OPERATES AS A PART OF THE NAVY IN TIME OF WAR OR WHEN THE PRESIDENT SO DIRECTS, IT IS OBVIOUS THAT ITS PERSONNEL MUST BE TRAINED IN PREPARATION FOR WAR AND THAT ITS FACILITIES MUST BE DESIGNED FOR INTEGRATION INTO THE NAVAL FORCES OF THE UNITED STATES IN THE EVENT OF WAR. IN THIS RESPECT, THE COAST GUARD IS MORE OF A RESERVE FORCE OF THE NAVY THAN THE SEVERAL NAVAL RESERVE UNITS, AS IT IS A PERMANENT ORGANIZATION IN ACTIVE SERVICE AT ALL TIMES WITH A CONTINUOUS DUTY TO BE PREPARED FOR WAR AS A PART OF THE NAVY. IN FACT, SOME UNITS OF THE COAST GUARD ARE OPERATING UNDER THE NAVY AT THE PRESENT TIME. IN THIS CONNECTION, ATTENTION IS INVITED TO THE FOLLOWING EXTRACT FROM THE EXECUTIVE ORDER OF THE PRESIDENT DATED MAY 2, 1916, AND QUOTED IN ARTICLE 1 (2) OF THE COAST GUARD REGULATIONS:

"THAT WHENEVER THE COAST GUARD OR ANY PART OF IT SHALL IN TIME OF PEACE OPERATE AS A PART OF THE NAVY IN ACCORDANCE WITH LAW, THE PERSONNEL OF THE COAST GUARD SHALL BE SUBJECT TO THE REGULATIONS OF THE COAST GUARD SERVICE, EXCEPT INSOFAR AS RELATES TO MILITARY REQUIREMENTS WHICH HAVE TO DO SOLELY WITH THE MOVEMENTS OR OPERATIONS OF SHIPS, CONCERNING WHICH THEY SHALL BE SUBJECT TO THE ORDERS OF THE SENIOR NAVAL OFFICER TO WHOM THEY ARE DIRECTED BY PROPER AUTHORITY TO REPORT * * * WHENEVER THE WHOLE OR ANY PART OF THE PERSONNEL OF THE COAST GUARD IS OPERATING WITH THE PERSONNEL OF THE NAVY, OFFICERS AND MEN OF EACH SERVICE SHALL HAVE THE SAME AUTHORITY AND CONTROL OVER OFFICERS AND MEN OF THE OTHER SERVICE AS THAT TO WHICH THEIR RANK OR RATING ENTITLES THEM IN THEIR RESPECTIVE SERVICES.'

THE TRAINING OF COAST GUARD PERSONNEL IN MILITARY SCIENCE IN PREPARATION FOR WAR AS A PART OF THE NAVY IS CARRIED ON SIMULTANEOUSLY WITH THE EXECUTION OF ITS DUTIES AS THE NATION'S MARITIME POLICE FORCE, AND THE PERFORMANCE OF ITS OTHER PEACETIME FUNCTIONS. SINCE THE TWO CLASSES OF DUTIES ARE CONTINUOUS, THEY ARE INSEPARABLE. IN VIEW OF THIS FACT, IT WOULD APPEAR THAT THE TRANSPORTATION OF COAST GUARD PROPERTY, FOR THE MOST PART, WOULD SATISFY THE REQUIREMENT OF MOVEMENT FOR MILITARY OR NAVAL, AND NOT FOR CIVIL, USE, ALTHOUGH SOME ASPECT OF CIVIL USE WOULD BE PRESENT IN MOST SITUATIONS. THE DEPARTMENT BELIEVES, HOWEVER, THAT THE MILITARY OR NAVAL FACTOR, PARTICULARLY AT THIS TIME, PREDOMINATES OVER THE CIVIL ASPECT ENTERING INTO THE PURPOSE OF SUCH SHIPMENTS, AS THE MANIFOLD PEACETIME DUTIES OF THE COAST GUARD ARE, AND MUST BE, SUPERIMPOSED ON A SOLID BACKGROUND OF MILITARY PREPARATION.

IN YOUR DECISION OF NOVEMBER 25, 1940, IT WAS POINTED OUT THAT THE TRANSPORTATION OF PROPERTY DIRECTED TO THE ACCOMPLISHMENT OF THE PURPOSES OF THE SELECTIVE TRAINING AND SERVICE ACT OF 1940, APPROVED SEPTEMBER 16, 1940 ( PUBLIC, NO. 783, 76TH CONG.), IS PROPERTY OF A MILITARY RATHER THAN A CIVIL CHARACTER AND IN THE VIEW THAT WHATEVER PROPERTY IS NECESSARY TO INCREASE OR TRAIN THE PERSONNEL OF THE ARMED FORCES IS PROPERLY TO BE REGARDED AS MILITARY PROPERTY WHEN SO USED, NO REASON APPEARS WHY SUCH TRANSPORTATION IS NOT WITHIN THE DESCRIPTION OF "MILITARY OR NAVAL PROPERTY OF THE UNITED STATES MOVING FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE.'

ATTENTION IS CALLED TO THE FACT, IN THIS CONNECTION, THAT PERSONNEL OF THE COAST GUARD IS GROUPED WITH THE ARMY, NAVY, AND MARINE CORPS IN SECTION 5 (A) OF THE SELECTIVE TRAINING AND SERVICE ACT OF 1940 AS BEING EXEMPT FROM REGISTRATION AND LIABILITY FOR SERVICE, WHICH IS TANTAMOUNT TO THE RECOGNITION BY CONGRESS THAT THE COAST GUARD IS A PART OF THE LAND AND NAVAL FORCES OF THE UNITED STATES WITHIN THE MEANING OF THAT ACT. BEING A PART OF SUCH FORCES, IT ALSO WOULD APPEAR THAT THE PRESIDENT COULD, UNDER SECTION 3 (A) OF SAID ACT, DIRECT THAT SELECTEES BE INDUCTED INTO THE COAST GUARD, AS IN THE CASE OF THE ARMY, NAVY, AND MARINE CORPS, FOR THE REQUISITE 1-YEAR PERIOD OF TRAINING PROVIDED IN SECTION 3 (B). IN VIEW OF THESE CIRCUMSTANCES, IT WOULD SEEM TO FOLLOW THAT COAST GUARD PROPERTY, IN GENERAL, COMES WITHIN THE CATEGORY OF MILITARY PROPERTY "NECESSARY TO INCREASE OR TRAIN THE PERSONNEL OF THE ARMED FORCES," AS POINTED OUT IN YOUR DECISION OF NOVEMBER 25, 1940.

IT IS TRUE THAT, IN THE LOUISVILLE AND NASHVILLE RAILROAD COMPANY CASE, THE BASIS FOR THE DECISION THAT PERSONNEL OF THE COAST GUARD WERE NOT "TROOPS" APPEARS TO REST UPON THE VIEW THAT THE COAST GUARD IS NOT A PART OF THE MILITARY FORCES OF THE UNITED STATES EXCEPT WHEN SERVING AS A PART OF THE NAVY. THIS LINE OF REASONING IS DIFFICULT TO UNDERSTAND, AS THE ACT OF JANUARY 28, 1915, MAKES NO DISTINCTION IN THE STATUS OF THE COAST GUARD AS A PART OF THE MILITARY FORCES OF THE UNITED STATES, DEPENDING WHETHER IT IS OPERATING UNDER THE TREASURY DEPARTMENT OR AS A PART OF THE NAVY. IN ANY EVENT, THERE WAS NO ISSUE BEFORE THE SUPREME COURT WHETHER PROPERTY OF THE COAST GUARD MAY, FOR THE MOST PART, BE TREATED AS "MILITARY" BY VIRTUE OF THE STATUTORY CLASSIFICATION OF THAT SERVICE AS CONSTITUTING A PART OF THE MILITARY FORCES OF THE UNITED STATES.

IT IS APPRECIATED, OF COURSE, THAT ALL COAST GUARD PROPERTY CANNOT BE CHARACTERIZED AS MILITARY AND THERE MAY BE INSTANCES WHERE PROPERTY SO CHARACTERIZED MAY NOT BE TRANSPORTED FOR MILITARY USE. AIDS TO NAVIGATION, PROPERTY USED IN CONNECTION WITH MARITIME TRAINING, AND PROPERTY FOR LIFE-SAVING PURPOSES MAY BE CITED AS EXAMPLES. IN THE LAST ANALYSIS, IT WOULD APPEAR THAT THE CIRCUMSTANCES OF EACH SHIPMENT MUST BE CONSIDERED AND, IN THE LANGUAGE OF YOUR DECISION OF NOVEMBER 25, 1940,"THE DETERMINATION WHETHER THE USE SO INTENDED IN MILITARY OR NAVAL IN CHARACTER WOULD SEEM TO DEVOLVE THE APPLICATION OF STANDARDS OF JUDGMENT PECULIARLY FOR EXERCISE BY THE MILITARY ESTABLISHMENTS.'

YOUR DECISION IS REQUESTED WHETHER THE VIEWS OF THE DEPARTMENT AND THE CRITERIA HEREIN EXPRESSED ARE CORRECT WITH RESPECT TO WHETHER COAST GUARD PROPERTY TRANSPORTED IS OR IS NOT ENTITLED TO THE APPLICABLE LAND-GRANT RATES.

APPARENTLY THE VIEWS EXPRESSED ABOVE ARE PREDICATED LARGELY UPON THE PROPOSITION THAT THE COAST GUARD, BY VIRTUE OF THE DECLARATION IN THE ACT CREATING IT AND THE FORM OF ITS ORGANIZATION AND OPERATION, IS PROPERLY TO BE REGARDED AS A MILITARY FORCE AND THAT AS A CONSEQUENCE THE TRANSPORTATION OF PROPERTY OF THE COAST GUARD IS TO BE VIEWED AS MILITARY PROPERTY AND "FOR THE MOST PART" AS SATISFYING, IN VIEW OF THE TRAINING FOR OPERATION WITH THE NAVY,"THE REQUIREMENT OF MOVEMENT FOR MILITARY OR NAVAL, AND NOT FOR CIVIL USE.' IN OTHER WORDS RELIANCE APPEARS TO BE PLACED UPON THE STATED MILITARY CHARACTERISTICS OF THE ORGANIZATIONAL FEATURES OF THIS BRANCH OF THE SERVICE AND ITS TRAINING FOR OPERATION IN NATIONAL DEFENSE AS ESTABLISHING THE RIGHT, UNDER SECTION 321 OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 954, TO DEDUCTION FOR LAND-GRANT FROM CHARGES FOR THE TRANSPORTATION OF ITS PROPERTY.

IN THIS CONNECTION IT IS TO BE NOTED THAT WHILE, AS SUGGESTED IN YOUR LETTER, THE ACT OF JANUARY 28, 1915, 38 STAT. 800, CREATING THE COAST GUARD, DECLARED THAT IT SHOULD CONSTITUTE A PART OF THE MILITARY FORCES OF THE UNITED STATES IT DECLARED, ALSO, THAT THE COAST GUARD WAS ESTABLISHED IN LIEU OF THE THEN EXISTING REVENUE-CUTTER SERVICE AND LIFE-SAVING SERVICE AND PROVIDED THAT IT ,SHALL OPERATE UNDER THE TREASURY DEPARTMENT IN TIME OF PEACE AND OPERATE AS A PART OF THE NAVY, SUBJECT TO THE ORDERS OF THE SECRETARY OF THE NAVY, IN TIME OF WAR OR WHEN THE PRESIDENT SHALL SO DIRECT.' THIS PROVISION FOR DUAL OPERATION WOULD SEEM TO HAVE RESULTED FROM THE FACT THAT THE FUNCTIONS OF THE COAST GUARD IN TIME OF PEACE PERTAINED PRIMARILY TO MATTERS WITH WHICH THE NAVY, AS SUCH, APPARENTLY WAS NOT CONCERNED. THESE ACTIVITIES ARE STATED IN THE COAST GUARD EXTRACT FROM THE ANNUAL REPORT OF THE SECRETARY OF THE TREASURY ON THE STATE OF THE FINANCES FOR THE FISCAL YEAR 1940, AS FOLLOWS:

THE COAST GUARD, AS THE FEDERAL MARITIME POLICE AGENCY, HAS CARRIED ON THE INTERRELATED DUTIES, EMBRACED WITHIN SUCH FUNCTION, OF LAW ENFORCEMENT, PROMOTION OF SAFETY OF LIFE AT SEA AND PROTECTION OF LIFE AND PROPERTY, AND THE MAINTENANCE OF A STATE OF PREPAREDNESS FOR NATIONAL DEFENSE. WITH ITS SHORE UNITS FORMING A COORDINATED NETWORK OF PROTECTIVE AND MARINE OBSERVATION STATIONS ALONG ALL THE COASTS OF THE UNITED STATES, HAWAII, ALASKA, PUERTO RICO, AND VIRGIN ISLANDS, AND WITH ITS VESSELS PATROLLING THE ENTIRE LENGTH OF OUR COASTAL AND NAVIGABLE WATERS, THE SERVICES OF THE COAST GUARD, INVOLVING USE OF VESSELS, AIRCRAFT, AND COASTAL UNITS, HAVE BEEN UTILIZED IN VARIOUS COOPERATIVE MEASURES WITH OTHER BRANCHES OF THE GOVERNMENT, IN ADDITION TO CARRYING ON THE REGULAR DUTIES OF THE SERVICE. THE REGULAR ACTIVITIES OF THE COAST GUARD INCLUDE PREVENTION OF THE SMUGGLING OF LIQUOR, NARCOTICS, AND OTHER CONTRABAND; PATROL OF THE WATERS OF THE NORTH PACIFIC OCEAN AND BERING SEA AND SOUTHEASTERN ALASKA IN THE ENFORCEMENT OF LAWS AND REGULATIONS FOR THE PROTECTION OF THE FUR SEAL, SEA OTTER, AND FISHERIES, AND OF CERTAIN OTHER LAWS IN ALASKA; PATROL IN THE ENFORCEMENT OF THE NORTH PACIFIC HALIBUT ACT; ENFORCEMENT OF THE WHALING TREATY ACT AND OIL POLLUTION ACT; SUPERVISION OF THE ANCHORAGE AND MOVEMENTS OF VESSELS AND OF THE HANDLING OF EXPLOSIVES, INFLAMMABLE MATERIAL, AND OTHER DANGEROUS CARGO ABOARD VESSELS; ENFORCEMENT OF THE CUSTOMS, NAVIGATION, MOTORBOAT, AND OTHER RELATED LAWS OF THE UNITED STATES; INTERNATIONAL SERVICE OF ICE OBSERVATION AND ICE PATROL IN THE NORTH ATLANTIC OCEAN; WINTER PATROL OF THE ATLANTIC COAST TO AID VESSELS AND PERSONS IN DISTRESS; REMOVAL OF DERELICTS AND OTHER OBSTRUCTIONS TO NAVIGATION FROM THE PATHS OF MARINE COMMERCE; PATROL OF REGATTAS AND MARINE PARADES; ADMINISTRATION OF THE UNITED STATES MARITIME SERVICE; AND THE SAVING AND PROTECTION OF LIFE AND PROPERTY AT SEA AND ALONG THE COASTS.

APPLICATION OF THE NEUTRALITY LAWS IN THE EXISTING INTERNATIONAL SITUATION HAS RESULTED IN THE COAST GUARD ASSUMING AN IMPORTANT ROLE IN THE THEIR ENFORCEMENT.

SEE, ALSO, THE ENUMERATION OF " DUTIES AND AUTHORITY OF THE COAST GUARD" AS STATED IN DETAIL, WITH APPROPRIATE REFERENCES TO PERTINENT STATUTES, IN CHAPTER II OF REGULATIONS FOR THE UNITED STATES COAST GUARD, 1940.

IN DETERMINING THE APPLICATION OF LAND-GRANT STATUTES TO THE TRANSPORTATION OF PERSONNEL OF THE ARMY AS TROOPS OF THE UNITED STATES THE NATURE OF THE DUTIES INVOLVED RATHER THAN THE MERE FACT OF MEMBERSHIP IN A MILITARY ORGANIZATION HAS BEEN HELD TO BE CONTROLLING. IN THIS CONNECTION ATTENTION IS INVITED TO THE CASE OF SOUTHERN PACIFIC CO. V. UNITED STATES, 285 U.S. 240, 76 L.1ED. 736. IN THAT CASE IT WAS CONTENDED BY THE GOVERNMENT THAT ANY PART OF THE ARMY TRAVELING UPON GOVERNMENT BUSINESS MUST BE TRANSPORTED AT LAND-GRANT RATES BUT THE COURT SAID:

WHILE, AS IS ARGUED BY THE UNITED STATES, RIVER AND HARBOR IMPROVEMENT HAS IN ONE ASPECT A BEARING UPON THE MILITARY DEFENSE OF THE UNITED STATES, OBVIOUSLY THE PRINCIPAL PURPOSE OF THIS WORK IS THE PROMOTION OF COMMERCE AND TRANSPORTATION, BY MAINTAINING AND DEEPENING CHANNELS, AND CONSTRUCTING DIKES, JETTIES, AND OTHER WORKS WHICH EFFECT THE IMPROVEMENT OF NAVIGATION GENERALLY.

CONCEDING THAT ENGINEER OFFICERS OF THE UNITED STATES ARMY PERFORM A TRUE MILITARY FUNCTION WHEN ENGAGED IN WORK ON THE MILITARY DEFENSES OF THE UNITED STATES, AND, WHEN SO ENGAGED FORM A PART OF THE NATION'S TROOPS, WE ARE OF OPINION THAT THEIR ACTIVITY IN CONNECTION WITH RIVERS AND HARBORS WORK AND THE CALIFORNIA DEBRIS COMMISSION IS NONMILITARY IN CHARACTER, AND FALLS WITHIN THE SAME CATEGORY AS THAT OF MANY OTHER EMPLOYEES AND OFFICIALS OF THE WAR DEPARTMENT, THE NATURE OF WHOSE SERVICE EXCLUDES THEM FROM CLASSIFICATION AS PART OF THE "TROOPS OF THE UNITED STATES.'

IN VIEW OF THE PRINCIPLE APPLIED IN THAT CASE, IT IS NOT UNDERSTOOD HOW THE COAST GUARD WHEN ASSIGNED TO THE PERFORMANCE OF THE ENUMERATED DUTIES NORMALLY REQUIRED OF IT WHILE OPERATING UNDER THE TREASURY CAN BE CONSIDERED AS ENGAGED IN ACTIVITIES WHICH ARE MILITARY IN PURPOSE AND, THAT BEING TRUE, IT IS NOT APPARENT HOW THE TRANSPORTATION OF ITS PROPERTY AS INCIDENT TO THE PERFORMANCE OF THOSE DUTIES COULD BE VIEWED AS TRANSPORTATION "FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE" WITHIN THE MEANING OF SECTION 321 OF THE TRANSPORTATION ACT OF 1940, NOTWITHSTANDING THE MILITARY CHARACTERISTICS OF THE COAST GUARD AS AN ORGANIZATION.

CONCERNING THE STATEMENT IN YOUR LETTER THAT " THE TRAINING OF COAST GUARD PERSONNEL IN MILITARY SCIENCE IN PREPARATION FOR WAR AS A PART OF THE NAVY IS CARRIED ON SIMULTANEOUSLY WITH THE EXECUTION OF ITS DUTIES AS THE NATION'S MARITIME POLICE FORCE, AND THE PERFORMANCE OF ITS OTHER PEACETIME FUNCTIONS," IT IS NOTED THAT IN THE COAST GUARD EXTRACT FROM ANNUAL REPORT, MENTIONED ABOVE, IT IS STATED:

UNDER THE ACT OF JANUARY 28, 1915, THE COAST GUARD CONSTITUTES A PART OF THE MILITARY FORCES OF THE UNITED STATES, OPERATING UNDER THE TREASURY DEPARTMENT IN TIME OF PEACE AND AS A PART OF THE NAVY IN TIME OF WAR OR WHEN THE PRESIDENT DIRECTS. WHILE THE SERVICE IS CONSTANTLY PREPARED FOR NATIONAL-DEFENSE OPERATIONS, THE EXISTING INTERNATIONAL SITUATION HAS LED TO PREPARATIONS ESPECIALLY TO FIT AND AUGMENT THE RESOURCES AND CAPACITY OF THE COAST GUARD FOR NATIONAL DEFENSE. APPROPRIATIONS WERE PROVIDED BY THE FIRST SUPPLEMENTAL NATIONAL DEFENSE APPROPRIATION ACT OF JUNE 26, 1940, FOR INCREASING THE ARMAMENT OF VESSELS, AND PLANS HAVE BEEN MADE, IN COLLABORATION WITH THE NAVY, TO PROVIDE FOR THE MOST EFFECTIVE UTILIZATION OF THE COAST GUARD ORGANIZATION.

UNDER THE PRINCIPLE APPLIED IN THE CASE OF THE SOUTHERN PACIFIC CO. V. UNITED STATES, SUPRA, IT WOULD APPEAR THAT WHERE THE PRINCIPAL PURPOSE OF SUCH TRAINING IS IN PREPARATION FOR THE PERFORMANCE BY THE COAST GUARD OF ITS DUTIES AS A PART OF THE NAVY AS DISTINGUISHED FROM PREPARATION FOR THE PERFORMANCE OF THE DUTIES NORMALLY REQUIRED OF IT OTHERWISE WHILE OPERATING UNDER THE TREASURY, SUCH TRAINING IS PROPERLY TO BE REGARDED AS MILITARY IN PURPOSE AND THE TRANSPORTATION OF COAST GUARD PROPERTY AS INCIDENT TO OR REQUIRED FOR SUCH TRAINING WOULD BE SUBJECT TO DEDUCTIONS FOR LAND-GRANT WHERE APPLICABLE. THE QUESTION WHETHER PARTICULAR TRAINING IS UNDERTAKEN AND ACCOMPLISHED PRINCIPALLY IN PREPARATION FOR THE ONE OR THE OTHER OF THESE PURPOSES MUST NECESSARILY BE ONE FOR DETERMINATION ADMINISTRATIVELY AS A QUESTION OF FACT AND SUCH DETERMINATION WHEN PROPERLY INDICATED IN CONNECTION WITH THE PAYMENT OF TRANSPORTATION BILLS WILL BE ACCEPTED BY THIS OFFICE IN THE AUDIT OF ACCOUNTS AS PRIMA FACIE CORRECT.