B-16793, JUNE 11, 1941, 20 COMP. GEN. 870

B-16793: Jun 11, 1941

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TRANSPORTATION - TRANSIT PRIVILEGES AND LAND-GRANT DEDUCTIONS WHILE THE GENERAL RULE IS THAT THE APPLICABLE THROUGH RATE FOR A TRANSIT SHIPMENT IS THE RATE IN EFFECT ON THE DATE OF ACCEPTANCE FOR TRANSPORTATION AT THE POINT OF ORIGIN. WHERE THE RIGHT OF THE GOVERNMENT TO LAND-GRANT DEDUCTIONS ON PROPERTY MOVING FOR CIVIL USE IS REMOVED BY THE CARRIER'S COMPLIANCE WITH SECTION 321 (B). WHILE THE SHIPMENT IS IN STORAGE AT THE TRANSIT POINT. THE COMMERCIAL CHARGES APPLICABLE TO THE TRANSPORTATION FROM THE TRANSIT POINT TO DESTINATION ARE NOT SUBJECT TO LAND-GRANT DEDUCTIONS. AS FOLLOWS: THERE IS ATTACHED FOR CONSIDERATION A COPY OF PUBLIC VOUCHER FOR TRANSPORTATION OF FREIGHT SUBMITTED BY THE YAZOO AND MISSISSIPPI VALLEY RAILROAD COMPANY AS CARRIER'S BILL NO.

B-16793, JUNE 11, 1941, 20 COMP. GEN. 870

TRANSPORTATION - TRANSIT PRIVILEGES AND LAND-GRANT DEDUCTIONS WHILE THE GENERAL RULE IS THAT THE APPLICABLE THROUGH RATE FOR A TRANSIT SHIPMENT IS THE RATE IN EFFECT ON THE DATE OF ACCEPTANCE FOR TRANSPORTATION AT THE POINT OF ORIGIN, WHERE THE RIGHT OF THE GOVERNMENT TO LAND-GRANT DEDUCTIONS ON PROPERTY MOVING FOR CIVIL USE IS REMOVED BY THE CARRIER'S COMPLIANCE WITH SECTION 321 (B), PART II, TITLE III, OF THE TRANSPORTATION ACT OF 1940, WHILE THE SHIPMENT IS IN STORAGE AT THE TRANSIT POINT, THE COMMERCIAL CHARGES APPLICABLE TO THE TRANSPORTATION FROM THE TRANSIT POINT TO DESTINATION ARE NOT SUBJECT TO LAND-GRANT DEDUCTIONS. THE RIGHTS OF THE GOVERNMENT UNDER LAND-GRANT STATUTES DISCUSSED.

ASSISTANT COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF AGRICULTURE, JUNE 11, 1941:

THERE HAS BEEN CONSIDERED YOUR LETTER OF MAY 10, 1941, AS FOLLOWS:

THERE IS ATTACHED FOR CONSIDERATION A COPY OF PUBLIC VOUCHER FOR TRANSPORTATION OF FREIGHT SUBMITTED BY THE YAZOO AND MISSISSIPPI VALLEY RAILROAD COMPANY AS CARRIER'S BILL NO. ASM 85323, SUPPORTED BY GOVERNMENT B/L NO. A-2283692, FOR FREIGHT CHARGES FROM CHICAGO, ILLINOIS, TO FOREST, MISSISSIPPI, ON A CARLOAD SHIPMENT OF POTATOES WHICH ORIGINATED AT BAKER, MINNESOTA, AND MOVED INTO CHICAGO, ILLINOIS, ON GOVERNMENT B/L NO. A- 2263516. THE INBOUND TRANSPORTATION CHARGES WERE PAID ON PUBLIC VOUCHER FOR TRANSPORTATION OF FREIGHT, D.O.V. NO. 1728123, DATE MARCH 29, 1941, SYMBOL NO. 78-400, ACCOUNTS OF G. F. ALLEN, SUBMITTED BY THE CHICAGO, MILWAUKEE, ST. PAUL AND PACIFIC RAILROAD COMPANY, AS CARRIER'S BILL NO. G- 42010, COPIES OF WHICH ARE ATTACHED. IT WILL BE NOTED FROM THE ATTACHED PAPERS THAT THE ORIGIN DATE OF BAKER, MINNESOTA, WAS OCTOBER 30, 1940, WHEREAS THE TRANSPORTATION ACT OF 1940, SUBSEQUENTLY DISCUSSED, WAS EFFECTIVE SEPTEMBER 18, 1940, EXCEPT FOR THE SPECIFIC PROVISIONS TO THE CONTRARY FOUND IN SECTION 321, PART II, OF TITLE III OF THE TRANSPORTATION ACT. THE REQUIRED RELEASES WERE APPROVED BY THE SECRETARY OF INTERIOR, AS FOLLOWS:

GREAT NORTHERN RAILWAY COMPANY, 1/23/41.

CHICAGO, ST. PAUL, MINNEAPOLIS AND OMAHA RY. CO., 11/25/40.

ILLINOIS CENTRAL SYSTEM, 11/28/40.

MOBILE AND OHIO RAILROAD COMPANY, 11/15/40.

THE QUESTION FOR DETERMINATION IS THE PROPER BASIS FOR FREIGHT CHARGES ON THE MOVEMENT FROM THE TRANSIT POINT, WHICH WAS CHICAGO, ILLINOIS, TO FINAL DESTINATION, WHICH WAS FOREST, MISSISSIPPI, ACCORDING TO THE INTERPRETATION TO BE PLACED UPON SECTION 321, PART II, OF TITLE III OF THE TRANSPORTATION ACT OF 1940, WHICH READS AS FOLLOWS:

"SEC. 321. (A) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, BUT SUBJECT TO THE PROVISIONS OF SECTION 1 (7) AND 22 OF THE INTERSTATE COMMERCE ACT, AS AMENDED, 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 FORCES OF THE UNITED STATES (OR OF PROPERTY OF SUCH MEMBERS) WHEN SUCH MEMBERS ARE TRAVELING ON OFFICIAL DUTY; AND THE RATE DETERMINED BY THE INTERSTATE COMMERCE COMMISSION AS REASONABLE THEREFOR SHALL BE PAID FOR THE TRANSPORTATION BY RAILROAD OF THE UNITED STATES MAIL: PROVIDED, HOWEVER, THAT ANY CARRIER BY RAILROAD AND THE UNITED STATES MAY ENTER INTO CONTRACTS FOR THE TRANSPORTATION OF THE UNITED STATES MAIL FOR LESS THAN SUCH RATE: PROVIDED FURTHER, THAT SECTION 3769, REVISED STATUTES ( U.S.C., 1934 EDITION, TITLE 41, SEC. 5), SHALL NOT HEREAFTER BE CONSTRUED AS REQUIRING ADVERTISING FOR BIDS IN CONNECTION WITH THE PROCUREMENT OF TRANSPORTATION SERVICES WHEN THE SERVICES REQUIRED CAN BE PROCURED FROM ANY COMMON CARRIER LAWFULLY OPERATING IN THE TERRITORY WHERE SUCH SERVICES ARE TO BE PERFORMED.

"/B) IF ANY CARRIER BY RAILROAD FURNISHING SUCH TRANSPORTATION, OR ANY PREDECESSOR IN INTEREST, SHALL HAVE RECEIVED A GRANT OF LANDS FROM THE UNITED STATES TO AID IN THE CONSTRUCTION OF ANY PART OF THE RAILROAD OPERATED BY IT, THE PROVISIONS OF LAW WITH RESPECT TO COMPENSATION FOR SUCH TRANSPORTATION SHALL CONTINUE TO APPLY TO SUCH TRANSPORTATION AS THOUGH SUBSECTION (A) OF THIS SECTION HAD NOT BEEN ENACTED UNTIL SUCH CARRIER SHALL FILE WITH THE SECRETARY OF THE INTERIOR, IN THE FORM AND MANNER PRESCRIBED BY HIM, A RELEASE OF ANY CLAIM IT MAY HAVE AGAINST THE UNITED STATES TO LANDS, INTERESTS IN LANDS, COMPENSATION, OR REIMBURSEMENT ON ACCOUNT OF LANDS OR INTERESTS IN LANDS WHICH HAVE BEEN GRANTED, CLAIMED TO HAVE BEEN GRANTED, OR WHICH IT IS CLAIMED SHOULD HAVE BEEN GRANTED TO SUCH CARRIER OR ANY SUCH PREDECESSOR IN INTEREST UNDER ANY GRANT TO SUCH CARRIER OR SUCH PREDECESSOR IN INTEREST AS AFORESAID. SUCH RELEASE MUST BE FILED WITHIN ONE YEAR FROM THE DATE OF THE ENACTMENT OF THIS ACT. NOTHING IN THIS SECTION SHALL BE CONSTRUED AS REQUIRING ANY SUCH CARRIER TO RECONVEY TO THE UNITED STATES LANDS WHICH HAVE BEEN HERETOFORE PATENTED OR CERTIFIED TO IT, OR TO PREVENT THE ISSUANCE OF PATENTS CONFIRMING THE TITLE TO SUCH LANDS AS THE SECRETARY OF THE INTERIOR SHALL FIND HAVE BEEN HERETOFORE SOLD BY ANY SUCH CARRIER TO AN INNOCENT PURCHASER FOR VALUE OR AS PREVENTING THE ISSUANCE OF PATENTS TO LANDS LISTED OR SELECTED BY SUCH CARRIER, WHICH LISTING OR SELECTION HAS HERETOFORE BEEN FULLY AND FINALLY APPROVED BY THE SECRETARY OF THE INTERIOR TO THE EXTENT THAT THE ISSUANCE OF SUCH PATENTS MAY BE AUTHORIZED BY LAW.'

IT IS THE CONTENTION OF THE CARRIERS AND THE ASSOCIATION OF AMERICAN RAILROADS THAT ON THIS MOVEMENT THE DATE OF SHIPMENT FROM THE TRANSIT POINT IS CONTROLLING FOR THE DETERMINATION OF THE PROPER BALANCE OF CHARGES. THIS POSITION IS FULLY SET FORTH IN A LETTER ADDRESSED TO THE CHIEF TRAFFIC OFFICERS AND CHIEF ACCOUNTING OFFICERS OF THE CARRIERS BY MR. A. F. CLEVELAND, VICE PRESIDENT OF THE ASSOCIATION OF AMERICAN RAILROADS, ON JANUARY 14, 1941, WHICH READ AS FOLLOWS:

"OUR OPINION HAS BEEN ASKED AS TO THE PROPER METHOD OF RENDERING BILLS AGAINST THE UNITED STATES GOVERNMENT ON SHIPMENTS OF THE GOVERNMENT GIVEN TRANSIT PRIVILEGES UNDER THE CARRIERS' REGULAR TRANSIT TARIFFS WHICH ARE NOT NOW ENTITLED TO THE BENEFIT OF LAND-GRANT DEDUCTIONS BUT WHICH MOVED INTO THE TRANSIT POINT ON GOVERNMENT BILLS OF LADING PRIOR TO THE EFFECTIVENESS OF THE PROVISIONS OF SECTION 321 OF THE TRANSPORTATION ACT OF 1940.

"IT IS UNDERSTOOD THAT SUCH SHIPMENTS MOVED INTO THE TRANSIT POINT AT FULL LOCAL RATES LESS ANY LAND-GRANT DEDUCTIONS WHICH MIGHT BE APPLICABLE TO THE IN-BOUND MOVEMENT. UNDER THE PUBLISHED TRANSIT TARIFFS, THE SHIPMENT IS MOVED OUT OF THE TRANSIT POINT AT THE BALANCE OF THE THRU RATE FROM POINT OF ORIGIN TO FINAL DESTINATION ARRIVED AT BY DEDUCTING FROM SUCH THROUGH RATE THE LOCAL RATE INTO THE TRANSIT POINT, THIS BALANCE BEING SUBJECT TO LAND-GRANT DEDUCTIONS UNDER THE RULING OF THE COMPTROLLER GENERAL.

"THE QUESTION IS WHETHER OR NOT UNDER THE USUAL PROVISIONS OF THE TRANSIT TARIFFS WHICH ESTABLISH THE FICTION OF A THRU MOVEMENT FROM POINT OF ORIGIN TO FINAL DESTINATION, AND THE ESTABLISHED PRACTICE AND RULINGS THAT SUCH THRU RATE AND ALL RULES, REGULATIONS, AND CHARGES IN CONNECTION THEREWITH AS OF THE DATE OF THE MOVEMENT FROM THE TRANSIT POINT MUST CONTINUE TO APPLY TO THIS OUT-BOUND MOVEMENT AND WHETHER OR NOT THIS ALSO INCLUDES THE REQUIREMENT THAT SUCH OUT-BOUND BALANCE IS SUBJECT TO LAND- GRANT DEDUCTIONS.

"AFTER CONSULTATION WITH THE LAW DEPARTMENT, IT IS OUR OPINION THAT IT IS NOT; THAT THE LAW PROVIDES THAT THE GOVERNMENT MUST PAY COMMERCIAL RATES ON AND AFTER THE DATE OF THE FILING OF A RELEASE (WHICH IS AFTERWARDS APPROVED BY THE SECRETARY OF INTERIOR) AND IT IS OUR OPINION THAT NOTHING IN THE TARIFFS OF THE CARRIERS CAN BE CONSTRUED AS COUNTERACTING THE EFFECTS OF THE LAW.

"IT IS, THEREFORE, OUR OPINION THAT ON SUCH SHIPMENTS THE GOVERNMENT SHOULD BE BILLED AT THE FULL COMMERCIAL BALANCE OF THE THRU RATE, PLUS ANY TRANSIT CHARGE WHICH THE TARIFF MAY PROVIDE.'

THE DEPARTMENT DOES NOT CONCUR IN THE VIEWS EXPRESSED BY THE ASSOCIATION OF AMERICAN RAILROADS. THE INTERSTATE COMMERCE ACT, IN SECTION 6, REQUIRES ALL COMMON CARRIERS BY RAIL TO PUBLISH AND FILE WITH THE INTERSTATE COMMERCE COMMISSION ALL OF THEIR EFFECTIVE RATES, CHARGES, AND SPECIAL SERVICES, AND FURTHER PROVIDES RATES, CHARGES, AND SPECIAL SERVICES SO AUTHORIZED BY TARIFF SHALL BE THE LEGAL CHARGES COLLECTIBLE BY THE CARRIERS. IT IS PROVIDED IN THE ELKINS ACT, SECTION I, AS AMENDED, THAT,"WHENEVER ANY CARRIER FILES WITH THE INTERSTATE COMMERCE COMMISSION OR PUBLISHES A PARTICULAR RATE UNDER THE PROVISIONS OF THE ACT TO REGULATE COMMERCE OR ACTS AMENDATORY THEREOF, OR PARTICIPATES IN ANY RATES SO FILED, OR PUBLISHES THAT RATE AS AGAINST SUCH CARRIER, ITS OFFICERS OR AGENTS, IN ANY PROSECUTION BEGUN UNDER THIS ACT, SHALL BE CONCLUSIVELY DEEMED TO BE THE LEGAL RATE, AND ANY DEPARTURE FROM SUCH RATE, OR ANY OFFER TO DEPART THEREFROM, SHALL BE DEEMED TO BE AN OFFENSE UNDER THIS SECTION OF THIS ACT.'

IT IS THE PURPOSE TO DEMONSTRATE HERE THAT THE LAND-GRANT FREIGHT RATES WERE DEFINITELY ESTABLISHED RATES AND HAD THE FULL FORCE OF THE INTERSTATE COMMERCE ACT JUST AS ANY OTHER FREIGHT RATE FOUND IN THE CARRIERS' TARIFFS PUBLISHED AND FILED WITH THE INTERSTATE COMMERCE COMMISSION.

ALL OF THE ORIGINAL LAND GRANT ACTS CONTAINED THE FOLLOWING CLAUSE:

"THE SAID RAILROADS AND BRANCHES SHALL BE AND REMAIN PUBLIC HIGHWAY FOR THE USE OF THE GOVERNMENT OF THE UNITED STATES, FREE FROM TOLL OR OTHER CHARGE, FOR TRANSPORTATION OF ANY PROPERTY OR TROOPS OF THE UNITED STATES.'

CULMINATING LITIGATION OVER THIS CLAUSE, THE UNITED STATES SUPREME COURT IN THE CASE OF THE LAKE SUPERIOR AND MISSISSIPPI RAILROAD COMPANY V. THE UNITED STATES, 93 U.S. 442, HELD THAT THE GOVERNMENT ONLY SECURED TO ITSELF FREE USE OF THE ROADWAYS OR REAL PROPERTY AND APPURTENANCES, SUCH AS ROADBED, STATIONS, ROUND HOUSES, ETC., AND THAT THE CARRIERS WERE ENTITLED TO COMPENSATION FOR USE OF THEIR ROLLING STOCK, PERSONNEL, FUEL AND WORK PERFORMED IN TRANSPORTING GOVERNMENT PROPERTY. SUBSEQUENTLY IN THE CASE OF THE ATCHISON RAILROAD COMPANY V. THE UNITED STATES, 15 COURT OF CLAIMS 126-151, IT WAS DECIDED THAT 50 PERCENT OF TARIFF RATES AND FARES WOULD BE AN EQUITABLE COMPENSATION FOR ALL RAILROAD SERVICES IN EXCESS OF THOSE IN WHICH THE SUPREME COURT PREVIOUSLY HELD THE GOVERNMENT HAD SECURED TO ITSELF FREE BY VIRTUE OF THE QUOTED CLAUSE IN THE LAND- GRANT ACTS.

AS THE COMPENSATION FIXED WAS A DEFINITELY STATED PERCENT OF THE TARIFF RATES AND FARES ON A FORMULA WHICH DID NOT VARY, THE LAWFUL RATE ON ALL GOVERNMENT FREIGHT BECAME THE PUBLISHED TARIFF RATE APPLIED AGAINST THE STATED FORMULA AND SUCH RATES MUST BE DETERMINED ACCORDING TO ALL OTHER PROVISIONS OF THE LAW.

THE TRANSIT ARRANGEMENTS OF THE CARRIERS AS ESTABLISHED BY LAWFUL PUBLICATIONS HAVE BEEN THE SUBJECT OF CONSIDERABLE DISPUTE AND THERE ARE DECISIONS ON RECORD, BY BOTH THE INTERSTATE COMMERCE COMMISSION AND THE SUPREME COURT OF THE UNITED STATES, DEFINING, INTERPRETING, AND DEFINITELY LIMITING THESE PUBLICATIONS. AMONG THESE DECISIONS, IT IS FOUND THAT THE SUPREME COURT OF THE UNITED STATES IN THE CASE OF THE CENTRAL RAILROAD COMPANY V. UNITED STATES, 257 U.S. 247, HAS SAID THAT THE TRANSIT ARRANGEMENT "RESTS UPON THE FICTION THAT THE INCOMING AND OUTGOING TRANSPORTATION SERVICE, WHICH ARE IN FACT DISTINCT, CONSTITUTES A CONTINUOUS SHIPMENT OF THE IDENTICAL ARTICLE FROM POINT OF ORIGIN TO FINAL DESTINATION.'

THE INTERSTATE COMMERCE COMMISSION IN THE CASE OF INTERSTATE REMEDY COMPANY V. AMERICAN EXPRESS COMPANY, 16 I.C.C. 436, SAID " IF THERE IS OFFERED TO HIM UNDER THE TARIFF A RIGHT OF STOPPING IN TRANSIT, RECONSIGNMENT, STORAGE, OR RETURN OF FREIGHT, HE IS ENTITLED TO THE USE OF SUCH PRIVILEGE, EVEN THOUGH IT MAY BE LATER CANCELLED OUT OF THE TARIFF BEFORE THE TIME ALLOWED FOR THE EXERCISE OF SUCH RIGHT HAS EXPIRED. THE DATE OF ORIGIN SHIPMENT DETERMINES THE RIGHT, PRIVILEGE, AND OBLIGATIONS ATTACHING TO THAT SHIPMENT THROUGHOUT ITS TRANSPORTATION; AND THIS MUST BE DETERMINED BY THE TARIFF IN FORCE UPON THAT DATE.' AGAIN IN THE TRANSIT CASE, 25 I.C.C. 130, 133, IT WAS STATED "THE RATE IN EFFECT AT THE TIME SHIPMENT BEGAN TO MOVE IS THE RATE LAWFULLY APPLICABLE. IN CASE A PRIVILEGE HAS BEEN ENJOYED PRIOR TO THE DATE OF AN ORDER, A TARIFF CANCELLING SUCH PRIVILEGE DOES NOT AFFECT TONNAGE THAT BEGAN TO MOVE PRIOR TO THE CANCELLATION, BUT SUCH TONNAGE IS SUBJECT TO THE POLICING REQUIREMENTS.'

THE PRINCIPLE ESTABLISHED AND FOLLOWED IN THESE CASES BY BOTH THE INTERSTATE COMMERCE COMMISSION AND THE SUPREME COURT OF THE UNITED STATES SEEMS TO HAVE BEEN BASED UPON THE UNDERSTANDING THAT NO CHANGE IN THE LAW OR THE CARRIERS' PUBLISHED TARIFFS WHICH ARE A PART OF THE LAW CAN IN ANY WAY AFFECT ANY PRIVILEGE, RIGHT, OR EXPECTATIONS, WHICH A SHIPPER COULD ANTICIPATE ACCORDING TO THE EXISTING LAWS OR PUBLISHED TARIFFS AT THE TIME A TRANSIT MOVEMENT WAS INITIATED FROM ORIGINAL POINT OF SHIPMENT.

CONSIDERING NOW THE EFFECT OF THE TARIFFS AS THEY APPLIED TO THIS PARTICULAR TRANSACTION, IT WILL BE FOUND THAT ITEM 3380-B ON PAGE 6 OF SUPPLEMENT 7 TO C., M., ST. P. AND P., G.F.D. NO. 163601-I, I.C.C. NO. B- 7175, PROVIDES THAT POTATOES, CARLOADS, ORIGINATING AT STATIONS IN MINNESOTA MAY BE STOPPED IN TRANSIT AT CHICAGO, ILLINOIS, FOR STORAGE, REHANDLING, TRANSFERRING, AND MIXING WHEN DESTINED TO CHICAGO, ILLINOIS, AND POINTS BEYOND. CIRCLE B AT THE BOTTOM OF PAGE 6, REFERS TO ITEM 520, WHICH IS FOUND ON PAGE 3 OF THE SAME SUPPLEMENT AND READS AS FOLLOWS: "THE RULES AND REGULATIONS PROVIDED IN ITEMS 160-360, INCLUSIVE, 380 TO 470, INCLUSIVE, AND ITEM 530, WILL NOT APPLY IN CONNECTION WITH SHIPMENTS OF CABBAGE, GARLIC, ONIONS, POTATOES, AND RUTABAGAS, GIVEN TRANSIT UNDER ITEMS 3140, 3160, 3200 TO 3580, INCLUSIVE. FOR RULES AND REGULATIONS TO APPLY IN CONNECTION WITH SUCH PRIVILEGES, SEE WESTERN TRUNK LINE TARIFF NO. 392, AGENT L. E. KIPP-S, I.C.C. NO. A-3149, ILL. C.C. NO. 288, M.R.C. NO. 258, P.S.C. MO. NO. 680, N.D.C. NO. 104.'

WESTERN TRUNK LINE FREIGHT TARIFF NO. 392, L. E. KIPP'S NO. 349, IN ITEM 135, PAGE 6, READS AS FOLLOWS: "/A) RATE INTO THE TRANSIT STATION WILL BE THE CURRENT TARIFF RATE POINT OF ORIGIN TO SUCH STATION.

"/B) RATE FROM TRANSIT STATION TO TRANSIT DESTINATION WILL BE THE DIFFERENCE BETWEEN THE RATE COLLECTED TO THE TRANSIT STATION AND THE TRANSIT RATE APPLICABLE FROM POINT OF ORIGIN TO TRANSIT DESTINATION. SUBJECT TO PARAGRAPH C.)

"/C) TRANSIT RATE TO BE APPLIED SHALL BE THE APPLICABLE RATE IN EFFECT ON DATE OF SHIPMENT FROM POINT OF ORIGIN:

"1. FROM POINT OF ORIGIN TO TRANSIT DESTINATION, OR

"2. FROM POINT OF ORIGIN TO TRANSIT STATION, OR

"3. FROM TRANSIT STATION TO TRANSIT DESTINATION, WHICHEVER IS ASSESSED, PLUS TRANSIT CHARGE AND ANY OTHER APPLICABLE CHARGES, IF ANY, AS PROVIDED IN TARIFF CARRIERS PARTIES HERETO OR THEIR AGENT LAWFULLY ON FILE WITH THE INTERSTATE COMMERCE COMMISSION ON INTERSTATE TRAFFIC OR WITH THE PROPER STATE COMMISSION ON INTRASTATE TRAFFIC.

"/D) THE WEIGHT ON WHICH THE TRANSIT CHARGE IS TO BE ASSESSED WILL BE THE ACTUAL WEIGHT OF THE TRANSIT PORTION OF THE SHIPMENT, OR THE MINIMUM CARLOAD WEIGHT APPLICABLE IN CONNECTION WITH THE TRANSIT RATE, WHICHEVER IS GREATER.'

WESTERN TRUNK LINE TARIFF 10-K, I.C.C. A-3131 ON PAGE 7 ASSIGNED INDEX NO. 416, TO THE ORIGIN STATION BAKER, MINNESOTA. ON PAGE 66, INDEX NO. 4316, IS FOUND TO BE INCLUDED IN ORIGIN GROUP 13, WHICH ON PAGE 75 IS EXPLAINED AS TAKING GROUP I RATES PLUS 14 CENTS PER HUNDREDWEIGHT. PAGE 31, THE FINAL DESTINATION, FOREST, MISSISSIPPI, IS ASSIGNED INDEX NO. 35174, AND ON PAGE 131, FROM GROUP I, THE ESTABLISHED RATE IS 65 CENTS PER HUNDRED WEIGHT; ADDING THE ARBITRARY OF 14 CENTS PER HUNDREDWEIGHT, THERE IS ESTABLISHED FROM BAKER, MINNESOTA, TO FOREST, MISSISSIPPI, A THROUGH RATE OF 79 CENTS PER HUNDREDWEIGHT ON POTATOES IN CARLOADS. THIS RATE IS APPLICABLE VIA GREAT NORTHERN, ST. PAUL, MINNESOTA, CHICAGO, ST. PAUL, MINNEAPOLIS AND OMAHA, LE MARS, IOWA, ILLINOIS CENTRAL, CHICAGO, ILLINOIS, ILLINOIS CENTRAL, CAIRO, ILLINOIS, MOBILE AND OHIO, MERIDIAN, MISSISSIPPI, YAZOO AND MISSISSIPPI VALLEY, BEYOND.

ACCORDING TO THE UNDERSTANDING OF THE DEPARTMENT THAT THE TRAFFIC IS SUBJECT TO THE PROVISIONS OF THE LAW AND PUBLISHED TARIFFS IN EFFECT ON THE DATE SHIPMENT MOVED FROM BAKER, MINNESOTA, THE FOLLOWING LAND GRANT FORMULA SHOULD BE APPLIED TO THE ESTABLISHED RATE OF 79 CENTS PER HUNDREDWEIGHT.

CHART

PERCENT OF LAND GRANT (1) TO CAIRO - ------------------------------- .42 (1) TO ST. PAUL -------------- ----------- 38 PERCENT 48.127 (1) BEYOND -- ------------------------ ------ 62 PERCENT (2) TO LEMARS ----------------- --------- 22 PERCENT 48.774 (2) BEYOND ------------------------------ 78 PERCENT 43.283 (1) BEYOND CAIRO ---------------------------- .37 (3) TO MERIDIAN --------------------------- 71 PERCENT 27.063 (3) BEYOND -------- ------------------------- 29 PERCENT 50.000

NET THROUGH RATE ------------------------- .47259

PAID IN RATE ----------------------------- .21414

BALANCE ---------------------------------- .25845

(1) WTL DS 476-D--- SFTB DS 286-C.

(2) MILEAGE PRORATE 242 MILES TO LE MARS, IA., 846 MILES TO CAIRO, ILLINOIS, VIA CHICAGO, ILLINOIS.

(3) M AND O DS A-467--- Y AND MV DS 3114-A.

REFERENCE TO CARRIER'S BILL WILL REVEAL THAT THE CHARGES HAVE BEEN CALCULATED BY DEDUCTING FROM THE THROUGH RATE OF 79 CENTS PER HUNDREDWEIGHT, AN AMOUNT OF 38 CENTS PER HUNDREDWEIGHT, WHICH IS SUPPOSED TO BE REPRESENTATIVE OF THE INBOUND MOVEMENT TO THE TRANSIT POINT DESPITE THE FACT THAT THE DEPARTMENT DID NOT PAY 38 CENTS PER HUNDREDWEIGHT, BUT A LAND-GRANT RATE OF .21414 CENTS PER HUNDREDWEIGHT. THIS PROCEDURE IS IN DIRECT CONFLICT WITH THE PRINCIPLE EXPRESSED IN THE ASSISTANT COMPTROLLER GENERAL'S DECISION NO. A-97126 OF SEPTEMBER 20, 1949, IN WHICH IT WAS STATED, IN EFFECT, THAT CALCULATION OF CHARGES ON GOVERNMENT FREIGHT MOVING ON A TRANSIT BASIS SHOULD BE MADE BY DIVIDING THE APPLICABLE RATE OVER THE TRANSIT POINT ON ESTABLISHED COMMERCIAL DIVISIONS WITH THE LAND- GRANT FORMULA APPLIED TO THOSE PARTS OF THE THROUGH RATE THAT ACCRUED WHILE GOVERNMENT OWNED OVER LAND-GRANT MILEAGE. THERE DOES NOT APPEAR TO BE ANY BASIS OF REASON TO SUPPORT THE PROCEDURE THAT HAS BEEN ADOPTED BY THE CARRIER IN THE CALCULATION OF CHARGES ON THIS MOVEMENT.

IT HAS BEEN THE PURPOSE OF THIS PRESENTATION TO ESTABLISH THE FOLLOWING PRINCIPAL POINTS:

(1) THAT THE LAND-GRANT FREIGHT RATES HAD ACTUAL AND TANGIBLE EXISTENCE.

(2) THAT IT IS A WELL-ESTABLISHED PRINCIPAL OF LAW THAT THE ORIGIN DATE OF TRANSIT TONNAGE CONTROLS THE ASSESSMENT OF FREIGHT CHARGES.

(3) THAT IN VIEW OF FACTS (1) AND (2) THE THROUGH LAND-GRANT FREIGHT RATES IN EFFECT ON THE ORIGIN DATE OF THE TRANSIT TONNAGE CONTROLLED THE THROUGH MOVEMENT.

THERE IS ALSO ATTACHED A COPY OF PUBLIC VOUCHER FOR TRANSPORTATION OF FREIGHT RENDERED BY THE YAZOO AND MISSISSIPPI VALLEY RAILROAD COMPANY AS CARRIER'S BILL NO. A.S.M. 2792, SUPPORTED BY B/L NO. A 2277054, WHICH IS SIMILAR TO THE CASE DISCUSSED IN DETAIL, EXCEPT THAT THIS CONSIGNMENT DID NOT BECOME THE PROPERTY OF THE UNITED STATES GOVERNMENT UNTIL DATE OF MOVEMENT FROM THE TRANSIT POINT; HOWEVER, IF IT IS HELD THAT THE PROVISIONS OF THE LAW AND ESTABLISHED FREIGHT TARIFFS IN EFFECT AT THE TIME OF ORIGINAL MOVEMENT MUST BE CONSIDERED IN DETERMINING THE PROPER FREIGHT CHARGES, THIS TYPE OF TRAFFIC IS THEN SUBJECT TO THE PREVIOUS DECISION OF THE ASSISTANT COMPTROLLER GENERAL NO. A-97126, OF SEPTEMBER 20, 1939, AND THE CHARGES SHOULD BE CALCULATED ACCORDINGLY, RATHER THAN ON THE FULL BALANCE AS STATED BY THE CARRIER.

DUE TO THE FACT THAT THE CARRIERS ARE NOT IN ACCORD WITH THE UNDERSTANDING OF THE DEPARTMENT, A RULING IS RESPECTFULLY REQUESTED.

ACCORDING TO THE COPY OF BILL OF LADING A-2283692, SUBMITTED WITH YOUR LETTER, THE SHIPMENT FROM CHICAGO TO DESTINATION WAS FORWARDED FROM CHICAGO UNDER DATE OF DECEMBER 17, 1940. AS INDICATED IN YOUR LETTER, THE EFFECTIVE DATES OF RELEASES FILED BY THE CARRIERS CONCERNED BETWEEN CHICAGO AND DESTINATION WERE PRIOR TO THE DATE OF RESHIPMENT FROM CHICAGO.

YOUR CONCLUSION THAT THE UNITED STATES IS ENTITLED TO DEDUCTION FOR LAND GRANT WITH RESPECT TO THE CHARGES FOR THAT PORTION OF THE HAUL BEYOND CHICAGO, NOTWITHSTANDING THAT THE LAND-GRANT CARRIERS INVOLVED BEYOND THAT POINT HAD FILED RELEASES WHICH HAD BECOME EFFECTIVE, UNDER THE TERMS OF THE TRANSPORTATION ACT OF 1940, BEFORE THE DATE OF RESHIPMENT FROM CHICAGO, IS BASED UPON THE ASSUMPTION THAT BY VIRTUE OF THE PROVISIONS OF THE LAND-GRANT STATUTES THERE WAS ESTABLISHED, AS OF THE DATE OF THE ACCEPTANCE OF THE SHIPMENT AT BAKER, MINNESOTA, BY A COMMON CARRIER FOR TRANSPORTATION, A NET RATE WHICH WAS AS FIXED AND INVARIABLE IN ITS APPLICABILITY TO THIS SHIPMENT AS THE GROSS OR TARIFF RATE, PUBLISHED AND FILED AS REQUIRED BY THE INTERSTATE COMMERCE ACT, WOULD BE TO A LIKE SHIPMENT BELONGING TO A MEMBER OF THE GENERAL PUBLIC AND TENDERED, ON HIS BEHALF, FOR LIKE TRANSPORTATION. IT WOULD APPEAR, HOWEVER, THAT THIS VIEW CONFUSES THE REQUIREMENTS OF THE INTERSTATE COMMERCE ACT, AS TO THE APPLICABILITY OF DULY FILED AND PUBLISHED RATES, WITH THE PROVISIONS OF THE LAND-GRANT STATUTES REQUIRING THAT IN EFFECTING PAYMENT FOR THE TRANSPORTATION OF PROPERTY OF THE UNITED STATES OVER LAND-GRANT LINES A SPECIFIED PERCENTAGE OF THE FULL COMPENSATION ACCRUING TO SAID LINES, COMPUTED ON THE BASIS OF RATES AVAILABLE TO THE PUBLIC, SHALL NOT BE EXCEEDED.

INSOFAR AS THE APPLICABILITY OF RATES, PUBLISHED AND FILED PURSUANT TO THE REQUIREMENTS OF INTERSTATE COMMERCE ACT IS CONCERNED, THE RULE IS WELL ESTABLISHED THAT THE RATE IN EFFECT ON THE DATE SHIPMENTS ARE ACCEPTED FOR TRANSPORTATION IS THE LEGAL RATE. TRANSCONTINENTAL FREIGHT COMPANY V. DIRECTOR GENERAL, 62 I.C.C. 127. SEE ALSO IN THIS CONNECTION SWIFT AND CO. V. UNITED STATES, 225 FED. 291. FOR THE APPLICATION OF THIS RULE IN CONNECTION WITH TRANSITED SHIPMENTS, SEE LARABEE FLOUR MILLS CORPORATION ET AL. V. ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY ET AL., 148 I.C.C. 5; SOUTHERN RICE SALES COMPANY, INC., V. NEW ORLEANS, TEXAS AND MEXICO RAILWAY COMPANY ET AL., 201 I.C.C. 113; FERD BRENNER LUMBER COMPANY V. DIRECTOR GENERAL, AS AGENT, ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY ET AL., 81 I.C.C. 241; AND BOARD OF TRADE OF KANSAS CITY, MO., ET AL. V. ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY ET AL., 69 I.C.C. 185.

IT IS WELL SETTLED ALSO THAT THE GOVERNMENT OF THE UNITED STATES, BEING A PART OF THE GENERAL PUBLIC, IS ENTITLED TO TRANSPORTATION AT RATES NOT IN EXCESS OF THOSE AVAILABLE TO THE PUBLIC FOR LIKE SERVICE. THUS IN 19 COMP. DEC. 770, 772, IT WAS SAID:

IN THE FIRST PLACE, IT MAY BE STATED THAT THE GOVERNMENT IS ENTITLED TO AS FAVORABLE RATES AND UNDER THE SAME CONDITIONS AS APPLY TO THE GENERAL PUBLIC UNLESS MORE FAVORABLE RATES AND CONDITIONS ARE ACCORDED THE GOVERNMENT WHICH MAY BE GIVEN WITHOUT VIOLATING THE INTERSTATE COMMERCE LAW. BUT IN THE ABSENCE OF ANY SUCH CONCESSIONS, THE GOVERNMENT IS SUBJECT TO THE SAME RATES AND CONDITIONS AS THE GENERAL PUBLIC. * * *

ALSO IN MISSOURI PACIFIC RAILROAD COMPANY V. THE UNITED STATES, 71 CT.1CLS. 650, 661, IT WAS STATED:

IT IS TO BE NOTED THAT THE CIRCULAR WAS NOT AUTHORIZED OR FILED WITH THE INTERSTATE COMMERCE COMMISSION AND FROM ITS TERMS CLEARLY INDICATES THE CHARGE AS A SURCHARGE, A CHARGE "IN ADDITION TO THE REVENUE ACCRUING ON TICKETS.' GOVERNMENT OFFICERS ARE WITHOUT AUTHORITY TO CONTRACT FOR RATES HIGHER THAN THOSE TENDERED TO THE PUBLIC IN DULY PUBLISHED AND AUTHORIZED TARIFFS. * * *

IT IS OBVIOUS, THEREFORE, THAT ANY CHANGE IN THE PUBLISHED TARIFF RATE, MADE EFFECTIVE AFTER THE ACCEPTANCE OF THE SHIPMENT HERE CONCERNED AT BAKER, MINNESOTA, WOULD BE EQUALLY AS INEFFECTIVE WITH RESPECT TO THIS SHIPMENT, IN THE ABSENCE OF ANY SPECIAL CONCESSION FROM THE CARRIERS, AS IT WOULD BE WITH RESPECT TO LIKE SHIPMENTS SIMILARLY TENDERED BY MEMBERS OF THE PUBLIC AT LARGE. IT IS NOT APPARENT, NOR IS IT UNDERSTOOD, THAT THE CARRIERS HERE CONCERNED CONTEND FOR THE APPLICATION OF ANY OTHER BASIS.

CONCERNING THE EFFECT OF THE LAND-GRANT STATUTES UPON THE MATTER OF CHARGES IT IS TO BE NOTED THAT THE GRANT OF LANDS IN AID OF THE CONSTRUCTION OF THE LINES OPERATED BY THE ILLINOIS CENTRAL SYSTEM AND THE MOBILE AND OHIO RAILROAD BETWEEN CHICAGO AND THE DESTINATION HERE CONCERNED WAS MADE SUBJECT TO THE PROVISION THAT "THE SAID RAILROAD AND BRANCHES SHALL BE AND REMAIN A PUBLIC HIGHWAY, FOR THE USE OF THE GOVERNMENT OF THE UNITED STATES, FREE FROM TOLL OR OTHER CHARGE UPON THE TRANSPORTATION OF ANY PROPERTY OR TROOPS OF THE UNITED STATES.' ACT OF SEPTEMBER 20, 1850, 9 STAT. 466, 457, AND ACT OF AUGUST 11, 1856, 11 STAT. 30, 31. AT THIS POINT IT IS PROPER TO OBSERVE THAT WHAT THE GOVERNMENT OBTAINED BY VIRTUE OF THIS CONDITION UPON THE GRANT WAS A RIGHT TO THE "USE" OF SAID RAILROADS FREE OF TOLL OR OTHER CHARGE UPON THE TRANSPORTATION OF ITS PROPERTY OR TROOPS. LAKE SUPERIOR AND MISSISSIPPI RAILROAD COMPANY V. UNITED STATES, 93 U.S. 442. PURSUANT TO THE DETERMINATION IN THAT CASE THAT THE ABOVE STATUTORY PROVISION GAVE THE UNITED STATES THE RIGHT TO USE THE "HIGHWAY" WITHOUT CHARGE BUT DID NOT REQUIRE THAT THE RAILROAD SHOULD TRANSPORT PROPERTY OF THE UNITED STATES FREE OF CHARGE, CONGRESS ADOPTED A POLICY OF IMPOSING A LIMITATION UPON THE AMOUNT THAT MIGHT BE PAID CARRIERS FOR TRANSPORTING PROPERTY OF THE UNITED STATES OVER ROADS SO AIDED IN CONSTRUCTION BY GRANTS OF LAND. THUS IN THE ACT OF JUNE 7, 1924, 43 STAT. 486, IT IS PROVIDED:

* * * THAT HEREAFTER PAYMENT SHALL BE MADE AT SUCH RATES AS THE SECRETARY OF WAR SHALL DEEM JUST AND REASONABLE AND SHALL NOT EXCEED 50 PERCENTUM OF THE FULL AMOUNT OF COMPENSATION, COMPUTED ON THE BASIS OF THE TARIFF OR LOWER SPECIAL RATES FOR LIKE TRANSPORTATION PERFORMED FOR THE PUBLIC AT LARGE, FOR THE TRANSPORTATION OF PROPERTY OR TROOPS OF THE UNITED STATES OVER ANY RAILROAD WHICH UNDER LAND-GRANT ACTS WAS AIDED IN ITS CONSTRUCTION BY A GRANT OF LAND ON CONDITION THAT SAID RAILROAD SHALL BE AND REMAIN A PUBLIC HIGHWAY FOR THE USE OF THE UNITED STATES, AND FOR WHICH ADJUSTMENT OF COMPENSATION IS REQUIRED IN ACCORDANCE WITH DECISIONS OF THE SUPREME COURT CONSTRUCTING SUCH LAND GRANT ACTS, OR OVER ANY RAILROAD WHICH WAS AIDED IN ITS CONSTRUCTION BY A GRANT OF LAND ON CONDITION THAT SUCH RAILROAD SHOULD BE A POST ROUTE AND MILITARY ROAD, SUBJECT TO SUCH REGULATIONS AS CONGRESS MAY IMPOSE RESTRICTING THE CHARGE FOR SUCH GOVERNMENT TRANSPORTATION, AND SUCH PAYMENT SHALL BE ACCEPTED AS IN FULL FOR ALL DEMANDS FOR SUCH SERVICE.

SIMILAR PROVISIONS HAD BEEN CONTAINED IN PRIOR WAR DEPARTMENT APPROPRIATION ACTS FOR MANY YEARS. IT IS TO BE NOTED THAT THE ABOVE PROVISION IMPOSES A LIMITATION UPON THE AMOUNT OF PAYMENT AND THAT TO DETERMINE THAT LIMITATION IT IS FIRST NECESSARY TO ASCERTAIN "THE FULL AMOUNT OF COMPENSATION" COMPUTED, AS THE ACT SPECIFIES,"ON THE BASIS OF THE TARIFF OR LOWER SPECIAL RATES FOR LIKE TRANSPORTATION PERFORMED FOR THE PUBLIC AT LARGE.' IT IS NOT APPARENT HOW THE OPERATION OF THIS STATUTORY REQUIREMENT, IN AND OF ITSELF, ESTABLISHES A NET RATE SUBJECT TO THE PROVISIONS AND REQUIREMENTS OF THE INTERSTATE COMMERCE ACT. WHILE THE USE, AS A PRACTICAL MATTER, OF A NET RATE, DERIVED BY REDUCING A GROSS OR TARIFF RATE BECAUSE OF ITS APPLICATION OVER A LAND GRANT ROAD, MAY CONTRIBUTE TO CONVENIENCE IN THE COMPUTATION OF THE CHARGES CONSTITUTING THE MAXIMUM PAYABLE, THERE APPEARS NO BASIS FOR THE CONCLUSION THAT THE NET RATE SO DERIVED, AS DISTINGUISHED FROM THE GROSS OR TARIFF RATE FROM WHICH COMPUTED, IS SUBJECT TO THE PROVISIONS AND THE REQUIREMENTS OF THE INTERSTATE COMMERCE ACT. THAT IT IS NOT SO SUBJECT SEEMS SUFFICIENTLY ESTABLISHED BY THE FACT THE INTERSTATE COMMERCE COMMISSION IN UNITED STATES V. UNION PACIFIC RAILROAD COMPANY ET AL., 28 I.C.C. 518, 524, STATED:

* * * NO DUTIES ARE DELEGATED TO US UNDER, AND WE CAN NOT ASSUME TO INTERPRET OR DETERMINE THE PURPOSE OR SCOPE OF, THE SO-CALLED PUBLIC HIGHWAYS ACT OF OF STATUTES UNDER WHICH RIGHTS AND PRIVILEGES MAY BE RESERVED TO THE UNITED STATES IN RETURN FOR SUBSIDIES IN LANDS OR BONDS OR LOAN OF CREDIT. IF THE DENIAL OF THE THROUGH ROUTES AND JOINT RATES HERE SOUGHT TENDS TO DEPRIVE THE GOVERNMENT OF THE FULL BENEFIT OF LAND-GRANT DEDUCTIONS RESERVED TO IT BY STATUTE, REMEDY MUST BE SOUGHT AT OTHER HANDS THAN OURS.

ON THE OTHER HAND, THE VIEW THAT THE PROVISIONS OF THE LAND-GRANT STATUTES RELATE TO THE MATTER OF PAYMENT RATHER THAN TO THE ESTABLISHING OF A NET RATE SEEMS CLEARLY INDICATED IN THE EARLY CONSIDERATION GIVEN THE REQUIREMENTS OF VARIOUS LAND-GRANT STATUTES IN 8 COMP. DEC. 598, IN WHICH IT WAS SAID:

THE FUNDAMENTAL PRINCIPLE UPON WHICH THE ADJUSTMENT OF COMPENSATION IS REQUIRED TO BE MADE IS THAT THE BASIS OF COMPENSATION SHOULD NOT BE IN EXCESS OF THE RATES CHARGED THE PUBLIC FOR THE SAME KIND OF SERVICE. THIS PRINCIPLE SHOULD GOVERN EVEN IN THE ABSENCE OF LEGISLATION, AND WHETHER SERVICE IS OVER AIDED OR NONAIDED LINES. NO RAILROAD CONTENDS FOR ANY OTHER BASIS OF SETTLEMENT.

WHERE THE EARNINGS ARE DETERMINED IN ACCORDANCE WITH THIS PRINCIPLE, SETTLEMENT THEREFOR IS MADE AS REQUIRED BY LAW; NAMELY---

NONAIDED ROADS ARE PAID IN FULL;

BOND-AIDED ROADS ARE CREDITED WITH THEIR EARNINGS;

FIFTY PERCENT LAND-GRANT ROADS ARE PAID ONE-HALF OF THEIR EARNINGS;

FREE LAND-GRANT ROADS ARE PAID NOTHING.

IN SOUTHERN PACIFIC COMPANY V. THE UNITED STATES, 48 CT.1CLS. 227, THE COURT OF CLAIMS IN CONSIDERING A RELATED MATTER, STATED:

THE COMPTROLLER OF THE TREASURY, IN A VERY EXHAUSTIVE OPINION COVERING THE ENTIRE SUBJECT, FOUND IN 8 COMP. DEC., P. 598, HELD ADVERSELY TO CLAIMANT'S CONTENTION. THE OPINION CITES AND ANALYZES THE VARIOUS DECISIONS UPON THE SUBJECT AND SO COMPLETELY COVERS THE ENTIRE CONTROVERSY THAT WE CITE IT WITH OUR ENTIRE APPROVAL.

CONFORMABLY WITH THE PRINCIPLES THUS INDICATED IT WOULD APPEAR THAT THE CHARGES FOR THE TRANSPORTATION SERVICE HERE CONCERNED ARE REQUIRED TO BE COMPUTED, IN THE ABSENCE OF ANY SPECIAL CONCESSIONS FROM THE CARRIERS, ON THE BASIS OF RATES APPLICABLE ACCORDING TO DULY FILED, PUBLISHED, AND EFFECTIVE TARIFFS, AND AVAILABLE TO THE GENERAL PUBLIC FOR LIKE TRANSPORTATION, BUT THAT PAYMENT FOR THE SERVICE, WHERE SUBJECT TO THE PROVISIONS OF THE ACT OF JUNE 7, 1924, 43 STAT. 486, IS NOT TO EXCEED "50 PERCENTUM OF THE FULL AMOUNT OF COMPENSATION" FOUND SO ACCRUING OVER ANY RAILROAD AIDED IN ITS CONSTRUCTION BY GRANTS OF LAND MADE UPON THE CONDITIONS SPECIFIED IN THE CITED ACT. ACCORDINGLY THERE IS FOR CONSIDERATION ONLY THE QUESTION WHETHER THE TRANSPORTATION ACT OF 1940 REMOVES THE APPLICATION OF THIS PROVISION WITH RESPECT TO THE TRANSPORTATION HERE CONCERNED.

SECTION 321, PART II, TITLE III, OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 954, APPROVED SEPTEMBER 18, 1940, PROVIDES IN SUBSTANCE, IN SUBSECTION (A/--- AS TO SHIPMENTS OF GOVERNMENT PROPERTY MOVING FOR CIVIL USE, AS DISTINGUISHED FROM MILITARY OR NAVAL USE--- THAT NOTWITHSTANDING ANY OTHER PROVISION OF LAW THE GOVERNMENT SHALL PAY (SUBJECT TO CERTAIN EXCEPTIONS APPARENTLY NOT PERTINENT TO THE MATTER HERE), THE FULL APPLICABLE COMMERCIAL RATES OR CHARGES FOR TRANSPORTATION BY ANY COMMON CARRIER SUBJECT TO THE INTERSTATE COMMERCE ACT. THIS PROVISION, HOWEVER, IS QUALIFIED BY THE FURTHER PROVISION IN SUBSECTION (B) TO THE EFFECT THAT IF ANY CARRIER BY RAILROAD FURNISHING SUCH TRANSPORTATION, OR ANY PREDECESSOR IN INTEREST, SHALL HAVE RECEIVED A GRANT OF LANDS FROM THE UNITED STATES TO AID IN THE CONSTRUCTION OF ANY PART OF THE RAILROAD OPERATED BY IT THE PROVISIONS OF LAW WITH RESPECT TO COMPENSATION FOR SUCH TRANSPORTATION SHALL CONTINUE TO APPLY TO SUCH TRANSPORTATION AS THOUGH SUBSECTION (A) HAD NOT BEEN ENACTED "UNTIL SUCH CARRIER SHALL FILE WITH THE SECRETARY OF THE INTERIOR, IN THE FORM AND MANNER PRESCRIBED BY HIM A RELEASE OF ANY CLAIM IT MAY HAVE AGAINST THE UNITED STATES TO LANDS, INTERESTS IN LANDS," ETC., UNDER SUCH GRANT. THE NECESSARY EFFECT OF THESE PROVISIONS APPEARS TO BE THAT FROM THE EFFECTIVE DATES OF RELEASES FILED AS REQUIRED BY SUBSECTION (B) THE REQUIREMENTS OF THE PROVISIONS OF SUBSECTION (A) ARE FOR APPLICATION AND UNDER THE PROVISIONS OF THAT SUBSECTION IT WOULD SEEM TO BE CLEAR THAT TRANSPORTATION OF PROPERTY FOR CIVIL USE, PERFORMED AFTER THE EFFECTIVE DATE OF RELEASES FILED AS REQUIRED BY SUBSECTION (B), IS NOT SUBJECT TO THE PROVISIONS OF LAW APPLICABLE OTHERWISE TO TRANSPORTATION OVER LAND-GRANT LINES. THE SHIPMENTS HERE CONCERNED, HAVING BEEN TRANSPORTED FROM CHICAGO TO DESTINATION AFTER THE EFFECTIVE DATES OF RELEASES FILED AS REQUIRED BY THE TRANSPORTATION ACT OF 1940, THE COMMERCIAL CHARGES APPLICABLE TO SAID SERVICE ARE NOT SUBJECT TO DEDUCTIONS FOR LAND GRANT.

INASMUCH AS THE CARRIER'S ORIGINAL BILL FOR THE SERVICE CONCERNED WAS NOT SUBMITTED WITH YOUR LETTER CONSIDERATION HAS BEEN CONFINED TO THE QUESTION OF WHETHER THE COMMERCIAL CHARGES FOR SAID SERVICE ARE SUBJECT TO DEDUCTION FOR LAND GRANT AND NO ATTEMPT HAS BEEN MADE TO VERIFY THE CHARGES CLAIMED.