B-1878, DECEMBER 6, 1939, 19 COMP. GEN. 555

B-1878: Dec 6, 1939

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THE GENERAL ACCOUNTING OFFICE MUST HOLD THAT THEY ARE SUBJECT TO SAID PROVISIONS. THERE IS NO BASIS FOR DISTINCTION. CERTAIN REFUNDS WERE DUE THE UNITED STATES FROM YOUR COMPANY ON OFFICIAL MESSAGES ORIGINATING IN FOREIGN COUNTRIES WHICH WERE TRANSMITTED PART WAY OVER THE LINES OF FOREIGN COMPANIES AND RELAYED TO THE UNITED STATES OVER YOUR TRANSATLANTIC CABLES. THE SAID FEDERAL COMMUNICATION ORDER 15-A IS IN PART AS FOLLOWS: 2. THAT IN CASES WHERE GOVERNMENT MESSAGES ARE TRANSMITTED BETWEEN ANY OF SUCH POINTS IN PART OVER THE FACILITIES OF ANY CARRIER OR CARRIERS SUBJECT TO THE POST ROADS ACT * * * (SUCH CARRIER OR CARRIERS BEING HEREINAFTER CALLED DOMESTIC CARRIER OR CARRIERS). RESPECTING THE MATTER IS AS FOLLOWS: YOUR LETTER OF MARCH 14.

B-1878, DECEMBER 6, 1939, 19 COMP. GEN. 555

TELEGRAMS - RATES - FOREIGN MESSAGES - APPLICABILITY OF FEDERAL COMMUNICATIONS COMMISSION RATE-FIXING ORDERS IN THE ABSENCE OF A FINAL JUDICIAL DETERMINATION THAT GOVERNMENT MESSAGES TRANSMITTED OVER THE FOREIGN CABLES OF A DOMESTIC TELEGRAPH COMPANY DO NOT COME WITHIN THE PROVISIONS OF THE POST ROADS ACT OF JULY 24, 1866, AS AMENDED, THE GENERAL ACCOUNTING OFFICE MUST HOLD THAT THEY ARE SUBJECT TO SAID PROVISIONS, AND, HENCE, TO THE ORDERS OF THE FEDERAL COMMUNICATIONS COMMISSION, AS SUCCESSOR TO THE POSTMASTER GENERAL, PRESCRIBING THE RATES ON GOVERNMENT MESSAGES FOR CARRIERS SUBJECT TO THE ACT, AND THERE IS NO BASIS FOR DISTINCTION, IN APPLYING THE ORDERS IN QUESTION, BETWEEN OUTGOING AND INCOMING CABLE MESSAGES.

ACTING COMPTROLLER GENERAL ELLIOTT TO B. R. ALLEN, SUPERINTENDENT, WESTERN UNION TELEGRAPH COMPANY, DECEMBER 6, 1939:

CAREFUL CONSIDERATION HAS BEEN GIVEN THE MATTERS SET FORTH IN YOUR LETTER OF JUNE 29, 1939, IN EFFECT REQUESTING RECONSIDERATION OF DECISION OF MARCH 14, 1939, HOLDING THAT, PURSUANT TO THE TERMS OF ORDER 15-A OF THE FEDERAL COMMUNICATIONS COMMISSION--- AS SUCCESSOR TO THE POSTMASTER GENERAL IN THAT RESPECT--- FIXING THE RATES FOR GOVERNMENT TELEGRAPH COMMUNICATIONS FOR THE YEAR ENDING JUNE 30, 1937, CERTAIN REFUNDS WERE DUE THE UNITED STATES FROM YOUR COMPANY ON OFFICIAL MESSAGES ORIGINATING IN FOREIGN COUNTRIES WHICH WERE TRANSMITTED PART WAY OVER THE LINES OF FOREIGN COMPANIES AND RELAYED TO THE UNITED STATES OVER YOUR TRANSATLANTIC CABLES.

THE SAID FEDERAL COMMUNICATION ORDER 15-A IS IN PART AS FOLLOWS:

2. THAT DURING THE PERIOD STATED TELEGRAPH COMMUNICATIONS BETWEEN THE SEVERAL DEPARTMENTS OF THE GOVERNMENT AND THEIR OFFICERS AND AGENTS, BETWEEN POINTS IN THE CONTINENTAL UNITED STATES * * * AND POINTS IN FOREIGN COUNTRIES TRANSMITTED BY ANY CARRIER OR CARRIERS SUBJECT TO THE POST ROADS ACT (APPROVED JULY 24, 1866, 14 STAT. 221, AS AMENDED, 47 U.S.C. 1-6), * * * BETWEEN ALL POINTS EMBRACED WITHIN THE SCOPE OF SUCH ACT, * * * SHALL BE SENT AT RATES NOT EXCEEDING FIFTY (50) PERCENTUM OF THE RATES APPLICABLE TO COMMERCIAL COMMUNICATIONS OF THE SAME CLASS, * * * EXCEPT THAT RATES FOR GOVERNMENT CODE MESSAGES SHALL NOT EXCEED SIXTY (60) PERCENTUM OF THE ORDINARY GOVERNMENT RATES AS HEREIN PRESCRIBED; PROVIDED, HOWEVER, THAT IN CASES WHERE GOVERNMENT MESSAGES ARE TRANSMITTED BETWEEN ANY OF SUCH POINTS IN PART OVER THE FACILITIES OF ANY CARRIER OR CARRIERS SUBJECT TO THE POST ROADS ACT * * * (SUCH CARRIER OR CARRIERS BEING HEREINAFTER CALLED DOMESTIC CARRIER OR CARRIERS), AND IN PART OVER THE FACILITIES OF A CARRIER, CARRIERS, ADMINISTRATION, OR ADMINISTRATIONS NOT SUBJECT THERETO (HEREINAFTER CALLED FOREIGN CARRIERS OR ADMINISTRATIONS), THE CHARGES FOR GOVERNMENT COMMUNICATIONS SHALL NOT EXCEED THE FOLLOWING, TO WIT):--- FOR GOVERNMENT COMMUNICATIONS BETWEEN POINTS IN THE CONTINENTAL UNITED STATES AND MEXICO OR CANADA (CERTAIN RATES) * * * AND FOR GOVERNMENT COMMUNICATIONS BETWEEN ALL OTHER POINTS, THE CHARGES SHALL NOT EXCEED THE PERCENTAGES SPECIFIED IN THE SECOND ORDERING PARAGRAPH HEREIN (FIFTY PERCENTUM FOR STRAIGHT MESSAGES AND SIXTY PERCENTUM THEREOF FOR CODE MESSAGES, SUPRA) APPLIED TO THE FULL PORTION OF THE CHARGES ACCRUING TO THE DOMESTIC CARRIER OR CARRIERS, PLUS THE CHARGES ACTUALLY MADE FOR UNITED STATES GOVERNMENT COMMUNICATIONS BY SUCH FOREIGN CARRIERS OR ADMINISTRATIONS; * * * ( ITALICS SUPPLIED.)

YOUR LETTER OF JUNE 29, 1939, RESPECTING THE MATTER IS AS FOLLOWS:

YOUR LETTER OF MARCH 14, 1939, FILE B-1878 AND LETTER OF APRIL 22, 1939, FROM MR. H. J. CAROW, CHIEF, MISCELLANEOUS SECTION OF THE GENERAL ACCOUNTING OFFICE, FILE A-ADH-MISC; IN REFERENCE TO REFUNDS ON WESTBOUND GOVERNMENT CABLEGRAMS, WERE FORWARDED TO OUR EXECUTIVE OFFICE AND THE FOLLOWING LETTER FROM MR. J. C. WILLIVER, VICE PRESIDENT, IS QUOTED IN RESPONSE:

"WE REGRET, OF COURSE, TO TAKE ISSUE WITH THE ACTING COMPTROLLER GENERAL OR THE GENERAL ACCOUNTING OFFICE ON ANY SUBJECT, BUT WE FEEL THAT IN THIS CASE WE ARE ON PARTICULARLY STRONG GROUND.

INSOFAR AS THE POSITION OF THE GENERAL ACCOUNTING OFFICE AND OF THE ACTING COMPTROLLER GENERAL IS BASED UPON ANY ORDER OR ADVICE ISSUED BY THE FEDERAL COMMUNICATIONS COMMISSION, AND SUCH COMMISSION IN THIS PARTICULAR MATTER IS ACTING AS SUCCESSOR OF THE POSTMASTER GENERAL IN THE FIXING OF CABLE RATES UNDER THE ACT OF 1866, OUR POSITION MUST NECESSARILY BE THAT UNDER THE ACT NEITHER THE POSTMASTER GENERAL NOR HIS SUCCESSOR HAS POWER TO FIX SUCH RATES INASMUCH AS THE ATLANTIC CABLES ARE ENTIRELY OUTSIDE THE SCOPE OF THE POST ROADS ACT, HAVE ALWAYS BEEN SO AND HAVE BEEN SO HELD BY VARIOUS GOVERNMENTAL AUTHORITIES WHEN THE QUESTION HAS BEEN UP IN OTHER ASPECTS HERETOFORE.

"IT IS ALSO OUR POSITION THAT THE COMMISSION IS WITHOUT JURISDICTION OVER WESTBOUND INTERNATIONAL CABLE RATES EXCEPT BETWEEN THE INTERNATIONAL BOUNDARY LINE AND THE POINT OF DESTINATION IN THIS COUNTRY.

" I THINK IT MAY BE USEFUL IN THIS CONNECTION TO BRIEFLY REVIEW THE HISTORY OF REDUCED RATES ON U.S. GOVERNMENT CABLEGRAMS INSOFAR AS THIS COMPANY, AT LEAST, AND SUCH OF ITS CABLES AS ARE NOT THE SUBJECT OF SPECIAL GRANTS IMPOSING SOME SUCH OBLIGATION, ARE CONCERNED:

"ORIGINALLY THERE WAS NO REQUIREMENT OR OBLIGATION FOR REDUCED RATES OF ANY SORT ON U.S. GOVERNMENT CABLEGRAMS, BUT THE COMPANY AS A FOREIGN CORPORATION SEEKING LANDING RIGHTS AND OPERATING PRIVILEGES ABROAD FOUND IT NECESSARY TO AGREE TO GIVE THE BRITISH GOVERNMENT THE PRIVILEGE OF HALF RATES OVER ITS CABLES--- HALF RATES BEING CONSTRUED AS ONE-HALF OF THE NORMAL FULL RATE TARIFF OVER THE CABLE SECTION. WE FELT THAT OUR OWN GOVERNMENT SHOULD BE ON THE MOST-FAVORED-NATION BASIS REGARDLESS OF THEIR CONSIDERATIONS IN THE MATTER OF RATES CHARGED OVER OUR CABLES--- AND ACCORDINGLY WE CHARGED THE U.S. GOVERNMENT THE SAME AS THE BRITISH GOVERNMENT FOR THE TRANSATLANTIC TRANSMISSION. THESE HALF NORMAL RATES NECESSARILY APPLIED ONLY TO MESSAGES FILED AT WESTERN UNION OFFICES IN THIS COUNTRY OR ABROAD, SINCE WHEN GOVERNMENT CABLEGRAMS ARE FILED AT OFFICES OF FOREIGN ADMINISTRATIONS THOSE ADMINISTRATIONS QUITE GENERALLY DECLINE TO TAKE COGNIZANCE OF ANY SUCH SPECIAL ARRANGEMENTS AND COLLECT FROM SENDERS THE FULL PUBLISHED TARIFF RATES. WHEN, THEREFORE, U.S. GOVERNMENT MESSAGES FROM A PART OF TRAFFIC TRANSFERRED BY CONNECTING LINES ABROAD, THEY BEAR NO DISTINGUISHING MARKS AS GOVERNMENT MESSAGES, AND THEY ARE ACCOUNTED FOR TO US BY THE CONNECTING LINES AS ORDINARY FULL-PAID MESSAGES AND SETTLEMENTS ARE MADE WITH US ACCORDINGLY. EVENTUALLY, THE STATE DEPARTMENT DREW OUR ATTENTION TO THIS CONDITION AND TO THE FACT THAT IT RESULTED IN OUR RECEIVING FULL RATES INSTEAD OF HALF RATES FOR THE TRANSOCEAN HANDLING OF THESE PARTICULAR INCOMING GOVERNMENT MESSAGES, AND ASKED THAT WE REFUND THE DIFFERENCE BETWEEN THE AMOUNTS RECEIVED AND THE AMOUNTS WHICH WOULD HAVE ACCRUED TO US IF THE MESSAGES HAD BEEN CHARGED AT ONE-HALF OUR NORMAL RATE, SAY BETWEEN LONDON AND NEW YORK, AS PER DETAILED LIST WHICH THEY SUBMITTED. ALTHOUGH THIS INVOLVED A VERY LARGE AMOUNT OF CLERICAL WORK TO VERIFY THE ITEMS, WHICH WAS NOT CONTEMPLATED WHEN WE MADE THE GRATUITOUS OFFER TO HALVE THE NORMAL RATE FOR THE CABLE SECTION, WE ACCEDED TO THE REQUEST AND HAVE BEEN MAKING SETTLEMENTS ACCORDINGLY FROM THAT TIME TO THIS.

"WE HAVE NEVER AT ANY TIME UNDERTAKEN TO GIVE THE GOVERNMENT THE BENEFIT OF ONE-HALF OF ANY REDUCED CHARGE OVER THE ATLANTIC SECTION WHICH RESULTS WHEN IN APPLYING COMPETITIVE RATES BETWEEN CERTAIN COUNTRIES THERE IS LEFT FOR OUR HAUL SOMETHING LESS THAN OUR NORMAL CABLE PROPORTION. THE MEETING OF COMPETITIVE THROUGH RATES SOMETIMES LEAVES VERY LITTLE FOR THE ATLANTIC SECTION, AND IT IS INEQUITABLE AND UNREASONABLE, AND CERTAINLY WITHOUT ANY DUE FOUNDATION IN LAW, TO REQUEST OR SUGGEST THAT WE SHOULD HALVE THE LITTLE THAT MAY REMAIN FOR US. IT IS TRUE THAT THE ORDER OF THE FEDERAL COMMUNICATIONS COMMISSION PLACING THE RATES ON GOVERNMENT MESSAGES FOR THE YEAR BEGINNING JULY 1, 1936, FOR THE FIRST TIME WAS SO WORDED AS TO APPLY THE 50 PERCENT TO OUR PROPORTIONS RATHER THAN THE ORDINARY TRANSATLANTIC PROPORTIONS, BUT THIS ORDER WAS OBVIOUSLY DESIGNED TO COVER THE CHARGES ON OUTGOING MESSAGES ORIGINATING IN THE UNITED STATES AND CAN HAVE NOTHING REALLY TO DO WITH THE QUESTION HEREIN INVOLVED, SINCE AS STATED THE COMMISSION LACKS JURISDICTION OVER RATES CHARGED ABROAD, WHETHER ACTING UNDER ITS OWN POWERS OR UNDER THE PROVISIONS OF THE ACT OF 1866.

"WE SHALL BE GLAD TO CONTINUE TO CREDIT THE U.S. GOVERNMENT WITH WHATEVER AMOUNTS WE RECEIVE IN EXCESS OF ONE-HALF OF THE NORMAL FULL RATE CHARGED OVER OUR ATLANTIC CABLES FROM LONDON OR AZORES TO NEW YORK, AND REGRET THAT WE ARE UNABLE TO CONCEDE ANYTHING FURTHER THAN THIS.'

YOUR COMPANY THUS RELIES PRIMARILY ON THE PREMISES THAT ITS ATLANTIC CABLES ARE ENTIRELY OUTSIDE THE SCOPE OF THE POST ROADS ACT, THAT THE FEDERAL COMMUNICATIONS COMMISSION, AS SUCCESSOR TO THE POSTMASTER GENERAL, HAS NO AUTHORITY UNDER THAT ACT, OR OTHERWISE, TO FIX RATES FOR GOVERNMENT COMMUNICATIONS TRANSMITTED OVER SUCH CABLES, AND, THEREFORE, THAT THE SAID ORDER 15-A HAS NO APPLICATION TO SUCH COMMUNICATIONS.

IN UNITED STATES V. WESTERN UNION TELEGRAPH COMPANY, 272 FED. 311, DECIDED FEBRUARY 25, 1921, THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK REFUSED TO ENJOIN YOUR COMPANY FROM LANDING A CABLE FROM BARBADOS NEAR MIAMI, FLORIDA, IN THE ABSENCE OF ANY LEGISLATIVE PROHIBITION. THE OPINION IN THE CASE, BY DISTRICT JUDGE AUGUSTUS N. HAND, IS IN PART AS FOLLOWS:

THE POST ROADS ACT OF JULY 24, 1866, (SUPRA) PROVIDES:

"THAT ANY TELEGRAPH COMPANY NOW ORGANIZED, OR WHICH MAY HEREAFTER BE ORGANIZED, UNDER THE LAWS OF ANY STATE IN THIS UNION, SHALL HAVE THE RIGHT TO CONSTRUCT, MAINTAIN, AND OPERATE LINES OF TELEGRAPH THROUGH AND OVER ANY PORTION OF THE PUBLIC DOMAIN OF THE UNITED STATES, OVER AND ALONG ANY OF THE MILITARY OR POST ROADS OF THE UNITED STATES WHICH HAVE BEEN OR MAY HEREAFTER BE DECLARED SUCH BY ACT OF CONGRESS, AND OVER, UNDER, OR ACROSS THE NAVIGABLE STREAMS OR WATERS OF THE UNITED STATES: PROVIDED, THAT SUCH LINES OF TELEGRAPH SHALL BE SO CONSTRUCTED AND MAINTAINED AS NOT TO OBSTRUCT THE NAVIGATION OF SUCH STREAMS AND WATERS, OR INTERFERE WITH THE ORDINARY TRAVEL ON SUCH MILITARY OR POST ROADS.'

THERE IS A FURTHER PROVISION THAT GOVERNMENT MESSAGES SHALL BE ENTITLED TO PRIORITY, AND SHALL BE TAKEN AT RATES TO BE FIXED BY THE POSTMASTER GENERAL.

AN OPINION WAS RENDERED BY ATTORNEY GENERAL WILLIAMS IN 1872 (14 OP. ATTYS. GEN. 63/--- WHICH IT IS TO BE NOTICED WAS PRIOR TO THE DECISION OF THE SUPREME COURT IN PENSACOLA TELEGRAPH CO. V. WESTERN UNION TELEGRAPH CO., 96 U.S. 1, 24 L.ED. 708--- THAT THIS ACT WAS ONLY INTENDED TO APPLY TO INTERIOR LINES OF TELEGRAPH DESIGNED FOR COMMUNICATION BETWEEN POINTS WITHIN THE UNITED STATES AND NOT TO EXTERIOR OCEANIC LINES DESIGNED FOR TELEGRAPHIC INTERCOURSE WITH FOREIGN LANDS. BUT A TELEGRAPH LINE UNDER "NAVIGABLE STREAMS" AND "WATERS" IS GENERALLY KNOWN AS A CABLE, AND WATERS WITHIN ONE MARINE LEAGUE OF THE SHORES HAVE BEEN FREQUENTLY TERMED "THE NAVIGABLE WATERS OF THE UNITED STATES.' WHILE THE SEVERAL STATES HAVE JURISDICTION IN SOME RESPECTS OVER WATERS WITHIN THE THREE-MILE LIMIT, THEIR JURISDICTION IS SUBJECT TO THE PARAMOUNT POWER OF THE FEDERAL GOVERNMENT OVER INTERSTATE AND FOREIGN COMMERCE. SEE STOCKTON V. B. AND N.Y.R.R. ( C.C.) 32 FED. 9; ILLINOIS CENTRAL RY. V. ILLINOIS, 146 U.S. 435, 13 SUP. CT. 110, 36 L.ED. 1018; MANCHESTER V. MASSACHUSETTS, 139 U.S. 240, 11 SUP. CT. 559, 35 L.ED. 159.

IT APPEARS FROM THE RECORD IN THE SUPREME COURT IN THE CASE OF PENSACOLA TELEGRAPH CO. V. WESTERN UNION TELEGRAPH CO., 96 U.S. 1, 24 L.ED. 708, THAT THE WESTERN UNION HAD OBTAINED A FEDERAL FRANCHISE UNDER THE POST ROADS ACT BY ACCEPTING THE RESTRICTIONS AND OBLIGATIONS THEREIN AND THAT ITS BUSINESS WAS FOREIGN AS WELL AS INTERSTATE. IT OWNED THE STOCK OF THE INTERNATIONAL OCEAN TELEGRAPH COMPANY, AND BY MEANS OF THE TWO KEY WEST CABLES OF THE LATTER LAID UNDER THE ACT OF MAY 5, 1866, COULD TRANSMIT MESSAGES TO THE ISLAND OF CUBA. IT ALSO OWNED TELEGRAPH LINES EXTENDING THROUGH NOVA SCOTIA, IN THE DOMINION OF CANADA, AND CONNECTING WITH EUROPE.

THE FOREGOING PENSACOLA TELEGRAPH CASE APPARENTLY SANCTIONS THE DOING OF A FOREIGN BUSINESS BY A DOMESTIC TELEGRAPH COMPANY, WHICH HAS COME IN UNDER THE ACT OF JULY 24, 1866, AT LEAST SO FAR AS THE PORTION OF THE BUSINESS CONDUCTED WITHIN THE UNITED STATES IS CONCERNED. THE SUPREME COURT, IN THE PENSACOLA CASE, 96 U.S. AT PAGE 9 (24 L.ED. 708), SPEAKING OF THE RIGHTS OF THE WESTERN UNION UNDER THE POST ROADS ACT, SAID:

"THE TELEGRAPHIC ANNOUNCEMENT OF THE MARKETS ABROAD REGULATES PRICES AT HOME AND A PRUDENT MERCHANT RARELY ENTERS UPON AN IMPORTANT TRANSACTION WITHOUT USING THE TELEGRAPH FREELY TO SECURE INFORMATION. IT IS NOT ONLY IMPORTANT TO THE PEOPLE, BUT TO THE GOVERNMENT. BY MEANS OF IT THE HEADS OF THE DEPARTMENTS IN WASHINGTON ARE KEPT IN CLOSE COMMUNICATION WITH ALL THEIR VARIOUS AGENCIES AT HOME AND ABROAD, AND CAN KNOW AT ALMOST ANY HOUR, BY INQUIRY, WHAT IS TRANSPIRING ANYWHERE THAT AFFECTS THE INTEREST THEY HAVE IN CHARGE. * * * THERE IS NOTHING TO INDICATE AN INTENTION OF LIMITING THE EFFECT OF THE WORDS EMPLOYED, AND THEY ARE, THEREFORE, TO BE GIVEN THEIR NATURAL AND ORDINARY SIGNIFICATION. READ IN THIS WAY, THE GRANT EVIDENTLY EXTENDS TO THE PUBLIC DOMAIN, THE MILITARY AND POST ROADS, AND THE NAVIGABLE WATERS OF THE UNITED STATES. THESE ARE ALL WITHIN THE DOMINION OF THE NATIONAL GOVERNMENT TO THE EXTENT OF THE NATIONAL POWERS, AND ARE THEREFORE SUBJECT TO LEGITIMATE CONGRESSIONAL REGULATION. * * *" THE COURT FURTHER REMARKED IN THE CASE OF TELEGRAPH CO. V. TEXAS, 105 U.S. AT PAGE 464 (26 L.ED. 1067), THAT:

"THE WESTERN UNION TELEGRAPH COMPANY HAVING ACCEPTED THE RESTRICTIONS AND OBLIGATIONS OF THIS PROVISION BY CONGRESS, OCCUPIES IN TEXAS THE POSITION OF AN INSTRUMENT OF FOREIGN AND INTERSTATE COMMERCE, AND OF A GOVERNMENT AGENT FOR THE TRANSMISSION OF MESSAGES ON PUBLIC BUSINESS.'

COUNSEL FOR DEFENDANT CALLS ATTENTION TO ORDER NO. 3252 OF THE POST OFFICE DEPARTMENT OF JULY 1, 1920, IN WHICH THE POSTMASTER GENERAL DECLARES THAT PURSUANT TO THE AUTHORITY VESTED IN HIM BY THE FOREGOING ACT OF CONGRESS APPROVED JULY 24, 1866, HE FIXES THE RATES OVER THE CABLES OF THE UNITED STATES AND HAYTI TELEGRAPH AND CABLE COMPANY BETWEEN NEW YORK AND SOUTH AMERICA FOR THE GOVERNMENT. IT THUS APPEARS THAT THIS DEPARTMENT OF THE GOVERNMENT RECOGNIZES THE POST ROADS ACT AS GIVING THE RIGHT TO CONDUCT A FOREIGN TELEGRAPHIC BUSINESS OVER WHICH GOVERNMENT RATES MUST BE FIXED AS PRESCRIBED BY THE ACT. FROM THIS IT IS EVIDENT THAT THE COURT WAS OF THE VIEW THAT THE FOREIGN CABLE BUSINESS OF A DOMESTIC COMPANY WHICH HAD ACCEPTED THE BENEFITS OF THE POST ROADS ACT CAME WITHIN THE SCOPE OF THAT ACT. COUNSEL FOR YOUR COMPANY ARGUED IN THAT CASE, AND THE COURT APPARENTLY AGREED, THAT THE POST ROADS ACT GAVE THE RIGHT TO CONDUCT A FOREIGN TELEGRAPHIC BUSINESS, AND THAT THERE HAD BEEN RECOGNIZED THAT SUCH BUSINESS WAS SUBJECT TO THE PROVISIONS IN THE ACT FOR FIXING GOVERNMENT RATES. THE ACTION OF THE DISTRICT COURT IN THIS CASE WAS AFFIRMED BY THE CIRCUIT COURT OF APPEALS FOR THE SECOND CIRCUIT ON MARCH 10, 1921. UNITED STATES V. WESTERN UNION TELEGRAPH CO., 272 FED. 893. THE COURT STATED:

* * * AND OUR INCLINATION ALSO IS TO THINK THAT THE WESTERN UNION TELEGRAPH COMPANY HAS THE RIGHT TO LAND ITS CABLE ON THE BEACH NEAR MIAMI, FLA., UNDER THE POST ROADS ACT * * *.

WHILE THE DECREE OF THE CIRCUIT COURT OF APPEALS IN THAT CASE WAS REVERSED BY THE SUPREME COURT OF THE UNITED STATES ON OCTOBER 23, 1922, WITHOUT CONSIDERATION ON THE MERITS, BUT "IN ACCORDANCE WITH THE STIPULATION FILED HEREIN," AND THE CAUSE WAS REMANDED TO THE DISTRICT COURT WITH DIRECTIONS TO ENTER A DECREE DISMISSING THE BILL WITHOUT PREJUDICE AND WITHOUT COSTS TO EITHER PARTY, 260 U.S. 754, SUCH ACTION WAS APPARENTLY TAKEN BY VIRTUE OF THE ENACTMENT IN THE INTERIM OF THE ACT OF MAY 27, 1921, 42 STAT. 8, EXPRESSLY PROHIBITING THE LANDING OR OPERATION OF CABLES TO FOREIGN COUNTRIES UNLESS A WRITTEN LICENSE THEREFOR HAS BEEN ISSUED BY THE PRESIDENT, AND, HENCE, DOES NOT DETRACT FROM THE EFFECT OF THE STATEMENTS BY THE LOWER COURTS RESPECTING THE APPLICATION OF THE POST ROADS ACT TO THE FOREIGN CABLE BUSINESS OF A DOMESTIC COMPANY SUBJECT TO THE ACT.

IN EMERGENCY FLEET CORPORATION V. WESTERN UNION TELEGRAPH COMPANY, 275 U.S. 415, 416, DECIDED JANUARY 3, 1928, THE SUPREME COURT OF THE UNITED STATES, BY MR. JUSTICE BRANDEIS, SAID:

BY POST ROADS ACT, JULY 24, 1866, C. 230, 14 STAT. 221; REV. STAT. SECTIONS 5263-5266, THE UNITED STATES OFFERED PRIVILEGES OF GREAT VALUE TO ANY TELEGRAPH COMPANY WHICH SHOULD ELECT TO ACCEPT ITS PROVISIONS. RETURN, IT REQUIRED, BY SECTION 2 OF THE ACT: "THAT TELEGRAPHIC COMMUNICATIONS BETWEEN THE SEVERAL DEPARTMENTS OF THE GOVERNMENT OF THE UNITED STATES AND THEIR OFFICERS AND AGENTS SHALL, IN THEIR TRANSMISSION OVER THE LINES OF ANY OF SAID COMPANIES, HAVE PRIORITY OVER ALL OTHER BUSINESS, AND SHALL BE SENT AT RATES TO BE ANNUALLY FIXED BY THE POSTMASTER GENERAL.' EACH YEAR SINCE THE PASSAGE OF THE ACT THE GOVERNMENT RATES HAVE BEEN SO FIXED. FOR THE FISCAL YEARS BEGINNING JULY 1, 1921, AND JULY 1, 1922, THEY WERE FIXED FOR DOMESTIC TELEGRAMS SUBSTANTIALLY AT 40 PERCENT OF THE COMMERCIAL RATE; AND FOR CABLEGRAMS AT 50 PERCENT OF THE COMMERCIAL RATE.

THE WESTERN UNION ACCEPTED THE PROVISIONS OF THE ACT ON JUNE 8, 1867. PENSACOLA TELEGRAPH CO. V. WESTERN UNION TELEGRAPH CO., 96 U.S. 1, 4; TELEGRAPH CO. V. TEXAS, 105 U.S. 460. * * *

THE QUESTION WHETHER MESSAGES TRANSMITTED FOR THE FLEET CORPORATION AFTER MAY 31, 1922, SHALL BE PAID FOR AT THE COMMERCIAL RATES OR AT THE LOWER GOVERNMENT RATES IS ONE OF STATUTORY CONSTRUCTION. THE POST ROADS ACT HAD BEEN IN FORCE, WITHOUT AMENDMENT, MORE THAN 55 YEARS BEFORE THE TRANSACTIONS HERE INVOLVED. THROUGHOUT THAT PERIOD, THE RIGHTS OF THE GOVERNMENT AND THE WESTERN UNION CONCERNING THE TRANSMISSION OF MESSAGES HAD BEEN GOVERNED BY THE ACT, UNAFFECTED BY ANY SPECIAL CONTRACT; * * *

THE LANGUAGE OF SECTION 2 OF THE POST ROADS ACT, SECTION 5266, REVISED STATUTES; 47 U.S.C. 3, THAT TELEGRAMS BETWEEN THE SEVERAL DEPARTMENTS OF THE GOVERNMENT AND THEIR OFFICERS AND AGENTS "IN THEIR TRANSMISSION OVER THE LINES OF ANY TELEGRAPH COMPANY" ACCEPTING THE BENEFITS OF THE ACT, SHALL HAVE PRIORITY OVER ALL OTHER BUSINESS,"AT SUCH RATES AS THE POSTMASTER GENERAL SHALL ANNUALLY FIX," IS NOT RESTRICTED TO THE LAND LINES OF SUCH COMPANIES BUT CLEARLY IS BROAD ENOUGH TO INCLUDE MESSAGES TRANSMITTED OVER THE MARINE CABLE LINES OF ANY SUCH COMPANY. WHILE THE PARTICULAR POINT DOES NOT APPEAR EVER TO HAVE BEEN DEFINITELY DECIDED BY THE COURTS, THE CONCLUSION SEEMS JUSTIFIED FROM THE VIEWS EXPRESSED BY THE COURTS IN THE CASES, SUPRA, THAT THE STATUTE SHOULD BE SO CONSTRUED.

IN PRACTICAL EFFECT, THE CABLES ARE BUT AN EXTENSION OF YOUR LAND LINES, IN THE INTEGRATED TELEGRAPHIC COMMUNICATION SYSTEM OF YOUR COMPANY, THE WHOLE OF WHICH PARTAKES OF, AND IS BENEFITED BY, THE CONCESSIONS AND ADVANTAGES OBTAINED UNDER THE POST ROADS ACT. HAVING TAKEN AND ENJOYED FOR MANY YEARS THE "PRIVILEGES OF GREAT VALUE" GRANTED BY THE STATUTE, THERE WOULD SEEM IN ALL FAIRNESS LITTLE REASON TO CONTEND FOR, OR TO SUPPORT, A NARROW INTERPRETATION OF THE LEGISLATION TO EXCLUDE CABLES AND THUS SUBTRACT FROM YOUR RETURN OBLIGATIONS TO THE GOVERNMENT. IF YOU THINK THE FEDERAL COMMUNICATIONS COMMISSION'S ORDERS DO NOT ALLOW YOU A SUFFICIENT RETURN ON A PARTICULAR CLASS OF GOVERNMENT BUSINESS, SUCH AS HERE INVOLVED, THAT IS A MATTER FOR SUBMISSION TO THE COMMISSION. THIS OFFICE HAS NO AUTHORITY, OF COURSE, TO VARY THE TERMS OF THE ORDERS, OR THE RATES, PRESCRIBED BY THE COMMISSION PURSUANT TO THE STATUTES VESTING JURISDICTION OF SUCH MATTERS IN THAT AGENCY.

ACCORDINGLY, IN THE ABSENCE OF A FINAL JUDICIAL DETERMINATION THAT GOVERNMENT MESSAGES TRANSMITTED OVER THE FOREIGN CABLES OF YOUR COMPANY DO NOT COME WITHIN THE SCOPE OF THE POST ROADS ACT, IT MUST BE HELD BY THIS OFFICE THAT THEY ARE SUBJECT TO THE PROVISIONS OF THAT ACT, AND, HENCE, TO THE ORDERS OF THE FEDERAL COMMUNICATIONS COMMISSION, AS SUCCESSOR TO THE POSTMASTER GENERAL, PRESCRIBING THE RATES ON GOVERNMENT MESSAGES FOR CARRIERS SUBJECT TO THE ACT. THERE APPEARS NO SOUND BASIS FOR YOUR CONTENTION THAT THE PROVISION OF THE ORDER IN QUESTION RELATES ONLY TO OUTGOING CABLE MESSAGES, AND NOT TO INCOMING CABLE MESSAGES. SEE 14 OP. ATTY. GEN. 123.

THE CONCLUSIONS OF THE PRIOR DECISION ARE AFFIRMED. THE AMOUNT OF THE REFUNDS IN QUESTION SHOULD BE REMITTED AS EARLY AS PRACTICABLE TO AVOID COLLECTION BY SET-OFF AGAINST AMOUNTS WHICH OTHERWISE MAY BE DUE, OR MAY BECOME DUE, YOUR COMPANY.