B-5686, FEBRUARY 2, 1940, 19 COMP. GEN. 690

B-5686: Feb 2, 1940

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TRANSPORTATION - RATES - DIFFERENT TARIFFS APPLICABLE TO RAIL-WATER-RAIL AND WATER-RAIL SHIPMENTS - INITIAL CARRIER'S AGREEMENT TO PROTECT LOWER RATE WHERE CHARGES COMPUTED UNDER TARIFF APPLICABLE TO A RAIL-WATER-RAIL MOVEMENT OF A PARTICULAR SHIPMENT WERE LESS THAN THE CHARGES COMPUTED UNDER TARIFF FOR WATER-RAIL MOVEMENT OF THE SAME SHIPMENT. THE ACTUAL TRANSPORTATION WAS BY THE WATER-RAIL METHOD AFTER THE INITIAL (WATER) CARRIER HAD AGREED THE CHARGES TO THE GOVERNMENT WOULD NOT EXCEED THOSE ACCRUING ON THE RAIL-WATER-RAIL BASIS. PAYMENT WAS PROPER ON THE BASIS OF THE LOWER "THROUGH RATE" (AS DISTINGUISHED FROM A "JOINT THROUGH RATE" SUCH AS MIGHT BE ESTABLISHED BY AGREEMENT BETWEEN THE CARRIERS) WHICH THE INITIAL CARRIER AGREED TO PROTECT UNDER SECTION 22 OF THE INTERSTATE COMMERCE ACT WHICH PERMITS THE CARRIAGE OF GOVERNMENT PROPERTY AT REDUCED RATES.

B-5686, FEBRUARY 2, 1940, 19 COMP. GEN. 690

TRANSPORTATION - RATES - DIFFERENT TARIFFS APPLICABLE TO RAIL-WATER-RAIL AND WATER-RAIL SHIPMENTS - INITIAL CARRIER'S AGREEMENT TO PROTECT LOWER RATE WHERE CHARGES COMPUTED UNDER TARIFF APPLICABLE TO A RAIL-WATER-RAIL MOVEMENT OF A PARTICULAR SHIPMENT WERE LESS THAN THE CHARGES COMPUTED UNDER TARIFF FOR WATER-RAIL MOVEMENT OF THE SAME SHIPMENT, AND THE ACTUAL TRANSPORTATION WAS BY THE WATER-RAIL METHOD AFTER THE INITIAL (WATER) CARRIER HAD AGREED THE CHARGES TO THE GOVERNMENT WOULD NOT EXCEED THOSE ACCRUING ON THE RAIL-WATER-RAIL BASIS, PAYMENT WAS PROPER ON THE BASIS OF THE LOWER "THROUGH RATE" (AS DISTINGUISHED FROM A "JOINT THROUGH RATE" SUCH AS MIGHT BE ESTABLISHED BY AGREEMENT BETWEEN THE CARRIERS) WHICH THE INITIAL CARRIER AGREED TO PROTECT UNDER SECTION 22 OF THE INTERSTATE COMMERCE ACT WHICH PERMITS THE CARRIAGE OF GOVERNMENT PROPERTY AT REDUCED RATES, AND ANY ADJUSTMENT OF THE REVENUE ACCRUING FROM THE APPLICATION OF SUCH THROUGH RATE IS FOR DETERMINATION BY AND BETWEEN THE INTERESTED CARRIERS.

ASSISTANT COMPTROLLER GENERAL ELLIOTT TO THE ATLANTA AND ST. ANDREWS BAY RAILWAY CO., FEBRUARY 2, 1940:

THERE HAS BEEN CONSIDERED YOUR REQUEST FOR AN ADDITIONAL ALLOWANCE OF $41.21 ON YOUR BILL A-1241-A WHICH WAS PRESENTED FOR $107.33 FOR TRANSPORTING "216 BUNDLES OF COTS, LINKED OR WOVEN WIRE, FOLDED FLAT (THICKNESS FOLDED EXCEEDING 2 INCHES)," 10,368 POUNDS, FROM PHILADELPHIA, PA., TO YOUNGSTOWN, FLA., UNDER BILL OF LADING WQ-928609, DECEMBER 21, 1934, ROUTED "M. AND M.T. CO., SAVANNAH, GA., S.A.L. RY., RIVER JUNCTION, FLA., L. AND N.R.R. COTTONDALE, FLA. A. AND ST. A.B. .' THE SAID BILL WAS PAID BY E. C. MORTON, ARMY DISBURSING OFFICER, UNDER VOUCHER 2828, APRIL 4, 1935, IN THE AMOUNT SO CLAIMED. SUBSEQUENTLY, YOU PRESENTED BILL NO. A -1241-D FOR $22.63 WHICH WAS DISALLOWED UNDER CERTIFICATE NO. 118278 1/2, APRIL 4, 1938, AND A REQUEST WAS MADE IN SAID CERTIFICATE FOR A REMITTANCE OF $18.58, ACCOUNT OF AN OVERPAYMENT OF A LIKE AMOUNT BY THE DISBURSING OFFICER ON YOUR ORIGINAL BILL. THEREAFTER, THE SUM OF $18.58 WAS DEDUCTED IN SETTLEMENT NO. T-145455, FEBRUARY 8, 1939, FROM THE AMOUNT OTHERWISE DUE YOU ON BILL NO. E-837.

YOUR PRESENT REQUEST FOR $41.21 INCLUDES THE AMOUNT SO DEDUCTED FROM YOUR BILL NO. E-837, PLUS THE SUM OF $22.63, AND WITH REFERENCE TO THE AMOUNT NOW CLAIMED YOU STATE, IN EFFECT, THAT THE RATE APPLIED BY YOU IN YOUR ORIGINAL BILL AND THE RATE UPON WHICH YOU HAVE RECEIVED PAYMENT FOR TRANSPORTING THE SHIPMENT HERE CONCERNED ARE BOTH IN ERROR; THAT THE CORRECT GROSS RATE AT THE TIME OF SHIPMENT WAS THE SECOND-CLASS LESS-THAN- CARLOAD RATE OF $1.64 PER 100 POUNDS; AND THAT THE APPLICATION OF SAID RATE IS IN ACCORDANCE WITH INFORMAL ADVICE YOU HAVE RECEIVED FROM THE INTERSTATE COMMERCE COMMISSION.

IT APPEARS THAT ON THE DATE OF THE SUBJECT SHIPMENT RATES ON FURNITURE FROM PHILADELPHIA, PA., TO YOUNGSTOWN, FLA., WERE PUBLISHED IN TWO TARIFFS; ONE, AGENT SPEIDEN'S TARIFF I.C.C. 1814, NAMED A SECOND-CLASS RATE OF $1.64 APPLICABLE ON COTS, SUCH AS HERE CONCERNED, IN LESS-THAN- CARLOAD QUANTITIES AND ALSO A CARLOAD CLASS 50 RATE OF 97 CENTS PER 100 POUNDS, SUBJECT TO A MINIMUM CARLOAD WEIGHT OF 20,000 POUNDS, SUCH RATES APPLYING VIA THE MERCHANTS AND MINERS TRANSPORTATION CO. TO SAVANNAH, GA., THENCE THE SEABOARD AIR LINE RAILWAY TO RIVER JUNCTION, LOUISVILLE AND NASHVILLE RAILROAD TO COTTONDALE, FLA., AND THE ATLANTA AND SAINT ANDREWS BAY RAILWAY CO., TO YOUNGSTOWN, FLA.; THE OTHER TARIFF, AGENT CURLETT'S NO. 44-C, I.C.C. NO. A-418, PROVIDED A CARLOAD RATE ON THE SUBJECT COMMODITY OF 58 PERCENT OF THE FIRST-CLASS RATE OF $1.93, OR $1.12, SUBJECT TO A MINIMUM CARLOAD WEIGHT OF 10,000 POUNDS, WHEN LOADED IN CARS 40 FEET, 9 INCHES OR LESS IN LENGTH, APPLICABLE VIA THE PENNSYLVANIA RAILROAD FROM A PHILADELPHIA STATION THENCE VIA THE MERCHANTS AND MINERS TRANSPORTATION CO. AND CONNECTIONS FROM PHILADELPHIA TO YOUNGSTOWN, OVER THE ROUTE DESCRIBED HEREIN IN CONNECTION WITH THE RATE PUBLISHED IN AGENT SPEIDEN'S TARIFF I.C.C. NO. 1814. THUS THE SITUATION WAS SUCH THAT WERE THE SUBJECT SHIPMENT OF COTS TENDERED TO THE MERCHANTS AND MINERS TRANSPORTATION CO. AS THE ORIGINATING CARRIER AT PHILADELPHIA, THE GROSS CHARGES UNDER AGENT SPEIDEN'S TARIFF I.C.C. NO. 1814 WOULD HAVE BEEN $170.04, COMPUTED ON THE BASIS OF A LESS-THAN-CARLOAD RATE OF $1.64 PER 100 POUNDS, WHILE, ON THE OTHER HAND, HAD THE SHIPMENT BEEN TENDERED TO THE PENNSYLVANIA RAILROAD AS THE ORIGINATING CARRIER AT A PHILADELPHIA STATION FOR FORWARDING VIA THE MERCHANTS AND MINERS TRANSPORTATION CO. FROM PHILADELPHIA, THE GROSS CHARGES UNDER AGENT CURLETT'S TARIFF NO. I.C.C. A-418 WOULD HAVE BEEN $116.12, COMPUTED ON THE BASIS OF THE CARLOAD RATE OF 58 PERCENT OF THE FIRST-CLASS RATE OF $1.93 OR $1.12 PER 100 POUNDS.

IT WAS APPARENTLY DUE TO THIS DIFFERENCE IN CHARGES, WHICH RESTED UPON THE SELECTION BY THE SHIPPER OF THE ORIGINATING CARRIER, THAT PROMPTED NEGOTIATIONS BETWEEN THE QUARTERMASTER AND THE ASSISTANT GENERAL FREIGHT AGENT OF THE MERCHANTS AND MINERS TRANSPORTATION CO., AT PHILADELPHIA ON DECEMBER 20, 1934, THE DAY PRIOR TO THE DATE THE SUBJECT PROPERTY WAS TENDERED TO THAT CARRIER FOR SHIPMENT; THE NEGOTIATIONS ARE REFERRED TO IN A LETTER OF THE ASSISTANT GENERAL FREIGHT AGENT OF THE STEAMSHIP LINE UNDER FILE NO. 720-A, DECEMBER 20, 1934, WHICH READS AS FOLLOWS:

REFERRING TO TELEPHONE CONVERSATION TODAY WE ARE PLEASED TO ADVISE THAT WE WILL PROTECT 58 PERCENT OF THE ST CLASS RATE APPLICABLE ON FURNITURE, INCLUDING STEEL WIRE COTS, CARLOAD MINIMUM, 10,000 LBS., WHEN MOVING ON GOVERNMENT BILL OF LADING, FROM OUR DOCK AT PHILADELPHIA TO POINTS CONTAINED IN SPEIDEN'S I.C.C. 1814 WHEN ROUTING THEREIN APPLIES VIA OUR LINE.

FOR YOUR READY REFERENCE I AM LISTING BELOW RATES APPLICABLE ON THE ABOVE COMMODITY, C.L. MIN. 10,000 LBS., AS FOLLOWS:

PHILADELPHIA TO---

CRESTVIEW, FLA., $1.19 M. AND M.T. TO SAVANNAH S.A.L. TO RIVER

JCT., L. AND N. BEYOND.

YOUNGSTOWN, FLA., $1.28 M. AND M.T. TO SAVANNAH S.A.L. TO RIVER

JCT., L. AND N. TO COTTONDALE IN CARE OF A. AND S.A.B.

RATES QUOTED INCLUDE INSURANCE AND ARE SUBJECT TO LAND GRANT DEDUCTIONS.

IT WOULD SEEM, THEREFORE, THAT HAD NOT THE MERCHANTS AND MINERS TRANSPORTATION CO. AGREED TO PROTECT THE RATE FOR A RAIL-WATER-RAIL MOVEMENT ON THE WATER-RAIL SHIPMENT HERE CONCERNED, THE PROPERTY WOULD HAVE BEEN TENDERED TO THE RAIL LINES AS ORIGINATING CARRIER.

IT IS TO BE OBSERVED, HOWEVER, THAT THE RATE OF $1.28 QUOTED BY THE ASSISTANT GENERAL FREIGHT AGENT AS A MATTER OF "READY REFERENCE" IS NOT "58 PERCENT OF THE ST CLASS RATE APPLICABLE ON FURNITURE, INCLUDING STEEL WIRE COTS, CARLOAD MINIMUM, 10,000 LBS., " ( ITALICS SUPPLIED) AS THE TARIFF NAMING THE RATE SUBJECT TO THIS RATING, AGENT CURLETT'S I.C.C. A- 418, SUPPLEMENT NO. 33, PROVIDES A FIRST-CLASS RATE OF $1.93, AND 58 PERCENT OF $1.93 IS EQUAL TO $1.12. THE RATE OF $1.28 QUOTED BY THE STEAMSHIP LINE AS A MATTER OF REFERENCE WAS APPARENTLY DERIVED FROM 58 PERCENT OF THE FIRST-CLASS RATE OF $2.21 PUBLISHED IN AGENT SPEIDEN'S TARIFF I.C.C. 1814 AS APPLYING ON ARTICLES OTHER THAN FURNITURE, THE SAID TARIFF ALSO PROVIDING A LESS-THAN-CARLOAD FIRST CLASS RATE OF $1.93 FOR CERTAIN KINDS OF FURNITURE. IT IS NOTED THAT NEITHER OF THE FIRST-CLASS RATES NAMED IN AGENT SPEIDEN'S I.C.C. 1814 MAY BE USED FOR THE PURPOSE OF DETERMINING A CARLOAD RATE ON FURNITURE BASED ON "58 PERCENT OF THE FIRST- CLASS RATE APPLICABLE.' THAT IT WAS PROPOSED TO PROTECT THE RAIL-WATER- RAIL RATE OF $1.12 AND THEREBY ELIMINATE A DEPARTURE FROM THE REQUIREMENTS OF THE FOURTH SECTION OF THE INTERSTATE COMMERCE ACT, U.S.C. TITLE 49, SECTION 4, IS INDICATED BY LETTER OF THE GENERAL FREIGHT AGENT OF THE MERCHANTS AND MINERS TRANSPORTATION CO. IN LETTER ADDRESSED TO THIS OFFICE UNDER DATE OF OCTOBER 4, 1938, FILE 979, READING AS FOLLOWS:

REPLYING TO YOURS OF THE 26TH, FILE T-305-WES-CERT.-118278 1/2, REGARDING RATES ASSESSED ON SHIPMENT OF FURNITURE, INCLUDING STEEL WIRE COTS, CARLOAD MINIMUM WEIGHT 10,000 POUNDS, FROM PHILADELPHIA TO YOUNGSTOWN, FLA., VIA M. AND M.T. CO. TO SAVANNAH, S.A.L. TO RIVER JUNCTION, L. AND N.R.R. TO COTTONDALE, A. AND ST. A.B.R.R. BEYOND, WOULD SAY THIS IS EVIDENTLY THE SAME SHIPMENT CONCERNING WHICH WE WROTE THE A. AND ST. A.B. RY. ON MAY 23D, AS FOLLOWS:

"REPLYING TO YOURS OF THE 17TH, FILE 288-USGB-A-1241-D, AND RETURNING ENCLOSURES COVERING SHIPMENT OF FURNITURE FROM PHILADELPHIA, PA., TO YOUNGSTOWN, FLA., MOVING UNDER UNITED STATES GOVERNMENT BILL OF LADING WQ- 9280609, WOULD SAY I DO NOT SEE HOW YOU CAN COLLECT ADDITIONAL CHARGE FROM THE GOVERNMENT OF $22.63 BECAUSE OF THE FOURTH SECTION VIOLATION INVOLVED, BUT AS UNDER THE LAW THE DELIVERING CARRIER IS CHARGED WITH THE COLLECTION OF FREIGHT CHARGES, THIS IS A MATTER WHICH MUST BE DETERMINED BY YOURSELF.

"IF YOU FEEL YOU CAN COLLECT HIGHER CHARGE BASED ON WATER-RAIL RATE, THAN RESULTS FROM RAIL-WATER-RAIL RATES WHICH WERE THEN LAWFULLY IN EFFECT, THEN YOU SHOULD OF COURSE TAKE THIS MATTER UP FURTHER WITH THE GOVERNMENT, AS WE ON OUR PART HAVE NOTHING TO DO WITH THIS FEATURE OF THE MATTER.'

AS YOU KNOW THE LAW IMPOSES UPON THE DELIVERING CARRIER THE DUTY OF COLLECTING PROPER FREIGHT CHARGES, AND WHILE WE DO NOT UNDERSTAND HOW THE DELIVERING CARRIER CAN ASSESS YOU MORE ON THIS WATER-RAIL SHIPMENT FROM OUR PIER AT PHILADELPHIA THAN THAT WOULD APPLY FROM RAIL STATION AT PHILADELPHIA, BECAUSE OF THE FOURTH SECTION SITUATION INVOLVED, WE HAVE NO RECOURSE BUT TO ABIDE BY THEIR DECISION IN THE MATTER, AND THEREFORE SUGGEST YOU AGAIN HANDLE THE MATTER WITH THEM IN AN EFFORT TO HAVE SHIPMENT ADJUSTED ON PROPER BASIS. WITH REFERENCE TO A DEPARTURE FROM THE REQUIREMENTS OF THE FOURTH SECTION OF THE INTERSTATE COMMERCE ACT IT IS TO BE OBSERVED THAT THE SECRETARY OF THE INTERSTATE COMMERCE COMMISSION IN HIS LETTER TO THE GENERAL FREIGHT AGENT OF THE A. AND ST. A.B. RAILWAY UNDER DATE OF MARCH 22, 1937, FILE 22118, WHICH COMMENTED ON THE INTERMEDIATE APPLICATION OF THE RATE PUBLISHED IN AGENT CURLETT'S TARIFF I.C.C. A-418, STATED IN CONCLUSION THAT:

* * * DUE CONSIDERATION WAS GIVEN THE FOURTH SECTION FEATURE INVOLVED AND, AS INTIMATED IN OUR LETTER OF JULY 8, 1936, TO THE WAR DEPARTMENT, THERE WAS AT THE TIME OF SHIPMENT A FOURTH SECTION VIOLATION.

ALTHOUGH IT WOULD APPEAR THAT A CARRIER MUST PROTECT ITS DULY PUBLISHED AND FILED RATES WITH RESPECT TO THE APPLICATION THEREOF ON COMMERCIAL TRAFFIC, IT MAY, NEVERTHELESS, CARRY PROPERTY OF THE UNITED STATES AT REDUCED RATES ( U.S.C. TITLE 49, SECTION 22). HOWEVER, IT IS YOUR CONTENTION IN THIS CONNECTION THAT---

* * * SECTION 22 DOES NOT AUTHORIZE ONE CARRIER TO QUOTE REDUCED OR SPECIAL JOINT THROUGH RATES APPLICABLE VIA OTHER CARRIERS WITHOUT SECURING SPECIFIC AUTHORITY FROM SUCH OTHER CARRIERS TO MAKE SUCH QUOTATION.

WHAT ARRANGEMENTS WERE MADE BY THE MERCHANTS AND MINERS TRANSPORTATION CO. WITH RESPECT TO SECURING CONCURRENCES OF OTHER CARRIERS INTERESTED IN THE SPECIAL RATE APPLIED ON THE SHIPMENT HERE CONCERNED IS NOT A MATTER OF RECORD IN THIS OFFICE, NOR DOES THIS APPEAR TO BE REQUISITE. THE INITIAL CARRIER IN THIS INSTANCE AGREED TO PROTECT THE SPECIAL RATE ON THE MOVEMENT FROM PHILADELPHIA, PA., TO YOUNGSTOWN, FLA., VIA SAVANNAH, THENCE SEABOARD AIR LINE FROM SAVANNAH, GA., TO RIVER JUNCTION, FLA., THE LOUISVILLE AND NASHVILLE RAILROAD TO COTTONDALE, FLA., AND THE A. AND ST. A.B. RAILWAY TO DESTINATION. THUS THE ARRANGEMENT BETWEEN THE INITIAL CARRIER AND THE GOVERNMENT SPECIFICALLY CONTEMPLATED SERVICE VIA THE SPECIFIED LINES AND THE SHIPMENT WAS MADE VIA THE LINES IN QUESTION IN THE DISTINCT UNDERSTANDING THAT THE CHARGES TO THE GOVERNMENT SHOULD NOT EXCEED THOSE ACCRUING ON THE BASIS SPECIFIED. THE BILL OF LADING PROVIDED THAT PAYMENT SHOULD BE MADE TO THE LAST CARRIER UNLESS OTHERWISE SPECIFICALLY PROVIDED. IT IS NOT APPARENT HOW PAYMENT TO THE LAST CARRIER, PURSUANT TO THE ABOVE PROVISION, MAY OPERATE TO INCREASE THE AMOUNT WHICH THE INITIAL CARRIER COULD COLLECT DIRECTLY FROM THE GOVERNMENT.

IN A SOMEWHAT SIMILAR SITUATION IN THE CASE OF MONTROSE OIL REFINING COMPANY V. SAINT LOUIS - SAN FRANCISCO RAILWAY COMPANY, 25 FED. (2D) 750, CERTIORARI DENIED 277 U.S. 598, IT WAS SAID THAT---

THE COMMISSION FOUND THAT DEFENDANTS HAD PUBLISHED AND IN EFFECT FROM LAWTON ( OKLAHOMA), TO FORT WORTH ( TEXAS), THROUGH CEMENT ( OKLAHOMA) BY WAY OF CHICKASHA ( OKLAHOMA), A RATE OF 15.5 CENTS * * * FOR SIMILAR SERVICE TO THAT RENDERED THE PLAINTIFF, AND THAT THIS RATE WAS NOT RESTRICTED TO THE LINES OF DEFENDANTS. THIS IS, IN EFFECT, A FINDING OF THE EXISTENCE OF A ,THROUGH RATE.' IT IS ARGUED, HOWEVER, IN THIS CONNECTION, THAT THE RATE COULD NOT BE MADE TO APPLY BECAUSE THE ROCK ISLAND HAD NOT PARTICIPATED IN ITS ESTABLISHMENT. RATES ESTABLISHED FOR TRANSPORTATION OVER JOINT LINES AND A JOINT ROUTE, BY THE CONCURRENCE OF THE PARTICIPATING CARRIERS, ARE "JOINT RATES" AND IT SEEMS TO BE COMMON PRACTICE FOR CARRIERS TO INITIATE BOTH CLASSES. THE FACT, THEREFORE, THAT THE ROCK ISLAND HAS NOT PARTICIPATED IN THE PUBLICATION OF THE RATE IN QUESTION WOULD NOT RENDER THE RATE INAPPLICABLE OVER ITS LINES FROM CHICKASHA. DEFENDANTS HELD THEMSELVES OUT, BY THE PUBLICATION OF THE TARIFF, AS CAPABLE OF ACCEPTING SHIPMENTS FROM LAWTON, UNRESTRICTED AS TO ROUTE, AND DELIVERING THEM AT FORT WORTH, FOR 15.5 CENTS PER HUNDRED POUNDS. THE ROUTING FOUND BY THE COMMISSION FOR SUCH SHIPMENTS THROUGH CEMENT AND BY WAY OF CHICKASHA WAS CLEARLY AVAILABLE. * * *

IT APPEARS, THEREFORE, THAT THE MERCHANTS AND MINERS TRANSPORTATION CO. COULD AGREE, AS IT DID HERE, UNDER SECTION 22 OF THE INTERSTATE COMMERCE ACT, TO PROTECT A LOWER "THROUGH RATE" AS DISTINGUISHED FROM A LOWER "JOINT THROUGH RATE" THAN THE APPLICABLE TARIFF RATE FROM ORIGIN TO DESTINATION FOR THE INSTANT SHIPMENT, AND THAT THE MATTER OF ADJUSTMENT OF REVENUE ACCRUING FROM THE APPLICATION OF SUCH THROUGH RATE TO THE SUBJECT SHIPMENT IS FOR DETERMINATION BY AND BETWEEN THE INTERESTED CARRIERS. ACCORDINGLY, PAYMENT HAVING BEEN MADE ON BASIS OF THE RATE WHICH THE ORIGIN CARRIER AGREED TO PROTECT, THE SETTLEMENT IS SUSTAINED.