B-130626, JUN. 4, 1957

B-130626, JUN. 4, 1957

TO CHICAGO, BURLINGTON AND QUINCY RAILROAD COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 1, 1957, FILE GOV-T 183 A- 548.4.2, REQUESTING REVIEW OF A NUMBER OF OUR SETTLEMENT CERTIFICATES WHICH DISALLOWED YOUR SUPPLEMENTAL BILLS FOR AN AGGREGATE OF $38,332.29, REPRESENTING ADDITIONAL CHARGES ALLEGED TO BE DUE FOR THE TRANSPORTATION OF VARIOUS SHIPMENTS OF SCRAP STEEL WHICH MOVED DURING 1944 AND 1945 FROM PACIFIC COAST POINTS AND WERE CONSIGNED TO THE UNITED STATES MARITIME COMMISSION, CARE OF INLAND STEEL COMPANY, INDIANA HARBOR, INDIANA.

THE ISSUE INVOLVED IN THESE CLAIMS IS WHETHER THE SUBJECT SHIPMENTS WERE "MILITARY OR NAVAL PROPERTY OF THE UNITED STATES MOVING FOR A MILITARY OR NAVAL AND NOT FOR CIVIL USE," AND THEREBY ENTITLED TO THE APPLICATION OF LAND-GRANT RATES, PURSUANT TO SECTION 321 (A) OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 898, 954 (49 U.S.C. 65). IN YOUR REQUEST FOR REVIEW YOU CITE CHICAGO AND NORTH WESTERN RAILWAY COMPANY V. UNITED STATES, 129 C.CLS. 439, AS AUTHORITY FOR YOUR POSITION THAT LAND GRANT IS NOT APPLICABLE TO THE TRANSPORTATION INVOLVED. IN THAT CASE THE COURT FOUND THAT THE FULL COMMERCIAL RATES WERE APPLICABLE TO SCRAP STEEL SHIPMENTS TO THE NORTH WESTERN STEEL AND WIRE COMPANY, STERLING, ILLINOIS, AND THE INLAND STEEL COMPANY, INDIANA HARBOR, INDIANA. HOWEVER, IN A CASE NOW PENDING BEFORE THE COURT OF CLAIMS--- CHICAGO, ROCK ISLAND AND PACIFIC RAILROAD COMPANY V. UNITED STATES, C.CLS. NO. 49213--- CONCERNING SHIPMENTS OF SCRAP STEEL TO THE INLAND STEEL COMPANY, INDIANA HARBOR, GRANITE CITY STEEL COMPANY, GRANITE CITY, ILLINOIS, THE OPINION OF THE COURT OF CLAIMS COMMISSIONER STATES THAT THE FINDING FOR THE PLAINTIFF IN THE CHICAGO AND NORTH WESTERN CASE RESTED ON THE ABSENCE OF INFORMATION IN THE RECORD AS TO THE CHARACTER OF THE END USE OF THE SCRAP AFTER ITS TRANSFORMATION INTO PRODUCTS SHIPPED BY THE STEEL MILLS TO CUSTOMERS, AND THE COURT'S REPEATED OBSERVATION THAT THE GOVERNMENT HAD NO CONTROL OVER THE SCRAP AFTER ITS DELIVERY TO THE MILLS.

THE COMMISSIONER'S FINDINGS OF FACT IN THE CHICAGO, ROCK ISLAND AND PACIFIC CASE REMEDIED THESE DEFICIENCIES SINCE THE PRECISE PERCENTAGE OF THE PRODUCTION OF THE STEEL MILLS FOUND TO BE MILITARY OR NAVAL IN CHARACTER WAS DETERMINED, AND THE GOVERNMENT'S UNINTERRUPTED CONTROL OVER THE USE OF THE SCRAP WAS ESTABLISHED. IT IS NOTED THAT THE COMMISSION'S PRINTED OPINION IN THE CHICAGO, ROCK ISLAND AND PACIFIC CASE IS THAT THE PLAINTIFF IS ENTITLED TO RECOVER NOT AT THE FULL COMMERCIAL RATES FOR THE ENTIRE QUANTITIES SHIPPED BUT, RATHER, ON A BASIS REFLECTING THE PERCENTAGES OF SCRAP STEEL ACTUALLY DIVIDED BETWEEN CIVILIAN AND MILITARY END USES.

ACCORDINGLY, WE WOULD NOT BE JUSTIFIED IN GIVING FAVORABLE CONSIDERATION TO YOUR CLAIMS IN VIEW OF THE PRESENT STATUS OF THE CHICAGO, ROCK ISLAND AND PACIFIC CASE.