B-21026, DECEMBER 1, 1941, 21 COMP. GEN. 503

B-21026, DECEMBER 1, 1941, 21 COMP. GEN. 503

TRANSPORTATION - TRANSIT PRIVILEGES AND LAND-GRANT DEDUCTIONS - CONTROLLING EFFECT OF MILITARY OR NAVAL USE NATURE OF IN-BOUND MOVEMENT WHERE THE BILL OF LADING COVERING THE IN-BOUND MOVEMENT OF GOVERNMENT PROPERTY FOR STORAGE IN TRANSIT IS CERTIFIED AS COVERING MILITARY OR NAVAL PROPERTY MOVING FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE, RAIL TRANSPORTATION CHARGES ON SUCH IN-BOUND MOVEMENT ARE SUBJECT TO THE LAND- GRANT-DEDUCTION REQUIREMENTS OF SECTION 321 OF THE TRANSPORTATION ACT OF 1940 EVEN THOUGH IT IS UNCERTAIN WHETHER THE PROPERTY WILL ULTIMATELY BE USED FOR "MILITARY OR NAVAL" OR FOR "CIVIL" PURPOSES.

ASSISTANT COMPTROLLER GENERAL ELLIOTT TO A. F. CLEVELAND, VICE PRESIDENT, ASSOCIATION OF AMERICAN RAILROADS, DECEMBER 1, 1941:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 7, 1941, FILE 2-132-2, WHICH READS AS FOLLOWS:

MY ATTENTION HAS BEEN CALLED TO A MOVEMENT OF MANILA FIBERS FROM SAN FRANCISCO, CALIFORNIA, TO DES MOINES, IOWA, IMPORTED FROM THE PHILIPPINE ISLANDS TO BE STORED IN TRANSIT AT DES MOINES AND LATER MOVED INTO THE POINT AT WHICH IT IS TO BE FINALLY USED.

A SPECIFIC MOVEMENT IS COVERED BY GOVERNMENT BILL OF LADING NO. TO3PS-159 FROM STRATEGIC MATERIALS SECTION, U.S. TREASURY DEPARTMENT, PROCUREMENT DIVISION, WASHINGTON, D.C., APPROPRIATION CHARGEABLE TO THE STRATEGIC AND CRITICAL MATERIALS, PROC. DIV., ACT OF JUNE 7, 1939, SHIPPED BY STATE PROCUREMENT OFFICE FOR CALIFORNIA, CONSIGNED TO PROCUREMENT DIVISION, PROCUREMENT DEPT., CARE OF WHITE LINE TRANSFER AND STORAGE CO., DES MOINES, IOWA. THE BILL OF LADING CARRIES ENDORSEMENT " FOR STORAGE IN TRANSIT AT DES MOINES, IOWA. MILITARY OR NAVAL PROPERTY OF THE UNITED STATES MOVING FOR MILITARY OR NAVAL USE AND NOT FOR CIVIL USE.'

WE ARE ADVISED THAT THE RAILROADS HAVE PUBLISHED A STORAGE-IN TRANSIT ARRANGEMENT AT DES MOINES TO TAKE CARE OF THIS MOVEMENT PROVIDING FOR A THROUGH RATE FROM SAN FRANCISCO TO FINAL DESTINATION WHEN SHIPMENTS MOVE FROM THE TRANSIT POINT.

IT IS OUR UNDERSTANDING THAT IT IS PROBABLE THAT A VERY LARGE PROPORTION OF THIS MANILA FIBER WILL BE USED BY THE NAVY AND, THEREFORE, WILL BE ENTITLED TO LAND-GRANT DEDUCTIONS UNDER SECTION 321 OF THE TRANSPORTATION ACT OF 1940, BUT IT IS BY NO MEANS CERTAIN THAT THIS WILL BE THE CASE AND IN THE EVENT THIS FIBER SHOULD REMAIN IN STORAGE UNTIL AFTER THE PRESENT EMERGENCY IS OVER IT MAY BE USED FOR COMMERCIAL AND NOT MILITARY PURPOSES.

THE FINAL CHARGES WHICH WILL BE ASSESSED WHEN THE SHIPMENTS MOVE FROM THE STORAGE POINT WILL BE BASED UPON A THROUGH RATE FROM SAN FRANCISCO TO FINAL DESTINATION, AND IN THE EVENT THE OUT-BOUND SHIPMENTS SHOULD BE USED FOR MILITARY OR NAVAL PURPOSES THEN THE THROUGH RATE COULD THEN PROPERLY BE READJUSTED TO TAKE IN CONSIDERATION THE PROPER LAND GRANT DEDUCTIONS. IT WOULD SEEM TO US, HOWEVER, THAT IN VIEW OF THE UNCERTAINTY OF THE FINAL USE TO WHICH THIS PRODUCT WILL BE PUT, THAT THE CHARGES ON THE INBOUND SHIPMENTS INTO THE TRANSIT POINT SHOULD BE BASED UPON THE COMMERCIAL RATE AS THE GOVERNMENT WOULD BE IN A POSITION TO SECURE THE BENEFIT OF LAND GRANT DEDUCTIONS IF PROPERLY APPLICABLE WHEN THE FINAL USE OF THE COMMODITY IS DETERMINED.

I SHALL APPRECIATE IT IF YOU WILL GIVE THIS MATTER CONSIDERATION AS PROMPTLY AS POSSIBLE AS THE TRAFFIC IS MOVING IN CONSIDERABLE VOLUMES.

THE SHIPMENT COVERED BY BILL OF LADING NO. TO3PS-159, TO WHICH YOU REFER, APPEARS TO HAVE BEEN TENDERED ON JUNE 16, 1941, TO THE WESTERN PACIFIC RAILROAD CO. AT SAN FRANCISCO, CALIF., BY THE UNITED STATES TREASURY DEPARTMENT, STATE PROCUREMENT OFFICE FOR CALIFORNIA, FOR TRANSPORTATION THENCE TO DES MOINES, IOWA, VIA " WP DREW MP CGW," AND TO HAVE BEEN DELIVERED AT DES MOINES TO THE PROCUREMENT DIVISION, TREASURY DEPARTMENT, BY THE CHICAGO GREAT WESTERN RY. CO. ON JUNE 24, 1941. THE DELIVERING CARRIER PRESENTED ITS BILL NO. F-213-A FOR THE TRANSPORTATION CHARGES WHICH REFLECTED DEDUCTIONS ACCOUNT OF LAND GRANT AND WAS SO PAID BY G. F. ALLEN, CHIEF DISBURSING OFFICER, ON VOUCHER NO. 597602, SEPTEMBER 30, 1941. THE BILL OF LADING BORE THE FOLLOWING NOTATION---

FOR STORAGE IN TRANSIT AT DES MOINES, IOWA. MILITARY OR NAVAL PROPERTY OF THE UNITED STATES MOVING FOR MILITARY OR NAVAL USE, AND NOT FOR CIVIL USE. THIS MATERIAL WAS TRANSPORTED FROM THE PHILIPPINE ISLANDS ON SS PRES. FILLMORE ENTERED AT THIS PORT JUNE 13, 1941.

IT APPEARS THAT STORAGE IN TRANSIT AT DES MOINES, IOWA, AS AUTHORIZED IN ITEM NO. 4240-C OF SUPPLEMENT NO. 21 TO TARIFF NO. 50-E, I.C.C. NO. 5521, OF THE CHICAGO GREAT WESTERN RY. CO.--- BEING A REISSUE OF ITEM 4240-B, PUBLISHED IN SUPPLEMENT NO. 16 TO THAT TARIFF-- WITH RESPECT TO " FREIGHT FROM * * * PHILIPPINE ISLANDS * * * REACHING UNITED STATES OR CANADA THROUGH PACIFIC COAST PORTS OF ENTRY," IS SUBJECT TO THE REQUIREMENT THAT ALL CHARGES INBOUND TO THE POINT OF STORAGE MUST BE COLLECTED "ON BASIS OF THE RATES IN EFFECT ON DATE OF SHIPMENT FROM PACIFIC COAST PORT OF ENTRY TO THE STORAGE POINT," AND TO THE PROVISIONS, AMONG OTHERS, THAT---

(E) NO STORAGE ROOM WILL BE PROVIDED BY THE CARRIERS, NOR WILL THE CARRIERS ASSUME STORAGE CHARGES, INSURANCE PREMIUMS OR OTHER EXPENSE WHICH MIGHT BE INCURRED WHILE THE FREIGHT IS IN THE CUSTODY OF THE WAREHOUSE COMPANY.

(F) WHEN THE GOODS ARE STORED UNDER THIS RULE IN WAREHOUSES NOT OPERATED BY THE CARRIER, THE CUSTODY AND POSSESSION OF THE GOODS SHALL BE THAT OF THE CONSIGNEE OR OWNER.

(G) THE TIME LIMIT FOR TRANSIT PRIVILEGES IS TWELVE (12) MONTHS FROM THE DATE OF THE FREIGHT BILL COVERING THE INBOUND SHIPMENT * * *.

IT IS APPARENT FROM THE FOREGOING THAT PAYMENT FOR THE INBOUND SERVICE IS REQUIRED TO BE MADE ON THE BASIS OF TREATING THE SHIPMENT INTO THE STORAGE, OR TRANSIT, POINT AS BEING A COMPLETED TRANSPORTATION SERVICE. WHETHER THE SHIPMENT IS OR IS NOT, IN FACT, THEREAFTER RESHIPPED FROM THE STORAGE POINT, PURSUANT TO THE AUTHORIZATIONS AND IN CONFORMITY WITH THE PROVISIONS OF PERTINENT TRANSIT TARIFFS, IS WITHOUT EFFECT UPON THE AMOUNT OF THE TRANSPORTATION CHARGES REQUIRED COMMERCIALLY TO BE PAID UPON COMPLETION OF THE INBOUND SERVICE TO THE STORAGE POINT. IN THIS SITUATION THERE ARE FOR APPLICATION, WHEN THE MATERIAL COMPRISING THE INBOUND SHIPMENT CONSISTS OF ,MILITARY OR NAVAL PROPERTY OF THE UNITED STATES MOVING FOR MILITARY OR NAVAL AND NOT FOR CIVIL ," WITHIN THE MEANING OF SECTION 321 OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 898, 954, THE REQUIREMENTS OF THE ACT OF JUNE 7, 1924, 43 STAT. 486, PROVIDING:

* * * 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 CONSTRUING 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.

THE POSSIBILITY THAT CONTRARY TO THE CURRENTLY NOTED PURPOSE AS EXPRESSLY STATED IN AN ADMINISTRATIVE CERTIFICATION UPON THE BILL OF LADING COVERING THE INBOUND SERVICE, THE PROPERTY HERE CONCERNED MAY ULTIMATELY BE PUT TO A DIFFERENT USE, NOT MILITARY OR NAVAL IN CHARACTER, WOULD AFFORD NO SUFFICIENT BASIS, IN VIEW OF THE PRESENT RECORD, FOR FAILING TO MAKE DEDUCTION FOR LAND GRANT, AS PROVIDED IN THE CITED STATUTES FROM THE CHARGES AS REQUIRED TO BE PAID COMMERCIALLY FOR THE INBOUND SERVICE. WHETHER ON RESHIPMENT THE USE OR PURPOSE THEN INTENDED TO BE SERVED MAY BE ,MILITARY OR NAVAL," ON THE ONE HAND, OR "CIVIL," ON THE OTHER, DOES NOT CHANGE THE FACT THAT FOR THE MOVEMENT INTO THE STORAGE POINT THE BILL OF LADING HERE CONCERNED IS CERTIFIED AS COVERING MILITARY OR NAVAL PROPERTY, MOVING FOR MILITARY OR NAVAL AND NOT FOR CIVIL USE. THE PRESENT RECORD, THEREFORE, AS TO THIS INBOUND SHIPMENT BRINGS THE TRANSACTION EXPRESSLY WITHIN THE REQUIREMENTS OF SECTION 321 OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 898, 954, FOR DEDUCTION FOR LAND GRANT AND ON THE BASIS OF THE FACTS SO INDICATED PAYMENT AT OTHER THAN THE LAND-GRANT RATES FOR THE INBOUND SERVICE WOULD NOT BE AUTHORIZED.

CONCERNING THE RESHIPMENT OF THIS PROPERTY, IF AND WHEN MADE, THE CHARGES THEREFOR WILL BE FOR COMPUTATION IN CONFORMITY WITH THE CIRCUMSTANCES THEN PREVAILING, CONSIDERED IN CONNECTION WITH THE PAYMENT OF INBOUND CHARGES.