B-125771, DEC. 8, 1955

B-125771, DEC. 8, 1955

TO ILLINOIS CENTRAL RAILROAD:

REFERENCE IS MADE TO YOUR REQUEST UNDER FILE G-N-1820-A-WAG FOR A REVIEW OF THE SETTLEMENT (OUR CLAIM NO. TK-417738) DATED MAY 27, 1953, WHICH DISALLOWED YOUR CLAIM FOR $3,121.78, ALLEGED TO BE DUE AS ADDITIONAL CHARGES FOR THE TRANSPORTATION OF SEVERAL CARLOAD SHIPMENTS OF FIR LUMBER WHICH ORIGINATED AT POINTS IN THE STATE OF OREGON. THE LUMBER WAS MILLED IN TRANSIT AT PORTLAND, OREGON, AND THEREAFTER WAS STOPPED FOR TREATING AT NORTH LITTLE ROCK, ARKANSAS, IN TWO INSTANCES, AND AT SALIDA, COLORADO, IN EIGHT OTHERS, AND FINALLY WAS RESHIPPED TO GULFPORT, MISSISSIPPI.

THE CHARGES SHOWN IN THE SETTLEMENT WERE BASED ON THE THROUGH TARIFF RATES APPLYING FROM THE ORIGINAL POINTS OF SHIPMENT IN THE STATE OF OREGON TO GULFPORT, AS NAMED IN TRANS-CONTINENTAL FREIGHT BUREAU EAST BOUND TARIFF NO. 17-R, AGENT L. E. KIPP'S I.C.C. NO. 1470, WITH DEDUCTIONS FOR LAND-GRANT COMPUTED VIA THE ROUTE THROUGH PORTLAND, OREGON, MINNEAPOLIS AND LYLE, MINNESOTA, EAST ST. LOUIS AND CAIRO, ILLINOIS, AND MERIDIAN AND JACKSON, MISSISSIPPI. IN TAKING EXCEPTION TO THIS SETTLEMENT, YOU CONTEND THAT THE LAND-GRANT ROUTE EMPLOYED MAY NOT BE USED BECAUSE THE COMMERCIAL TARIFFS GRANTING THE TRANSIT PRIVILEGES DO NOT NAME POINTS ON THE LAND- GRANT ROUTE AT WHICH TRANSIT PRIVILEGES ARE AVAILABLE AND, ACCORDINGLY, THAT ROUTE MAY NOT BE USED UNDER THE TERMS OF YOUR EQUALIZATION AGREEMENT FOR THE PURPOSE OF CONSTRUCTING A NET LAND-GRANT RATE ON SHIPMENTS TRANSITED AT SALIDA AND NORTH LITTLE ROCK. TO THE CONTRARY, THE TRANSIT PRIVILEGE REQUESTED AND GRANTED BEYOND THE MILLING POINT (PORTLAND) WAS FOR THE PURPOSE OF CREOSOTING AND, UNDER THE PROVISIONS OF GULF MOBILE AND OHIO RAILROAD COMPANY FREIGHT TARIFF NO. GPO 3044-A, I.C.C. NO. 64, ITEMS 70 AND 156, THAT PRIVILEGE WAS AVAILABLE AT COLUMBUS, MISSISSIPPI, A POINT ON THE LAND-GRANT ROUTE EMPLOYED IN COMPUTING THE CHARGES SHOWN IN THE SETTLEMENT, THE BASIS FOR WHICH WAS SET FORTH IN DETAIL IN GENERAL ACCOUNTING OFFICE FORM 1003, DATED MAY 2, 1946.

INSOFAR AS THE QUESTION OF THE TRANSIT PRIVILEGE HAVING ANY BEARING UPON THE MATTER OF EQUALIZING LAND-GRANT TRANSPORTATION CHARGES IS CONCERNED, THE CREOSOTING OF THE SHIPMENTS EN ROUTE WAS NOT A TRANSPORTATION SERVICE BUT WAS MERELY INCIDENTAL THERETO. AT THE TIME THE SUBJECT SHIPMENTS MOVED THE LINE-HAUL CARRIERS DESIGNATED IN THE ROUTING INSTRUCTIONS SHOWN ON THE COVERING BILLS OF LADING HAD ON FILE WITH THE GOVERNMENT AN AGREEMENT---

"* * * TO ACCEPT FOR THE TRANSPORTATION OF PROPERTY SHIPPED FOR ACCOUNT OF THE GOVERNMENT OF THE UNITED STATES AND FOR WHICH THE GOVERNMENT OF THE UNITED STATES IS LAWFULLY ENTITLED TO REDUCED RATES OVER LAND-GRANT ROADS, THE LOWEST NET RATES LAWFULLY AVAILABLE, AS DERIVED THROUGH DEDUCTIONS ACCOUNT OF LAND-GRANT DISTANCE FROM LAWFUL RATES FILED WITH THE INTERSTATE COMMERCE COMMISSION * * * APPLYING FROM POINT OF ORIGIN TO DESTINATION AT TIME OF MOVEMENT.'

UNDER THE TERMS OF THE EQUALIZATION AGREEMENT, THE CARRIERS THAT ACTUALLY PERFORMED THE THROUGH SERVICE AGREED TO ACCEPT FOR THE TRANSPORTATION OF PROPERTY OF THE KIND HERE IN QUESTION THE LOWEST NET RATES LAWFULLY AVAILABLE THROUGH DEDUCTION FOR LAND-GRANT DISTANCE FROM LAWFUL RATES APPLYING FROM ORIGIN TO DESTINATION AT TIME OF MOVEMENT, AND THERE APPEARS TO BE NOTHING IN THE EQUALIZATION AGREEMENT THAT WOULD PRECLUDE THE USE, FOR EQUALIZATION PURPOSES, OF THE NET RATE DERIVED VIA A ROUTE NOT PASSING THROUGH THE TRANSIT POINT. HAD THE SHIPMENTS MOVED VIA THE ROUTES THROUGH SALIDA AND NORTH LITTLE ROCK WITHOUT BEING ACCORDED TRANSIT PRIVILEGES AT THESE POINTS THERE WOULD BE NO QUESTION AS TO THE APPLICABILITY OF THE NET RATES VIA THE EQUALIZED ROUTE. CONSEQUENTLY, THE ACCEPTANCE OF AN AUTHORIZED TRANSIT PRIVILEGE WOULD NOT APPEAR TO MAKE THE PROVISIONS OF THE EQUALIZATION AGREEMENT INAPPLICABLE ON A SHIPMENT ACCORDED SUCH SERVICE, SINCE A TRANSIT SERVICE IS BASED ON THE THEORY THAT THE TRANSPORTATION CONTRACT HAS NOT BEEN COMPLETED, AND THAT THE SHIPMENT FROM ORIGIN TO DESTINATION IS THE SAME IN PRINCIPLE AS IF THE SHIPMENT HAD MOVED THROUGH WITHOUT TRANSIT. CHICAGO BOARD OF TRADE V. ANN ARBOR RAILROAD COMPANY, 39 I.C.C. 643, 651; LARABEE FLOUR MILLS COMPANY V. CHICAGO, BURLINGTON AND QUINCY RAILROAD COMPANY ET AL., 223 I.C.C. 55, 64.

ON THIS RECORD, THE SETTLEMENT DISALLOWING YOUR CLAIM DOES NOT APPEAR TO HAVE BEEN IN ERROR AND, ACCORDINGLY, IT IS SUSTAINED.