B-129961, MAR. 28, 1957

B-129961, MAR. 28, 1957

TO GULF, MOBILE AND OHIO RAILROAD COMPANY:

REFERENCE IS MADE TO YOUR LETTERS OF JULY 13 AND NOVEMBER 7, 1956, FILE NOS. 36056-44-CL-24, 45754-44-CL-24, AND 6298-CL-24, REQUESTING REVIEW OF OUR SETTLEMENT CERTIFICATE IN CLAIM NOS. TK-603805, TK-602049, TK-603597, TK-603807, AND TK-602043, DISALLOWING YOUR SUPPLEMENTAL BILLS FOR AN AGGREGATE OF $31,078.75, REPRESENTING ADDITIONAL CHARGES ALLEGED TO BE DUE FOR THE TRANSPORTATION OF VARIOUS SHIPMENTS OF SCRAP STEEL FROM PACIFIC COAST POINTS DURING 1944. THE SHIPMENTS COVERED BY CLAIM NO. TK-602049 (YOUR SUPPLEMENTAL BILL NO. 36056-44A FOR $2,630.91) WERE CONSIGNED TO THE UNITED STATES MARITIME COMMISSION, CARE OF GRANITECITY STEEL COMPANY, GRANITE CITY, ILLINOIS. THE REMAINDER OF THE INVOLVED SHIPMENTS WERE CONSIGNED TO THE UNITED STATES MARITIME COMMISSION, CARE OF LACLEDE STEEL COMPANY, FEDERAL, ILLINOIS.

THE ISSUE INVOLVED IN THESE CLAIMS IS WHETHER THE SUBJECT SHIPMENTS WERE "MILITARY OR NAVAL PROPERTY OF THE UNITED STATES MOVING FOR 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, AND THE 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 COMMISSIONER'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.

ON MARCH 20, 1957, REPRESENTATIVES OF OUR OFFICE MET IN CONFERENCE WITH YOUR GENERAL SOLICITOR, MR. LEO H. POU, TO DISCUSS THE STATUS OF THE SUBJECT CLAIMS. MR. POU WAS INFORMED THAT OUR ACTION WOULD BE HELD IN ABEYANCE UNTIL JUDGMENT IS RENDERED IN THE ABOVE-MENTIONED CHICAGO, ROCK ISLAND AND PACIFIC CASE. WE SUGGESTED THAT EVIDENCE BE SUBMITTED TO ESTABLISH THE PERCENTAGE OF SCRAP STEEL UTILIZED BY THE LACLEDE STEEL COMPANY IN 1944 WHICH FOUND ITS WAY INTO END PRODUCTS FOR CIVILIAN USE.

AFTER DECISION IS REACHED IN THE CHICAGO, ROCK ISLAND AND PACIFIC CASE, WE WILL GIVE FURTHER CONSIDERATION TO YOUR CLAIMS IN THE LIGHT OF SUCH ADDITIONAL EVIDENCE AS YOU MAY CARE TO SUBMIT.