B-133943, JAN. 15, 1958

B-133943, JAN. 15, 1958

TO CENTRAL OF GEORGIA RAILWAY COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 25, 1957, FILE N 42957-O-A, REQUESTING REVIEW OF THAT PORTION OF OUR SETTLEMENT DATED FEBRUARY 19, 1957, WHICH DISALLOWED YOUR CLAIM FOR $103.62 ADDITIONAL FREIGHT CHARGES ON FOUR SHIPMENTS OF PLYWOOD PANELS THAT MOVED FROM ST. LOUIS, MISSOURI, TO SAVANNAH, GEORGIA, DURING DECEMBER 1945, UNDER GOVERNMENT BILLS OF LADING NOS. DA-TPS-1092890, DA-TPS 1092889, DA-TPS-1092888, AND DA-TPS- 1092887.

FOR THIS SERVICE YOU CLAIMED AND WERE PAID CHARGES COMPUTED AT THE FULL COMMERCIAL RATE OF 40 1/2 CENTS PER 100 POUNDS. IN THE AUDIT OF THIS PAYMENT WE REDUCED THE COMMERCIAL RATE TO A NET RATE OF 34.307 CENTS PER 100 POUNDS BY APPLICATION OF LAND-GRANT DEDUCTIONS. THE BASIS PRODUCED CHARGES RESULTING IN AN OVERPAYMENT OF $103.62 ON THE FOUR SHIPMENTS, WHICH WAS RECOVERED FROM AN AMOUNT OTHERWISE DUE ON YOUR BILL NO. 59088. IN OUR AUDIT WE APPLIED THE NET LAND-GRANT RATE ON THE THEORY THAT THE SHIPMENTS CONSISTED 100 PERCENT OF UNITED STATES MILITARY PROPERTY MOVING FOR MILITARY USE. THEREAFTER, YOU FILED CLAIM FOR REFUND OF THE $103.62 PER BILL NO. N-42957-B-C-E-12225 9. SUCH CLAIM WAS DISALLOWED BY THE SETTLEMENT OF FEBRUARY 19, 1957.

IN REQUESTING REVIEW OF THIS ACTION YOU CONTEND THAT LAND-GRANT DEDUCTIONS ARE NOT APPLICABLE BECAUSE THESE SHIPMENTS MOVED AFTER LEND LEASE WAS TERMINATED. YOU ASSERT THAT LEND-LEASE WAS TERMINATED AFTER V-J DAY AND THAT, CONSEQUENTLY, MATERIALS MOVING UNDER THE LEND-LEASE PROGRAM AFTER THAT DATE WERE NOT FURNISHED FOR NAVAL OR MILITARY USE WITHIN THE SCOPE OF SECTION 321 (A), TRANSPORTATION ACT OF 1940, 54 STAT. 898, 954. HOWEVER, ALTHOUGH LEND-LEASE WAS TERMINATED AS A WEAPON FOR THE DEFENSE OF THE UNITED STATES, AUTHORITY TO CARRY OUT LEND-LEASE COMMITMENTS ENTERED INTO PRIOR TO JUNE 30, 1946, WAS EXTENDED TO JUNE 30, 1949, BY THE ACT OF APRIL 16, 1945, 59 STAT. 52.

THERE DOES NOT APPEAR TO BE ANY QUESTION THAT THE MATERIAL WHICH MOVED IN THESE SHIPMENTS WAS PROPERTY OF THE UNITED STATES. MATERIAL SHIPPED BY THE UNITED STATES MAY BE MILITARY OR NAVAL PROPERTY OF THE UNITED STATES, WHETHER OR NOT IT IS SECURED BY A MILITARY OR NAVAL DEPARTMENT, AND MAY MOVE FOR A MILITARY OR NAVAL USE, WHETHER OR NOT INTENDED FOR THE DIRECT USE OF A MILITARY OR NAVAL DEPARTMENT OF THE UNITED STATES. SEE NORTHERN PACIFIC RAILWAY V. UNITED STATES, 330 U.S. 248. THE MILITARY OR NAVAL CHARACTER OF THE MATERIAL IS DETERMINED BY THE USE FOR WHICH IT IS PRIMARILY INTENDED. ON PAGE 254 OF THE REPORT IN THE NORTHERN PACIFIC RAILWAY CASE PROPERTY FOR A MILITARY OR NAVAL USE IS DEFINED AS---

"* * * ALL PROPERTY CONSUMED BY THE ARMED FORCES OR BY THEIR ADJUNCTS, ALL PROPERTY WHICH THEY USE TO FURTHER THEIR PROJECTS; ALL PROPERTY WHICH SERVES THEIR MANY NEEDS OR WANTS IN TRAINING OR PREPARATION FOR WAR, IN COMBAT, IN MAINTAINING THEM AT HOME OR ABROAD, IN THEIR OCCUPATION AFTER VICTORY IS WON.'

AFTER VICTORY IN EUROPE AND IN JAPAN THE UNITED KINGDOM WAS ENGAGED WITH THE UNITED STATES AND OTHER ALLIES IN THE OCCUPATION OF DEFEATED COUNTRIES, AND THE INVASION AND OCCUPATION OF A TERRITORY BY A HOSTILE ARMY IS AN INCIDENT OF WAR AND A MILITARY OPERATION. SEE ARTICLE 42, ET SEQ., HAGUE CONVENTION OF 1907, 36 STAT. 2306. 31 COMP. GEN. 629.

IT HAS BEEN ADMINISTRATIVELY DETERMINED THAT THE END USE OF THE PLYWOOD PROCURED UNDER UNITED KINGDOM REQUISITION NO. BBC/23754 WAS 81.25 PERCENT MILITARY IN CHARACTER AND 18.75 PERCENT CIVIL PROPERTY. SUCH MILITARY CHARACTERIZATION IS SUPPORTED BY A DESCRIPTION OF THE SPECIFIC MILITARY PURPOSES TO WHICH THE PLYWOOD WAS TO BE APPLIED, AND THOSE PURPOSES APPARENTLY CONTINUED TO EXIST AFTER V-J DAY IN THIS INSTANCE. SINCE WE PREVIOUSLY APPLIED THE NET LAND-GRANT RATE ON THE THEORY THAT THESE SHIPMENTS CONSISTED 100 PERCENT OF MILITARY PROPERTY AND THE RECORD NOW SHOWS THAT ONLY 81.25 PERCENT WAS MILITARY IN CHARACTER, AN ADJUSTMENT WILL BE MADE TO ALLOW YOU REFUND OF THE LAND GRANT DEDUCTIONS FOR THAT PERCENTAGE OF THE SHIPMENTS WHICH WERE INTENDED FOR CIVIL USE. SETTLEMENT WILL ISSUE TO YOUR FAVOR ON THAT BASIS IN DUE COURSE.