1. Where a land grant railroad, having an established route
partly land grant aided between two terminal points, developed an
alternative route which in part was identical with the original
route and, to that extent, land grant aided,
held that the
Government was entitled, under its land grant Act contract, to
compensate the railroad for terminal-to-terminal service on the
basis of the lower tariff available on the alternative route less
the higher land grant percentage deduction applicable on the
original route, irrespective of what route was actually used in
shipment. Pp.
307 U. S. 394,
307 U. S.
401.
2. This conclusion is consistent with the long continued
administrative construction given land grant contracts. P.
307 U. S.
401.
3. Doubts in respect of the interpretation of public grants are
to be resolved in favor of the Government. P.
307 U. S.
401.
87 Ct.Cls. 442 affirmed.
Certiorari, 306 U.S. 625, to review a judgment dismissing the
petition in a suit brought by the railroad company against the
United States to recover sums claimed to be due on account of
transportation charges.
Page 307 U. S. 394
MR. JUSTICE REED delivered the opinion of the Court.
This case involves the right of the Government to deduct from
the public terminal-to-terminal tariffs of a railroad over a route,
partly of land grant aided mileage, identical with part of the
mileage of another earlier constructed route of the same road
between the same terminals, sums based upon the higher proportion
of land grant aided mileage in this latter route. On account of the
importance of the question in administration, certiorari was
granted. [
Footnote 1]
The carrier owns and operates two lines of railroad between
Portland, Oregon, and Roseville, California, and Davis, California,
both southern points being on the Central Pacific, now the Southern
Pacific, Railroad in California. From the California junctions,
there is direct connection over the same Southern Pacific rails
into San Francisco. The older line is called the Siskiyou, the
newer the Cascade Route. For a considerable portion of the distance
between Portland and San Francisco, the two routes are identical.
There are two differences; one is between Eugene, Oregon, and Black
Butte, California. On
Page 307 U. S. 395
the west, the Siskiyou Route passes through Grant's Pass and
Siskiyou, a distance of 300 miles, to connect Eugene and Black
Butte. The eastern, or Cascade Route, joins the same two points by
a shorter (275 miles) line through Natron and Klamath Falls. The
second deviation is between Tehama, California, and Davis and
Roseville, respectively. Here, the Siskiyou Route is to the east,
104 miles long, and the Cascade Route to the west, 110 miles.
Where the routes are identical, some of the mileage is land
grant aided. Some is not. The mileage of the Siskiyou which is
different from the Cascade is largely land grant aided. None of the
Cascade Route, except where it uses the same rails as the Siskiyou,
has land grants. Based on the proportion of aided mileage and the
percentage of deduction allowed to the Government from the tariffs
charged private shippers, the United States, between San Francisco
and Portland, is entitled to a land grant deduction via the
Siskiyou Route of 42.792 percent. Via the Cascade Route, the
deduction is 17.801 percent. There are slight variations for East
Portland.
During December, 1931, and January, 1932, the carrier
transported, in both directions, certain property of the United
States on Government bills of lading from Portland or East Portland
to San Francisco. No directions were given by the Government as to
the routes over which the shipments were to move. While, before
November 11, 1931, the terminal-to-terminal rates over the two
routes were the same, after that date, authorized revisions
resulted in a rate competitive with water borne commerce over the
Cascade and a higher rate over the Siskiyou. These public tariffs
were so much lower over the Cascade than they were over the
Siskiyou Route that the net cost to the Government, after the
deductions
Page 307 U. S. 396
deemed applicable by the railroad was less over the Cascade than
it was over the Siskiyou, despite the higher percentage of
deduction allowed the latter route.
The Government was billed on the Cascade tariffs with deductions
for land grant mileage of about 17 percent. It paid on the basis of
the Cascade tariffs, but deducted on the ratio of the land grant to
total miles between the terminals on the Siskiyou Route, or some 42
percent. The Government claims that it is entitled to the lowest
rate, between the terminals, less the percentage of deduction over
the original land grant aided route. The carrier protested, and
brought this action in the Court of Claims to recover the
difference between the Cascade tariffs less the Cascade ratio of
land grant mileage and that paid by the Government, the Cascade
tariffs less the Siskiyou ratio. The Court of Claims, after making
special findings of fact, adjudged that the carrier was not
entitled to recover, and dismissed its petition.
The Government obtained concessions from the established tariffs
by virtue of the acceptance by the carrier of grants of land, ten
alternate sections per mile on each side of the line, to aid in the
construction of a railroad as described in the statute authorizing
the conveyance. [
Footnote 2]
This statute was similar in form to the land grant construed in
Burke v. Southern Pacific R. Co., [
Footnote 3] and, upon compliance with its requirements,
became a contract, "obligatory on both" [
Footnote 4] the carrier and Government. The carrier
agreed it should
"be and remain a public highway for the use of the government of
the United States, free of all toll or other charges upon the
transportation of the property or troops of the United States, and
the same shall be transported over said road at the cost,
charge,
Page 307 U. S. 397
and expense of the corporations or companies owning or operating
the same, when so required by the government of the United
States."
The authorization was
"to lay out, locate, construct, finish, and maintain a railroad
and telegraph line between the city of Portland, in Oregon, and the
Central Pacific Railroad, in California. . . ."
The road was located in accordance with these requirements.
In December, 1887, the Siskiyou Route was finished. The road
running from its southern terminus at Roseville to San Francisco
had been finished in 1870. This gave a through route from San
Francisco to Portland, 774.16 miles long with 663.16 land grant
aided. The Cascade Route was built later in small sections,
primarily for local service or links in other projected distinct
railroad undertakings. The California deviation from the Siskiyou
between Tehama and Davis was finished in 1882. The Oregon section,
forming with that portion of the Siskiyou an irregular ovoid
figure, was put together between 1905 and 1926, being completed
September first of the latter year. This route is 725.03 miles
between Portland and San Francisco, with 258.13 miles built with
grants in aid. Each route is necessary for adequate transportation
service to the areas traversed. At the time of the completion of
the Cascade, and until November 10, 1931, the tariffs over the two
routes between the terminals were the same.
On May 23, 1928, there was enacted an act for the relief of the
land grant railroad operated between East Portland, Oregon, and
Roseville, California. [
Footnote
5] As Roseville
Page 307 U. S. 398
is the junction terminal of the Siskiyou, and is not served by
the Cascade, this description covers only the Siskiyou line built
under the 1866 act. By its terms, the Government relinquished its
privilege of free transportation, and accepted in lieu thereof a
right to the same rate as is paid to other land grant roads. This
is fifty percent of the public tariff for land grant aided mileage.
[
Footnote 6]
The Act of 1866, granting the aid, specified, only generally,
the route of the new road. It was to begin at some point on the
Central Pacific Railroad in the Sacramento Valley, and thence run
northerly to Portland. By the grant of millions of acres of public
lands, the Government prepaid for transportation [
Footnote 7] over the line, wherever it might
be built. It was entitled to service for its property or troops
without further cost from whomsoever owned or operated the aided
facility between the Central Pacific and Portland. [
Footnote 8] By the 1928 act, the Government
agreed, for the "relief of the land grant" road, to put it upon the
same basis as other land grant roads. By this concession, no change
was made in the extent of the obligation to give land grant
service.
The two acts are quite clear in their requirement that the
company which constructed the road or its successors in ownership
or operation should transport the property
Page 307 U. S. 399
or troops of the United States over the railroad at the rate
fixed by their provisions. The uncertainty as to the meaning arises
in the application of the right of transportation to the mileage.
On completion of the original project between Portland and the
Central Pacific, there was a definite right of way, the present
Siskiyou Route, with every mile between East Portland and the
Central Pacific aided by land grants. This same situation existed
as to all or parts of other bond or land aided roads. [
Footnote 9]
Page 307 U. S. 400
Soon there were changes and shortening of these lines. The
Government was faced with the problem of the proper ratio of land
grant or bond-aided deductions or allocations to be applied where
new non-aid mileage is used between terminals formerly served in a
higher proportion by land grant mileage. Cut-offs and the
elimination of curves furnished occasion for these decisions. Thus,
in 1888, in a ruling as to transportation services rendered by the
Central Pacific Railroad, where the Central had three lines from
Sacramento to San Francisco, with varying bond-aided mileages, the
Comptroller of the Treasury ruled, when the road sought to render
statements for the line actually used, that all United States
accounts should be stated in terms of the bond-aided mileage of the
original route. As the amounts due to the carrier were applied to
retirement of the bonds in aid, this ruling preserved the charges
for this purpose. This ruling has been
Page 307 U. S. 401
followed in roads aided by land grants. [
Footnote 10] The long-continued administrative
interpretation has decided weight in reaching a conclusion upon the
construction of this contract, [
Footnote 11] particularly when the Congress, after such
interpretation, gives up a right for free transportation between
the terminals. Any doubt must be resolved in favor of the
Government. [
Footnote
12]
The construction adopted in the Court of Claims was reached in
United States v. Northern Pac. Ry. Co., [
Footnote 13] where there was a shortening
of 94.24 miles in the through route between St. Paul and Seattle by
means of a cut-off. In that case, too, the old route was maintained
for local use.
It is urged, however, that, in this instance, we have a new
line, an addition, rather than a cut-off in, or a shortening or
straightening of, an original line. [
Footnote 14] So far as terminal-to-terminal
transportation is concerned, the Cascade Route does not function as
a new line or an addition. It is simply another way carrying goods
by the same railroad between San Francisco and Portland. By which
route the shipment moves is immaterial on the question of deduction
for land grants. The conclusion that the lowest public tariffs are
to have land grant deductions
Page 307 U. S. 402
based upon the proportion of the land grant mileage in the
original line, seems consonant with the purpose of the acts.
Affirmed.
MR. JUSTICE DOUGLAS took no part in the consideration or
decision of this case.
[
Footnote 1]
Cf. Schedule of Land Grant and Bond-Aided Railroads of
the U.S. Office of the Quartermaster General of the Army, Circular
No. 4, February 1, 1922. This shows the land grant mileage in the
United States at the date of issue. In order to obtain a share of
government traffic, nonland grant roads have entered widely into
freight land grant equalization agreements by which they agree to
carry freight, routed over their lines at "the lowest net rates
lawfully available, as derived through deductions account of land
grant distance. . . ."
Cf. Circular 3, Feb. 6, 1935,
Office of Quartermaster General, War Department, Freight Land Grant
Equalization Agreements.
[
Footnote 2]
Act of July 25, 1866, 14 Stat. 239.
[
Footnote 3]
234 U. S. 234 U.S.
669.
[
Footnote 4]
Id., 234 U. S. 680
cf. United States v. Central Pacific R. Co., 118 U.
S. 235,
118 U. S.
238.
[
Footnote 5]
The Act of May 23, 1928, c. 720, 45 Stat. 722, 723,
provides:
"Chap. 720. -- An Act For the relief of the land grant railroad
operated between the station formerly known as East Portland, in
the State of Oregon, and Roseville, in the State of
California."
"
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That the
land grant railroad heretofore operated, and now being operated,
between the station formerly known as East Portland, in the State
of Oregon, and Roseville, in the State of California, shall
hereafter receive compensation for transportation of property and
troops of the United States at the same rate as is paid to land
grant railroads organized under the Land Grant Act of March 3,
1863, and the Act of July 27, 1866 (chapter 278):
Provided, That the Congress hereby reserves the right at
any time by law to prescribe such charges as it deems advisable for
such Government transportation."
[
Footnote 6]
Lake Superior & M. R. Co. v. United States,
93 U. S. 442,
93 U. S.
454-455.
Louisville & N. R. Co. v. United
States, 273 U. S. 321,
273 U. S. 323.
Act of June 7, 1924, c. 291, 43 Stat. 477, 486. This act determined
the proportion of the regular tariff to be paid for the
transportation.
[
Footnote 7]
Louisville & N. R. Co. v. United States,
267 U. S. 395,
267 U. S.
402.
[
Footnote 8]
§ 5, Act of July 25, 1866, 14 Stat. 240.
[
Footnote 9]
The laws relating to land grant and bond-aided railroads contain
several types of conditions. The most prevalent condition was
that
"the said railroad shall be and remain a public highway for the
use of the Government of the United States, free from toll or other
charge upon the transportation of any property or troops of the
United States."
This was construed to require the railroad to furnish only free
use of the rails and permanent structures.
Lake Superior &
M. R. Co. v. United States, 93 U. S. 442. It is
to be found in the following acts: Act of Sept. 20, 1850, 9 Stat.
466 (Ill. Cent. R.; Mobile & O. R.); Act of June 10, 1852, 10
Stat. 8 (Chicago, B. & Q. R.; Missouri Pac. Ry.; St. Louis
& S.F. Ry.); Act of Feb. 9, 1853, 10 Stat. 155 (Chicago, R.I.
& Pac. Ry.; St. Louis, Iron Mtn. & So. Ry.); Act of May 15,
1856, 11 Stat. 9 (Chicago & N.W. Ry.; Chicago, B. & Q. R.;
Chicago, M. & St. P. Ry.; Chicago, R.I. & Pac. Ry.); Act of
May 17, 1856, 11 Stat. 15 (Louisville & N. R.; Seaboard Air
Line Ry.); Act of June 3, 1856, 11 Stat. 17, 18, 20, 21 (Ala. Great
So. R.; Central of Ga. Ry.; Chicago & N.W. Ry.; Chicago, M.
& St. P. Ry.; Chicago, St. P., M. & O. Ry.; Duluth, So.
Shore & At. Ry.; Grand Rapids & Ind. R.; Grand Trunk R.;
N.Y. Cent. R.; Louisville N.R.; Mich. Cent. R.; Missouri, Kan.
& Texas Ry.; Nashville, C. & St.L. Ry.; Pere Marquette R.;
Southern Ry. Co.; Vicksburg, S. & Pac. R.); Act of Aug. 11,
1856, 11 Stat. 30 (Ala. & Vicksburg Ry.; Gulf & Ship. Id.
R.); Act of March 3, 1857, 11 Stat. 195 (Chicago & N.W. Ry.;
Chicago, M. & St. P. Ry.; Chicago, St. P., M. & O. Ry.;
Great No. Ry.; Northern Pac. Ry.); Act of March 3, 1863, 12 Stat.
772 (Atchison, T. & S.F. Ry.; Missouri, Kan. & Texas Ry.);
Act of May 5, 1864, 13 Stat. 64 (Northern Pac. Ry.); Act of May 5,
1864, 13 Stat. 66 (Minneapolis, St. P. & S. Ste. Marie Ry.);
Act of May 12, 1864, 13 Stat. 72 (Chicago, M. & St. P. Ry.);
Act of March 3, 1865, 13 Stat. 526 (Chicago & N.W. Ry.;
Chicago, M. & St. P. Ry.; Great No. Ry., Northern Pac. Ry.).
Some of the grants went further and required the railroad to
furnish free transportation. Act of July 1, 1864, 13 Stat. 339
(Missouri, Kan. & Texas Ry.); Act of July 3, 1866, 14 Stat. 78
(N.Y. Cent. R.; Mich. Cent. R.); Act of July 4, 1866, 14 Stat. 87
(Chicago, M. & St. P. Ry.); Act of July 25, 1866, 14 Stat. 239
(Southern Pac. Co.); Act of July 26, 1866, 14 Stat. 289 (Missouri,
Kans. & Texas Ry.); Act of July 28, 1866, 14 Stat. 338
(Chicago, R.I. & Pac. Ry.; St. Louis, Iron Mtn. & So. Ry.).
Others authorized the railroad to charge for Government
transportation, subject to regulations which Congress might impose
restricting such charges. Act of July 2, 1864, 13 Stat. 365
(Northern Pac. Ry.); Act of July 27, 1866, 14 Stat. 292 (Atchison,
T. & S.F. Coast Lines; St. Louis & S.F. Ry.; Southern Pac.
Co.); Act of March 3, 1871, 16 Stat. 573 (Southern Pac. Co.). The
Act of July 1, 1862, 12 Stat. 489 (Missouri Pac. Ry.), provided for
fair and reasonable rates for Government transportation, not to
exceed the amounts paid by private parties for the same kind of
service.
See Schedule of Land-Grant and Bond-Aided
Railroads of the U.S. Office of the Quartermaster General of the
Army, Circular No. 4, February 1, 1922.
[
Footnote 10]
(1888) 3 Dig.Dec.2d Comp. 299. Followed in (1899) V Dec. of
Comp. of Treas. 364; (1911) XVII Dec. of Comp. of Treas. 633;
(1914) XXI Dec. of Comp. of Treas. 238; (1917) XXIV Dec. of Comp.
of Treas, 193; (1923) 3 Dec. of Comp.Gen. 267; (1931) 10 Dec. of
Comp.Gen. 552; (1936) 15 Dec. of Comp.Gen. 614.
But see
(1900) VII Dec. of Comp. of Treas. 224; (1902) VIII Dec. of Comp.
of Treas. 474.
[
Footnote 11]
Cf. Fox v. Standard Oil Co., 294 U. S.
87,
294 U. S. 96;
Armstrong Paint & Varnish Works v. Nu-Enamel Corp.,
305 U. S. 315,
305 U. S.
329-330.
[
Footnote 12]
Broad River Power Co. v. South Carolina, 281 U.
S. 537,
281 U. S. 548.
[
Footnote 13]
30 F.2d 655,
rehearing denied, 32 F.2d 698.
[
Footnote 14]
United States v. Kansas Pacific Ry. Co., 99 U. S.
455;
United States v. Denver Pacific Ry. Co.,
99 U. S. 460;
United States v. Central Pacific R. Co., 118 U.
S. 235.
MR. JUSTICE BUTLER, dissenting.
The land grant Act of July 25, 1866, and compliance with it,
constitute a contract. [
Footnote
2/1] This case calls for construction of a provision in § 5.
[
Footnote 2/2] The court of claims
sustained the government's deduction on account of land grant
mileage that is not included in or possibly attributable to the
railroad over which the shipments moved. The inclusion, as a part
of the aided railroad, of 275.6 miles of the Cascade Route between
Springfield Junction, Oregon, and Black Butte, California, is not
permissible
Page 307 U. S. 403
under the terms of the contract, nor is computation of the land
grant deduction from charges for transportation via Cascade on the
percentage applicable to charges for transportation via Siskiyou
warranted by constructions heretofore put upon like Acts.
See the following reproduction of map submitted as an
exhibit at the argument in this Court.
|
307
U.S. 393diag1|
image:a
I
The grant was made to induce and aid construction of a railroad
between Portland and some point to be selected by the grantees on
the Central Pacific to serve the Willamette, Umqua, and Rogue River
Valleys in Oregon, and the Sacramento and Shasta Valleys in
California, and to be located as shown on maps made by the grantees
and filed with the Secretary of the Interior. The railroad was
located and constructed, and, since its completion in 1887, has
been maintained and kept in use, in accordance with the contract.
The aided portion is 663.13 miles long, extending between East
Portland, Oregon, and Roseville, California, a point on the Central
Pacific east of Sacramento and about 111 miles from San Francisco.
It is now called the Siskiyou Route.
Section 5 declares that the grantees shall keep "said railroad"
in repair and use; that it shall be "a public highway" for the use
of the United States, and that property and troops of the United
States shall be transported over "said road" at the cost, charge,
and expense of the corporations or companies owning or operating
"the same," when so required by the government.
Plainly, the contract applies only to the land-aided railroad
between Portland and Roseville; not to the haul between Portland
and San Francisco nor to that between Roseville and San Francisco.
The contract neither expresses nor implies any special undertaking
by the carrier as to charges for government transportation
between
Page 307 U. S. 404
the port or terminal of Portland and that of San Francisco.
The Act of May 23, 1928, [
Footnote
2/3] merely substitutes 50 percent of the commercial charges
for free transportation under § 5. Thus, as modified, the Act of
1866 requires plaintiff to furnish government transportation
between points on and wholly via the land grant railroad for
one-half the charges applicable to like service for private
parties. And, for government transportation between a point on the
aided railroad and one on another line, there is deducted from
charges generally made one-half the percentage that aided mileage
attributable to that service is of the total miles hauled.
The Cascade stretch was not completed until 1926, and, as shown
by the findings, it is made up of branches extended during a number
of years prior to 1912 little by little from Black Butte to Kirk to
reach productive forest and agricultural areas.
See
Diagram 1, below.
DIAGRAM 1
Hatched Lines Show Land-aided Mileage
image:b
At its northerly end, a short piece from Springfield Junction to
Natron was completed in 1891; in 1912 that branch was built to
Oakridge to serve timber areas on both sides of the Cascades, and
ultimately to be a part
Page 307 U. S. 405
of a line connecting with the Central Pacific in Nevada or with
the Union Pacific in eastern Oregon. These systems were then under
one control. About the same time -- 1911-1914 -- plaintiff built
from Fernley, Nevada, a point on the Central Pacific, northwesterly
to Westwood, California to serve industries there. Consummation of
the project to complete the line between Fernley and Springfield
Junction via Natron, Oakridge, Kirk, and Klamath Falls was delayed
because of the suit brought in 1908 under the Sherman Anti-Trust
Act by the United States in the Circuit Court for the district of
Utah (
see United States v. Union Pacific R. Co., 188 F.
102), which resulted in decree dissolving control by the Union
Pacific of the Southern Pacific.
United States v. Union Pacific
R. Co., 226 U. S. 61. In
1929, with the approval of the Interstate Commerce Commission,
plaintiff completed the connection between Springfield Junction and
Fernley to form a part of the through route between Portland, Salt
Lake City, and points east.
The court of claims found that, since the completion of the
Cascade stretch,
"plaintiff has had, and now has, two complete lines of railroad
or routes in Oregon and northern California, one the Siskiyou route
. . . serving the valleys and areas described . . . producing much
tonnage of timber, agricultural products, livestock, etc., and the
other the Cascade route . . . also serving large timber areas and
agricultural and livestock producing areas, each of these lines of
railroad serving producing areas quite generally at all points.
Plaintiff has maintained the Siskiyou route, transporting a
substantial and varied traffic and serving a large and important
area. The Siskiyou route and the Cascade route are two separate and
distinct routes or lines of railroad, necessary for adequate
transportation service to the interested areas or territories
traversed by such lines. "
Page 307 U. S. 406
The stretch of railroad between Springfield Junction and Black
Butte via Siskiyou, all land-aided, is 300.42 miles long; it is
used for through transportation and also serves locally in the
Willamette, Umqua, and Rogue River Valleys. All land-aided mileage
in that route continuously has been operated and maintained for the
service of the public, including transportation of property and
troops of the United States. The stretch between the same points
via Cascade, none of it land-aided, is 275.6 miles long, most of
which is east of the Cascade Mountains. It also carries through and
local traffic. To illustrate how unreasonable and arbitrary it is
to attribute that mileage to the aided railroad built, as required
by the Act of 1866, to open and develop the great valleys west of
the mountains, let it be noted that, except at and near the
connecting points, Springfield Junction and Black Butte, these
stretches serve widely separated territories of vast extent; the
area between them is greater than that of the State of
Massachusetts. The mileage of the Cascade stretch is greater than
the distance between Washington and West Point via New York City.
The mileage of the Siskiyou stretch is substantially the same as
the distance between Washington and Pittsburgh.
Upon completion of the Siskiyou Route, plaintiff established
through rates between Oregon and California points; in order to
meet competition of water carriers, it was compelled to make rates
between Portland and San Francisco lower than rates between
intermediate points. In 1912, after enactment of the long- and
short-haul clause of § 4, Interstate Commerce Act, the Commission
permitted the maintenance of lower through rates; it found they
were forced by water competition, and were lower than normal, fair,
and reasonable rates. In 1920, § 4 was again amended to require the
Commission to find that the lower through rates permitted by it
were reasonably compensatory.
Page 307 U. S. 407
In 1927, the Commission, upon plaintiff's showing of operating
costs on the Siskiyou Route, found that the through rates were less
than reasonable, and granted authority to establish rates between
the terminals lower than intermediate rates, but so much higher
than the competing water rates that plaintiff could not share in
the business. The Commission thereafter reopened the case. In order
to show the reasonably compensatory nature of the lower through
rates, plaintiff based its showing on the more favorable
transportation conditions and substantially lower operating costs
on the Cascade Route. Pursuant to the Commission's report and order
of July, 1930, the plaintiff revised its tariffs effective November
11, 1931. The low through rates on the Siskiyou Route were
discontinued, and higher rates, in accord with § 4, were
substituted. Much lower rates, to meet water competition, were
established via the Cascade Route as to transportation of about 25
percent of all articles that move between the cities of Portland
and San Francisco. During the period between completion of the
Cascade Route and the effective date of the new rates, the through
rates were the same via both routes.
The aided mileage in the Siskiyou Route, 663.16 miles, between
Portland and San Francisco, is 85.584 percent of the total. The
aided mileage in the Cascade Route is 258.13 miles, or 35.602
percent of the total. Charges for the shipments in question
applicable via the Cascade Route, less 17.801 percent (one-half of
the percent of land grant mileage to total) are substantially less
than those via Siskiyou, less 42.792 percent. The government did
not expressly direct the shipments in question to be hauled over
the Cascade Route, but it did, in fact, choose to have them go that
way. It was plaintiff's duty to send them over the route on which
the charges would be lower. The government refused to pay more
than
Page 307 U. S. 408
the lower rates applicable via Cascade minus the land grant
deduction of 42.792 percent applicable to the higher charges over
the Siskiyou Route.
The findings compel the conclusions that the Cascade stretch
between Springfield Junction and Black Butte was not built to
better alignment or lessen grades of, add trackage to or otherwise
improve, the land-aided stretch via Siskiyou between the same
points; that it was made up of branches and extensions constructed
from time to time to develop productive areas, to serve local needs
and, upon completion, to be a separate and distinct railroad
between Springfield Junction and Black Butte, a part of which was
also to serve as a section of the transcontinental route above
referred to. Clearly it is not a part of the railroad aided by the
grant of 1866. It was not constructed to aid transportation on, or
as a substitute for, any part of the aided railroad. The fact that
it is used to haul government shipments like those in question does
not suggest any failure of plaintiff fully to perform the land
grant contract to maintain and keep in use the aided railroad
between Portland and Roseville. There is nothing in the grant, or
in the circumstances under which it was made and complied with,
that gives any support to the government's claim that, from the
lower charges applicable to shipments by private parties via
Cascade, it is entitled to deduct the higher land grant percentage
applicable to transportation via Siskiyou.
II
The opinion of the court of claims shows its judgment to have
been reached on an assumption of fact that is not sustained by the
findings or otherwise supported. It says:
"The method of settlement with plaintiff used by the General
Accounting Office in this case has been consistently and uniformly
followed by the defendant's accounting
Page 307 U. S. 409
officers for more than fifty years in cases involving the same
or similar questions."
There is no finding to that effect, but, to support the
statement, the opinion continues:
"The principle was stated by the Second Comptroller of the
Treasury in a decision April 17, 1888, as follows:"
"If a railroad have a line between two points, aided in whole or
in part, and subsequently acquire a new line or lines nonaided
between those same points, the accounts for Government
transportation, when performed over the new line or lines, shall be
stated in the same proportion of aided to non-aided miles as though
the transportation were over the original line."
The decision referred to has not been reported or anywhere
published. It may be found on file in the General Accounting
Office, Miscellaneous Claims Division, Vol. 55, p. 422. The passage
above-quoted is one of two sentences excerpted from different parts
of the document, and together published, without more, as paragraph
1160, Vol. 3, p. 299 of Kern's 1893 Digest of Decisions of the
Second Comptroller of the Treasury. [
Footnote 2/4] As counsel failed to make available to us
the unreported text of the decision, it is assumed that nothing
more than the statement in the Digest was brought to the attention
of the lower court.
To give weight to the Second Comptroller's dictum and justify
its application to this case, the lower court adds:
"This rule as stated has been uniformly observed in the
settlement of accounts for government transportation of property
and troops of the United States, and has been applied in settlement
of accounts for transportation rendered
Page 307 U. S. 410
the Government where through service has been rendered by a
shorter line substituted in whole or in part for the longer aided
and original line. (
See stipulations of the parties in
United States v. Northern Pacific Ry. Co., 30 F.2d 655.)
This long established rule has been acquiesced in by land grant
railroads generally, and was acquiesced in by this plaintiff during
the period between the completion of its Cascade line in 1926 to
1931 when its accounts against the Government for the
transportation of Government property were settled in this manner.
It was not until the shipments involved in this suit were moved
that plaintiff made protest against the position of the Government.
We do not regard the fact the rates between San Francisco and
Portland were the same over both routes between 1926 and 31 as
material or altering in any way the principle involved."
As to that passage, it is to be observed:
The opinion states that the rule, said to have been established
by administrative practice, has been applied to transportation
rendered by a "shorter line substituted in whole or in part for the
longer aided and original line." The court definitely found that
the Cascade stretch is a line separate and distinct from the aided
railroad. It was not substituted for, or used in lieu of, the
Siskiyou Route. It was chosen by or for the government because
applicable charges, whatever the basis of calculation of land grant
deductions, were less than those for like transportation via the
other stretch.
The cited stipulation between the Northern Pacific Railway and
the United States cannot here be made to serve in lieu of special
findings of fact. [
Footnote 2/5]
Moreover, as
Page 307 U. S. 411
will be shown, the circuit court of appeals in that case held
against the carrier on the ground that new unaided mileage had been
substituted for aided mileage in the original route. That case
makes strongly in favor of plaintiff here, for the findings of the
court of claims show that no part of the original aided railroad
had been abandoned as to the traffic in question or otherwise.
The lower court's statement that, from the completion of the
Cascade stretch in 1926 until the shipments here involved,
plaintiff acquiesced in the rule adopted by the court is not
supported by the findings. But, even if warranted, it is without
significance, for the question presented in this case did not and
could not arise while the rates applicable between Portland and San
Francisco were the same.
III
The court of claims failed to find as fact that the government
followed, or the carriers accepted as sound, the dictum excerpted
by Kern from the decision of the Second Comptroller of April 17,
1888. To supply the omission, the government cites in its brief,
without adequate statement of the facts or explanation, all
administrative rulings and judicial decisions it deems to have any
bearing on the question now before us. The former are referred to
in
footnote 10 of this Court's
opinion [
Footnote 2/6] Here,
the material substance of each will be indicated.
Page 307 U. S. 412
1. Ruling of April 17, 1888, by Second Comptroller of the
Treasury, Butler. At that time, the Central Pacific had three lines
between Sacramento and San Francisco. They are indicated on Diagram
2, below.
|
307
U.S. 393diag2|
DIAGRAM 2
Scale: Appx 1 inch = 12 miles
Hatched Lines Show Bond-aided Mileage
image:c
Route 1, via Brighton, Tracy, and Niles, was the original
railroad, 140 miles, of which 103 were bond-aided. Route 2 via
Davis and Port Costa, 90 miles, had no aided mileage. Route 3 via
Brighton, Tracy, and Port Costa, was 151 miles, of which 63
belonged to the bond-aided stretch in Route 1. The bonds in aid
were given under the Act of July 1, 1862, 12 Stat. 489, 494.
See also amendatory Acts of July 2, 1864, 13 Stat. 356,
and May 7, 1878, 20 Stat. 56. Section 6 declares that the aid
grants are made on condition that the company shall keep the
railroad in repair and use, transport troops and property of the
government "at fair and reasonable rates of compensation, not to
exceed the amounts paid by private parties for the same kind of
service," and that all compensation for that transportation shall
be applied to the payment of the bonds. For a time immediately
preceding the Second Comptroller's decision, the government stated
the accounts of the company as though all shipments had been hauled
over Route 1. The railroad maintained that payment should be made
in accordance with the bond-aided mileage in the route used. Thus
arose the issue decided.
The bond-aid contract had been construed to require the Treasury
to retain the compensation for government transportation over
bond-aided mileage and to apply it in payment of the bonds.
United States v. Kansas Pac. Railway Co., 99 U. S.
455;
United States v. Central Pacific R. Co.,
118 U. S. 235.
These cases definitely established that compensation for government
transportation over nonaided extensions of the aided railroads
should not be withheld or applied to pay the bond debt. But the
Second
Page 307 U. S. 413
Comptroller held that rule not applicable. He found that
accounting officers were required by the Act to determine whether
the rates are "fair and reasonable," and stated the problem thus:
"Given a certain state of facts, what is the service rendered by
the railroad, and what is a fair and reasonable compensation
therefor?"
More specifically to disclose the point, the Second Comptroller
referred to the contractual relations between the government and
the carriers, and asked himself: "Are those relations impaired by
the railroad, if it pursues the course which in the present case it
contends to be right?" He answered affirmatively, and, to sustain
that view, reasoned as follows: to reimburse itself, the government
may withhold compensation for "carriage over an aided line." The
security is impaired if the railroad
"parallels or duplicates an aided line between two points and
diverts the government business to that line without in some way
recognizing its indebtedness to the government. [
Footnote 2/7]"
Then, granting that, on strictest legal construction of the
statutes and of the decisions of this Court, there was nothing to
preclude such a course by the railroad, the Second Comptroller went
on to say: "But the principles of equity and ethics forbid the
application of such a construction." Invoking the maxim "he that
seeks equity must do equity" as being "most forcibly pertinent," he
declared that, so long as the railroad is indebted to the
government on account of the bond-aided line, it must
Page 307 U. S. 414
not imperil the government's opportunity to recoup, and
concluded that all accounts, without regard to the route used,
should be stated upon the basis of bond-aided mileage.
The company claimed that acquisition of Route 2 was necessary
because it threatened the existence of the Central Pacific, and
that Route 3 was acquired for convenience because it had better
grades than the original line. It argued that the Government had an
interest in the new lines, and should be willing to pay entire
compensation for carriage over them. Against that contention, the
Second Comptroller said:
"But the acquiring or building by a railroad of new lines
connecting two points already connected by the road of the company
is one of the ordinary elements of modern railroading, intended to
enhance the usefulness of the original line in the same way as does
the
replacing of iron by steel rails, or
wooden by
stone buildings, of
handbrakes by automatic
appliances. [
Footnote 2/8] Is
the Government to lose its right of withholding compensation for
carriage over a trestle, the construction of which
in
wood it aided, simply because the railroad has seen fit
to
replace the wooden structure by one of iron?"
He denounced as untenable both the position of the government
and that of the company, and declared
"that a medium course is not only practicable and equitable, but
is justified under the Acts . . . by the changed and apparently
unanticipated condition of affairs since the construction of the
railroad was contemplated."
He suggested that the company should recognize that the
government's security should not be impaired by a duplicating line,
and that the government should recognize such an improvement of
route as materially lessens distance or difficulties of
transportation between two points. Then, reasoning in more definite
terms, he said:
Page 307 U. S. 415
"If the original line . . . , 140 miles in length, were entirely
aided, and the Government's supplies were taken over the new and
unaided line, 90 miles in length, it would not be right, on the one
hand, for the railroad to demand actual compensation for the 90
miles, or, on the other hand, for the Government to maintain that
the account should be adjusted on a basis of 140 miles, and that
amount passed to the credit of the railroad on the Government's
books.
The non-aided line was used to replace the aided
line, and credit for the 90 miles only should be given the
railroad on the Government's books. The same reasoning applies when
the original line was aided in part."
"If, of the original 140 miles . . . , 103 were aided, and the
accounts were so stated as to pay the railroad for 37 miles and
carry 103 miles to the railroad's credit, the same ratio should be
applied when transportation is over a new line between those points
and 103/140 of the total distance traversed should be considered as
aided, and should be carried to the railroad's credit on the
Government's books, compensation for the balance of 37/140 being
paid direct to the railroad."
Following these passages, the Second Comptroller said:
"If a railroad have a line between two points, aided in whole or
in part, and subsequently acquire a new line or lines nonaided
between those same points, the accounts for Government
transportation, when performed over the new line or lines, shall be
stated in the same proportion of aided to nonaided miles, as though
the transportation were over the original line."
This is the statement found in par. 1160, 3 Dig.2d Comp. 299, on
which the court of claims grounded its judgment.
Applying the generalization so attempted, he ruled:
"On this basis, the accounts of the railroad coming to this
bureau will be finally settled. I am of the opinion that
Page 307 U. S. 416
substantial justice would thus be done -- the railroad would not
impair the security of the Government, and the Government would
recognize the right of the railroad to make
improvements."
The crucial phrase of the generalization, "a new line or lines
non-aided," would include mileage that is separate and distinct
from an aided railroad maintained and kept in use between the same
points. But the Second Comptroller, on the grounds that acquisition
of new lines was the same as making additions and betterments to
the original aided line, and that Routes 2 and 3 were used to
replace Route 1, treated the lines constituting the three routes as
a single railroad bond-aided to the extent of 103/140 of its
length. [
Footnote 2/9] It thus
appears that the broad generalization does not express the
principle of the decision or fit the situation described by it as
mere betterment of the line built pursuant to the bond-aid
contract.
The decision does not relate to the question in this case.
Plaintiff does not contend that, if aided mileage of the Siskiyou
stretch not used may be attributed to the Cascade stretch that was
used to do the hauling in question, the corresponding percentage,
42.792 percent, should not be applied. Plaintiff's point is that
the findings preclude the assignment of any aided mileage to the
nonaided Cascade stretch. The text of the Second Comptroller's
decision shows that he did not decide or deal with any such
issue.
2. Ruling of January 5, 1899 by Acting Comptroller Mitchell in a
Southern Pacific case, V Dec. of Comp. of
Page 307 U. S. 417
Treas. 364.
See 307
U.S. 393diag2|>Diagram 2. A government clerk traveled to
Sacramento via Stockton. A part of the route used was bond-aided.
He returned via Benicia on the shorter and usually traveled
nonaided route. The question was whether payment should be made to
the company for transportation over the nonaided route. This
decision merely follows the uncalled for and inapplicable
generalization attempted by Second Comptroller Butler in the
Central Pacific case.
3. Ruling of November 19, 1900 by Assistant Comptroller Mitchell
in an
Illinois Central case, VII Dec. of Comp. of Treas.
224.
See Diagram 3, below.
|
307
U.S. 393diag3|
DIAGRAM 3
Scale: Appx 1 inch = 20 miles
Hatched Lines Show Land-aided Mileage
image:d
The company operated a land-aided railroad between Cairo and
Chicago. It had two routes for passenger travel between Cairo and
St. Louis: the shorter via Carbondale and Pinckneyville, had some
unaided mileage; the longer, via Du Quoin, was aided throughout.
The government having failed to designate either route, and the
shorter being the usually traveled one over which all through
trains operated, the company carried the government passenger that
way. The question was whether the land grant deduction should be
calculated on the percentage of land-aided mileage in the route
used, or on the greater percentage in the other route. Assistant
Comptroller Mitchell did not follow the general statement of Second
Comptroller Butler in the
Central Pacific case, but held
that, as the government did not choose between the routes, the
deduction should be calculated on the mileage used.
In the list of administrative rulings, cited by the government,
this is the first one that involves construction of a land grant
Act. Land aid differs essentially from bond aid. Contracts in
respect of the latter require government transportation over aided
mileage at "fair and reasonable rates," and that the compensation
earned be applied on the bond debt. No diminution of charges for
government transportation is exacted. The railroad receives
Page 307 U. S. 418
credit, instead of cash, for the charges calculated at full
rates. But the land grant Acts require service either free or at
half rates forever. Questions as to compensation under them concern
not merely form of payment of full charges, but the amount of
payment. Unreasonable, indeed, would it be to hold that carriers'
acquiescence in government construction of bond aid Acts is binding
or entitled to weight in cases involving construction of the land
grant Acts.
4. Ruling of January 21, 1902 by Comptroller Tracewell in a
Great Northern case, VIII Dec. of Comp. of Treas. 474.
See Diagram 4, below.
|
307
U.S. 393diag4|
DIAGRAM 4
Scale: Appx. 1 inch = 74 miles
Hatched Lines Show Land-aided Mileage
image:e
The government shipped
Page 307 U. S. 419
property from St. Paul, Minnesota, to points west of Larimore,
North Dakota. The company had three routes between the points just
named. The percentage of aided mileage in the route via Crookston,
"a," is larger than that in either route "b" or "c." The government
having failed to choose a route, the company hauled by the shortest
route, "c;" it was generally used for like service. The question
was whether land grant deduction should be calculated on the
percentage of the shorter line actually used or the higher
percentage of the longer one not used.
The decision, as well as the quoted generalization, of Second
Comptroller Butler, are in terms broad enough to
Page 307 U. S. 420
cover the question presented, but Comptroller Tracewell,
refusing to follow either, decided against the government's
contention. He said:
"Where, with Government aid, two separate and independent lines
of railroad have been constructed from a common point to entirely
different points, but which subsequently by extension and
independent connections are projected through a common point, and
all these lines have subsequently passed to the control of a single
company, and transportation is furnished between such common points
for the Government by the most usually traveled of said routes,
deduction for land grant should be made on the basis of such route,
in the absence of a contract or a request for transportation by the
other route."
If followed, this ruling would require land grant deduction in
the case at bar to be calculated on the land grant mileage of the
Cascade Route used.
Compare Diagrams
307
U.S. 393diag1|>1 and
307
U.S. 393diag4|>4.
5. Ruling of February 28, 1911 by Comptroller Tracewell in a
St. Louis, Iron Mountain & Southern (Missouri Pacific)
case, XVII Dec. of Comp. of Treas. 633.
See 307
U.S. 393diag5|>Diagram 5, below.
|
307
U.S. 393diag5|
DIAGRAM 5
Scale: Appx. 1 inch = 17 miles
Hatched Lines Show Land-aided Mileage
image:f
The company had a land-aided railroad between Birds Point,
Missouri (on the west bank of the Mississippi opposite Cairo,
Illinois) and Texarkana, Arkansas, via Dexter, Missouri. Government
shipments from Cairo to Dexter were generally transported across
the river at Birds Point, and thence by the land-aided line. On
government shipments between Cairo and Texarkana by that route,
99.247 percent was land-aided. Because of a change in the bed of
the river, it was necessary to haul the shipments in question via
Thebes and Illmo. The land grant deduction applicable to that route
was 81.234 percent. The railroad insisted that, having been forced
to give up the old route, it should not be required to make
deduction for the non-aided mileage between Cairo and Dexter via
Thebes. But the Comptroller refused
Page 307 U. S. 421
to accept that contention, and ordered settlement on the basis
of land-aided mileage in the route via Birds Point.
There is a fundamental difference between that case and the one
before us. The carrier had abandoned the land-aided route for hauls
between Cairo and Dexter. The Southern Pacific kept the Siskiyou
Route in use.
6. Ruling of October 19, 1914 by Comptroller Downey in an
Atchison case, XXI Dec. of Comp. of Treas. 238.
See 307
U.S. 393diag6|>Diagram 6, below.
|
307
U.S. 393diag6|
DIAGRAM 6
Scale: Appx. 1 inch = 58 miles
Hatched Lines Show Land-aided Mileage
image:g
The company has a line in Kansas between Lawrence and Chanute,
land-aided to the extent of 91.3 miles and unaided as to 3.02
miles, part of the distance between Chanute and Humboldt. It has
another line between Atchison and the Colorado boundary via Topeka
and Emporia, all of which is land-aided. To connect these two aided
lines, there was built an unaided branch between Lawrence and
Topeka, and later another between Ottawa and Emporia. The
government shipped cement from Chanute to Holbrook, Arizona.
Earlier, the shipment would have moved through Humboldt, Ottawa,
Lawrence, Topeka, Emporia, and thence to point of destination.
Page 307 U. S. 422
But, because of the construction of the branch between Ottawa
and Emporia, the shipment in question was hauled over that line. By
this route, the haul
Page 307 U. S. 423
between Chanute and Holbrook was 59.13 miles less than over the
other route, and aided mileage between those points was less by
91.42 miles. The Comptroller held that the land grant deduction
should be based on the land-aided mileage of the original route. He
found that the land grant Act (12 Stat. 772) required the aided
railroads "to be and remain public highways for the use of the
government," and that the branch lines made new through routes "to
the abandonment, in part, of the aided through route." He said:
"It has long been the holding of the accounting officers that
the changing of a line of railroad and abandoning of any part of
the original aided line does not deprive the Government of its
original rights, and settlement for service over the new line is
therefore required to be made as if the transportation were over
the original line. (
See 3 Dig.Dec.2d Comp. 299; V Dec. of
Comp. of Treas. 364)."
As the ground on which that ruling rests is abandonment of a
part of the aided line, it gives no support to the judgment before
us.
7. Ruling of October 1, 1917, by Comptroller Warwick in a
Missouri Pacific case, XXIV Dec. of Comp. of Treas. 193.
The published report does not disclose the physical situation. It
is indicated by Diagram 7, below, prepared on the basis of
information found in an unpublished opinion in the same case
rendered May 8, 1917.
|
307
U.S. 393diag7|
DIAGRAM 7
Scale: Appx. 1 inch = 100 miles
Hatched Lines Show Land-aided Mileage
image:h
The government shipped stone from Batesville, Arkansas on an
unaided line via Kansas City to Leavenworth Penitentiary, Kansas.
An older route between the same points was via White River Branch
Connection, Cairo Branch Connection, Carondolet Branch Connection,
Pacific, and Kansas City. The ratio applicable in computing land
grant deduction for shipments hauled that way is 17.933 percent.
The Warden at Leavenworth paid the company for the service in
question over the unaided line, without any land grant deduction.
However, the Comptroller held
Page 307 U. S. 424
the carrier subject to the same percentage of deduction as
applied to the aided route. On the company's application, he
granted rehearing, upheld the principle on which he ordered the
deduction, and declared it would be applied to future shipments.
But, in view of particular facts and equities involved, he
concluded that the accounts paid prior to the date of the decision
could be allowed without land grant deduction.
It requires no discussion to show that the direct route used
should have been chosen for the transportation in question. The
Comptroller cited no land grant contract to support the rule that
he made applicable to future shipments. Nor did he cite Second
Comptroller Butler's ruling or any case -- and, so far as disclosed
by diligent research, briefs of counsel, and this Court's opinion
just announced, there is none that tends to sustain so incongruous
an attribution of aided mileage not used to an unaided route
used.
8. Ruling of October 27, 1923 by Comptroller McCarl in a
Southern Pacific case, 3 Comp.Gen. 267.
See
Diagram 8, below.
|
307
U.S. 393diag8|
DIAGRAM 8
Scale: Appx. 1 inch = 64 miles
Hatched Lines Show Land-aided Mileage
image:i
This case involved a government shipment from Marshall
(Spokane), Washington to Roseburg, Oregon. It was routed over an
unaided line of the Oregon-Washington Railroad & Navigation
Company subject to an equalization agreement that charges would not
exceed the amount payable had the service been by the land grant
line yielding the lowest net rate. The Northern Pacific line
between Marshall and Portland via Pasco and Tacoma was land-aided.
Later, there was built between Pasco and Portland a line jointly
owned by the Northern Pacific and the Great Northern; it is a part
of the Spokane, Portland & Seattle Railway. Upon completion of
that line, the Northern Pacific canceled its rates applicable
between Marshall and Portland by its aided line through Tacoma and
announced that the rates in its tariffs would
Page 307 U. S. 425
only apply via the new unaided line. The Comptroller held that,
as to the government transportation in question, the aided stretch
of the Northern Pacific had been abandoned, and that the government
was therefore entitled "to the transportation over the substituted
line on the same basis as though transportation was furnished over
the original land grant line," and directed that land grant
deduction should be allowed.
That case differs form the one at bar in that the Northern
Pacific, having no tariff applicable to the shipment
Page 307 U. S. 426
via its aided line, had abandoned that line, and for it
substituted a new one.
9. The decisions in
Northern Pac. Ry. Co. v. United
States are next in chronological order.
See Diagram
9, below.
|
307
U.S. 393diag9|
DIAGRAM 9
Hatched Lines Show Land-aided Mileage
(Approximately 1700 Miles of Land-aided Road
Omitted)
image:j
On government request, the company transported two Marines by
through passenger train from St. Paul to Seattle. The Northern
Pacific land grant
Page 307 U. S. 427
aided a route from a point on Lake Superior to one on Puget
Sound. Pursuant to the terms of the statute (Act of July 2, 1864,
13 Stat. 365) the aided railroad was built from the terminal
established at Ashland in Wisconsin to the one established at
Tacoma in Washington. Neither St. Paul nor Seattle is or ever was a
terminal on that or any other land grant line of the Northern
Pacific.
See United States v. Northern Pacific Ry. Co.,
177 U. S. 435,
177 U. S. 441.
St. Paul is more than 100 miles off the aided line; Seattle, more
than 50 miles. In the route traveled by the train in question, the
only aided mileage between St. Paul and the original Northern
Pacific land grant line is a stretch of about 20 miles between
Watab and Little Falls, which is a part of the land-aided railroad
between Watab and Brainerd constructed by the Western Railroad
Company under the Act of March 3, 1857, 11 Stat. 195. [
Footnote 2/10] There is no aided mileage
between Seattle and Palmer Junction, where the original line
connects with the route used.
The issue in the case was whether, in addition to an undisputed
deduction of 3 percent, there should be deducted from the full
commercial fare, $63.16, a land grant percentage of 46.001 percent,
as claimed by the company, leaving a balance of $33.09, or 47.285
percent, as claimed by the government, leaving a balance of $32.29.
Thus, the amount in issue as to each passenger was 80 cents.
The controversy arose from the fact that the government
attributed to the route used the stretches of aided mileage between
Little Falls and Staples via Brainerd and between Palmer Junction
and Auburn via Meeker, amounting in all to 94.24 miles.
The government's theory was that the new unaided lines were
"merely alternate or lieu routes -- routes established
Page 307 U. S. 429
by the railroad to shorten or straighten its line," and that
therefore the calculation of land grant deduction should take into
account aided mileage not used to render the service in question.
The District Court refused so to interpret the facts, and held the
deduction should be calculated on mileage actually used. 22 F.2d
858, 859. But the Circuit Court of Appeals, one judge dissenting,
found that the unused aided mileage had been abandoned. 30 F.2d
655. And, upon that interpretation of the stipulated facts, it said
(p. 659):
"It thus appears that, except by this latter route
[
i.e., via unaided stretches between Little Falls and
Staples, and between Palmer Junction and Auburn], through carriage
by the Northern Pacific [from St. Paul] to the entire Pacific Coast
is abandoned."
The facts early distinguish that case from the one now under
consideration. It is here immaterial whether the judgment rests on
a correct or erroneous interpretation of the stipulation on which
the case was submitted. It is enough to say that the aided
stretches were excluded by the company because not used, and were
included by the government on the ground that, having been
abandoned, they should be attributed to the route used.
10. Ruling of June 23, 1931 by Comptroller General McCarl in a
Missouri Pacific case, 10 Comp.Gen. 522.
See
Diagram 10, below.
|
307
U.S. 393diag10|
DIAGRAM 10
Hatched Lines Show Land-aided Mileage
image:k
The company constructed an unaided cut-off between Jedburg
Junction and Eureka Junction, intermediate points on its land-aided
line between St. Louis and Pacific. The distance between them via
the cut-off is 2.99 miles. Over the old land-aided line via
Glencoe, it is 4.93 miles. That track was still in use for some
local trains. At another place on its line, within the city of St.
Louis, the company substituted O.68 of a mile of nonaided line for
a longer one which is aided. The Comptroller General held that the
aided mileage not used should be attributed to the cut-off mileage
used. He said:
"It would seem to be too clear for serious argument that,
Page 307 U. S. 430
of the distances shown after the cut-off . . . between Eureka
and Jedburg and the O.68 miles from union station connection to the
union station, or a total of 3.67 miles is not over the land grant
line, but it is equally clear that the new mileage of 3.67 miles
was substituted for mileage over the original line for which grants
of public lands were made."
It requires imagination to discover in that case anything in
principle or in fact that will support the conclusion reached by
the court of claims in the case at bar.
11. Ruling of January 16, 1936 by Comptroller General McCarl, 15
Comp.Gen. 614. It has no bearing upon the case at bar. The question
was whether, in computing percentage of land grant deduction, the
line of the Spokane, Portland & Seattle Railway between Pasco
and Portland (
see 307
U.S. 393diag8|>Diagram 8), owned jointly by the Northern
Pacific and the Great Northern, is to be regarded as a Northern
Pacific line. The Comptroller General answered in the
affirmative.
IV
There is apparent attempt to draw from the Act of 1928 some
support for the construction on which this Court affirms the
judgment below. But, so far as concerns the question in this case,
that Act does not indicate any congressional interpretation of the
land grant Act of 1866. The sole purpose of that measure was to
substitute 50 percent deduction in place of free transportation; it
was passed in order to relieve the Southern Pacific of a burden to
which other aided railroads were not subject. When it was enacted,
May 23, 1928, only eight of the rulings above referred to had been
made; two related to bond-aid contracts, and are not in point; two
were in favor of the railroads, and do not support the judgment in
this case. And, as above shown, none gives any support to
Page 307 U. S. 431
the expansion of the terms of the contract that is here made.
The 1928 Act was passed while the decision of the district court in
the
Northern Pacific case remained unreversed.1927, 22
F.2d 858. That case was not decided in the Circuit Court of Appeals
until 1929, 30 F.2d 655. If the Act could be deemed to be a
construction of
Page 307 U. S. 432
the land grant -- as plainly it may not -- it would have to be
read as approving the decision of the district court, for that was
the only judicial decision in that field.
V
The land grant line has been kept in use. The contract is that,
where government transportation is wholly over that line, deduction
of 50 percent shall be made, and that, where it is partly over that
line, there shall be deducted the percentage that aided mileage
used is of total haul. But this Court holds that, even if the
government elects to have its freight move over a separate and
distinct unaided railroad, the plaintiff is bound to apply the
percentages applicable to charges for transportation over the aided
line. Thus, the decision implies a formula or rule to the effect
that a land grant deduction once found applicable to charges for
transportation over a route made up of aided and unaided mileage
between two points is to be applied to all subsequent government
shipments between those points, even if the route actually used
includes no aided mileage. There is nothing in this contract or in
any of the railroad land grant Acts, either as written or as
hitherto construed, to warrant that construction.
I am of opinion that the judgment should be reversed.
MR. JUSTICE McREYNOLDS and MR. JUSTICE ROBERTS join in this
opinion.
[
Footnote 2/1]
Lake Superior & M. R. Co. v. United States,
93 U. S. 442;
Union Pacific R. Co. v. United States, 104 U.
S. 662,
104 U. S. 664;
United States v. Central Pacific R. Co., 118 U.
S. 235,
118 U. S. 238;
Burke v. Southern Pacific R. Co., 234 U.
S. 669,
234 U. S. 680;
United States v. Northern Pac. Ry. Co., 256 U. S.
51,
256 U. S. 64;
United States v. Galveston, H. & S.A. Ry. Co.,
279 U. S. 401.
[
Footnote 2/2]
"
And be it further enacted, That the grants aforesaid
are made upon the condition that the said companies shall keep said
railroad . . . in repair and use, and shall at all times transport
the mails upon said railroad . . . for the government of the United
States, when required so to do by any department thereof, and that
the government shall at all times have the preference in the use of
said railroad . . . therefor at fair and reasonable rates of
compensation, not to exceed the rates paid by private parties for
the same kind of service. And said railroad shall be and remain a
public highway for the use of the government of the United States,
free of all toll or other charges upon the transportation of the
property or troops of the United States, and the same shall be
transported over said road at the cost, charge, and expense of the
corporations or companies owning or operating the same, when so
required by the government of the United States."
14 Stat. 239, 240, 241.
[
Footnote 2/3]
"An Act or the relief of the land-grant railroad operated
between the station formerly known as East Portland, in . . .
Oregon, and Roseville, in . . . California.
Be it enacted
. . . That the land-grant railroad heretofore operated, and now
being operated, between the station formerly known as East
Portland, in . . . Oregon, and Roseville, in . . . California,
shall hereafter receive compensation for transportation of property
and troops of the United States at the same rate as is paid to
land-grant railroads organized under the Land Grant Act of March 3,
1863, and the Act of July 27, 1866 (chapter 278) [pursuant to which
such railroads transport government property at a charge of 50
percent of the regular tariffs]:
Provided, That the
Congress hereby reserves the right at any time by law to prescribe
such charges as it deems advisable for such Government
transportation."
45 Stat. 722.
[
Footnote 2/4]
The first sentence reads:
"The Central Pacific Railroad Company should recognize the
Government's demand that its security for repayment of money
advanced in aid of the construction of the original line be not
impaired or whittled away by a duplicating of the line."
[
Footnote 2/5]
See M. E. Blatt Co. v. United States, 305 U.
S. 267,
305 U. S. 277;
Stone v. United States, 164 U. S. 380,
164 U. S. 383;
Crocker v. United States, 240 U. S.
74,
240 U. S. 78;
Brothers v. United States, 250 U. S.
88,
250 U. S. 93;
United States v. Wells, 283 U. S. 102,
283 U. S. 120;
United States v. Esnault-Pelterie, 299 U.
S. 201,
299 U. S. 206.
And see American Propeller Co. v. United States,
300 U. S. 475,
300 U. S.
479-480.
[
Footnote 2/6]
The footnote reads:
"(1888) 3 Dig.Dec.2d Comp. 299. Followed in (1899) V Dec. of
Comp. of Treas. 364; followed, (1911) XVII Dec. of Comp. of Treas.
632; (1914) XXI Dec. of Comp. of Treas. 238; (1917) XXIV Dec. of
Comp. of Treas.193; (1923) 3 Dec. of Comp.Gen. 267; (1931) 10 Dec.
of Comp.Gen. 552; (1936) 15 Dec. of Comp.Gen. 614.
But see
(1900) VII Dec. of Comp. of Treas. 224; (1902) VIII Dec. of Comp.
of Treas. 474."
[
Footnote 2/7]
And then the decision quotes a passage from a message of
President Cleveland, then very recently sent to Congress with the
report of three commissioners appointed to investigate the affairs
of railroad companies that had received government aid, declaring
that the acts were passed upon the theory that the roads should be
constructed
"according to the common rules of business, fairness, and duty,
and that their ability to pay their debts should not be impaired by
unfair manipulations "
[
Footnote 2/8]
Italics in quotations are added.
[
Footnote 2/9]
Under our decisions, the contract extended only to the aided
railroad.
United States v. Kansas Pacific Ry. Co.,
99 U. S. 455;
United States v. Central Pacific R. Co., 118 U.
S. 235. As Route 2 had no aided mileage and Route 3 only
63 of its 151 miles, the Comptroller erred in treating the lines
constituting the three routes as a single railroad.
[
Footnote 2/10]
Between Minneapolis and St. Paul the Northern Pacific uses,
under an operating contract, 8.23 miles of land-aided road
belonging to another company. That stretch was not involved in the
litigation.