1. Section 321(a) of the Transportation Act of 1940 provides
that commercial rates shall be applicable to transportation of
property for the United States, excepting "military or naval
property of the United States moving for military or naval and not
for civil use."
Held: Phosphate rock and superphosphate which were
property of the United States, and which were transported in 1941
on consignment to the British Ministry of War Transport under the
Lend-Lease Act, but which were for use in Britain as farm
fertilizer, were not within the exception, and were not entitled to
land-grant, rather than commercial, rates. Pp.
330 U. S.
239-242,
330 U. S.
247.
2. The fact that the goods transported were "defense articles"
under the Lend-Lease Act did not of itself entitle them to
land-grant rates under § 321(a). Pp.
330 U. S.
242-245.
3. Although the exception in § 321(a) is to be construed
strictly in favor of the United States, the standards of the
Lend-Lease Act are not to be read into the Transportation Act. Pp.
330 U. S.
243-244.
4. The property here involved was being transported for a
"civil" use within the meaning of § 321(a), since it was destined
for use by civilian agencies in agricultural projects, and not for
use by the armed services to satisfy any of their needs or wants or
by any civilian agency which acted as their adjunct or otherwise
serviced them in any of their activities. Pp.
330 U. S.
245-247.
152 F.2d 228, 230, affirmed.
Page 330 U. S. 239
Respondents brought suits against the United States under the
Tucker Act, 36 Stat. 1091, to recover sums allegedly due for
transportation of government property. The District Courts gave
judgment for respondents. 60 F. Supp. 433 (No. 56). The Circuit
Court of Appeals affirmed. 152 F.2d 228, 230. This Court granted
certiorari. 328 U.S. 826.
Affirmed, p.
330 U. S.
247.
MR. JUSTICE DOUGLAS delivered the opinion of the Court.
These cases involve controversies between the United States and
respondent carriers over the transportation charges for shipments
of government property in 1941. In one case, phosphate rock and
superphosphate are involved; in the other, phosphate rock. In both,
the commodities were purchased by the United States, shipped on
government bills of lading over the lines of respondents, and
consigned to the British Ministry of War Transport. They were
exported to Great Britain under the Lend-Lease Act of March 11,
1941, 55 Stat. 31, 22 U.S.C.Supp. 1, § 411
et seq., for
use as farm fertilizer under Britain's wartime program for
intensified production of food. It is agreed that these shipments
were "defense articles" as defined in § 2 of that Act. [
Footnote 1]
Page 330 U. S. 240
Respondents billed the United States for transportation charges
on these shipments at the commercial rate, and were paid at that
rate. The Seaboard is a land grant railroad. The Atlantic Coast
Line is not, but it entered into an equalization agreement with the
United States in 1938 under which it agreed to accept land grant
rates for shipments which the United States could alternatively
move over a land grant road. [
Footnote 2] The General Accounting Office excepted to
these payments on the ground that land grant rates were applicable.
The amounts of the alleged overpayments were deducted from
subsequent bills concededly due by the United States. Respondents
thereupon instituted suits under the Tucker Act, 36 Stat. 1091,
1093, as amended, 28 U.S.C. § 41(20), to recover the amounts
withheld. The United States counterclaimed for the difference
between the amounts due under the commercial rate and those due
under the land grant rate, and asked that the difference be set off
against the claims of respondents, and that the complaints be
dismissed. The District Courts gave judgment for respondents. The
Circuit Court of Appeals affirmed. 152 F.2d 228, 230. The cases are
here on petitions for writs of certiorari which we granted because
of the importance of determining the controlling principle for
settlement of the many claims of this character against the
Government.
For years, the land grant rate was fifty percent of the
commercial rate, and was applicable to the transportation
Page 330 U. S. 241
of property or troops of the United States. 43 Stat. 477, 486,
10 U.S.C. § 1375;
United States v. Union Pacific R. Co.,
249 U. S. 354,
249 U. S. 355;
Southern Ry. Co. v. United States, 322 U. S.
72,
322 U. S. 73. A
change was effected by the Transportation Act of September 18,
1940, 54 Stat. 898, 954, 49 U.S.C. § 65.
See Krug v. Santa Fe
Pac. R. Co., 329 U. S. 591. All
carriers by railroad which released their land grant claims against
the United States [
Footnote 3]
were, by that Act, entitled to the full commercial rates for all
shipments, except that those rates were inapplicable to the
transportation of
"military or naval property of the United States moving for
military or naval and not for civil use or to the transportation of
members of the military or naval forces of the United States (or
property of such members) when such members are traveling on
official duty. . . ."
§ 321(a). [
Footnote 4] The
Seaboard filed such a release.
Page 330 U. S. 242
Accordingly, the question presented by these cases is whether
the fertilizer was "military or naval property of the United States
moving for military or naval and not for civil use" within the
meaning of § 321(a) of the Transportation Act.
The legislative history of the Transportation Act of 1940 throws
no light on the scope of the except clause. [
Footnote 5] But it is apparent from the face of
the statute that there are important limitations on the type of
property which must be carried at less than the applicable
commercial rates. In the first place, it is not the transportation
of "all" property of the United States that is excepted, but only
the transportation of "military or naval" property of the United
States. In the second place, the excepted property must be "moving
for military or naval and not for civil use." Thus, the scope of
the clause is restricted both by the nature of the property shipped
and by the use to which it will be put at the end of the
transportation.
The bulk and main stress of petitioner's argument are based on
the Lend-Lease Act, which was enacted about six months after the
Transportation Act. It is pointed out that, in the case of every
shipment under the Lend-Lease Act, there was a finding by the
Executive that the shipment
Page 330 U. S. 243
would promote our national defense, [
Footnote 6] that the Act was indeed a defense measure,
[
Footnote 7] and that, unless
the administration of that Act is impeached, all lend-lease
"defense articles" fall within the except clause, and are entitled
to land grant rates.
Under conditions of modern warfare, foodstuffs lend-leased for
civilian consumption sustained the war production program and made
possible the continued manufacture of munitions, arms, and other
war supplies necessary to maintain the armed forces. For like
reasons, fertilizers which made possible increased food production
served the same end. In that sense, all civilian supplies which
maintained the health and vigor of citizens at home or abroad
served military functions.
So, for us, the result would be clear if the standards of the
Lend-Lease Act were to be read into the Transportation Act. For the
circumstance that the fertilizer was to be used by an ally, rather
than by this nation, would not be controlling.
Page 330 U. S. 244
Our difficulty, however, arises when we are asked to transplant
those standards into the Transportation Act. And that difficulty is
not surmounted though the exception in § 321(a) be construed, as it
must be,
Northern Pacific R. Co. v. United States, post,
p.
330 U. S. 248,
strictly in favor of the United States.
In the first place, the Transportation Act, which preceded the
Lend-Lease Act by only six months, provided its own standards. They
were different, at least in terms, from the standards of the
Lend-Lease Act, and they were provided at a time when Congress was
much concerned with the problems of national defense. In September,
1940, when the Transportation Act was passed, Congress and the
nation were visibly aware of the possibilities of war.
Appropriations for the army and navy were being increased, and the
scope of their operations widened, [
Footnote 8] alien registration was required, [
Footnote 9] training of civilians for
military service was authorized, [
Footnote 10] development of stockpiles of strategic and
critical materials was encouraged [
Footnote 11] -- to mention only a few of the measures
being passed in the interests of national defense.
See 50
Yale L.J. 250. Moreover, the realities of total war were by then
plain to all. Europe had fallen; militarism was rampant. Yet, in
spite of our acute awareness of the nature of total war, in spite
of the many measures being enacted and the many steps being taken
by the Congress and the Chief Executive to prepare our national
defense,
Page 330 U. S. 245
§ 321(a) of the Transportation Act was couched in different
terms. In other parts of that Act, [
Footnote 12] as in many other Congressional enactments
passed during the period, the exigencies of national defense
constituted the standard to govern administrative action. But the
standard written into § 321(a) did not reflect the necessities of
national defense or the demands which total war makes on an
economy. It used more conventional language -- "military or naval"
use as, contrasted to "civil" use. That obviously is not conclusive
on the problem of interpretation which these cases present. But, in
light of the environment in which § 321(a) was written, we are
reluctant to conclude that Congress meant "all property of the
United States transported for the national defense" when it used
more restrictive language.
In the second place, the language of § 321(a) emphasizes a
distinction which would be largely obliterated if the requirements
of national defense, accentuated by a total war being waged in
other parts of the world, were read into it. Section 321(a) uses
"military or naval" use in contrast to "civil" use. Yet, if these
fertilizer shipments are not for "civil" use, we would find it
difficult to hold that like shipments by the Government to farmers
in this country during the course of the war were for "civil" use.
For, in total war, food supplies of allies are pooled, and the
importance of maintaining full agricultural production in this
country, if the war effort was to be successful, cannot be
gainsaid. When the resources of a nation are mobilized for war,
most of what it does is for a military end -- whether it be
rationing, or increased industrial or agricultural production,
price control, or the
Page 330 U. S. 246
host of other familiar activities. But, in common parlance, such
activities are civil, not military. It seems to us that Congress
marked that distinction when it wrote § 321(a). If that is not the
distinction, then "for military or naval and not for civil use"
would have to be read "for military or naval use or for civil use
which serves the national defense." So to construe § 321(a) would,
it seems to us, largely or substantially wipe out the line which
Congress drew, and, in time of war, would blend "civil" and
"military," when Congress undertook to separate them. Yet § 321(a)
was designed as permanent legislation, not as a temporary measure
to meet the exigencies of war. It was to supply the standard by
which rates for government shipments were to be determined at all
times -- in peace as well as in war. Only if the distinction
between "military" and "civil" which common parlance marks is
preserved will the statute have a constant meaning, whether
shipments are made in days of peace at times when there is hurried
activity for defense, or during a state of war.
In the third place, the exception in § 321(a) extends not only
to the transportation of specified property for specified uses. It
extends as well to
"the transportation of members of the military or naval forces
of the United States (or property of such members) when such
members are traveling on official duty. . . ."
That clause plainly does not include the multitude of civilians
employed by the Government during the war and exclusively engaged
in furthering the war effort, whether they be lend lease officials
or others. [
Footnote 13]
Thus, the entire except clause
Page 330 U. S. 247
contained in § 321(a) will receive a more harmonious
construction if the scope of "military or naval" is less broadly
construed, so as to be more consonant with the restrictive sense in
which it is obviously used in the personnel portion of the
clause.
In sum, we hold that respondents in these cases were entitled to
the full applicable commercial rate for the transportation of the
fertilizer. In
Northern Pacific R. Co. v. United States,
supra, we develop more fully the breadth of the category of
"military or naval property" of the United States "moving for
military or naval . . . use." It is sufficient here to say that the
fertilizer was being transported for a "civil" use within the
meaning of § 321(a), since it was destined for use by civilian
agencies in agricultural projects, and not for use by the armed
services to satisfy any of their needs or wants, or by any civilian
agency which acted as their adjunct or otherwise serviced them in
any of their activities.
Affirmed.
* Together with No. 57,
United States v. Atlantic Coast Line
Railroad Co., also on certiorari to the same Court.
[
Footnote 1]
The term includes "[a]ny agricultural, industrial or other
commodity or article for defense."
[
Footnote 2]
The points from which the phosphate was moved by the Atlantic
Coast Line are also stations on the Seaboard Line. Hence, the
United States is entitled to secure land grant deductions from the
Atlantic Coast Line if the Seaboard would have been subject to land
grant rates on those articles.
Since the land grant rates were substantially lower than the
commercial rates, roads which competed with the land grant lines
were unable to get the government business. For that reason, they
entered into equalization agreements.
See Southern Ry. Co. v.
United States, 322 U. S. 72,
322 U. S.
73-74.
[
Footnote 3]
Section 321(b).
[
Footnote 4]
This provision was eliminated from § 321(a) by the Act of
December 12, 1945, 59 Stat. 606, 49 U.S.C.Supp. V, § 65(a). Section
2 of that Act made October 1, 1946, the effective date of the
amendment, but provided that
"any travel or transportation specifically contracted for prior
to such effective date shall be paid for at the rate, fare, or
charge in effect at the time of entering into such contract of
carriage or shipment."
Senator Wheeler, Chairman of the Senate Committee on Interstate
Commerce, who had charge of the bill on the floor, made the
following statement concerning pending controversies of the nature
involved in the instant cases:
"Now, Mr. President, I wish to repeat what I said a moment ago.
It should be made perfectly clear that the passage of this bill
resulting in the repeal of the land grant rates will have no effect
whatever upon the controversies as to the proper classification of
this material, provided it has moved prior to the effective date of
the act. These controversies, which were discussed extensively at
the hearings, will have to be settled by the courts, and action on
the present bill, if favorable, will have no effect whatever upon
the question of whether materials that have moved prior to the
repeal fall within or without the classification of military or
naval property."
91 Cong.Rec. p. 9237.
[
Footnote 5]
See H.Rep. No. 2016, 76th Cong., 3d Sess., p. 87;
H.Rep. No. 2832, 76th Cong., 3d Sess., p. 93. Relief from land
grant deductions was urged on the basis of the financial plight of
the railroads and the substantial increase in government traffic
which occurred in the 1930's.
See Report of President's
Committee of September 20, 1938, I Hearings, House Committee on
Interstate and Foreign Commerce, 76th Cong., 1st Sess., on H.R.
2531, pp. 261, 271-272; Public Aids to Transportation (1938), Vol.
II, pp. 42-45. The section finally enacted appears to represent a
compromise between a House Bill eliminating land grant rates
entirely (
see H.Rep. No. 1217, 76th Cong., 1st Sess., p.
27) and a Senate Bill which, by its silence, left them unchanged.
S. 2009, 76th Cong., 1st Sess.
[
Footnote 6]
The authority was vested in the President, who might, when he
deemed it "in the interest of national defense," authorize the
Secretary of War, the Secretary of the Navy, or the head of any
other department or agency of the Government to lease, lend, etc.,
"any defense article." § 3(a)(2).
[
Footnote 7]
The Act was entitled "An Act to Promote the Defense of the
United States," and the interests of national defense were the
standards governing its administration, as § 3(a)(2),
supra, note 6 makes
plain. The same purpose is evident from the Committee Reports.
H.Rep. No. 18, 77th Cong., 1st Sess., pp. 2, 11; S.Rep. No. 45,
77th Cong., 1st Sess., p. 2. And, as President Roosevelt stated on
September 11, 1941, in transmitting the Second Report under the
Act,
"We are not furnishing this aid as an act of charity or
sympathy, but as a means of defending America. . . . The lend-lease
program is no mere side issue to our program of arming for defense.
It is an integral part, a keystone, in our great national effort to
preserve our national security for generations to come by crushing
the disturbers of our peace."
S.Doc. No. 112, 77th Cong., 1st Sess., p. VI.
[
Footnote 8]
See, for example, Act of June 11, 1940, 54 Stat. 265,
292, 297; Act of June 13, 1940, 54 Stat. 350, 377; Act of June 14,
1940, 54 Stat. 394; Acts of June 15, 1940, 54 Stat. 396; Act June
15, 1940, 54 Stat. 400; Act of June 26, 1940, 54 Stat. 599.
[
Footnote 9]
Act of June 28, 1940, 54 Stat. 670, 8 U.S.C. § 451
et
seq.
[
Footnote 10]
Act of September 16, 1940, 54 Stat. 885, 50 U.S.C.Appendix, §
301
et seq.
[
Footnote 11]
Act of September 16, 1940, 54 Stat. 897.
[
Footnote 12]
Thus, § 1 emphasized the policy in establishing a national
transportation system adequate,
inter alia, to meet the
needs "of national defense."
[
Footnote 13]
The provision under land grant legislation that "troops of the
United States" should be transported at half rates was held not to
include discharged soldiers, discharged military prisoners,
rejected applicants for enlistment, applicants for enlistment
provisionally accepted, retired enlisted men, or furloughed
soldiers en route back to their stations.
United States v.
Union Pacific R. Co., supra. The same result was reached in
the case of engineer officers of the War Department who were
assigned to duty in connection with the improvement of rivers and
harbors.
Southern Pacific Co. v. United States,
285 U. S. 240.