Pursuant to § 322 of the Transportation Act of 1940, the
Government paid, upon presentation and prior to audit bills
presented by respondent railroad, for transporting government
property in 1944. On post-audit, the Government found that it had
been overcharged, and, upon refusal of respondent to refund the
amount of the overcharge, deducted the amount from a bill for
transportation services rendered by respondent in 1950. Respondent
then sued the Government under the Tucker Act for the full amount
of the 1950 bill. In its answer, the Government admitted the 1950,
bill but claimed credit for the 1944 overcharge and its payment of
the difference by check. Respondent then admitted receipt of the
check, but claimed that the remainder of the 1950 bill was due and
unpaid.
Held: respondent has the burden of proving that its
1944 charges were computed at lawful and authorized rates, and it
is entitled to recovery only if it satisfies that burden. Pp.
355 U. S.
254-264.
(a) It is clear from the legislative history of § 322 that both
Congress and the railroads contemplated that the Government's
protection against overcharges available under the pre-audit
practice should not be diminished, and that the burden of the
carriers to establish the correctness of their charges was to
continue unabridged. Pp.
355 U. S.
255-260.
(b) The burden of the carrier to establish the lawfulness of its
charges is the same under § 322 as it was under the superseded
practice, under which payment was withheld until the carrier
established the correctness of its charges. Pp.
355 U. S.
260-262.
(c) Conventional principles of contractual setoff should not
govern the determination of the carrier's burden of proof in this
action merely because the complaint frames an action for recovery
of the full amount of the 1950 bill, rather than the amount
deducted therefrom. Pp.
355 U. S.
262-263.
236 F.2d 101, reversed and remanded.
Page 355 U. S. 254
MR. JUSTICE BRENNAN delivered the opinion of the Court.
The General Accounting Office audited transportation bills of
the respondent, rendered and paid in 1944, and determined that the
Government was overcharged in the amount of $1,025.26. When the
respondent did not refund this amount on demand, the Government
exercised the right, reserved in § 322 of the Transportation Act of
1940, [
Footnote 1] to deduct
the overpayments from a subsequent bill. The Government credited
that amount against a bill of the respondent, admittedly owing, of
$1,143.03 for 1950 transportation services, and paid the balance of
$117.77 by check.
The respondent thereupon brought this action under the Tucker
Act [
Footnote 2] in the
District Court for Massachusetts. The complaint seeks recovery not
of the $1,025.26 deducted, but of the full amount of the 1950 bill
of $1,143.03. The Government's answer admits the 1950
Page 355 U. S. 255
bill but pleads its payment by the check of $117.77 and the
credit of $1,025.26 in liquidation of the overcharges determined in
the 1944 bills. The respondent filed a pleading in response to the
government answer [
Footnote 3]
admitting
"that it did receive the check in the amount of $117.77, all as
recited by the defendant, leaving the balance due and to this date
unpaid in the amount of $1025.26."
The question presented in both courts below, and in this Court,
is whether, in this action, the carrier has the burden of proving
the correctness of the 1944 bills, or the Government the burden of
proving that it was overcharged. The District Court held that the
respondent carrier was pleading on a contract against which the
Government was attempting to "set off" claims under other
contracts, and that "whoever attempts to set off the other
contractual claims has the burden of showing there are other
claims." In the absence of government evidence proving the claimed
overcharges in the 1944 bills, a motion of the respondent for
summary judgment was granted. The judgment entered, however, was
for $402.84, because the respondent accepted the amount of 1944
overcharges in the difference between that sum and the amount of
the bill. The Court of Appeals for the First Circuit affirmed the
judgment. 236 F.2d 101. We granted certiorari, 352 U.S. 965.
Before enactment of § 322, the Government protected itself
against transportation overcharges by not paying transportation
bills until the responsible government officers, and, in doubtful
cases, the General Accounting Office, first audited the bills and
found that the charges were correct. [
Footnote 4] When charges were questioned the carrier
Page 355 U. S. 256
was required to justify them. If administrative settlement was
not reached and the carrier sued the United States to recover the
amount of the bill, no one questions that it was the carrier's duty
to sustain the burden of proving the correctness of the charges.
[
Footnote 5]
Southern
Pacific Co. v. United States, 272 U.
S. 445,
272 U. S. 448.
Section 322, however, required the payment of such bills "upon
presentation . . . prior to audit or settlement by the General
Accounting Office. . . ." The audit procedures
Page 355 U. S. 257
remained substantially the same as those in effect prior to the
statute, but the former means of protecting against overcharges --
by not paying the bills until their correctness was proved -- has,
by force of the statute, been replaced by the method of collecting
them from subsequent bills, under the right reserved by the section
to the Government "to deduct the amount of any overpayment to any
such carrier from any amount subsequently found to be due such
carrier." We recently said, in
United States v. Western Pacific
R. Co., 352 U. S. 59,
352 U. S.
74:
". . . This right [to deduct overpayment from subsequent bills
of the carrier] was thought to be a necessary measure to protect
the Government, since carriers' bills must be paid on presentation,
and before audit."
Again, at page
352 U. S.
75:
"The fact that the Government paid the carrier's bills as
rendered is without significance in light of § 322 of the
Transportation Act,
supra, requiring payment 'upon
presentation' of such bills, and postponing final settlement until
audit."
This interpretation of § 322 finds full support in the
legislative history of the section. The section was included in the
omnibus transportation bill, which became the Transportation Act of
1940, in direct response to a demand of the railroads for
legislation relieving them of the inordinate delays in payment of
their bills attributable to the pre-audit procedure, which tied up
substantial amounts of accounts receivable and contributed to the
financial difficulties which confronted the railroads during the
depression years. The then President of the Association of American
Railroads raised the issue in a letter to the Procurement Division
of the Department of the Treasury dated October 5, 1937.
(
See 355
U.S. 253app|>Appendix to
Page 355 U. S. 258
this opinion, p.
355 U. S.
264.) Proposed legislation in almost the identical
language which became § 322 was thereupon introduced in 1938.
[
Footnote 6] It failed of
passage in the Seventy-fifth Congress, and a number of similar
proposals were therefore introduced in the Seventy-sixth Congress.
[
Footnote 7] None of these
passed, but, in the following year, the provision was included as §
322 of the Transportation Act of 1940. [
Footnote 8]
It is entirely clear that, although the railroads sought, in the
words of their spokesman, "corrective action . . . that will render
impossible such long delays in payment for services rendered," to
gain that end, the railroads recognized that any remedy suggested
on their behalf should be
"both practical and legal, and [one] which can easily be made
operative without the assumption of any risk insofar as the
Government is concerned."
It was "with this thought in mind" that the railroads proposed
the elimination of pre-audit procedures and the prompt payment of
transportation bills when rendered, with audit
"after payment . . . [of] these bills referred to the General
Accounting Office or such other governmental auditing
Page 355 U. S. 259
office as might be desired for audit."
The plan contemplated that, "in the event . . . this audit
reveals an overpayment," the same
"will be promptly paid by the railway, preserving, however, the
right of the carrier to make further effort to re-collect in the
event that it does not believe the proper charges resulted from the
Government's audit. [
Footnote
9]"
In hearings before the House Committee on Interstate and Foreign
Commerce held June 1, 1938, [
Footnote 10] in connection with one of the bills
incorporating the proposal which became § 322, the then General
Counsel of the Association of American Railroads, arguing in
support of the
Page 355 U. S. 260
proposal, urged that,
"[i]f that section could be put in here, it would require the
payment of the bills by the Government as they are rendered by the
railroads, with the privilege, however, of course, if it should
develop that there has been an overpayment, the Government may
deduct that amount from subsequent bills."
The conclusion is inescapable from this history that the
Congress was desirous of aiding the railroads to secure prompt
payment of their charges, [
Footnote 11] but it is also clear that the Congress, and
the railroads, contemplated that the Government's protection
against overcharges available under the pre-audit practice should
not be diminished. The burden of the carriers to establish the
correctness of their charges was to continue unabridged. The
carriers were to be paid immediately upon submission of their
bills, but the carriers were, in return, promptly to refund
overcharges when such charges were administratively determined. The
carrier would then have "to re-collect" the sum refunded by
justifying its bills to the agency or by proving its claim in the
courts. The footing upon which each of the parties stood when
controversies over charges developed was not to be changed. The
right of the United States to deduct overpayments from subsequent
bills was the carriers' own proposal for securing the Government
against the burden of having to prove the overpayment in
proceedings for reimbursement.
In the light of this history, we are unable to agree with the
holdings of the Court of Appeals that
"[a]ll that § 322 does is to authorize and direct disbursing
officers of the United States to pay transportation bills upon
presentation, without waiting for audit or settlement by the
General
Page 355 U. S. 261
Accounting Office,"
and that the reservation of the right of offset against
subsequent bills is without significance --
"We suppose that this provision was inserted out of an abundance
of caution, because the availability of a setoff by the United
States need not depend upon specific statutory authorization,"
citing
Gratiot v. United
States, 15 Pet. 336,
40 U. S. 370,
236 F.2d 101, 105.
Nor do we share the view of the Court of Appeals that "the
position of the United States as shipper, so far as the present
case is concerned, is no different from that of a private shipper."
Id., 236 F.2d at 104. Even if we assume that,
"[i]f a private shipper or consignee should pay the carrier
before satisfying himself of the correctness of the charges
demanded -- as he may be required to do pursuant to § 3(2) of the
Interstate Commerce Act and regulations of the Commission
thereunder -- and later sues for a refund of alleged overpayments,
or seeks to set off the amount of the overpayments against another
claim admittedly due, in either case, the shipper or consignee
would have the burden of alleging and proving the fact and the
amount of such overpayment, [
Footnote 12]"
the Court of Appeals overlooks the fact that the Government's
statutory right of setoff was designed to be the substantial
equivalent of its previous right to withhold payment altogether
until the carrier established the correctness of its charges. Thus,
the issue of overcharges, after the enactment of § 322, arises in a
different way, but the differing procedures by which the issue is
presented should not control the placement of the
Page 355 U. S. 262
burden of proof. [
Footnote
13] In effect, the situation is that the railroad is suing to
recover amounts which the Government initially paid conditionally,
and then recaptured, under the § 322 procedure. We therefore hold
that the burden of the carrier to establish the lawfulness of its
charges is the same under § 322 as it was under the superseded
practice.
Similarly, conventional principles of contractual setoff should
not govern the determination of the carrier's burden of proof in
this action merely because the complaint
Page 355 U. S. 263
frames an action for recovery of the full amount of the 1950,
bill rather than the amount deducted therefrom. The respondent's
brief concedes that,
"[w]henever a railroad brings an action against the Government,
directly upon the deduction [as, on the facts of the case, to
recover the alleged 1944 overpayments], it has the burden of
alleging and proving the facts of the case and establishing the
validity of its claim in the light of the contract and the
applicable tariffs."
There is also authority that the plaintiff has the same burden,
although suing on the subsequent bill, when the claim for damages
is for the amount of the deduction.
Suncook Mills v. United
States, 44 F. Supp.
744;
Eastport S.S. Co. v. United States, 131 Ct.Cl.
210, 130 F. Supp. 333;
Buch Express, Inc. v. United
States, 132 Ct.Cl. 772, 132 F. Supp. 473. [
Footnote 14] We do not see that a different
issue was shaped by the pleadings in this action.
Cf. Wisconsin
Central R. Co. v. United States, 164 U.
S. 190,
164 U. S. 212.
Although the
ad damnum clause of the complaint prays
recovery of $1,143.03, respondent's pleading filed in response to
the Government's answer admits the government payment of $117.77,
and that the actual controversy concerns the balance of $1,025.26.
The true dispute between the parties, arising from the
determination and collection of the overpayments as authorized by §
322, involves the lawfulness of the 1944 bills. It is the
substance, not the form, which should be our concern.
Cf. Alcoa
S.S. Co. v. United States, 338 U. S. 421;
Reynolds v. United States, 292 U.
S. 443. We hold that the respondent is entitled to
recover only if it satisfies its
Page 355 U. S. 264
burden of proving that its 1944 charges were computed at lawful
and authorized rates.
We do not here intimate that the administrative determination of
overpayment has binding effect in the judicial proceeding,
see
Wisconsin Central R. Co. v. United States, supra, at
164 U. S. 211;
Grand Trunk Western R. Co. v. United States, 252 U.
S. 112,
252 U. S.
120-121; and we agree with the Court of Appeals that the
extrinsic fact, namely the availability of the freight cars in the
sizes ordered, remains to be proved in the suit. Our conclusion is
that the burden in that respect is upon the carrier.
The judgment of the Court of Appeals is reversed with direction
to remand the case to the District Court for further proceedings
not inconsistent with this opinion.
Reversed and remanded.
MR. JUSTICE FRANKFURTER dissents on the basis of the opinion of
Chief Judge Magruder in the court below, 236 F.2d 101, and more
particularly because the respondent was not the initial
carrier.
[
Footnote 1]
Section 322 of the Transportation Act of September 18, 1940, 54
Stat. 955, 49 U.S.C. § 66, provides as follows:
"Payment for transportation of the United States mail and of
persons or property for or on behalf of the United States by any
common carrier subject to the Interstate Commerce Act, as amended,
or the Civil Aeronautics Act of 1938, shall be made upon
presentation of bills therefor, prior to audit or settlement by the
General Accounting Office, but the right is hereby reserved to the
United States Government to deduct the amount of any overpayment to
any such carrier from any amount subsequently found to be due such
carrier."
[
Footnote 2]
24 Stat. 505, as amended, 28 U.S.C. § 1346(a)(2).
[
Footnote 3]
The Pleading is captioned "Plaintiff's Answer to Defendant's
Counterclaim."
[
Footnote 4]
Government accounts generally are subject to audit prior to
payment. 33 Op.Atty.Gen. 383. Prepayment examination of claims has
statutory support in several statutes.
See 55 Stat. 875,
31 U.S.C. § 82b; R.S. § 3620, 31 U.S.C. § 492; R.S. § 3622, 31
U.S.C. § 496; R.S. § 3623, 31 U.S.C. § 498; R.S. § 3633, 31 U.S.C.
§ 514; R.S. § 3648, 31 U.S.C. § 529; 37 Stat. 375, as amended, 31
U.S.C. § 82; 55 Stat. 875, 31 U.S.C. § 82c. The claimant must
furnish proof satisfactorily establishing his claim.
Charles v.
United States, 19 Ct.Cl. 316. Doubtful accounts and claims are
transmitted to the General Accounting Office for review. Section 1
of GAO General Regulations No. 50, April 21, 1926, 4 CFR § 4.1.
[
Footnote 5]
The correctness of the 1944 bills turned on the determination of
fact whether freight cars of the shorter lengths ordered by the
United States were available when the initial carrier supplied cars
of larger sizes. A wartime measure permitted the charging of the
tariffs applicable to the cars furnished if the carrier could not
supply cars of the sizes ordered. 236 F.2d 101, 103. The General
Accounting Office determined the overpayment on a finding that the
documents showed that longer cars were furnished than were ordered.
On the question of whether cars of the sizes ordered were
available, the Government stated its position in answer to
interrogations: "Such information is peculiarly within the
knowledge of plaintiff [respondent] and/or the initial carrier. . .
." The ordinary rule, based on considerations of fairness, does not
place the burden upon a litigant of establishing facts peculiarly
within the knowledge of his adversary.
Cf. Selma, R. & D.
R. Co. v. United States, 139 U. S. 560,
139 U. S. 566;
United States v. Denver & R.G. R. Co., 191 U. S.
84,
191 U. S. 91-92.
The position of the respondent herein is that the Government had
all the information known to the carriers as to the availability of
cars of the sizes ordered.
[
Footnote 6]
S. 3876, 75th Cong., 3d Sess., introduced April 20, 1938 (83
Cong.Rec. 5569). H.R. 10620, 75th Cong., 3d Sess., introduced May
12, 1938 (83 Cong.Rec. 6842).
[
Footnote 7]
See, e.g., S. 1915, 76th Cong., 1st Sess., introduced
March 23, 1939 (84 Cong.Rec. 3143); S.1990, 76th Cong., 1st Sess.,
introduced March 30, 1939 (84 Cong.Rec. 3509). Section 1 of both of
these bills dealt with the elimination of land grant rates; § 2
with the payment of transportation bills upon presentation.
H.R. 2531, 76th Cong., 1st Sess., introduced January 13, 1939
(84 Cong.Rec. 345); H.R. 4862, 76th Cong., 1st Sess., introduced
March 8, 1939 (84 Cong.Rec. 2512). Section 501 of Title V of H.R.
2531 and §§ 201 and 202 of Title II of H.R. 4862 concerned
government traffic. Their provisions were substantially the same as
the provisions in S. 1915 and 1990.
[
Footnote 8]
H.R.Rep. No. 2016, 76th Cong., 3d Sess.; H.R.Rep. No. 2832, 76th
Cong., 3d Sess.
[
Footnote 9]
The postpayment audit of transportation bills by the General
Accounting Office has been a large-scale operation since enactment
of § 322. For example, the Annual Report of the Comptroller General
for the fiscal year ending June 30, 1951, pages 31-32, reports
that:
"During the fiscal year 1951, there was examined and reviewed in
the regular audit of freight transportation payments -- exclusive
of special cases -- a total of 633,706 vouchers covering 2,569,198
bills of lading, paid in the sum of $350,341,941, as to which there
were stated for issuance 25,591 notices of overpayment totaling
$6,301,799. There was examined and reviewed in the audit of
passenger transportation payments a total of 400,639 vouchers
covering 2,917,633 transportation requests, paid in the sum of
$91,380,604, as to which there were stated for issuance 11,015
notices of overpayment totaling $672,708."
A general practice of making refunds following determination of
overpayments has apparently developed under § 322. A footnote to
the Government's brief states:
"We are advised by the General Accounting Office that, during
the fiscal year ending June 30, 1956, carriers refunded a total of
$40,941,188.78. The amount deducted from subsequent bills during
that same period totaled $11,155,837.72. During the preceding
fiscal year, the total amount refunded was approximately two and
one-half times the amount deducted."
[
Footnote 10]
Hearings before the Committee on Interstate and Foreign Commerce
of the House of Representatives on H.R. 10620, 75th Cong., 3d
Sess., June 1, 1938, pp. 34-35.
[
Footnote 11]
The statute was broadened before final passage to apply to any
common carrier subject to the Interstate Commerce Act, as amended,
or the Civil Aeronautics Act of 1938.
See Hearings before
the Committee on Interstate and Foreign Commerce of the House of
Representatives on H.R. 2531, 76th Cong., 1st Sess., p. 472.
[
Footnote 12]
The private shipper must pay freight charges promptly, and has
no expressed right of offset of any overpayment against charges for
other transportation services. 24 Stat. 380, as amended, 49 U.S.C.
§ 3(2). A limited exception allows carriers to extend credit for a
period of 96 hours to private shippers under prescribed conditions
and limitations.
Ex parte No. 73, 57 I.C.C. 591.
[
Footnote 13]
Compare the practice followed in the Court of Claims,
which has concurrent jurisdiction with the District Court of
actions under the Tucker Act. A "Memorandum Order as to Procedure
in Common Carrier Cases," issued March 11, 1953, by the Court of
Claims (now, with some amendments, included as Appendix B in the
Rules of the Court of Claims, revised December 2, 1957), expressly
defines the "dispute" in cases of the instant kind, among others,
brought in that court:
"The word 'dispute' . . . means the shipment or shipments with
respect to which the General Accounting Office or other agency of
the Government determined that the carrier's charges had been
overpaid . . . , rather than subsequent shipments which are not in
dispute except for the fact that the overpayments determined as to
the shipments in dispute have been deducted from the amount of the
carrier's bills covering such subsequent shipments."
The memorandum prescribes a procedure for the framing of the
issues arising from the "dispute" as so defined. The carrier
bringing the action must furnish a detailed schedule as to "each of
the carrier's bills for the shipments in dispute," and is required
also to file at the time of its petition, or within 30 days
thereafter,
"a request for admission by the defendant [United States] of the
genuineness of any relevant documents described in and exhibited
with the request and of the truth of the material matters of fact
relied on by the carrier for recovery in the action."
The statements are expressly required to be
"sufficiently explicit to show the nature of the dispute and the
specific reason or reasons why the plaintiff believes it is
entitled to recover higher rates or charges than those allowed by
the Government."
Failure to comply with the requirements of the memorandum may be
cause for the imposition of sanctions, including dismissal of the
carrier's petition.
[
Footnote 14]
But see Atlantic Coast Line R. Co. v. United States,
136 Ct.Cl. 1, 140 F. Supp. 569, 572. The Court of Claims there
indicated that the burden would be on the United States, while
holding that the railroad had the duty to provide all the
information it had on the issue of availability of cars.
|
355
U.S. 253app|
APPENDIX TO OPINION OF THE COURT
The letter, dated October 5, 1937, was addressed by J. J.
Pelley, President of the Association of American Railroads, to
Captain H. E. Collins, Assistant Director, Procurement Division,
Treasury Department, and reads:
"Dear Captain Collins:"
"The railroads members of the Association of American Railroads,
which comprise about 98% of all the Class I railroads in the United
States, have been very much concerned by the long delay in securing
payment for transportation services rendered for the U.S.
Government. We know further, from conferences with the officers of
the American Short Line Railroad Association,
Page 355 U. S. 265
that their lines have been and are experiencing similar
difficulty. These delays are not justified, and the carriers should
not be expected to finance the Government, as they are now doing,
insofar as transportation is concerned. Furthermore, the railroads
are necessarily large borrowers, and, in that connection, are
required as a condition to their obtaining the necessary capital to
pay substantial interest charges on all such borrowed money,
whereas, on the other hand, the Government is paying no interest on
its delayed payments to the railroad companies, which delays in
many instances run over a year, and invariably are not settled for
sixty to ninety days. Although the railroads pay interest for the
money they borrow, they cannot under the law collect interest from
the Government, no matter how long settlements may be delayed. This
is obviously unfair."
"Under the law applicable to commercial shippers, transactions
with railroads are required to be on substantially a cash basis.
Shippers are required to pay freight charges within 48 hours on a
majority of the traffic, and in no case are they permitted credit
in excess of 96 hours. It appears to us, and particularly under the
present unfortunate financial position of the railroads, that the
carriers ought to receive settlement from the Government within 96
hours after a bill has been presented, and that would be possible
providing the proper machinery were set up and the proper
instructions issued."
"This matter is of very much greater importance today than it
has been in years past, for the reason that, under present
conditions, the Government is engaged in shipping to a very much
greater extent than ever before. Due to the various bureaus and
other agencies, particularly in connection with relief work and in
connection with some of the governmental corporations that have
been organized, the Government is today handling much tonnage which
was previously commercial traffic, so that the delay
Page 355 U. S. 266
in settlement for the transportation charges is much more
serious to the railroads today than would have been the case a
decade ago. It should also be borne in mind, in connection with
Government freight shipped under Government bills of lading, the
railroads are, under the law, not assessing their commercial rates,
but are making such discounts as the law requires because of land
grants, and which, in many instances, today means the handling of
this traffic on a basis below the actual cost of performing the
service. These facts are mentioned only as indicating the very
great importance of providing some sort of a system which will
permit the more prompt payment of these charges."
"That you may have a picture of the situation, your attention is
directed to the fact that, as of July 1, 1937, there were 94,182
outstanding unpaid railroad bills against the Government amounting
to $11,749,774, all of which bills had been rendered prior to May
1, 1937, and, of these bills and this amount, there was unpaid
$4,683,946, representing 37,761 bills which had been rendered prior
to January 1, 1937."
"We feel very sure that you and the other officers of the
Government will agree that this situation is one that is grossly
unfair, and that corrective action should be taken that will render
impossible such long delays in payment for services rendered."
"We are also of the opinion that it is not sufficient for us to
simply complain of this situation, but that, in addition thereto,
we ought to suggest a remedy which in our judgment is both
practical and legal, and which can easily be made operative without
the assumption of any risk insofar as the Government is concerned,
providing you and your associates will put the suggested plan in
operation and with such instructions issued as may be needed in
connection therewith. With this thought in mind, we
Page 355 U. S. 267
very respectfully submit for your consideration the
following:"
"We believe that the delay in the payment of transportation
charges by the Government to the railroads would be absolutely
avoided if the various departments contracting for transportation
were instructed to pay the bills as rendered, and, after payment,
have these bills referred to the General Accounting Office or such
other governmental auditing office as might be desired for audit.
In the event that this audit reveals an overpayment, then claim be
presented to the carrier for the amount thereof which will be
promptly paid by the railway, preserving, however, the right of the
carrier to make further effort to re-collect in the event that it
does not believe the proper charges resulted from the Government's
audit. Attention is further directed to the fact that the railroads
would never have, under such a plan, more money than the Government
lawfully owed, for the reason that the Government is shipping daily
and is currently obligated to the railroad companies for
transportation charges. This would place the handling of
governmental transportation charges on substantially the same basis
as applies in connection with commercial transactions."
"I am very sure from our previous negotiations with you and
others connected with the Government with regard to the same
subject that there exists no differences as between us as to the
necessity of more prompt payment than has heretofore prevailed. I
hope that you and your associates may consider the suggestions
contained herein as reasonable and practical, and that we may rely
upon your good offices to bring about some such arrangement. It may
be that you may desire to discuss this matter, and perhaps make
some suggestions that differ somewhat from the plan proposed
herein. Should this situation develop, I want to assure you that
either the
Page 355 U. S. 268
officers of this Association or the appropriate officers of this
Association with a committee of the lines will gladly discuss the
subject with you at such time and place as may be mutually
satisfactory. I feel sure that we both desire to obtain a very
substantial improvement in the situation that now exists, and I am
of the opinion that, if these matters can be handled along lines
somewhat similar to those which we have recommended, that it will
not only create a much better feeling as between the railroads and
the Government, but, in addition thereto, will materially reduce
the expenditures of both parties in the handling of these accounts
and give to the railroads money which is due and greatly
needed."
"With very kindest regards, I beg to remain."
"Yours most cordially,"
"(Signed) J. J. Pelley."