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mands of the work of this Court preclude an independent canvass of a record of thirteen volumes, containing more than 5000 pages. Two judges below who had gone over this mass of evidence reached opposite conclusions regarding its sufficiency to support the Board's findings. For the determination of this issue we remand the case to the Circuit Court of Appeals.

Reversed and remanded.


NO. 56.



Argued January 13, 1947.-Decided March 3, 1947.

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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. 239-242, 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. 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. 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. 245-247. 152 F.2d 228, 230, affirmed.

*Together with No. 57, United States v. Atlantic Coast Line Railroad Co., also on certiorari to the same Court.


Opinion of the Court.

Respondents brought suits against the United States under the Tucker Act, 36 Stat. 1091, to recover sums allegerlly 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. 247.

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Robert L. Werner argued the cause for the United States. With him on the brief were Acting Solicitor General Washington, Assistant Attorney General Sonnett, Philip Elman, Paul A. Sweeney, Oscar H. Davis and Hubert H. Margolies.

Thomas L. Preston argued the cause for respondents in No. 56. With him on the brief was W. R. C. Cocke.

Thomas W. Davis argued the cause for respondent in No. 57. With him on the brief was J. M. Townsend.

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 LendLease Act of March 11, 1941, 55 Stat. 31, 22 U.S. C. Supp. I, § 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.

i The term includes "Any agricultural, industrial or other commodity or article for defense.”

Opinion of the Court.

330 U.S.

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. The General Accouniing 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 per cent of the commercial rate and was applicable to the transportation

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, 73–74.


Opinion of the Court.


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, 355; Southern Ry. Co. v. United States, 322 U. S. 72, 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' 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 of property of such members) when such members are traveling on official duty ... $ 321 (a). The Seaboard filed such a re

s Section 321 (b).

* This provision was eliminated from 8 321 (a) by the Act of December 12, 1945, 59 Stat. 606, 49 U.S. C. Supp. V, 8 65 (a). Section 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.

Opinion of the Court.

330 U.S.

lease. 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." 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

* 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, 1 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.


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