Case Name: THE PENNSYLVANIA RAILROAD COMPANY v. THE UNITED STATES
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1900-06-11
Citations: 35 Ct. Cl. 584
Docket Number: Departmental, No. 65
Parties: THE PENNSYLVANIA RAILROAD COMPANY v. THE UNITED STATES.
Judges: Nott, Ch. J., was absent when this case was decided.
Reporter: United States Court of Claims Reports
Volume: 35
Pages: 584–595

Head Matter:
THE PENNSYLVANIA RAILROAD COMPANY v. THE UNITED STATES.
[Departmental, No. 65.
Decided June 11, 1900.]
On the Proofs.
The claim is referred to the court by the Secretary of the Treasury on the recommendation of the Comptroller of the Treasury under the Bowman Act, March 8, 1888 (22 Stat. L., 485, § 2). The action of the Comptroller in reporting the matter to the Secretary for reference to the court purports to have been at the request of the claimant, but the company writes a letter to the clerk of the court to the effect that “the Pennsylvania Company does not care to avail itself of the privilege of being represented by counsel.”
Under the provisions of the Bowman Act, March 8, 1888 (22 Stat. L., 485, § 2) the Secretary of the Treasury is entitled to have the facts found by the court and its conclusions of law and opinion thereon for the “guidance and action” of the Department, although the claimant does not appear to prosecute the case.
The Reporters' statement of tbe case:
The following are the facts of the case as found by the court:
I. Under date of June 3, 1898, the board of managers of. what was known as the Joint Traffic Association caused to be issued General Circular No. 26, in these words:
“board or managersi “General Circular No. 26 (superseding General Cir- “ John Burton cular No. 25 and suspending General Circular “ Geo. G. Cochran, No. 19). “D. S. Gray,
“H. J. Hayden, “H. C. Hicks, “ Milton Knight, “Geo. Olds, VJCU. V1UB, “Geo. F. Randolph, “ Orland Smith, “ W. P. Walker, jr.
“ H. J. Hayden, “ Chairman.
“Joint Trafeio Association. “_4STn ' ' U
“rates and fares for transportation of u. s. military AND NAVAL FORCES AND EQUIPMENTS AND SUPPLIES.
“To afford effective assistance to the Government and to secure, during the pending war, uniform rates of transportation to the railway companies comprising the Joint Traffic Association for the United States military and naval forces and their equipments and supplies, the managers hereby recommend the following rates, fares, and charges upon the traffic subject to their jurisdiction, the same to apply only when the transportation is performed solely for the account of the United States upon its requisitions and, as to freights, upon its bills of lading.
'MOVEMENTS BY PASSENGER-TRAIN SERVICE.
“First. One and one-half cents per mile per capita, including the carriage in the cars with the troops of their personal effects and equipments.
“ Second. Twenty cents per car per mile for animals, supplies, and equipage when transported by order of the Government in the same trains which carry troops in carloads.
“Third. No mileage to be computed at less than 25 miles.
“Fourth. The mileage to be computed upon the shortest practicable route, the same to apply via all routes via which short-line fares regularly apply. When transportation is specifically demanded by proper officers of the Government via longer routes than those via which short-line fares regularly apply, payment to be made according to the lengths of the routes designated.
“Fifth. If sleeping cars are called for in the requisitions for transportation, such extra service shall be charged for in addition to the foregoing fares upon such terms as may be agreed upon with the sleeping-car companies.
“movements by fkei&ht-train service.
“Sixth. The duly authorized published freight tariff rates on powder and explosives, either in carload quantities or less.
“'Seventh. The duly authorized published freight tariff rates, less 25 per cent', on equipments and supplies which are provided with a carload rating (other than powder and explosives), when transported in carloads at the duly authorized minimum weights.
‘ ‘ Eighth. The duly authorized published freight tariff rates, less 15 per cent, on equipments and supplies (other than powder and explosives), when transported in less than such carloads or in any quantities as to such of the articles as are not provided with a carload rating.
“ The foregoing freight rules and reductions apply to rates upon the specified traffic forwarded all rail between points on the lines of companies members of the Joint Traffic Association when passing to, from, or through the western termini of the trunk lines.
“Ninth. They may also apply as follows to duly authorized through rates between other points when published jointly with carriers which concur in the terms hereof, provided the reductions are borne proportionately by all such connections on the basis of the existing divisions of Joint Traffic Association lines therewith, viz:
u(a) To the duly authorized proportional freight rates in cents per 100 pounds to or from Ohio River points; Mississippi River east-bank points (Cairo and north thereof to East Dubuque, inclusive) or other western junctions.
“ (5) To duly authorized published through all-rail rates of which Joint Traffic Association lines receive percentage proportions (except as specified in article tenth,' section a), also to the specified ocean-and-rail rates in both directions.
“ (o) In cases where adjacent associations or lines grant percentage concessions from joint through rates less than those herein authorized, the concessions granted by such associations or lines shall be the full measure of the reductions made by J oint Traffic Association lines from such through rates.
“Tenth. Tbe provisions of this circular should not apply—
“(a) Upon said freight traffic to or from Pacific coast points carried under the existing understandings with the transcontinental lines at through rates and percentage divisions.
“(5) Upon shipments of coal, coke, iron ore, mill cinder, limestone, or petroleum, carloads, crude or refined.
“(c) To all-rail differential rates — i. e., the net rates will be the same via the differential all-rail lines as via the standard all-rail lines.
“notes.
“(a) The Western Trunk Line committee has concurred in the terms of this circular regarding freight rates to and from Mississippi River and Dlinois points covered by the Joint Rate Committee Agreement.
“(b) The Merchants and Miners’ Transportation Co. and the Old Dominion S. S. Co. will be governed by the freight provisions of this circular, provided the traffic is handled in connection with companies members of the Joint Traffic Association.
“(c) The Boston and Albany, Boston and Maine, Central Vermont, Fitchburg, Maine Central, and Rutland Railroad companies will accept the freight provisions of this circular to and from points on or via their lines, except that the Rut-land Railroad does not concur in article sixth, as to powder, etc.
“ (d) As to all the rail, ocean, river, and lake lines via which joint through rates are published, which are not. covered by the foregoing clauses or specified as assenting hereto, it will be necessary for the initial lines to ascertain the extent to which such connections will participate.
“general conditions.
“Eleventh. In view of the reductions made, it is understood that the Government will arrange to accept the net figures and not ash for bids, and will also endeavor to divide the traffic fairly among the several carriers. If, however, bids are asked for, it is recommended that the above uniform net figures be given.
“Twelfth. The above rates and fares by passenger or freight train service are not to apply to the transportation of cadets to or from the West Point or Annapolis academies, or to the supplies sent thereto.
“Thirteenth. Subject in all réspects to the foregoing rules and conditions, connecting lines may contract with the United States Government for the transportation of the'stated forces and supplies over the lines comprising this association to the extent herein advised.
“C. R. BLANCHARD,
“ Commissioner.” .
II. Whether the terms and conditions set forth in said circular were accepted by the claimant company at the time does not appear, but it does appear that under date of December 21,-1898, the claimant company notified the Auditor of the War Department that they would not be bound by the provisions of said general circular. Nor does it appear that the defendants accepted the provisions of said circular. On the contrary, it does appear that when the circular was communicated to the Quartermaster-General that officer, in a letter to Mr. Blanchard, said ‘‘that this tariff will be inoperative where competition is invited for any transportation, and the lowest bid is accepted on any of the roads of your association forming a part of the route;” and later, under date of June 15, 1898, the Quartermaster-General United States Army, in response to a communication from the chief quartermaster, Department of the Lakes, Chicago, Ill., in relation to said circular, instructed that officer that “the circular herein referred to has no binding effect upon the Quartermaster’s-Department or its officers, as it was only recommended by the Joint Traffic Association. He will therefore continue to invite competition for the best rates obtainable,” which was done, and troops were transported under contracts made pursuant to such bids.
III. Under date of October 12,1898, the Central Passenger Association adopted paragraph 785, as follows:
“An interpretation of Joint Traffic Association general circular No. 26 having been requested by certain United States army officers, it is hereby declared by the lines of this association that the terms of said circular were never intended to apply on movements of individual soldiers, but that the lá-cente per mile rate was intended to and does only apply to the movement of regiments, battalions, or other large detachments traveling as regular military organizations.”
In consequence of which interpretation the Quartermaster-General, under date of December 30, 1898, instructed the depot quartermaster at Washington, D. C., that “in view of this interpretation of circular No. 26, in the absence of any special agreement to the contrary, settlement will be made at the tariff rates charged the public, less deductions on account of land-grant transportation or in parties of less than ten on one transportation request.”
IY. Under date of December 22,1898, the Central Freight Association, Chicago, promulgated information No. 9, Series A, whereby it was provided “ that the special rates on United States military and naval equipments and supplies moved by freight-train service, established únder Joint Traffic Association general circular No. 26, dated June 3, 1898, from points in Central Freight Association to points east of the trunk line, western termini, will be canceled December 31, 1898, and that on and after January 1, 1899, full tariff rates will be charged.”
V. Under date of March 10,1900, the passenger agent, southeastern district of claimant company, referring to the ruling of the Comptroller of the Treasury Department, wherein the settlement of .the claimant’s accounts had been directed to be made upon the basis of the rates set forth in said Circular No.. 26, among other things, said to that officer:
“Therefore, on behalf of the Pennsylvania Railroad Com-panjr, I pray for a reconsideration of the question and earnestly urge and request a reversal or modification of said ruling on the grounds of equity and justice.
“In support of my position, I submit and contend that said Joint Traffic Association circular should not have been construed or interpreted in the nature of an agreement, as nothing therein can be found to justify this conclusion, being by its phraseology, spirit, and intent simply a recommendation or authorization conveying the right and privileges to all lines comprising the said Joint Traffic Association to adopt or apply the rates therein named should they so elect, the action being elective and not mandatory.
“The object and purpose of the Joint Traffic Association was not to enter into compacts or agreements with the Government, organizations, or individuals on behalf .of the various lines members thereof, thejr reserving unto themselves that right, but for the maintenance of rates; to prescribe and enforce the observance of a stable and conservative policy for the government of the lines in interest; to correct and eradicate demoralizing causes and evils, and to authorize or approve the adoption of reduced rates for special movements and special occasions, thereby establishing a uniform basis and precluding the application of a lower rate than agreed upon, although it was within the province of any line, if considered expedient or desirable, to refrain from availing itself of the advantage of such authorization. Again I say, the action was opitional and not obligatory. The.same rule obtains respecting the existing passenger associations.
“Hoping you will recognize the merit and justice of my appeal, and requesting your early decision, I am,
“Very trulv,
“C. Studds, P. A. 8. E DistA
VI. Tbe claim in tbis case was transmitted to the court under . date of May 14,1900, by tbe Secretary of the Treasury, under section 2 of tbe act of March 3, 1883 (22 Stat. L., p. 485), transmitting with his letter a letter to himself from the Comptroller of the Treasury, under date of May 11, 1900, in these words:
“ TreasuRY Department,
“ Office of Comptroller of the Treasury,
“ Washington, May 11,1900.
“The honorable
The Secretary of the Treasury.
“ Sir: At the request of the claimant, I transmit herewith tbe claim of The Pennsylvania Company for $37.25, for passenger transportation services Tendered the Quartermaster’s Department of the Army in November, 1898, upon which the Auditor for the War Department allowed the sum of $25.10. Payment of the amount allowed by the Auditor was not accepted, but a revision of the account by the Comptroller was requested, and the matter is now pending before this office.
“As this case involves controverted questions of fact and law, and a decision in the same will affect a class of cases and furnish a precedent for the future action of this Department in other cases, I have to request that all the papers be transmitted to the Coui’t of Claims for its findings of fact and conclusion of law, under the provisions of section 2 of the act of March 3, 1883'(22 Stat., 485).
‘ ‘ The general question upon which a decision is requested is whether the provisions of General Circular No. 26, issued by the Joint Traffic Association June 3, 1898 (a copy of which is inclosed and marked ‘ Exhibit A’), shall be applied to the transportation involved in this account.
“If this circular applies to the case, the amount allowed by the Auditor, viz, li cents per mile per man, is conceded to be correct. If this circular does not apply to the case, the amount claimed by the company is believed to be correct.
“It will be observed that the company concedes that the rate of 1\- cents per mile applies east of Pittsburg, Pa., on transportation, request No. 62290. (See letter of claimant of April 25,1900, copy herewith, marked ‘Exhibit B.’)
“The more specific questions upon which a decision is requested are:
“ 1. Did the provisions of JointTraffic Association Circular No. 26 go into effect and operation on the .date of its issue without any subsequent action on the part of the constituent members of said association?
“2. If question 1 be answered in the affirmative, to what companies and lines of railroad, and over what territory, did the rates provided in said circular apply? (See Traveler’s Official Guide, p. lvii, for May, 1898, herewith.)
“3. If question 1'be answered in the affirmative, did the decision of the Supreme Court in case of United States v. Joint Traffic Association (171 U. S., 505, 578) have the effect of abrogating and withdrawing the rates provided in Circular No. 26, from and after the date of the decision of said court, or from any other date? If from any other date, what date?
“4. If the decision of the Supreme Court, supra, did not have the effect of abrogating and withdrawing the rates mentioned, did the Central Freight Association, or any other association of railroad companies, have the power to speak and act for the constituent members of the Joint Traffic Association in withdrawing said rates; specifically, did Information Circular No. 9, of December 22,1898, of the Central Freight Association, have the effect of withdrawing the freight rates provided in Circular No. 26, from and after January 1, 1899, as to all the lines and companies represented in said association; also from all lines and companies represented in the Trunk Line Association? (See Information Circular No. 9, copjr herewith, marked ‘Exhibit C.’)
“5. As the Joint Traffic Association was dissolved sometime in 1898, date not known, must each company represented in said late association, desiring to withdraw the rates fixed in Circular No. 26, have „to act each for itself, or can some other association of which the company is a member act for said company in withdrawing said rates?
“ In view, of the importance of this case, I request that the court be asked to advance the same on the docket, and that an early decision be given.
“ Eespectfully, E. J. Traoewell,
“Comptroller.”
The claimant did not appear.
Mr. George H. Gorman (with whom was Mr. Assistant Attorney- General Pradt) for the defendants.

Opinion:
Peelle, J.,
delivered the opinion of the court:
The claim in this case comes before the court by reference from the Secretary of the Treasury on the recommendation of the Comptroller of the Treasury, under section 2, act of March 3, 1883 (22 Stat. L., p. 485), which reads:
" Seo. 2. That when a claim or matter is pending in any of the Executive Departments which may involve controverted questions of fact or law, the head of such Department may transmit the same, with the vouchers, papers, proofs, and documents pertaining thereto, to said court, and the same shall be there proceeded in under such rules as the court may adopt. When the facts and conclusions of law shall have been found the court shall not enter judgment thereon, but shall report its findings and opinions to the Department by which it was transmitted for its guidance and action."
Although the action of the Comptroller in reporting the matter to the Secretary of the Treasury for reference to the court purports to have been at the request of the claimant company, the company, under date of June 1, 1890, through its general passenger agent, E. A. Eord, addressed a letter to the clerk of this court in which, referring to the reference of the case by the Secretary of the Treasury, he says: "I beg leave to respectfully inform you that the Pennsylvania Company does not care to avail itself of the privilege of being-represented by counsel in the hearing of this case."
Nevertheless, under the provisions of the statute cited the Secretary of the Treasury is entitled to have the facts found by the court, with its conclusions of law thereon, together with its opinion, for the ' ' guidance and action " of the Department, and we will, therefore, endeavor to answer the questions propounded in their order.
"(1) Did the provisions of Joint Traffic Association circular No. 26 go into effect and operation on the date of its issue without any subsequent action on the part of the constituent members of said association? "
As the circular issued by the Joint Traffic Association was intended to apply only to the United States military and naval forces and their equipments and supplies, as expressed in the circular, the same would not, of course, go into effect by its own operation; but whether the provisions of the circular went into operation on the day of its issue without subsequent action on the part of the constituent members of the association is immaterial, since the findings show that the provisions of the circular with or without such action were never accepted bj- the Government, without which no contract was entered into between it and the claimant company in relation thereto.
That the provisions of the circular, however, were intended in the nature of a proposition-both to the constituent members of the association and to the Government seems evident from the language, setting forth the purpose of the circular, wherein it is said "the managers hereby recommend the following rates, faros, and charges upon the traffic subject to their jurisdiction, the same to apply only when the transportation is performed solely for the account of the United States, upon its requisitions, and as to freights, upon its bills of lading." Then follow the rates, and in paragraph eleven it is provided that:
"In view of the reduction made, it is understood that the Government will arrange to accept the net figures and not ask for bids, and will also endeavor to divide the traffic fairly among the several carriers. If, however, bids are asked for, it is recommended that the above uniform net figures be given."
The Government declined to '•accept the net figures," as the findings show, and in lieu thereof, on June 15, 1898, the Quartermaster-General instructed the chief quartermaster, Department of the Lakes, Chicago, Ill., that "the circular herein referred to has no binding effect upon the Quartermaster's Department or its officers, as it was only recommended by the Joint Traffic Association. He will, therefore, continue to invite competition for the best rates obtainable;" which was done, and troops were transported under contracts made pursuant to such bids.
Whether the constituent members of the association, or any of them, did, as a matter of fact, accept the provisions of the circular and enter into several contracts with the Government on the basis of the rates set forth therein, does not appear, except as shown in the findings in respect of the claimant company.
Furthermore, the provisions of said circular, as construed by the Central Passenger Association in' October, 1898, were not intended to apply to the transportation of individual soldiers, for which the claim in suit was transmitted to the court, What the effect would have been had the Government accepted the provisions of the circular it is not necessary to decide.
. " (2) If question No." 1 be answered in the affirmative, to what companies and lines of railroads and over what territory did the rates provided in said circular apply ?" (See Traveler's Official Guide, page lvii, for May, 1898, herewith.)
The only information we have in respect of what companies and over what territory they operate is set forth in the case of the United States v. Joint Traffic Association (171 U. S. R., 505, and the Traveler's Official Guide), to which reference is made in the foregoing question, and we are unable to answer further, even if it were material, though, in view of our negative answer to the first question, it is unnecessary.
" (3) If question No. 1 be answered in the affirmative, did the decision of the Supreme Court in case of United States v. Joint Traffic Association (171 U. S. R., 505, 578) have the effect of abrogating and withdrawing the rates provided in Circular No. 26 from and after the date of the decision of said court, or from any other date ? If from any other date, what date? "
As the acceptance of the provisions of the circular by the Government, as we hold, was essential to constitute a contract between it and the claimant company, and there was no such acceptance, there were no rates to abrogate or withdraw.
" (4) If the decision of the Supreme Court (supra) did not have the effect of abrogating and withdrawing the rates mentioned, did the Central Freight Association, or any other association of railroad companies, have the power to speak and act for the constituent members of the Joint Traffic Association in withdrawing said rates; specifically, did Information Circular No. 9, of December 22, 1898, of the Central Freight Association, have the effect of withdrawing the freight rates provided in Circular No. 26 from and after January 1, 1899, as to all lines and companies represented in said association; also from all lines and companies represented in the Trunk Line Association? (See Information Circular No. 9, copy herewith, marked 'Exhibit C.')"
Although this question is beyond the scope of the claim referred, which is for the transportation of individual soldiers and not for freight, we will say that as there were no rates agreed upon between the Government and the association there were none to withdraw by either the Joint Traffic Association or any other association or constituent member thereof.
"(5) As the Joint Traffic Association was dissolved some time in 1898 — date not known — must each company represented in said late association desiring to withdraw the rates fixed in Circular No. 26 have to act each for itself; or can some other association of which the company is a member act for said company in withdrawing said rates ? "
As the circular was in the nature of a proposition to the Government to transport troops and supplies which was never accepted by it, there was no contract binding on either party, and hence so far as the Joint Traffic Association avíis concerned the rates it proposed Went out of existence Avith its dissolution.
In this vieAV of the case it is immaterial to inquire as to the scope of the authority of the War Department or its officers to bind the Government by acceptance, Anthout advertisement, of the transportation rates so proposed.
The clerk of this court is directed to certify the foregoing findings and opinion to the Secretary of the Treasury.
Nott, Ch. J., was absent when this case was decided.