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., 22 U.S.C.A. § 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.
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 Accounting Office excepted to these payments on the ground that land-grant rates were applicable. The amounts of the alleged over-payments 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), 28 U.S.C.A. § 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. 4 Cir., 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 of property or troop of the United States. 43 Stat. 477, 486, 10 U.S.C. § 1375, 10 U.S.C.A. § 1375; United States v. Union Pacific R. Co., 249 U.S. 354, 355, 39 S.Ct. 294, 295, 63 L.Ed. 643; Southern Ry. Co. v. United States, 322 U.S. 72, 73, 64 S.Ct. 869, 870, 88 L.Ed. 1144. A change was effected by the Transportation Act of September 18, 1940, 54 Stat. 898, 954, 49 U.S.C. § 65, 49 U.S.C.A. § 65. See Krug v. Santa Fe Pac. R. Co., 329 U.S. 591, 67 S.Ct. 540. 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 property of such members) when such members are traveling on official duty * * *' § 321(a). The Seaboard filed such a release. 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.