240 Reporter's Statement of the Case effect fixed by the Office of Price Administration for materials of the kind and grade removed from the site, with Kansas City as the basing point. In arriving at the net value, the freight from the loading points to Kansas City and the cost of dismantling were deducted. 5. May 11, 1943, plaintiff objected to the preliminary determination and on May 25 the War Production Board made an award of compensation for the material, other than the three segments mentioned in finding 2, in the sum of $164,386.55, using the same units, classifications, and computation as were used in the preliminary determination. Plaintiff refused to accept such amount as full compensation for the materials. Thereafter and on or about July 26, defendant paid to the Board of County Commissioners of Harvey County, Kansas, the sum of $20,497.89; to the Board of County Commissioners of Reno County, Kansas, the sum of $8,440.75; and to the Board of County Commissioners of Sedgwick County, Kansas, the sum of $25,878.38. These were the aggregate amounts of delinquent taxes due to said counties from plaintiff for the years 1934, 1935, 1936, and 1937 and which were a lien upon the materials taken. Such sums were found due said counties in the award and plaintiff consented to the payments to said counties as their part of just compensation. The award was $54,817.02 to the counties and $109,569.53 to the plaintiff, a total of $164,386.55. At that time defendant also paid to plaintiff the sum of $54,784.76, being 50 percent of that portion of the determined value awarded to plaintiff. No other payments of compensation have been made to or for the account of plaintiff with respect to the requisitioned property except that paid in relation to the three segments mentioned in finding 2 which are not involved in this suit. VALUE OF METAL TRACK MATERIAL Relay rail 6. Relay rail is used rail, suitable for relaying for further service as track. From the standpoint of volume and value, approximately four-fifths of the metal here involved was relay rail. Reporter's Statement of the Case 107 C. Cls. In July 1942, and for more than a year and a half earlier, there was a demand for relay rail greater than the available supply, most of which came from abandoned short-line railroads or streetcar lines. There were no posted or published prices or market quotations for relay rail at any time, except the Office of Price Administration schedule hereinafter mentioned. Transactions in relay rail were comparatively few and the price in each instance, prior to the establishment of maximum prices by the Office of Price Administration, depended, among other factors, upon the relation of supply to demand, the location of the rail with respect to the place of proposed re-use, the suitability of the type of rail to the re-use intended, and the situation with respect to competition, the market being so limited that dealers knew what their competitors had for sale. The United States began to buy relay rail and accessories in January 1941, and in 1942 was acquiring most of the available supply. 7. On December 2, 1941, the Office of Price Administration issued price schedule No. 46, effective on that date, wherein it established the maximum price for the sale of relay rail by railroads in plaintiff's class, as follows: The maximum price, f. o. b. shipping point for relaying rail * * * shall be $30.00 per gross ton minus the lowest railroad charge for transporting such rail from the railroad siding nearest the location of such rail to the basing point to which the lowest applicable railroad rate from such siding applies * * The following cities shall be deemed basing points: * Kansas City, Mo. The rate on such rails from loading points on plaintiff's line to Kansas City, Missouri, was $4.70 per gross ton, making a net maximum price, before deduction of demolition costs, of $25.30 per gross ton for the rail here involved. The reasons for establishing the maximum prices set forth in the schedule, as stated in said schedule, were: Relaying rails are used extensively in armament plants, as well as in the essential industrial and mining establishments provided for in the Defense Program. The prices of relaying rails have increased sharply since the begin 240 Reporter's Statement of the Case ning of 1941. In many instances, the price of relaying rail has been as high or higher than that of new rail. After a thorough investigation by the Office of Price Administration and numerous conferences with all branches of the relaying rail industry, I find that the maximum prices prescribed herein constitute a fair and equitable limitation on prices for relaying rail and are necessary to assure an adequate and even flow of relaying rail into defense channels. 8. During the year 1942 the United States Government was buying most of the relay rail in the United States at the ceiling prices established December 2, 1941, in part from abandoned short lines and streetcar lines and in part from Class 1 railroads which were replacing old rail with new rail. There were some purchases at ceiling prices by private industries engaged in war work. Most Class 1 railroads ordinarily utilized for their own purposes relay rail taken from their own tracks. They sold relay rail voluntarily to the United States in 1942 at the ceiling price for the purpose of cooperating with the government under an agreement by which the government promised to keep out of the new rail market if the railroads would make relay rail available. There was not enough new rail for all purposes and, since the government requirements were not for main line use and the rail would not be subjected to high speed use, the government deemed it advisable to let the railroads, which were burdened with the responsibility for transportation, have the available new rail. There also was in effect on and after April 22, 1942, an order of the War Production Board, known as Limitation Order L-88, which provided that, unless specifically exempted, recipients of new replacement rail must make available for use as directed by the War Production Board equivalent amounts of used rail, and also that no one should sell, transfer or otherwise dispose of rail or relay grade, among others, without authorization from the War Production Board. Although practically all purchases by the government were at the ceiling price, in two instances the price was $30.00 per ton f. o. b. shipping point, Dayton and Rochester, rather than at a basing point. In these instances, this resulted in a price exceeding the ceiling price by the amount of freight charges. 736172-47-vol. 107-18 Reporter's Statement of the Case 107 C. Cls. 9. During the year 1942 the government requisitioned from sixteen railroads, including that of plaintiff, some 766 track miles of relay rail and determined the value to be that of the ceiling price fixed by the Office of Price Administration on December 2, 1941. Except for plaintiff and another small carrier, the railroads accepted the amount so determined in satisfaction of their claims for compensation. Four of said railroads, including plaintiff, were other than Class 1. 10. The price of relaying rail commencing at the beginning of 1941 rose sharply and, in many instances, was as high or higher than that of new rail. Generally it was higher than that of new rail when the ceiling price of relay rail was fixed. During the years 1940 and until April 16, 1941, the competitive price of new rail, weighing 60 pounds to the yard or higher, was $40 a gross ton at the mills, and could be purchased at such price only in large quantities. On April 16, 1941, the Office of Price Administration fixed the maximum price on new steel, including rails, at the prices in effect that day, where it remained during the time here involved. Because of higher handling and reconditioning costs, relay rail of less than 35 pounds per yard, was higher priced than heavy rail. The price of such rail was not clearly limited by Office of Price Administration orders prior to late 1942 and steadily rose in price from 1939 to 1942. From a weighted average of sales prices equalling $37.18 per gross ton for such light rail in January 1941, the weighted average sales prices rose to $57.34 in July 1942. Until restrained by the orders of the Office of Price Administration, the increase in the price of heavy rails was approximately at the same rate. 11. Section 1306.254 of Price Schedule No. 46, provided that a person who, prior to November 1, 1941, had made a firm commitment calling for delivery after the date the maximum prices became fixed, at prices above such ceiling prices, might, in order to avoid losses, obtain special permission from the Office of Price Administration to complete the contract at the agreed prices. Under such special permission, a delivery of heavy relay rail at $42.50 per gross ton was made freight alongside ship at Portland, Maine; another at $34 per gross ton, Readsboro, Vermont; another at $36 per gross ton, Charleston, West Vir 240 Reporter's Statement of the Case ginia, and another at $50 per gross ton, Fort Huachuca, Arizona. no 12. There was no established market place for the sale or delivery of relay rail and other material of the character here involved. The price to be obtained in the instance of each sale depended in part upon the location of the material with reference to the location of the intended reuse. The cost of shipping was a factor in price. Because of the restrictions and conditions which existed as a result of the war, place can be specified to which the material here involved would have been shipped, had it been sold in an open competitive market, nor can any freight charge be specified for consideration in arriving at a price f. o. b. loading points on plaintiff's line. In the absence of such specific freight charges, the selection of Kansas City, Missouri, as a basing point is fair and reasonable. The freight rate on relay rail from loading points on plaintiff's line to Kansas City, Missouri, was $4.70 per gross ton. 13. The material involved in this suit had no value for the purpose of re-use or as scrap unless removed from the roadbed and detached from other units of material, and the cost of so removing and detaching is a factor in determining the value of such material for such purposes. 14. The fair and reasonable value on July 16, 1942, of the relay rail taken by defendant from plaintiff, as aforesaid, was $40 per gross ton less $4.70 per gross ton freight from loading points on plaintiff's line to Kansas City, or a net price of $35.30 per gross ton f. o. b. such loading points, less the cost of removal from the roadbed and detaching from other material. Angle bars, tie plates, bolts, and spikes 15. Angle bars, also called joint bars, are flanged plates bolted to the rails at adjoining ends for the purpose of fastening the lengths of rail together. Tie plates are flat or ridged plates placed between the rail and the tie to protect the tie and to provide a better base for the rail. With the bolts used to fasten the angle bars to the rails and the spikes used to hold the track to the ties, they are referred to as track accessories. |