Chicago, Milwaukee & St. Paul Railway Co. v. United States

Background

A Wisconsin railroad company sought $9,101.08 from the United States for carrying the mails between Milwaukee, Wisconsin, Republic, Michigan, and a short extension to Champion, Michigan. The services had been performed by the Milwaukee and Northern Railroad Company, and the claimant said it later acquired that company’s stock and property. The Postmaster General had designated the line as Postal Route No. 139,016 and issued orders fixing compensation. After an extension of about 8.89 miles to Champion, two December 1890 orders appeared — one that mistakenly fixed pay for the whole route and a second that plainly fixed pay only for the extension. The Government demurred, the Court of Claims dismissed the petition, and the railroad appealed.

Reasoning

The key question was whether the Postmaster General was required by statute to fix pay for the whole extended route instead of separately fixing compensation for the short extension. The Court read section 4002 as giving the Postmaster General authority to arrange routes and adjust pay, and said the statute only prescribes how rates are to be calculated by weighing mail. Nothing in the statute forces prior contracts to be canceled when a route is extended or forbids fixing pay just for an extension. The Court noted there was no record of a protest to the December 3 order and concluded the correction was lawful, so the dismissal was affirmed.

Real world impact

The decision confirms that postal authorities may set separate compensation for small route extensions and are not automatically required to recompute pay for the entire line. Railroads cannot compel the Government to abrogate existing arrangements when an extension is added, though a railroad can accept new terms. The Court expressly declined to decide whether the claimant’s assignment of the railroad’s rights was valid.