Article XXXI of the amendments to the constitution of this State provides as follows in section I:

"The general assembly shall have no powers hereafter, without the express consent of the people, to incur State debts to an amount exceeding $50,000, except in time of war, or in case of insurrection or invasion; nor shall they in any case without such consent pledge the faith of the State for the payment of obligations of others ***”

With reference to the first part of article XXXI, it is true that we cannot at this time state with certainty that the amount which the State of Rhode Island would have to contribute to the authority would be over $50,000. However, as a practical matter, I believe we can readily assume that the amount would be substantially over $50,000.

In view of the above, it is my opinion that the State of Rhode Island could not agree to the provisions of article VII of the Federal act unless and until such agreement received the express consent of the people of this State by way of a referendum. Furthermore, under the second clause of article XXXI above, it is not essential that any particular sum of money be involved so long as the proposed action amounts to a pledge of the faith of the State for the payment of the obligations of others. In this regard, I respectfully refer you to the opinion of our supreme court rendered on March 9, 1965, in connection with certain activities of the Rhode Island Turnpike & Bridge Authority. I particularly refer to that portion of the court's opinion which dealt with the use of the income from tolls. The court held that said use of that income brought the matter within the meaning of "others" as that word is used in article XXXI of the amendments to our constitution.

While it is true that the two situations; that is, the turnpike and bridge authority and the Northeast Rail Authority are not identical in all respects, it is my opinion that the legal reasoning used by our supreme court in its recent opinion is equally applicable to the instant situation. In view of the above, it is my considered judgment that a proper interpretation of both clauses of article XXXI of the amendments to the constitution of this State, and of the recent opinion of our supreme court, dictates the conclusion that the State of Rhode Island cannot, with propriety, and lawfully, agree to the provisions of article VII of the proposed Federal legislation unless and until the consent of the people of this State has been properly obtained.

Trusting that the above may be of assistance, I remain,

Respectfully,

J. JOSEPH NUGENT, Attorney General.

Senator PELL. One other point I would like to bring up, the question of subsidy versus a guarantee. I, too, share some of the doubts of my colleagues in the Congress about getting into a permanent operating subsidy because once you get into a subsidy, it is very hard ever to retract from that position.

My own hope is that with the renovation of the equipment and greater use of it we will be able to break even and the guarantee approach would mean that there would be a continuous squeeze for efficiency and economy of operation.

Now, once a subsidy is agreed to, once it is opened up, it is very hard to resist and I think generally speaking, philosophically, considering our political parties, we may seem to be on the wrong sides of the fence in this, that basically, we would do better to have a guarantee approach right through rather than a straight subsidy. I am wondering what your view would be on this?

Governor CHAFEE. Well, Senator, I really don't see that the guarantee here is going to do a great deal. It is helpful, but if this railroad should be on an operating basis where it was breaking even, or making a little bit of money, I think they would be in a position to go to the public to borrow money, or the banks to borrow money to get equipment.

In other words, any business that is making can borrow money. Yet, the Pell bill, as I understand it, would require the States or somebody to pick up the subsidy or pick up the operating deficits to make the thing break even and the Federal Government would then guarantee the bonds that it issues.

All this might result in obtaining money at a slightly reduced interest, but I don't think it really would be of great help to the railroad.

Senator PASTORE. Gentlemen, you are not considering one important thing. This is a measure that comes before the Congress. Now, this is what you are up against. If you amend the Pell bill, which has only to do with the New Haven and require that, ad infinitum, the Federal Government is to pick up any part of the deficit, I am afraid that it is going to be considered sectional legislation pertaining to one railroad and it would be obnoxious to the Congress of the United States.

You would have to develop before you can do what you are suggesting on a permanent basis-you would have to develop, you see, a national policy. You couldn't write this into one bill that just applied to the New Haven. You would have to write this in general law that could be invoked in any case of any railroad. And that is the point that was raised by Mr. Dominick, you see.

The minute we get the reason why the Ribicoff bill is acceptable to my way of thinking, you see, is for the reason that it is national in scope.

The fact that it applies presently in the New Haven, and maybe the Lackawanna, is only coincidental. But the fact remains that if you had this situation, let us say, in New Mexico or in Oregon or any place else, the Ribicoff bill would apply.

But, if you passed the Pell bill, the Pell bill calls for a compact among four States and the minute you begin to write Federal subsidies into that bill, you are into parochialism and it will never pass the Congress.

That is what you are up against.

Governor CHAFEE. Senator, 1 minute, if I may. I think you misunderstood me. I was not advocating the Pell bill.

Senator PASTORE. I wasn't being critical of you. I was merely saying this that if we begin to write Federal subsidies in the Pell bill, we can kiss it goodby.

Senator PELL. But as I understand it, my bill combined with the Ribicoff bill would be acceptable from your viewpoint as a permanent solution.

Governor CHAFEE. Yes, I think it would be very, very helpful. The real thing we need, as you have acknowledged, is the current money. Senator PELL. I realize that and I realize my bill does not meet the immediate need. What I have been trying to do is figure out a skeleton that might be enlarged to include New Jersey and maybe before we are finished provide a base for a general intercity run. Senator PASTORE. Thank you very much.

Governor Volpe.

STATEMENT OF HON. JOHN A. VOLPE, GOVERNOR OF THE
COMMONWEALTH OF MASSACHUSETTS

Governor VOLPE. Thank you very much.

Senator PASTORE. Incidentally, let me say this. Governor Dempsey was introduced to this committee by his illustrious colleague, Senator Ribicoff.

I took it upon myself to introduce my illustrious colleague, the Governor of the State of Rhode Island, Mr. John Chafee.

But I want to say, for the purpose of the record and people who are assembled here, that in my estimation, the Governor of Massachusetts has no peer in public service. He has been an intimate friend of mine; I have known him-the only regret is that he is a Republican and I am a Democrat. [Laughter.]

Governor VOLPE. Thank you very much, Senator. I enjoyed those very kind words.

I am delighted to come before the committee this morning. I am sorry that I was not able to be here at the beginning of the hearing, but the Governor of Massachusetts has to also be interested in mental health problems which are very, very essential to our State.

The problem of rail transportation in Massachusetts, and in all of the Northeast seaboard, cannot be neatly compartmentalized into separate problems. Commuter service cannot be considered apart from intercity and interstate passenger service; nor can freight service be considered without regard to the others.

Even if the New Haven Railroad were not in the business of carrying passengers at all, the deficit in its freight service would still be a problem sufficient to warrant governmental assistance-State or Federal or both. In order to be meaningful, therefore, any solution to the rail problems of the Northeast must consider and be responsible to the needs of all types of service.

Nor can this manifold problem be handled effectively by any one State. Even commuter service, properly deemed a local concern in those States with broad territorial expanse, is often a matter of interstate concern in the Northeast. Many New York commuter trains, for example, originate in Connecticut; just as many Boston commuter trains originate in Rhode Island.

cern.

The problem of continuing service of the Northeastern railroads, therefore, must be realistically recognized as a matter of regional conTo the extent this problem is to be met at the State level, it must be approached with cooperation and in concert by those Staes which are vitally affected-those States whose citizens are serviced by the railroad in question-those States whose economic growth and stability can be affected by the presence or absence of such service.

In Massachusetts, of course, our most immediate and pressing rail problem is the imminent cessation of the New Haven Railroad's passenger service. Quite frankly, Massachusetts, standing alone, has neither the wealth nor the facilities to meet this problem fully. However, Massachusetts does stand ready to do its part.

Our action when faced with cessation of passenger service on the Boston & Maine Railroad objectively demonstrates the feeling of responsibility which Massachusetts recognizes and is willing to assume in this area—a tangible recognition of the role, the duty of State gov

ernment to regard mass transportation as a governmental responsibility, and a State as well as a Federal responsibility.

But our efforts demonstrate as well the fallacy of expecting an individual State to provide and finance programs which will insure the continuation of the sound, efficient network of rail transportation so essential to the economic well-being and convenience of its citizens.

By the establishment of our Massachusetts Bay Transportation Authority, we have been able to fill the need for commuter service in 78 communities surrounding Boston, which otherwise would have been left without commuter service.

May I interject at this point, prior to the establishment of this authority, we had a Metropolitan Transit Authority combining 14 cities which annually paid the deficit for operating that authority. And my predecessor, and the legislature, saw fit to adopt the Mass Transportation Authority, which now encompasses a much larger area, comes within one town of the chairman's State, Rhode Island, in the servicethat it is rendering to or will be able to render to the communities when we effect, we hope, a contract with the New Haven.

This was accomplished through additional taxes now being imposed on the citizens of Massachusetts to finance this mass transportation.

My administration is now working closely with the very capable staff of the MBTA in an effort to provide rail service to 19 additional communities which were left without service when the Boston & Maine ceased service. But as yet, we have not been able to work out a solution to the cessation of passenger service on lines running to New Hampshire and Maine. Discontinuation of this service is a regional problem, an interstate problem. Its solution requires regional cooperation, planning, effort, and action.

Recognizing interstate and regional cooperation to be an essential element of any meaningful attempt to meet present and future rail crises, I support the concept of such cooperation set forth in S. 348, introduced by Senator Pell. If the problems of the New Haven railroad are to be met fully, they must be approached by those States directly involved-Massachusetts, Rhode Island, Connecticut, and New York as a common venture, and under a program which realistically and equitably assigns the role and burden each is to assume. With such an approach, a long-range solution can be reached.

As the Governor of Massachusetts, I stand ready and willing at any time, and at all times, to meet with the Governors of Rhode Island, Connecticut, and New York in the same spirit of cooperation which characterizes the New England Governors' conference, in an effort to work out in detail the terms of an effective interstate compact acceptable to our legislatures.

From our point of view, the New Haven Railroad must be preserved. Its passenger and freight service is essential to the convenience of our citizens and the stability of our economy. Similarly, its loss would be a serious blow to industrial growth and economic welfare of the entire region, a blow not only to those actually employed by the railroads, but also to thousands whose industrial jobs would be affected.

But this is not a State or regional problem alone. It is a national problem as well, one which the Federal Government has already recognized and must continue to recognize in the future. If the New Haven

Railroad is to be saved, if the States, individually and in concert, are to have an opportunity to provide a long-range solution, this railroad must receive substantial financial assistance and it must receive this assistance now.

Substantial aid must be provided immediately, first of all, merely to keep the wheels rolling, and, second, to reverse the downward spiral by providing equipment and service attractive enough to lure new passenger and freight service.

No single State can provide assistance of this magnitude, regardless of its desire and willingness to be helpful. This type of assistance must come, if it is to come at all, from the Federal level.

We would be less than realistic if we did not recognize that unless a substantial capital outlay is granted, the liquidation of this railroad will be no remote possibility. It will be a distinct probability. Such an eventuality would render any interstate effort to effect long-range solutions a mere academic exercise.

An additional factor which must be considered as an integral part of this problem is the President's proposed study of high-speed rail service linking the major cities of the Atlantic coast. The many right-of-way problems which might result from abandoned service could impose serious obstacles to the success of such an effort. Equally as important, any lapse of the New Haven's service would tend to disburse the existing network of commercial activity, which activity is the basis of this project's economic potential.

Recognizing the immediacy of this problem, mindful of the need for a substantial program of temporary assistance if the opportunity for a long-range solution is to continue, I endorse the concept of subsidy embodied in S. 325 introduced by Senator Ribicoff and in S. 1289 introduced by Senator Dodd.

You have heard many speakers during the several days of this hearing. You have been most gracious and attentive to our efforts to acquaint you with our problems, as well as our views, on the solutions which have been proposed. I know that you appreciate fully the seriousness of this problem, not only to the State of Massachusetts, but to the entire Northeast region. The people of Massachusetts are confident that you will act with prudence and dispatch to assist us in our efforts to meet this situation.

I am very grateful for your courtesy.

Thank you.

Senator PASTORE. Governor Volpe, that is an excellent statement. I might say that this committee has been treated today to three very, very brilliant statements on this subject. Governor, in the event that the Congress of the United States should pass the so-called Ribicoff bill, do you have any question about the State of Massachusetts meeting its obligations on the matching aspects of that bill?

Governor VOLPE. As a Republican Governor of Massachusetts, with a legislature which is composed of Democrats which outnumber Republicans by 2 to 1 in both branches of the legislature, it is rather hazardous for me to indicate what will happen in Massachusetts.

Senator PASTORE. I can't come there and help you like I can help Governor Chafee.

Governor VOLPE. We would welcome the help, nevertheless.

Senator PASTORE. Your own personal view is your State will feel the urgency of its responsibilities?