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regardless of the $20 million, there is no matching obligation for the first year which, I think, would throw the thing off.
Let Congress be in the position it is in, and let the administration take the position it has, I think that the Ribicoff matching is a reasonable matching:
It is limited to the $100 million, and maybe we could cut that amount down a little bit.
But the fact of the matter remains that this would require matching, from the start, and that bill does not apply alone to the New Haven, that would apply to the Erie-Lackawanna that you are talking about, or could apply to any other railroad in the United States of America, as an operating expedient.
But I have not lost all hope. We are still plugging.
Mr. ZELLERS. Thank you very much. And I appreciate it very much, your reception.
I have this literature that the chamber of commerce issued 2 weeks ago, and I might just leave copies with you.
Senator PASTORE. Fine. We will have it included in the record by reference.
Mr. BOBER. Thank you. I am Joseph Bober, secretary-treasurer of the Connecticut State Labor Council, AFL-CIO, which is the parent body for all the AFL-CIO local unions in this State, with a membership in excess of 150,000 people. Today I am speaking here on behalf of the council and its president, John J. Driscoll.
(The statement of John J. Driscoll follows:)
STATEMENT OF JOHN J. DRISCOLL, PRESIDENT, CONNECTICUT STATE LABOR COUNCIL,
AFL-CIO, PRESENTED BY JOSEPH BOBER, SECRETARY-TREASURER, CONNECTICUT STATE LABOR COUNCIL, AFL-CIO
Gentlemen, my name is Joseph Bober and I am secretary-treasurer of the Connecticut State Labor Council, AFL-CIO, the parent body for all AFL-CIO local unions in this State, with a membership in excess of 150,000 people. I am appearing today on behalf of the council and its president, John J. Driscoll.
Organized labor in Connecticut is most concerned about the present state of the New Haven Railroad because it appears that unless immediate steps are taken by governmental agencies to provide it with cash for current operations and for the purchase of modern equipment, the New Haven Railroad may terminate all passenger service and curtail its freight operations. Both are vital to Connecticut and to the workers in this State.
The abandonment of passenger service, if permitted, would not solve the financial problems of the road since it is clear that part of the current overhead charged to the passenger service would have to be absorbed by freight. These common costs in 1963 amounted to $19.6 million, or approximately 30 percent of the total cost of passenger services. If such costs were to be borne by freight, it would mean that the cost of freight service into and out of Connecticut would be increased significantly. Connecticut is one State that depends heavily upon importation of raw materials and the exportation of finished products and the railroad is the principal carrier. If the freight costs of Connecticut employers—as well as those of Massachusetts and Rhode Island, we might add-are increased significantly, we fear that our employers would suffer loss of business to other States which are closer to the sources of materials or markets or both. Our members—and many nonunion workers—would suffer from this through curtailment of employment opportunities. This might, we suggest, also affect the national economy in view of the large contribution Connecticut has been making to the production of 'defense items, since all such items would become more costly. Already, some employers are threatening to move from Connecticut if rail freight is not available.
Passenger service is also vital to Connecticut since we have some 30,000
commuters who reside in Connecticut. They are the source of income and employment to many Connecticut residents and the curtailment or abandon'ment of commuter services would cause many of them to leave Connecticut and move closer to the place of their employment. Increasing the charges of commuting does not answer the question of curing the passenger deficit since an increase in rates to make the passenger service self-sufficient would result, we are told, in exorbitant rates.
It appears to us that the only feasible solution is to return to subsidization of the railroad. This approach was used in the early days to get the railroad into existence and we have to return to it to keep it going. Of course, Federal money can only provide a temporary solution. We have asked the State of Connecticut to provide funds as well. If the New Haven Railroad can get new equipment and keep its operations going, we hope that the cash position would be improved sufficiently to permit the road to become self-sufficient.
We are therefore urging your committee to report out favorably the bills now under consideration or a committee bill which would aid the New Haven now. We would favor combining the bill introduced by Senator Abraham Ribicoff with the bill introduced by Senator Thomas Dodd since this would provide immediate cars for the New Haven, as well as other passenger-carrying lines. The Pell bill also might be incorporated into the two bills since it provides a public authority to supervise the spending of Federal—and perhaps State-money. While the matter is not directly before your committee, I might add that we do not believe that any merger of the New Haven with other lines should require the acceptance of the passenger service, as well as the freight service,
As we see the situation, time is running out. Lack of available cash threatens the very day-to-day existence of the line. The equipment is deteriorating and deferred maintenance is bringing the road close to the allowable safety limits. We urge your committee most respectfully to act now to aid Connecticut and the entire New England area before it is too late.
Mr. BRADFORD. My name is Amory H. Bradford. I am a member of the New York bar, and a resident of New York City.
I spent my entire life along the New Haven Railroad. I grew up in Providence, R.I., Senator.
I am appearing here in behalf of the Regional Plan Association, as a member of its executive committee and past president.
It is a 36-year-old civic organization, which has worked in planning in the New York metropolitan area.
I have a prepared statement, which I would like to file with the committee.
Senator PASTORE. Without objection, it will be so incorporated. (The testimony of Amory H. Bradford follows:)
TESTIMONY OF AMORY H. BRADFORD FOR REGIONAL PLAN ASSOCIATION
My name is Amory H. Bradford. I live at 3 East 94th Street, New York City. I am a member of the New York bar. I am speaking here for the Regional Plan Association as a member of its executive committee and past president. The association is a 36-year-old civic organization which has always worked for an efficient, attractive, and varied metropolitan area surrounding the port of New York.
We are not going to testify on any of the particular bills before you but only on the general principle of substantial Federal investment in modernizing the commuter railroads.
In late 1960, this committee commissioned Regional Plan Association to report -on commuter problems in the New York metropolitan region. We worked with a former Interstate Commerce Commissioner, Anthony F. Arpaia, on the recommendations. At that time, we came to certain conclusions, and the intervening time, as we believe, served only to underscore their soundness:
There is no feasible alternative to railroad commuter service in the New York metropolitan region, taking the service as a whole.
Wholesale modernization of the service is necessary to avoid steadily rising costs and to achieve optimum efficiency and standards of service that will hold and gain customers.
Such modernization would cost on the order of $1 billion over a 10-year period, or roughly $100 million a year. Only about half is likely to be needed in the form of a public grant. Just to put these figures in perspective, the highway agencies of all levels of government spent about $4 billion just for construction and major repairs in the tristate New York metropolitan region over the last decade.
Further economies and improvements in service are probable from consolidating all railroad commuter service into Manhattan under a single public agency, which could either operate the service or contract for a given level of service with one or more private corporations.
Those who know the densely populated, highly centralized, old metropolitan areas of the East understand how essential public transportation is to them. This is particularly true of the New York region. The Nation's key economic decisions are made in Manhattan's central business district. They grow out of innumerable meetings among constantly shifting groups. This kind of decisionmaking center can function well only when large numbers of people work very close together during the same hours of the day. In Manhattan, nearly 342 million people--almost the entire population of the second largest city of the country-enter and leave the central business district every day. This is an area no larger than Kennedy Airport. One-fourth of them come during a single hour of the morning, 9 to 10. Of these, 9 out of 10 arrive on public transportation. There would be no room for them to arrive by car and still keep a center that functions as Manhattan must.
It is understandable that persons who live in other parts of the country, in smaller cities or even in newer, more spreadout metropolitan areas, do not feel the necessity of public transportation as we do. In all metropolitan areas in the country, on the average about two-thirds of the employees use automobiles to get to work. But in our region, even including those who work in outlying sectors, only one person in three drives a car to work, and during rush hours there is no more room on the highways and streets within 20 miles of Manhattan. So our situation, and that of the other more concentrated urban areas in the East where a fifth of the Nation's population still lives, must be made clear to the other four-fifths of the population.
High peaks of demand are costly for all forms of transportation-whether extra highway capacity must be built for a few hours of the day or extra trains provided. Since the New York region depends so heavily on rail transportation to handle the peaks, rail transportation suffers these losses, even though it is the most efficient mode for transporting peakloads.
Federal aid to maintain rail commuter service in the larger metropolitan areas and particularly in the more concentrated ones—is justified by the importance of a smooth and dependable journey to work for the Nation's economic health. It might even be justified by the importance of getting the 70,000 Federal employees to their jobs on time in Manhattan.
But the main reason for Federal support for public transportation becomes clear when one begins to look at the transportation of the metropolitan areaany metropolitan area-as a single system. In certain regions and in certain sectors of those regions and at certain times of day, one mode of transportation may be most efficient. At other times and places, another may be. In the inner 500 or so miles of the 7,000-square-mile New York metropolitan region, the majority must use public transportation to get to work-in fact they must use rail transportation, either transit (the subways or port authority tubes) or railroad service. There is little room for expanding highways for more buses or automobiles. Studies have demonstrated that automobiles could not possibly do the whole job and buses would be far less efficient in handling present rail commuters. In many sections of the region, an attempted substitution of bus for rail would cause wholesale disruption of highway travel, neighborhoods, work schedules, real estate values, retail sales, and transportation workers' jobs. In many cases, the substitution would be so costly as to be unthinkable.
In short, rail is the most efficient way of transporting people at certain hours and in certain corridors. Since governments cannot neglect their responsibility to assure adequate access of people to their jobs—a responsibility they have assumed in highway construction and, in the New York region, in providing subway service and bus terminals—it seems logical and imperative that the governments should fulfill their responsibility to the commuter population in the most efficient way, viz., existing rail lines. The alternative is to let rail service gradually halt, when far more costly and disruptive means must be found to get people to work. Were highways but not public transportation to receive Federal funds in these regions, the result, inevitably, would be extra and inefficient spending for highways to do a job that rails could do more efficiently.
But why can't railroads pay their own way? Why not raise fares to equal railroad costs? Most observers—including the railroads themselves—feel that, as fares rise, enough riders will drop out and try to use their automobiles so that the total income from fares will scarcely go up while the burden on the highways increases. This is about what happened, in fact, when the New Haven last raised its fares. There is, in short, a law of diminishing returns. In fact, experiments in Philadelphia and Boston have demonstrated that railroads can increase total income while cutting fares, at least if that is accompanied by better service. But even there net income did not rise enough to meet expenditures.
Finally, some critics of public aid have harked back to the early days of railroading and asked why the principle does not still apply that railroads must provide the unprofitable service within their franchise area in return for the monopoly position the franchise provides. Unfortunately, this reasoning could not apply to several of the commuter lines in the New York region because none of their services produces a profit. For the New Haven, the coup de grace was the building of the parallel Connecticut Turnpike by a public agency. Furthermore, there is some question of whether the principle actually makes sense any more, with sharp competition between rail and truck for freight and between rail and air or bus for passengers. Furthermore, this principle does not really benefit the region. Private enterprise works when the corporation has a stake in providing the best possible service--when the enlightened self-interest of the corporation coincides with the public interest. This clearly does not occur when railroads are forced to provide a service they do not want to provide. Furthermore, a private commuter railroad could not possibly be expected to invest in research to keep rail passenger technology up to the heavily subsidized air technology or to the highway construction and design improvements resulting from Government research. Nor can railroads expect to obtain private financing for the modernization that is necessary to escape continually rising costs and a continually declining quality of service. On the other hand, a public agency responsible solely for providing the best commuter railroad transportation possible at the lowest possible price, an agency free to seek capital funds where they can reduce operating costs commensurately—as our research indicates would be true in the New York region-probably could be expected to provide good service at reasonable cost and could be kept politically responsible for results. This is not as possible if public funds are simply pumped into a private corporation providing commuter service along with other railroad operations, particularly with the extremely complicated bookkeeping necessary for railroads. Then, of course, the public agency would depend heavily on tax-free bonds and operation as well as Federal and State aid.
Regional Plan Association is a research organization that follows its studies to their conclusion without any particular political or economic bias. But the directors are men in responsible positions in business and the professions with representation from the labor movement. They are not inclined to fly easily toward a "Government knows best” solution. But the conclusion seemed to the board to be inevitable—that only through a public regional railroad commuter agency could adequate and efficient service be guaranteed.
We therefore strongly urge the Federal Government to provide sufficient funds for wholesale modernization of the commuter lines under such a public agency. We do not know exactly how much this would require from the Federal Government, but it seems likely that up to half of the necessary billion dollars of capital investment might have to come from public grants. Under the 1964 Mass Transportation Act, this would mean about $333 million from U.S. funds and $167 million from the States. Since the whole program would take about a decade, it would mean about $33 million a year of Federal aid. This contrasts with more than $170 million a year of Federal funds that is scheduled to be spent for construction of the Interstate Highway System alone in the New York region between 1936 and 1972. We then suggest that any operating deficits remaining after modernization be the responsibility of the States. Within the past week, all three States have indicated that they are going to take more responsibility for assuring commuter rail service.
Saving the commuter rail lines of the New York region is not a major transportation task, compared to other problems facing the Nation's urban areas. Done correctly, the New York region could provide excellent railroad service far cheaper than any alternative form of travel. Without railroad service, on the other hand, the region's transportation-and therefore its economy-could be seriously crippled. All that is needed is a public agency, bistate or tristate, that will modernize the lines and bring them together in a single system. We urge sufficient Federal funds to help to do this.
Mr. BRADFORD. I would also like to file a copy of the report which the Regional Plan Association prepared for this committee in 1961.
Senator PASTORE. How voluminous is the report, sir?
Mr. BRADFORD. January 31, 1961. It was a study of passenger transportation in the New York-Connecticut metropolitan region, with particular reference to railroad commutation.
Mr. BRADFORD. In an area such as Manhattan, every business day, the rush hour transportation must depend on rail transportation, the largest segment of which moves by commuter railroad.
This is something that can't be transferred to automobiles traveling on the highways. If rail commuters were transferred to the existing highways, no one would get to work by highway into Manhattan's central business district, and all movement of traffic in and out of the city would be completely disrupted.
To try to provide additional highways to take care of the rail commuters, 'if service were abandoned on the New Haven, or any of the other lines, which have an equal financial distress, it would not be within the physical range to build highways to bring in that rush hour traffic.
It is the position of the Regional Plan Association to provide adequate modernized railroad commuter service as a government expense.
Up to now the governments have assumed responsibility for providing transportation by highway, and also for providing parking facilities within the city. It provides a rapid transit within the city.
omm er transportation has been left to the railroads, I believe, which are losing money on it, and can't be expected to provide financing to provide this vital service.
It seems obvious we can't expect State governments to provide financing to the amounts indicated.
This principle has been recognized in the interstate highway program, where the Federal Government provides 90 percent of the capital funds, and the State 10 percent, and the cities, to a large extent, provide the maintenance, which would, in the case of a commuter railroad, be operating losses.
As I said earlier, the total capital needs would be in the order of $1 billion over 10 years. We think that approximately one-half of this can be recovered through the fares 'charged by the railroad, and the other half would be assumed as a government expense.
Senator PASTORE. When you say "government,” whom do you mean, State, city, or Federal ?
Mr. BRADFORD. This, obviously, is a matter to be borne between the Federal Government and the States.