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will prevail with respect to the railroads the moment we give them the money, riches will be there, but they will be gifts from the taxpayers and not earned on the basis of sound business practices.
Senator PASTORE. The Senator from Rhode Island is very happy that the Senator from Ohio is going to keep an open mind on this. [Laughter.]
Senator RIBICOFF. Mr. Chairman, I ask unanimous consent-
Senator RIBCOFF (continuing). I ask unanimous consent that my prepared statement be placed in the record as read. I think in the colloquy between us, all of us, my entire testimony has been covered, and I won't take any more time of the committee reading it. I would like the entire statement to be in the record.
Senator PASTORE. Is there any objection?
Senator Bass. No, Mr. Chairman, I have no questions. But I just don't want my cotton farmers to get mixed up in this whole argument. (Laughter.]
Senator RIBICOFF. I would say one of the ways of keeping your cotton farmers out of it is to take care of some of our transportation problems in the Northeast.
Senator LAUSCHE. My statement didn't deal with the cotton farmers. It dealt with the manufacturers of cotton goods, to whom last year we gave a $350 million subsidy.
Senator Bass. But we deal with it from the bolls to the rags.
STATEMENT OF SENATOR ABRAHAM RIBICOFF, DEMOCRAT, OF
Senator RIBICOFF. Mr. Chairman, I appreciate this opportunity to appear and testify in support of my bill, S. 325, and in support of the other measures that have been introduced and referred to this committee to preserve, improve, and develop essential passenger train service. I want to express my sincere thanks to you, Mr. Chairman, for this opportunity to bring before the committee a concern for an immediate and pressing problem—a problem of importance not only to the Northeast of the United States, but an urgent problem for the entire Nation.
Mr. Chairman, this morning 25,000 commuters traveled to work in New York City from their homes in suburban New York and Connecticut on the New Haven Railroad. They did not travel in any great style. They moved in drafty, creaking, ancient coaches. They waited through the usual delays. Tonight they will travel home again—in the same ancient equipment, and enduring the same delays. But they moved this morning--and they will, we hope, travel home again tonight.
The delays are long—the service inadequate—the cars obsolete. But the service has continued.
Commuter service on the New Haven, however, is reaching the end of the line. The railroad went into receivership in 1961. It has run at a deficit since 1958. And now the trustees of the New Haven have
petitioned the Interstate Commerce Commission for permission to institute a curtailment and eventual abandonment of commuter service in the New York area, effective March 29, 1965. That petition is now pending before the Commission, and under the law must be considered and decided within 4 months from March 29.
This is not the first crisis in the history of the New Haven's commuter service. Suburban residents of the New York metropolitan area have lived under the threat of curtailed or abandoned service for years. But if we are realistic, we must face the fact that this could well be the last crisis, and that commuter service could end.
The States have not stood idly by while these crises took place. For more than 8 years—under my administration as Governor and under Gov. John Dempsey—the State of Connecticut has labored to save the New Haven and its indispensable commuter service.
The entire State tax burden on the New Haven Railroad was forgiven and the New Haven now pays no taxes in the State of Connecticut. A Connecticut Transportation Authority was established, with authority to operate or to contract to operate the essential New Haven service. Connecticut authorized the appropriation of $3 million in State funds to assure the railroad's life. Since 1961, $500,000 in direct State aid has been extended annually for grade crossing and bridge maintenance. Last year Connecticut entered into a contract to pay $450,000 for Connecticut's share of the first year's payment on the amount necessary to allow the New Haven to rehabilitate 50 of its ancient commuter cars and acquire 80 new cars from the Port of New York Authority.
Rhode Island has extended substantial tax relief-over half a million dollars a year.
Last week Governor Rockefeller proposed the establishment of a New York Metropolitan
Commuter Transportation Authority to deal with the Long Island Railroad and regional commuter operations. On Saturday, Governor Rockefeller and Governor Dempsey announced that they would immediately begin exploring the feasibility of entering—through the proposed New York Authority and the already established and funded Connecticut Transportation Authority-into a commuter service contract with the New York Central and the New Haven trustees.
Under the proposal, the New York Central would manage the combined operations of its own commuter lines and those of the New Haven in the New York area. The New York Central-Pennsylvania merger is now before the Interstate Commerce Commission. The ICC should make it a condition of the merger that the New York Central agree to enter into such an arrangement with the authorities of New York and Connecticut.
The Governors' proposal is an encouraging step forward, and it seems clear that real progress is now being made on a State and regional level. The New Haven's problems are not the concern of only Connecticut—or of only New York. The New Haven's continued passenger and commuter service is a regional concern, far outstripping the capacity of any one State to deal effectively with the problem. And this characteristic of the New Haven Railroad commuter operation is shared by rail commuter systems throughout the Nation.
For several decades all the population growth in the United States has been within the metropolitan areas, made up of central cities and suburban rings. The Urban Land Institute estimates that all of the projected 70 million population growth from 1960 to 1980 will continue to occur in metropolitan areas, with 50 million of the increase in the suburbs. About three out of five persons in 1980 will live in the suburbs.
While a substantial amount of decentralization has occurred within these metropolitan areas, the cities remain the center of trade and finance. A study by thé New York Port Authority "Metropolitan Transportation—1980” noted that while the nature of the central city's economic activity was changing, a healthy growth rate in financial and service activities compensates for any loss in manufacturing.
The central city remains important. It is the hub around which the surrounding area revolves. And the rail transportation networks which feed the central cities cannot be ignored. They tie together growing, metropolitan regions, which cross city, town, and State boundaries.
The New Haven Railroad is such a network. It has been in trouble, and it is in worse trouble now. But who is to say that similar troubles will not beset other rail networks—other commuter lines? The signs are ominous. One rail commuter line after the other has disappeared, others are struggling to survive.
To take up the slack of disappearing service, we have built webs of highways around and into the central cities. And in a vicious circle, as we built more highways—as we paid more and more attention to the automobile—we made it that much more difficult for rail service to survive. Without astronomical investment in new construction, it would be impossible to throw all of the New York area's rail commuters onto the highways. Fifteen percent more commuters into New York City now travel by rail than by auto. The equivalent automobile traffic of only the New Haven's commuters, moving intheir own cars at 30 miles an hour, with the required distance of three car lengths between automobiles, could form a single line of traffic from New York City to Portland, Maine.
The utlimate solution to the comuter railroad problem must rest on a regional basis. Senator Pell's bill, S. 348, presents such a solution, on a workable basis, with Federal participation in a constructive partnership with the States. I support Senator Pell's proposal, and I believe it furnishes the only kind of long-range solution.
Long-range solutions based on State action with Federal participation, are imperative. We must accept the fact that there is a public responsibility to assure continued railroad service, just as there is a public responsibility to assure a system of public highways.
But I cannot emphasize too strongly that there is an immediate need which must be met. We—not just Connecticut, or New York, or Rhode Island, or Massachusetts—we, the etire Nation, have the New Haven Railroad's service today. We may well not have it tomorrow.
A regional public authority based on a partnership among the States and with the Federal Government will be needed to assure continued operation—but by the time the authority is established, funded, and ready to go, the New Haven could be dead.
Connecticut started to play a substantial role in the fight to save the New Haven 8 years ago. It has taken us that long to get where we are today—at the point, and only at the point, of exploring the feasibility of a permanent solution to the New Haven's problems. It will
take a significant length of time to work out the necessary arrangements for a satisfactory regional solution. We have started—but we must establish a mechanism which can make direct Federal assistance available to the railroads while the necessary permanent arrangements are being established.
And that is why I introduced S. 325. I believe it provides a workable mechanism for channeling Federal assistance into hard-pressed passenger railroads, to enable them to continue service until more lasting solutions are put into effect. The program of assistance established by S. 325 has no terminal date. I do not believe it would be wise to establish a time limit on the act itself-for the legislation is designed to deal with more than the problems of the New Haven.
A recent report of the Interstate Commerce Commision shows 66 Class I line-haul railroads throughout the Nation engaged in passenger service. All but three of those companies are losing money on that passenger service.
Mr. Chairman, I ask unanimous consent that a table showing those railroads and their losses on passenger service be inserted at this point in the record.
The program established by S. 325 is designed to aid not only the New Haven, but any hard-pressed passenger railroad which can demonstrate to the satisfaction of the Interstate Commerce Commission that: (1) the continuance of passenger-train operations specified in the application is required by the present or future public convenience and necessity; and (2) that the granting of aid requested is necessary to carry out effectively the public convenience and necessity.
The assistance authorized by S. 325 would be granted to qualified railroads under a formula designed to limit the amount of aid to an amount appropriate both to the railroad's needs and the amount of assistance contributed by States and local political subdivisions.
The maximum amount of financial aid available to any qualified railroad for any one calendar year would be the total of: (i) the railroad's expenses incurred in the preceding calendar year in the maintenance of way and structures directly related to railroad passenger service; plus (2) the previous year's direct payments by any State or political subdivision to the railroads for the maintenance-of-way and structures which are directly related to railroad passenger service; plus (3) the railroad's expenses in the preceding calendar year for the maintenance-of-way and structures which are assignable but not directly related to railroad passenger service. The amount of Federal assistance under subsection (3) is limited further to an amount not to exceed the aid, including tax relief, extended by any State or political subdivision to the applicant.
Putting some concrete numbers in the formula, the result for the New Haven would be approximately this:
Under subsection (1), the New Haven's expenses for maintenance of way and structures directly related to passenger service in 1964 are estimated to be $2,561,348;
Under subsection (2), State of Connecticut's direct payments to the railroad in 1964 were $500,000, paid in the nature of a subsidy for maintenance of highway bridge and grade crossings. Some part of this direct payment is attributable directly to passenger service—the exact amount directly related will depend upon the application of
the ICC's apportionment formula. No state other than Connecticut granted a direct cash payment to the railroad in 1964;
Under subsection (3), the New Haven's estimated maintenance of way and structure expenses assignable but not directly related to railroad passenger service were $4,276,054. Under this subsection, Federal aid could not exceed the total aid—including tax relief, but excluding aid counted under subsection (2)—made available by any State or political subdivision. From the figures available to me, it appears that the Federal aid would be limited under this subsection to $3,618,000, representing the total of the following tax relief assistance extended by States in 1964: $725,000, New York real property tax relief; $1,340,000, the New Haven's allocated share of the New York Central's real property tax relief on New York Grand Central terminal, shared jointly by the Central and the New Haven; $1,004,000, relief from Connecticut's gross receipts tax; $149,000, relief from Rhode Island's gross earnings tax; and $400,000, relief from real property taxes in Rhode Island.
The total maximum aid which could be made available under section 604 of my bill to the New Haven, assuming that the railroad was found to be a qualified applicant and using the latest estimates shown above, would thus appear to be $6,179,348, plus whatever portion of Connecticut's $500,000 might be found directly related to passenger service by the ICC.
No railroad passenger service can operate effectively without adequate equipment. Senator Pell summed up the condition of the New Haven's commuter equipment in his perceptive article in the February 25, 1965, issue of The Nation : "The senility of the New York commuter fleet, for example, is depressing to contemplate. Of a total of 190 cars, the 100 newest are 10 years old, and the remainder, almost half the fleet, vary in age from 30 to 50 years. None of the antiques, purchased between 1914 and 1931, is air conditioned and all are deteriorating rapidly, according to the trustees.'
Section 605 of my bill authorizes the Commission to grant funds to a qualified railroad applicant to assist in the acquisition and modernization of passenger cars. The amount of the grant would be determined by the Commission on the basis of the present and future public convenience and necessity, and would be in addition to the amounts provided under section 604, estimated above.
Any realistic attempt to deal with the problems of the New Havenor of most other threatened passenger lines--must recognize the need for aid in the acquisition of equipment. Operating subsidies alone are not enough. It does no good to subsidize the operation of inadequate equipment.
I offer my bill in the firm belief that we must establish a mechanism within the Federal Government whereby direct assistance can be provided to maintain and preserve essential passenger and commuter train service.
The Urban Mass Transportation Act of last year can provide assistance to commuter railroads, and to the New Haven, through established public authorities like those proposed by Governors Rockefeller and Dempsey, or that proposed by Senator Pell.
But our experience has demonstrated that the limited emergency provisions of the act are not sufficient to deal on an emergency basis with a crisis like the one facing the New Haven. My bill supplements