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I think the record ought to be a little more explicit,
Senator PASTORE. In that regard, because I think, myself, here we are actually getting into the core of the whole situation.
If the ICC should decide against the merger for any reason, then here we are, we are left with a deficit of about $17 million a year, which means $6 million freight, and the remainder for passenger service.
Now I realize that is one of the reasons why the trustees were permitted to file their petition for discontinuance of the passenger service, in order to save the freight service.
But I think it is quite important at this juncture to elaborate on what you mean.
Now, the Grinnell Co. employs how many people in Rhode Island ?
Senator PASTORE. To what extent do you rely on the railroad for freight transportation ?
Mr. CONGDEN. Last year, 1964, we controlled the Grinnell Corp., the home office, incidentally, is in Providence, R.I., we controlled about 10,000 carloads of freight last year.
Out of that, about a thousand moved in and out of my plant at Cranston, R.I.
Now, if we don't have a service that is maintained by the railroad, and here we are talking about a plant at Cranston, R.I., which was built for the employment of 1,800 men—incidentally, where we have five tracks right within the plant operation—the whole setup of the plant is built around a rail operation-now, if we don't have the limestone coming in from Mississippi, coming in by rail, to service this foundry, we are lost.
Senator PASTORE. We have no further questions of you, Mr. Congdon. We thank you very much for coming in.
All right, Mr. Bassett.
Senator PASTORE. Good for you. Identify yourself for the record, please.
Mr. BASSETT. My name is Harold Bassett. I am president of the Connecticut Taxpayers Association. I am not speaking for either of the political parties. Nor am I speaking for the chambers of commerce, or for the commuters, who apparently want to have someone else pay for a part of their ride.
I want to commend you, Senator Pastore, for making it possible to have this hearing in New Haven. It is quite unusual, in my 70-odd years of experience and observation to have problems brought to the grassroots that concern the Congress of the United States.
I feel, gentlemen, including Congressman Giaimo of this district, and the distinguished Senator Ribicoff, as well as the distinguished chairman of this committee, and Mr. Irwin, a Congressman from the Fairfield County district, that we are indeed very fortunate in being able to address our remarks to you gentlemen of this committee, because you stood for office, you were successfully elected in office, and, as a consequence of your position, I hope you, Mr. Chairman, will be as dynamic, as forceful, as energetic, as persuasive in the Senate as you have been here this morning, with regard to revitalizing the New Haven Railroad.
I don't believe it is necessary for anyone to convince this distinguished committee or anyone else that it is necessary to have the New Haven Railroad continue.
The New Haven Railroad is not a new affair. I can recall from my memory when the stock of the New Haven Railroad was $245 a common share, and was considered a widow's and orphan's investment, and legal for trust funds. Today it is not.
It has been through the process of receivership, as you gentlemen know, and not once, but more than once.
I share your comments, distinguished Chairman Pastore, when you say there is nothing the matter with the New Haven Railroad that money won't help.
But I amend that to say that, in addition to money, you need good, efficient management, and that is where we have not succeeded.
It is because, when you have a president of the New Haven Railroad not so long ago who is very likely distinguished in the field of law, but not in railroading, and that, from memory, I believe he received $75,000 a year salary, and the law firm with which he was connected in Boston was said to have received about $400,000 the same year, and when you open the spigot and siphon off these sums of money, from a railroad that is struggling for want of money, then, it seems to me, that this is very critical of management.
By reason of the fact that this committee here present this morning are Members of Congress, it is my feeling that this matter should be subsidized by the Federal Government because, as we, or, rather, you, the representatives of the people of the United States, can vote to devise ways and means to get to the moon, and ways and means to give money by putting it practically through a firehose and pumping it around the world, to buy friends, and the friends, regrettably, are running out before the money does, this is not charity that we are asking the Federal Government to indulge in, but it is the supporting and putting on to the main line an economically functioning, meritorious value known as the New Haven Railroad.
Speaking for the past, if I may, and for a moment only, Mr. Chairman, I had the good fortune to know the late treasurer, Augustus May, a resident of Bridgeport, that was with the New Haven Railroad 50 years ago. I used to take the train from Bridgeport, Conn., to New Haven, when I was in the investment banking business for 25 years.
We discussed finances, and Augustus May stated that one of the greatest brunts in the New Haven road was the amount of taxes they had to pay in Massachusetts for the use of the Boston and South Stations, and the New York Central, in the case of the Grand Central Station.
Now, by reason of the fact that most municipalities, from my observation and knowledge, in the State of Connecticut, are having great difficulty getting enough money to meet the obligations of their budget for their schoolteachers, for their sewers, for their highways, and all the rest that you are all too familiar with. · I feel that when it comes to asking for money to revitalize the necessity of the New Haven Railroad, we should address that problem to you gentlemen, who are Members of Congress, and I hope you will talk long and loud, to see to it that the Great White Father gives us a piece of the pie in the sky, as he is said to be giving many others.
With regard to the control of the Interstate Commerce, with regard to the Federal Congress and the Supreme Court, you, of Congress, have control of all of them.
Now, with regard to the subject of finances, which is your theme, there is nothing wrong with the New Haven Railroad that money won't help; how can you possibly expect matching funds or any other suggested financial remedy from the States involved when we are pouring billions, not millions, if you please, God knows where, and no return.
Plus the further fact that I have, upon reliable information, a reprint from the New York Times, where the loss on passengers in 1959 was 12.6 million; 1960, 13.3 million; 1961, 12.3 million; 1962, 10.9 million; 1963, 8.6 million ; 1964, 11.8 million.
Now, with regard to the decline of the passenger line in 1959, it was 23 million; in 1960 it was 20 million; 1961, 18 million; 1962, 14 million ; 1963, 14 million; and 1964, estimated at 1312 million.
There is no substitute for good management or for the money with which to keep the line running. It is not a question do we need it. It is a question we can't do without it.
But, if we subsidize the building of a thruway in Connecticut, with an expenditure of over $400 million, wherein we afford the railroads truck competition, if we afford subsidies for the airplanes, if we afford subsidies to the farmer, and say to him, “Don't plant so many acres, we will pay you not to produce," it seems to me that I don't know of any argument that you gentlemen can't use that will persuade the others in Congress, who are supposed to cooperate with you, to see to it that you, from Rhode Island, Senator Ribicoff from Connecticut, and the two distinguished Congressmen of Connecticut, are assisted from the source that we all should be assisted from.
Now, with regard to the local issue, I don't have to tell you, Mr. Chairman, that the ICC has the exclusive control of interstate commerce, not intrastate commerce.
And, if there is any doubt in your mind, I hold in my hand the United States Supreme Court Decision of the Southern Railroad.
Yes, thank you, sir; I know my 10 minutes are up.
Senator PASTORE. Go ahead and finish. You are a breath of fresh air. Keep going. Mr. BASSETT. Thank you.
I hold in my hand the report of the Supreme Court of the United States, where the Southern Railroad wanted to discontinue two trains, namely No. 7 and No. 8.
Why? Because they were not profitable.
There is a parallel with what you have been hearing a lot these many weeks. We want to discontinue passenger service of the New Haven because it is not profitable.
Well, who is it that got it into the deplorable conditions? It wasn't the Members of Congress. It wasn't the taxpayers of Connecticut. It was the mismanagement of the railroad.
And, so, if, in the wisdom of you gentlemen, and your ability to deal, if you can come up with a plan where the Federal Government will pay up the money, why, the money suggested by the State of Con
necticut, the distinguished Governor, on the $5 million dollar appropriation, and the $5 million from New York, and the $10 million from the Federal Government, that is a drop in the bucket.
We know, 1 year alone, as you said a moment ago, you were in the red to the tune of $17 million dollars. So how far is $20 million going to take you?
And that is just getting your foot in the door, as a consequence of this so-called complicated matter.
It is not complicated a bit.
Could you, as an individual, distniguished Senator and chairman of this committee, if you had a corporation and you were not successful for any reason whatsoever, including mismanagement, could you go to your legislature, or to your Congress or to your neighbor and say, “Brother, I squandered the money twice before, and I have been in receivership; move over, brother, give me a dime, multiply it by a million, I want to show you how fast I can spend it a third time," your answer would be no. It is just commonsense.
We can talk about this until hell freezes over. The question is what are we going to do about it.
I say this, you are the gentlemen that can do it.
Senator PASTORE. Now, we have certain officials of the State of Connecticut. We have Mr. Frank Reinhold, chairman of the Connecticut Transportation Authority.
Mr. REINHOLD. I am Frank M. Reinhold. I live in Watertown, Conn. I am chairman of the Connecticut Transportation Authority.
I am representing the Governor today in my comments. I don't plan to submit to you honored gentlemen any lengthy statement of our position.
I do want to mention that the statement which our Governor presented in Washington last week is also the statement of the Connecticut Transportation Authority.
I also wish to add that I do plan to leave with your committee a list of the various steps that the State of Connecticut has taken over the period of some 5 or 6 years to aid in this problem of the New Haven.
Senator PASTORE. If there is no objection, we will have that included in the committee files.
Mr. REINHOLD. Thank you, sir.
If this were purely an intrastate problem in Connecticut, I believe I am not overstating the fact to say that it would long since have been taken care of.
We do have problems in the cooperation with the adjoining States.
As you well know, we struggled for almost a year in connection with the MU Car Program, all through 1964, and much because of the difficulties with the adjoining States.
However, this is again active. We are working in very close cooperation with the State of New York. And we are doing all we know how to implement the agreement which was reached by Governors Dempsey and Rockefeller within the last 60 days. That agreement seems to be moving fairly rapidly.
I simply want to add that, as a member of the Connecticut Transportation Authority, we do have the funds with which to work. We do believe we know the problem as it exists. And we believe further, that the State of Connecticut, through its legislature, can give us additional funds with which to carry on.
And, gentlemen, I am strongly of the opinion, as an individual, that this matter is far from being completely discouraging.
I think we are finally beginning to move. And we believe that the adjoining States are going to move with us, and that you will see that these States that are involved in this problem are going to do their part, and we do need a certain amount of assistance from the Federal Government.
Now, except for those comments, and the fact I am willing to expose myself to questions, I have nothing more to say at this moment.
Senator PASTORE. Thank you very much.
As a matter of fact, your distinguished Governor appeared before our committee last week and stated the position very succinctly and very completely. You have corroborated pretty much everything he said.
I think, according to this hearing, and I already said it this morning, I think, with a little bit of common sense and coordination, and cooperation, we can resolve this problem.
This does not alleviate what Mr. Bassett has pointed out, nor does it vitiate the purpose of the introduction of these bills. .
We do have difficulties. There is no question at all about it.
Only yesterday, in the New York Legislature, representatives of the people in the northern part of that State indicated they could not care less about the passenger train problem that confronts the people of New England.
You will find that pretty much in Congress. People who come from another part of the country sometimes will fail to understand the problems, and make allowances for people in other parts of the country.
As Ár. Bassett pointed out, we, in New England, have supported these programs of benefit to other regions of the country and we have considered them in the public interest.
I quite agree with him, if we are going to subsidize tobacco that many people say give you cancer, if we are going to subsidize corn, which is to make liquor, which sometimes makes people drunk, if we can subsidize rye, which is used to make liquor and make people drunk, why can't we subsidize the New Haven Railroad?
Thank you very much, sir.
Now, Nr. Maurice Réid. I understand he has a very short statement.
Would you kindly make it, sir?
Mr. REID. Mr. Chairman, Senator Ribicoff, and distinguished members of the committee, I am Maurice W. Reid, president of the Connecticut State Chamber of Commerce, and I am appearing in behalf of that organization. I have a brief statement to make in support, in behalf of the railroad.
Our membership includes firms from all segments of business that are located throughout the State, both large and small, many of which are dependent upon the railroad for transportation of their materials and goods to move in interstate commerce.