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Senator PASTORE. Then I make a further point here, and without you misunderstanding me, because I am not trying to circumscribe it in any way, your freedom to speak on the subject.
I think that the Javits bill directs itself, more or less, toward the commuters.
Professor ZIMMERMANN. That's right.
Senator PASTORE. And we have gone into that—quite thoroughly, as a matter of fact—when Governor Rockefeller was before the committee yesterday.
He did explain that negotiations are going on between Governor Dempsey and himself, and that he has talked with the officials of the New York Central. These two Governors believe that they can utilize the Urban Mass Transportation Act to alleviate the commuter problem.
And then, of course, under the Ribicoff or Dodd bill you would have working capital to be used for operational purposes.
So the question came up, Do you need a compact in order to accomplish this agreement between New York, Connecticut, and the Housing and Home Finance Agency?
Professor ZIMMERMANN. You don't.
Senator PASTORE. The situation may be taken care of without Congress concerning itself with the Javits bill.
Of course, you already have it. The States are putting up a million and a half, and propose that the Federal Government put up 3 million, and that is 2 to 1.
So you see, what Senator Javits is doing, by his attempt to create a compact, is merely to codify what already exists, by way of a compact.
So, frankly, this committee has not engaged itself too much on the Javits bill, for this reason, because you can do everything that Senator Javits wants to do except to create the compact, you see, under existing laws, and under existing programs.
Professor ZIMMERMANN. I don't think this compact-
Professor ZIMMERMANN. I am not. The only point is that if there is going to be a compact-and there are some circumstances where there might be a necessity for a compact-it is at this point that we wanted to put in a word of caution, because it is one of the things that is in preparation.
Senator PASTORE. I think what you are saying is that you would be happy to go on the so-called Pell legislation, to latch onto that.
Professor ZIMMERMANN. That's right.
Senator PASTORE. The same argument you are making on this could be given on the Pell legislation.
Professor ZIMMERMANN. To show the importance of it, may I say the States have done things in mass transportation-and there are two instances that I can think of-which have been done under State compacts.
One is the Mass Transportation Act of Philadelphia, by the Philadelphia Port Authority, with the States of New Jersey and Pennsylvania. I understand they have done it this way, but I don't have the details.
And there is a bistate agency in St. Louis, which is also involved in some way in mass transportation. I don't know enough about it, however, to talk about it.
Senator PASTORE. I don't either. Governor Dempsey and Governor Rockefeller are working out that agreement. They may come up with it, and it may be a matter of compact.
Then, of course, that will satisfy the objection you are raising now.
Professor ZIMMERMANN. You see, the bus people surprise me. Here today, there are two compacts before Congress, and they are resisting the two.
I helped draft the one in New York State. One of them has been passed by New York State. The other will come up before it again. And a number of these States have drafted them.
The point of these compacts is to aid interstate buses in making more intracity stops, by lowering the financial burden of State taxes, fuel taxes, and registration fees.
Now, these compacts are before Congress and they got through the Senate, the Senate gave consent.
It was introduced in the House, and a single Member of Congress seems to be able to attach a condition that every State that has to join has to come down to Washington to get additional consent under the mechanism which is used in the Javits bill.
This is undesirable it is unnecessary and undesirable. It would just lead to one delay after another.
And, for the bus people, it is another case where the States are trying to do something with respect to mass transportation, and I think it is a subsidy of sorts to the bus people.
Very well, at this point I think that is about all we wanted to say, except for continuing with the statement that is here.
Senator PASTORE. Why don't you put the whole statement in the record ?
Professor ZIMMERMANN. Very well.
STATEMENT BY PROF. FRED ZIMMERMANN ON BEHALF OF NEW YORK STATE SENATOR
Max BERKING While I commend with Senator Javits and Congressman Reid on the need for concrete action and while I feel that their proposal embodies some interesting and valuable approaches, I believe that enactment of their bill at this time would add a new dimension of complexity and an undesirable rigidity to an already complex and confused situation.
Congress would be granting consent to a specific interstate compact which the Javits-Reid bill explicitly says "shall be as follows." In short, the States would be faced with an agreement between them which Congress had approved in specific and inflexible terms. The States would have no room to formulate a workable agreement in terms of their own situation.
The answer that the States would make changes or even present a new compact to Congress in place of the one embodied in congressional consent legislation is not sufficient. The freedom of the States to formulate an agreement satisfactory to them would be impaired. They would be working in the shadow of the congressional enactment.
They would not be certain of how insistent Congress would be about retaining its own enactment or parts thereof. A complex situation would be made much more complex.
For example, the Javits-Reid statement says that "the legislation expressly provides authority for the inclusion of additional States as members of the authority." While this is true it does so in an unfortunate fashion. It merely permits other States to join (again in the words of the bill) "on the same terms and under the same obligations as set forth in the preceding articles of this compact.” It makes no allowances for its additional problems and complexities that are involved in the inclusion of States and other segments of the transportation problem. The States are given no flexibility to fashion the compact for the wider area. In fact, the Javits-Reid bill even requires that the new membership must also have congressional consent, even though presumably the compact will be identical with the one they have already consented to.
This memorandum does not purport to be a definitive analysis of the rail authority bill, as such, but instead is an attempt to outline some initial reactions to certain of the features of the compact authorized by the bill. It is an attempt to be constructive by pointing up some of the apparent deficiencies many of which are comparatively minor in nature.
In essence, the bill grants the consent of Congress to a compact which is fully set forth therein, to be entered into by the States of New York and Connecticut creating a bistate authority to own, operate, or otherwise provide for the continuation of commuter and passenger rail operation within the States. In addition the bill provides for the Federal guarantee of obligations issued by such authority up to $500 million and for payment by the Secretary of Commerce of one-third of the operation deficits incurred annually by the authority in accordance with a formula stated in the bill.
This bill sets out the precise terms of the bistate compact to which the United States is consenting in advance of any action by the Legislatures of the States of New York and Connecticut. The usual procedure, of course, is for legislative enactment of an interstate compact by each State which will become party thereto, after introduction, debate, hearings, and finally passage of the bill embodying all the terms of the proposed compact by each house of each State's legislature. Such a procedure, of course, permits the essential adjustments of features of an interstate compact to the demands or requirements of the various parts and interests of the State voiced through their elected representatives in legislature. The body which will be created pursuant to this proposed compact will, of course, be a State body composed of representatives of each State and, responsive to a regional problem which is nevertheless the particular concern of the two States.
Numerous other reasons can be cited for the desirability of the origination of the compact in the Legislatures of the States of New York and Connecticut rather than in Congress. One of the most compelling practical reasons is, of course, the fact that the States should not be presented with a fait accompli which their elected representatives must accept or reject in toto.
Other features of the bill which might be commented on is the status of the Federal Government as outlined first in article III, paragraph 2. The Federal Government apparently will not be a party to the compact but will have a representative with power to veto matters relating to the issuance and sale of bonds guaranteed by the Federal Government and to report to the Secretary of Commerce with respect to the activities of the authority.
The next paragraph provides that no commissioner have an interest in any corporation "engaged in the manufacturing or selling of passenger transportation facilities," which seems an unduly broad restriction.
In article IV it should be noted that although three commissioners constitute a quorum of the authority that no action may be taken unless a majority of commissioners concur therein. A reasonable and customary requirement in this regard is to provide that no such action be taken unless a majority of commissioners from each State concur.
In article V the powers of the authority seem adequately detailed with the exception that no framework of purposes defining the areas in which such powers may be exercised is otherwise set forth in the bill. Thus in paragraph 6 of article V the authority is given power to acquire by condemnation any property without any stated limitation that such condemnation be in pursuit of a corporate purpose such as the provision of railroad services.
Article VIII which authorizes and provides details of bond issuance by the authority omits provision for any pledge of fares or other rail revenues to pay the bonds.
It is difficult to ascertain whether the payments-in-lieu-of-taxes provided for in article IX of the bill are intended to be mandatory upon the authority.
It should be noted that article XI provides that the compact become effective 90 days after the date of adoption by the last signatory, hardly an appropriate provision for an emergency measure.
It is to be hoped that the Congress will give this bill serious consideration in its attempt to aid the New Haven but in fulfilling this intent, it does not stand in the way of suitable action by the States themselves.
This statement should not in any way be construed as opposing the intent of this proposal which serves our common cause of maintaining the New Haven
service during this period of crisis and working toward a thorough modernization that is needed for the future.
I look forward to working with Senator Javits and Congressman Reid and other New York legislators in developing the bi-State compact that will ultimately be needed.
Senator PASTORE. Our next witness is Mr. Christensen.
Mr. CHRISTENSEN. My name is Tom Christensen. I represent the General Chairmen Association of the New Haven Railroad. This organization is composed of all the general chairmen of the labor organizations on the railroad.
I realize, Senator Pastore, that you have had a hard and long day, and that you have heard a lot of testimony, both from the common labor people and others, and I am not going to be repetitious, or anything else.
We realize there are several bills before your committee.
Evidently the one supported most of all seems to be the Ribicoff bill, and next seems to be Senator Pell's bill.
We realize, too, that Governor Dempsey, Governor Rockefeller, and all the others are now working hard, and have worked hard, to bring about some solution to this problem.
We, as the working people, or those of us representing the working people on this railroad, and, in fact, all the employees, realize the serious financial condition this railroad is in. And the jobs of the men we represent depend on the existence of this railroad.
I want to have you bear in mind, Senator, that most of the employees that are now working, because of the drastic force reductions that have been brought about in this railroad, whose curtailment for possible economic reasons or other reasons, that they wanted to save on payroll, those men today are in an age bracket, if they had to go out and attempt to secure some other industry, work in some other industry, it would be practically impossible, because they are railroad men, and they know the railroad trade, and any branch of it, is different from the outside, even though it is close.
So, Mr. Chairman, we will ask that your committee take into consideration the benefits in all the bills that have been placed before your committee, give them careful consideration, and not only for the benefit of the railroad employees, but also for the traveling public that depends on the passenger service, and for the people that are working in manufacturing and in industry as a whole within the State of Connecticut, that depend on this railroad for transportation purposes.
We ask you, and we solicit your support to carefully go over the testimony that has been put in today and in the previous hearings of your committee, and what the Governors of the various States do, and if possible come out with a bill that could take this railroad out of its present financial situation and give it a boost, and thereby preserve the jobs of our members.
Senator PASTORE. All right. We are now at the hour of 4:20. I assume this is the last witness.
Mr. BROWNING. Mr. Chairman, my name is L. L. Browning. I am the traffic manager of the Trailways of New England, Inc., which has its offices at Washington, D.C.
I have a prepared statement here, which is very short, but with the possibility of still shortening it further, I would like to put it into the record, with a summary, if it is satisfactory to you.
Senator PASTORE. It certainly is. Without objection, the whole statement will be inserted in the record. (The statement by L. L. Browning follows:)
STATEMENT OF L. L. BROWNING My name is L. L. Browning. I am traffic manager of Trailways of New Eng. land, Inc., with offices at Washington, D.C.
Oour interest in these preceedings is related to the long-haul aspects rather than the local commuter phase.
Trailways of New England operates buses from New York, N.Y., to Portland, Maine, serving such intermediate points as New Haven and Hartford, Conn.; Springfield, Worcester, Boston, Lowell, and Lawrence, Mass., and Portsmouth, N.H.
The present owners purchased Trailways of New England in 1957 at a time when the company was suffering from financial reverses. A complete reorganization policy was instituted and certain operating and traffic economies were introduced shortly thereafter. Improvements in terminal facilities and equipment serving points plus purchase of new buses finally bore fruit in 1960 when the company first realized a nominal profit, and it has continued to show a small profit for each succeeding year through 1964.
Terminal improvement has been a high-priority project for the company and expenditures ranging from more than $100,000 at Worcester and Boston, Mass., to over $6,000 at Hartford and New Haven, Conn., have been authorized over the last several years.
Also, Trailways of New England has increased its fleet of buses from the original 13 acquired in 1957 to a present-day complement of 52. Eight more are on order for delivery this spring. Approximately 65 percent of the fleet was purchased new during the period 1962–64 at an average cost of $48,000 per unit.
Additionally, Trailways of New England undertook an advertising program, moderate of necessity to begin with, increasing to the point where in 1964 more than $119,000 was budgeted and spent. Finally, the company, for the year 1964, has paid over $10,000 in Federal and State fuel taxes, $20,722 for vehicle licenses and registration, and over $97,000 in turnpike and bridge tolls.
Using every known policy for offering convenient, safe transportation to the public in the area served by Trailways of New England during the year 1964, with all the improvements and conditions set forth above, and using private funds without any subsidy from any Federal, State, or local body, the company, with revenues in excess of $4 million, realized a net income of approximately $200,000, or an operating ratio of about 95 percent.
In summary, it is the position of this company that competition subsidized by public taxes—a portion of which we in private enterprise must contribute would jeopardize the future of the bus industry regardless of the area in which this type of competition may be encountered. Private enterprise could not expect to remain attractive to businessmen under such conditions.
Mr. BROWNING. As we state here, our interests in these proceedings which are being conducted are related to the long-haul aspects of the problem rather than to the local commuter phase. This statement will just give you a general idea of our whole operation.
During the proceedings here today, there has been some mention of the fact that the trucks and buses possibly are getting by free so far as the use of the highways are concerned.
I would just like to point out for the verbal record here that our company, during the year 1964, paid over $10,000 in Federal and State fuel taxes.
We paid $20,722 for vehicle licenses and registrations, and over $97,000 in turnpike and bridge tolls. That was for the year 1964.
In summary, it is the position of this company that competition subsidized by public taxes-a portion of which we in private enterprise must contribute—would jeopardize the future of the bus industry, regardless of the area in which this type of competition may be