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But I do think that it does serve as a guideline to some considerable extent, particularly with regard to commuter transportation problems. But with regard to your question, I would reserve judgment
Mr. PELL. I agree, you don't have the value of having heard the ideas in the morning.
Senator PASTORE. Thank you, Mr. Kennedy, Senator KENNEDY. I appreciate your kindness and attention, Mr. Chairman, and apologize for keeping this chairman and this committee a few minutes ago. Thank you.
Senator PASTORE. Congressman Reid, we are privileged and honored to have you here today and we look forward to your thoughts and ideas on this important legislation, and you are at liberty to proceed in any way you like. STATEMENT OF HON. OGDEN R. REID, REPRESENTATIVE OF THE
26TH DISTRICT, STATE OF NEW YORK Mr. Reid. Thank you very much, Mr. Chairman. It is a distinct privilege to have the opportunity of testifying before you and your committee, and I do wish to thank you most warmly for the opportunity.
Senator Javits, I believe, has preceded me and discussed in some detail the joint bill that we have introduced, S. 1234, in the Senate, and the companion measure, H.R. 5308, in the House.
I will try not to duplicate what Senator Javits has said, both in his prepared statement and I believe in his subsequent discussion before the committee.
I will, however, with your permission, try and touch on a few highlights as I see the situation.
First, with regard to the New Haven Railroad, it seems clear to me that there is an emergency and critical need for immediate cash. The trustees have made abundantly plain that their cash reserves may be on the order of $4 to $5 million by July of this year, and it could be a figure lower than that should the railroad be affected by a severe snowstorm or an unsuspected strike.
Equally it is clear, I think, from the actions of the court that the court might, under certain circumstances, feel that it would have to take action to curtail or discontinue passenger service on the grounds of protecting the existing assets for the creditors of the bankrupt railroad.
Now, this could happen, I am reliably informed, even though the matter might be pending before the ICC. I would sincerely hope it would not occur, but I wish to mention it before this committee merely to underscore the criticality of the present situation.
The second point I would like to mention beyond that of the cash and the potential action of the court, is what would happen, Mr. Chairman, should the service be severely curtailed or discontinued.
An estimate of the American Transit Association published by General Electric in 1954, and somewhat updated, indicates that should the four tracks of the New Haven be eliminated, it would require something on the order of 80 separate highway lanes to make up the difference.
This is based on a study of what can transpire in any given highway lane and with cars going at the rate of 33 to 35 miles an hour, a highway lane can take care of, roughly, I am told by this study, 2,000 people per lane per hour, whereas a railroad can handle 40,000 people per hour per track, or a rapid transit system, as many as 68,000 people.
The only point in mentioning this is to underscore that should anything happen to the trackage and the service of the New Haven, the costs in terms of replacing the tracks with highways would be virtually prohibitive, and, therefore, it seems to be particularly pertinent and urgent that the Federal Government and the States do those things that will help insure the continuance of the service and its modernization.
The bill that Senator Javits and I have introduced tries to deal with both the short-run problem and the long-range problem. In the immediate future, we have proposed a bistate agency that could deal with the criticality of the cash situation with the Federal Government putting up approximately a third of subsidy funds and each of the States a third to deal with the deficit situation and the cash situation.
Equally, this bistate authority could underwrite bonds up to the amount of $500 million and the States or the Federal Government could underwrite the sale of these bonds.
Senator PASTORE. May I interrupt you for a question at this point, Mr. Congressman?
Mr. Reid. Yes, sir, Mr. Chairman.
Senator PASTORE. What would the third be predicated upon? What would be the formula, a third of the deficit, or a third of a contract figure?
Mr. REID. There is a precise formula in the bill, but it is essentially a deficit that would occur based on the formula in the bill and presuming there was effective and good management and sound operation of the railroad, it would be that amount not covered by incoming expenses.
Just how you would allocate depreciation and other amounts, I would think is a matter for the committee to consider in its wisdom. But the idea in back
Senator PASTORE. I realize that, but I would hope that we would get some assistance from the people who are sponsoring this legislation. You are saying that time is of the essence, and let's face it, Mr. Reid, you are very much interested in this problem and so am I.
This meeting was very highly heralded and I am here alone, and it is pretty hard to get a whole body of 435 Congressmen and 100 Senators, sometimes, interested in a problem that is not too parochial to them.
And you are saying that time is of the essence and I quite agree with you. We have had a divergence of point of view, even by people who are interested in the problem
and represent that particular area of the country, and the thing that I tried to explore with Mr. Javits, and I would like to explore it further with you is, in your opinion, is it possible to bring about an agreement that would just cover, even on your bistate arrangement, would it be possible to bring about an agreement whereby you could segregate, from the whole line the commuter sery
ice which runs west of New Haven to New York, without somehow affecting the whole complex of the railroad, and how would you segre
What formula would apply and what responsibility would you leave, let's say, to Rhode Island and to Massachusetts after you have straightened out your element of it, and at what juncture would they come in?
Now, these are very sensitive questions, that once you get down to the floor of the Senate you have to answer it. If I am the manager of the bill, and in all probability I will be, if it ever gets down there, because I don't think anybody else wants to, the question is, when it is thrown at me, What do I answer?
Mr. REID. Let me, Senator, try and be responsive to that question, which I think is extremely pertinent.
First, I would hope that the merger proceedings between the Pennsylvania and the New York Central would be considered sound and in the public interest and that the ICC, subject to procedures of quasijudicial agency, would act as promptly as possible.
And if that merger is approved, I hope that it would include the New Haven, that is to say, the New Haven freight service and, in addition, the long-haul passenger service. Whether it will include the commuter service seems to be an open question.
But assuming for the moment that it included the passenger service, then, presumably, the commuter service would be, at least, as regards the west end commuters service, which is the term the New Haven uses, that would be from New Haven on into New York.
The thought here is that at some point it is possible, and there have been umpteen different studies, and I must say much disagreement, as to what could be allocated to commuter service, what can be allocated to ground rents, what is properly charged to the overall passenger revenues of the railroad.
I frankly think there has been a little too much concern about how you allocate all of this. I think the problem now is to meet it, to try and find a way that will be simple, that will represent taking care of that portion that is not included in the merger.
I don't think one can be entirely precise as, there are several reports, all differ as to these allocations, and different people talking about the subject in which all have had their interpretations of the several reports.
Senator PASTORE. I would hope, because I understand there are certain representatives here of the trustees—I would hope that when the trustees testify tomorrow, they will touch upon this point. I think this is quite important because just as you say it is not precise, and anything we might do here would be subject to controversy. Unless we get some kind of agreement, it will be that much more difficult.
I do hope that some arrangement can be worked out.
Mr. REID. I concur wholeheartedly and I would hope it could be a formula that railroads, ICC, and several estates would agree what is equitable and fair. I don't think that should be too difficult, but it hasn't occurred up until now.
Senator PASTORE. Do I understand from your testimony that you think that much of the reason for the deficit in the passenger service is commuter service?
Mr. Reid. I think there is a portion properly allocatable to commuter service and another portion to the passenger service, and obviously a substantial amount to the freight service and the overall need for the New Haven to be included in a system with access to broader markets, the Midwest, Mid-Atlantic States. But when you get into dividing what are these ground rents at Grand Central Terminal and how much of these rents to apply to long-haul passenger versus the commuter, there seems to be a constant difference of opinion. But there is some equitable division and it shouldn't be difficult to reach a fair formula.
Senator PASTORE. Thank you very much for your contribution in that respect.
Mr. REID. To get back to the bill, in any event I would hope that the Federal Government would recognize some responsibility in this area to help the commuter railroads and, indeed, railroads in general. There is no question but what the Federal Government in the past has subsidized airlines, shipping, trucks, various other forms of transportation. I think the late President Kennedy's message calling for equality of opportunity among the several elements of transportation and somewhat less regulation and more free competition, hit the nail pretty much on the head.
I think it is only fair to say that this particular railroad was certainly hurt by the thruway going throughout New England. It has been unable to work out a prompt merger and all of this has hurt its business and its opportunity. But I do not feel that because of this the public interest or the interest of national defense or commerce of the United States should be seriously hurt because of it.
So I hope that your committee, and in the consideration of several bills, could define, as clearly as possible, what the Federal interest and Federal responsibility is in the field.
I would emphasize that the subsidy we are talking about here would be just a 2-year subsidy. It would be a short-range one until the New Haven and some of the elements pertaining thereto could hopefully reach a safe harbor.
But there is no question in my mind that the Federal Government has some responsibility and so do the States, and I have been one of those that have urged the State of New York, as well as Westchester County, and other relevant States—Connecticut—to step up and assume a fair and equitable share of some of these costs. I believe New York is now moving in that direction, both with regard to a program for replacing the rolling stock, overhaul of existing stock, and in a new plan that Governor Rockefeller and Governor Dempsey have proposed in the creation of a metropolitan commuter authority which I think, if it proceeds, would be in a position to contract for the commuter services initially with the New Haven's trustees and subsequently with the Pennsylvania and New York Central, but to continue the commuter service on some appropriate contract or fee basis.
I would hope that in the longer range, in the modernization and, indeed, perhaps in some of the cash requirements, the Federal Government could do that which is necessary to insure its continuance.
What we are talking about, it seems to me, is something that is vital.
As you know, Senator Pastore, much better than I, vital to all of New England, if anything happened to this railroad, it would seriously affect the commuters going into New York City, Westchester County, and indeed all business in New England, and I think it is unthinkable for the Federal Government or the States to allow this to happen. And we are extremely grateful for your committee to permit us to talk briefly on the point, to try to underscore the urgency, express the hope that our bill and other bills trying to meet this will be given careful consideraion and that Congress can play its proper role in seeing that this railroad is saved and that the efforts will move along collateral with those of the ICC, the merger and ultimately, perhaps a four or larger State compact which might deal with monorail or high-speed modernization of the line.
I think the public interest is at stake and I think the businesses of New England are at stake, and I think, frankly, and in its simplest terms, this is a case where Government and the States and private enterprise, the railroads, have a responsibility to act and I am sure that your committee can exercise significant leadership in helping this come about.
Senator PASTORE. Thank you very much, Mr. Reid, for the fine contribution you have made to these hearings.
Mr. REID. Thank you very much, Mr. Chairman.
Mr. Irwin, we are privileged and honored to have you here today, and we look forward to your ideas and thoughts on this important problem of the New Haven and the bills that are pending before us.
You may proceed in any way you like.
STATEMENT OF REPRESENTATIVE DONALD J. IRWIN, FROM THE
STATE OF CONNECTICUT
Mr. Irwin. I would like to read a statement and then, if there are some questions, I would like to address myself to them.
Mr. Chairman, I come before this committee as the representative of a district that consists of the lower half of Fairfield County, Conn., which probably would be the heaviest loser if the New Haven Railroad were to suspend commuter service.
The loss of commuter rail service would do more than force 14,000 people in Fairfield County to look for another way of getting to work. It would deal a devastating blow to the county's economy. It would depress property values. It would lead to stagnation. It would force many people to relocate elsewhere. It would mean additional thousands of cars during the rush hours jamming the already-crowded traffic arteries into New York City. And it would mean added congestion and countless problems for New York City when those cars finally got there. But I won't bore you with a recitation of the grim consequences, which by now are well known to you.
I come before this committee as one who has worked long and hard on the New Haven's problems. To say that the present situation is critical, however, is an understatement. It was critical 5 years ago when I introduced the bill that was the prototype of last year's mass transit legislation.
Now that the maladies of the New Haven can be easily diagnosed, we face another danger—the danger of too many plans heading in too many different directions.
The problems of the New Haven and of commuter railroads generally will not be solved by elaborate schemes. The answer right now