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Senator LAUSCHE. And under that program, how much do you understand was made available?

Mr. MARTIN. Thirty-five million.

Senator LAUSCHE. Thirty-five million?

Mr. MARTIN. Under provisions of title V of the act in the periods between 1958 and 1961.

Senator LAUSCHE. And that is, you have, then, $13 million out of the Defense Production Act, $35 million out of the 1958 act. How much has been made available to this New Haven-Hartford Railroad under the Mass Transportation Act?

Mr. MARTIN. I don't think anything has as yet, Senator Lausche. They have not qualified for any assistance under that.

Senator LAUSCHE. Mr. Kohl, can you tell?

Mr. KOHL. Nothing.

Senator LAUSCHE. This aid began in 1954 and it has run down to 1964, and the condition of the railroad has grown worse all the time. Is that correct?

Mr. MARTIN. That is correct, sir.

Senator LAUSCHE. What do you attribute the failure primarily to, Mr. Martin?

Mr. MARTIN. Well, it is a combination of several things, Senator Lausche. I think that it is a product of gross mismanagement. It is a continuation of large passenger deficits, particularly on the commuter services. The commuter service, mainly, in and out of the city of New York, we believe, is responsible for approximately $6 million a year in continuing loss, approximately a million dollars in and out of the city of Boston. Their freight revenues have declined substantially, which is probably the product of competition, and your motor competition. There has been a decline in the overall freight revenues.

Senator LAUSCHE. Right. How long back have these omens appeared about this railroad being incapable of surviving in the face of the way things were moving? Approximately when did the signs appear that it could not survive?

Mr. MARTIN. Well, they came for the loans in 1954 and 1955. I would say then.

Senator LAUSCHE. And then it became conspicuous in 1958 when they came in and got the guaranteed loans under the 1958 act? Mr. MARTIN. Correct, sir, and it became most

Senator LAUSCHE. What have the States done since that time to give. recognition to this fact without first coming to the Federal Government? I think you have answered that, but you have said that they have not done everything that they could do. Will you identify what, in your judgment, the States should have done and could do without coming to the Federal Government for gifts?

Mr. MARTIN. Well, they could have established an authority or a compact in the States of-take the instant problem, the commuter deficit in and out of New York. It could have been an authority set up between Connecticut and New York, either the State and local contribution, local participation to finance this chronic passenger deficit, commuter deficit. That is the one that that is putting them under now. That is what has brought the problem to a head. They are applying to withdraw those services. They can no longer sustain them.

Senator LAUSCHE. Let us get to the subject of tax relief. If the

problem began in 1954-and it is my understanding that there was no thought of giving tax relief until about 4 or 5 years ago. And even now there hasn't been full tax relief given locally and statewise except in Connecticut.

Mr. MARTIN. That is correct.

Senator PASTORE. And Rhode Island.

Mr. MARTIN. And Rhode Island.

Senator LAUSCHE. Is that correct?

Mr. MARTIN. That is correct, sir. I think the State of New York gave some tax relief, and then it was subsequently withdrawn. It was conditioned upon certain guarantees of service.

Senator LAUSCHE. Yes, and Massachusetts gave tax relief but attached a condition to it that the relief would not be available unless the working personnel was maintained and if there was anybody to be laid off it had to be done through authority granted by a court. Is that correct?

Mr. MARTIN. That is correct, sir. The tax relief given in Massachusetts was meaningless

Senator LAUSCHE. Will you reidentify the four agencies that met and discussed what the Federal Government's position ought to be?

Mr. MARTIN. Department of Justice, Department of the Treasury, the HHFA, Home and Housing Finance Agency, the Council of Economic Advisers, and the Department of Commerce.

Senator LAUSCHE. That would be five. And the judgment reached was that the Federal Government should not enter into the field of subsidizing this railroad, is that correct?

Mr. MARTIN. That is correct, sir.

Senator LAUSCHE. And does that judgment mean that it is the general concept of the administration that we should not enter into the subsidization of railroads generally?

Mr. MARTIN. The subsidization of their operations? That is correct, sir.

Senator LAUSCHE. In effect, a declaration is made, the United States Government does not deem it advisable and in the interest of the general public and in the interest of the perpetuation of our system of government to begin subsidizing the operation of the railroads. Mr. MARTIN. We don't believe it is sound public policy.

Senator LAUSCHE. Will you make clear in my mind what you said with respect to this statement which you made being attributable to the President or not?

Mr. MARTIN. To the best of my knowledge, sir, Senator Lausche, this problem hasn't been referred directly to the President. I couldn't speak to that.

Senator LAUSCHE. You don't know whether it has or not?

Mr. MARTIN. I do not know.

Senator LAUSCHE. But the Bureau of the Budget has approved? Mr. MARTIN. That is correct, sir.

Senator LAUSCHE. The Council of Economic Advisers has approved?

Mr. MARTIN. Correct, sir.

Senator LAUSCHE. Are the members of the Council appointed by the President?

Mr. MARTIN. Correct, sir.

Senator LAUSCHE. Is the Bureau of the Budget working directly out of the President's office?

Mr. MARTIN. It is the Executive Office of the President, yes, sir.
Senator LAUSCHE. Yes.

Senator PASTORE. Will the Senator yield to a question on the clarification of a point at this moment, Mr. Lausche?

Senator LAUSCHE. Yes, I will.

Senator PASTORE. You say that it has become the policy of the Government not to subsidize any form of operation or deficit in operation, am I correct, in transportation?

Mr. MARTIN. That is correct.

That goes into

Senator PASTORE. Has not the President of the United States suggested an authorization of $150 million for fiscal 1966 under the Urban Transportation Act for demonstration programs? Mr. MARTIN. I am not sure of the exact money. capital improvements and experimental services. Senator PASTORE. Cannot that be used for operation, too? Mr. MARTIN. As far as experiments are concerned. Senator PASTORE. Yes. Now, is that not subsidy? subsidy?

Well, is it not

It is assistance.

Mr. MARTIN. Well, subsidy is a pretty broad term. Senator PASTORE. Well, all right, I will buy that. Senator LAUSCHE. May I pursue that thought a bit? Has the Congress and the administration in the last 3 to 4 years distinguished between what are called experiments and tests as distinguished from the financing of permanent operations and services?

Mr. MARTIN. I think it is very carefully spelled out in the Urban Transportation Act of 1964.

Senator PASTORE. Yes.

Senator LAUSCHE. And in that Urban Transportation Act of 1964, when you appeared here, and Mr. Kohl and others, it was emphasized that we must take tests to see what the results would be through innovations in the rendition of service.

Mr. MARTIN. That is correct, sir.

Senator LAUSCHE. That is correct. And when you speak of providing subsidies from operations, you are not at all speaking about experiments and tests to determine what might subsequently be done by the industry itself, is that correct?

Mr. MARTIN. That is correct, sir.

Senator LAUSCHE. Now, I would like to ask you this: Have you made a study to find out to what extent the cost of services has made difficult the operation of this railroad?

Last week it was testified by the trustee that there are 2 hours of work in the morning, 2 hours of work in the evening, and the remainder of the day is idle, both with respect to personnel and equipment. Have you made a study of that problem as it confronts the railroad? Mr. MARTIN. Well, we are somewhat familiar with it, Senator. We did make a very detailed study on the railroad itself and the property, which I mentioned in my testimony, by Mr. Frederic Whitman, who is president of the Western Pacific Railroad in San Francisco. We were anxious to get somebody to go up and take a look at the property to advise the Government of the condition of the property and its operations who was sufficiently far removed from

the instant scene that he did not have any close relationship with the New Haven Railroad or in the eastern district. And they took a team of professional railroad people, operating men, all phases of operation of the railroad, and were on that property for some 6 weeks to 2 months. We have that report, and I would be happy to make it available to you.

Senator LAUSCHE. I wish you would. Does the workday of a hundred miles prevail on this railroad?

Mr. MARTIN. I could not answer that, Senator Lausche.
Senator LAUSCHE. You know what I am thinking of?

Mr. MARTIN. I understand, but in commuter operations it is obvious you have the main traffic that goes into the terminal in the morning hours when people are going to work and it takes them back out at night, and they would have to have crews for this, and it does present a problem in between times.

Senator LAUSCHE. Could you make available for the record information dealing with what the length of the day is, whether it is by hour or by miles that a full day's work is determined?

Mr. MARTIN. I am not sure that that information is in our report, but I know that the trustees, the operating trustees of the railroad certainly will furnish that information for the record.

(The following information was submitted subsequently for the record :)



New Haven, Conn., March 31, 1965.

U.S. Senator, New Senate Office Building, Washington, D.C.

DEAR SENATOR PASTORE: During the recently concluded Senate Commerce Committee hearings on the economic crisis of railroad passenger service in the Northeast, a question arose regarding the wage and workday schedules on the west end commuter service of the New Haven. I refer to the colloquy between Senator Lausche and Under Secretary Martin at pages 488 and 489 of the March 10, 1965, hearing report.

The inherent pattern of commuter traffic provides two volume peaks at either end of the normal workday with an extended period of low passenger volume commencing at midmorning and lasting until the termination of business hours in late afternoon. Because of the time spread between the two peak periods, it is not possible to service both the morning and evening rush hours within one work shift As the following will illustrate, two crews must be used.

Employees engaged in commutation service are paid on a different basis than those engaged in long-haul service. In the latter case, train crews, consisting of conductors, brakemen, trainmen, flagmen, and ticket collectors are paid on the basis of a 150-mile day, and engine crews, consisting of engineers and firemen, are paid on the basis of a 100-mile day. In commutation service, payment is made on the basis of "short turnaround" conditions. These conditions provide for an individual to work an 8-hour day which commences at the time the man reports for duty. All service in excess of the 8 hours is overtime.

Two qualifications to the "short turnaround" conditions must be noted. In the event an employee is relieved for more than 1 hour during the initial 8-hour day, his overtime period starts with the expiration of a 9-hour period computed from the employee's reporting time. Secondly, engine crews are paid a mileage rate in addition to the basic daily rate with overtime.

The following examples may be used to illustrate the application of the "short turnaround" principles as applied to a hypothetical train crew:

A. A commuter train crew, consisting of a conductor, flagman, and ticket collector, reports at Stamford, Conn., at 7 a.m. The crew makes two round trips between Stamford and Grand Central Terminal, completing the day's work at 4 p.m. with a total elapsed time of 9 hours. During the 9 hours the crew would be relieved for 61 minutes.

Each member of this crew would receive a basic day's wage, at the applicable rate, and no overtime is earned as the employee has not worked in excess of 8 hours within the 9-hour period and a total of 9 hours has not elapsed.

B. The same crew reports at Stamford at 7 a.m. and makes two round trips to Grand Central Station with no layovers at any point in excess of 60 minutes. The crew's final run is completed at 5 p.m.

This crew would receive pay for a basic 8-hour day together with 2 overtime hours, or a total of 10 hours. Had the crew received a relief period in excess of 60 minutes during the day, only 1 hour of overtime would have accumulated.

The above illustrations may be applied also to the engineer. His compensation is based on an 8-hour day with overtime for all service in excess of 8 hours within the 9-hour period or all service in excess of 9 hours. The only additional factor with respect to an engineer's compensation is the inclusion of a mileage component.

Engineers operate with a basic day of 100 miles with all service mileage in excess of this figure compensated for at an established mileage rate. The following example will service to illustrate the case of a hypothetical commuter train engineer:

The engineer reports at Stamford at 7 a.m. and operates two round-trip commuter trains to Grand Central Station. The engineer's day is complete at 4 p.m., with a relief period of 61 minutes during the day, or a total period consisting of 9 hours. The engineer has operated for a total of 140 miles.

The compensation he receives for such a day is the basic daily wage plus payment for the 40 additional miles computed by applying the mileage rate. He receives no overtime as he has not operated in excess of 8 hours within the 9-hour period, or in excess of 9 hours overall.

In the case of each of the illustrations used it is necessary to employ a second crew to operate the commuter train during the late afternoon and early evening rush hours. This crew's work, necessary to service the volume of passengers encountered at the end of the day, requires the New Haven to make compensation based upon the "short turnaround" conditions. The morning crew could not be required to spread its working day over a posible 12- to 14-hour day, or the total period involved with daily commuter transportation.

I am hopeful that these explanations are of aid in answering the queries raised during the committee hearing, and adequately illustrate one of the many problems present in the New Haven's commuter service.



Senator LAUSCHE. Since I have been here in Congress, intermittently on the floor of the Senate and otherwise I have heard arguments about the great success of socialistic operations in the Scandinavian countries. Time and again, especially one of my colleagues, when socialization was mentioned, he would say, "What is wrong with it?" Look at what has been done in Denmark and Sweden and Norway. And even in connection with this hearing last week the statement was made that the Government should take over the New Haven. Now, I would like to read into this record a report by Richard Starnes, who was in Stockholm and made a study of their socialized operations, and I think that the labor leaders connected with the railroad industry who once in a while say, "Let's socialize the railroads," ought to take head of this situation:

Mr. Starnes reports that in Sweden they have a 45-hour workweek, that they have an open shop by governmental order and that 60 percent of the workers are paid on a piecework basis, that the right to strike is matched by management's right to lockouts, that wildcat strikes are forbidden, that disputes must be settled by a labor court from which there is no appeal, that the labor court is made up of two representatives of labor, two of management, and three judges.

Now, the point I wanted to make is that if you are going to have Government subsidies or Government operation, I think it will be inevitable that there will have to be restrictions imposed upon the

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