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Senator Berking, accordingly, is making a very real effort, as part of the effort being made in New York State, to do something about the New Haven.

At this stage he has introduced a bill together with a member from the other party in the other house, which would set up an agency similar to the Connecticut Transportation Authority, to join with that authority in trying to work out a solution for the New Haven.

Of course, like most people at the State level, he is hopeful of meaningful participation by the Federal Government in the fiscal way involved, which would support the purposes of the bills introduced by Senator Ribicoff and Senator Dodd. However, I am not clear on this particular matter. It is quite conceivable that somewhere along the line we may come, particularly if we have to create an agency that can provide operations, alternatively, to provide operations by railroad, that we will have to use an interstate agency set up by an agency like the Interstate Commerce Commission.

Therefore, we are somewhat upset about the Javits bill, and it is to that bill that we wish to testify.

Senator PASTORE. Professor, I understand you are an authority on compacts.

Professor ZIMMERMANN. I am away from home, sir.

Senator PASTORE. You touched upon the point, and that point is well taken.

It is true that ordinarily compacts are worked out by the States in advance, and then given to the Congress for ratification.

But here there is an obligation on the part of the Federal Government, under the Javits bill to put up two-thirds and on the part of the States to put up one-third.

Professor ZIMMERMANN. It is the other way around.

Senator PASTORE. One-third Federal Government and two-thirds States; that is correct.

Professor ZIMMERMANN. Yes, sir.

Senator PASTORE. Don't you feel that under those circumstances the Federal Government itself would be justified in setting the guidelines of the compact.

I realize this is not the ordinary procedure. I guess that is the reason for it.

Now, you wouldn't expect the State of Connecticut, the State of New York, to have their own agreement, and then come up to the Federal Government and say, "This is it, and ratify it or don't ratify it. You are being obligated to pay one-third of the tab."

There is a distinction to be made there.

Professor ZIMMERMANN. I don't agree, sir. The Delaware compact was entered into by four States, New York, New Jersey, Pennsylvania and Maryland.

Senator PASTORE. And Delaware.

Professor ZIMMERMANN. And Delaware. The Federal Government, in that case, came in as a party to the compact. This is one real classic case of its kind. Here the Federal Government is contributing


And, if the Federal Government felt that this proposal was a fourState compact, to which the Federal Government was a party, I would say this had some merit and was logical.

But giving it to the States, and saying, "We dictated your agreement," I think that this not only is bad from an administrative and legislative point of view, but unnecessary. The Federal Government could always withhold the money, or use the money as some sort of a sanction.

Senator PASTORE. And the States don't have to agree either. You can use that point.

Professor ZIMMERMANN. The States don't have to agree.


PASTORE. They don't have to agree. They don't have to put up the two-thirds.

I am not questioning the fact, but you are stating what the ordinary procedure is, and that is the common thing. It has always been done that way.

That question was raised by our committee here yesterday. I am merely saying that was the reason why, I think, it was done this way by Mr. Javits, who is a good lawyer. In fact, Senator Pell did the same thing, more or less, in his bill.

Now, this is a variation from the ordinary procedure, because it is just as you say, the States ordinarily enter into a compact and present it to the Congress for consent.

I have explained the reason why I believe Mr. Javits adopted his approach. And I think that Mr. Javits pretty much was in consultation with his Governor's office before this bill was finally submitted.

Professor ZIMMERMANN. This, of course, I can't tell.

Senator PASTORE. There is no question about that. How much Governor Dempsey was involved in it, I don't know.

But Governor Dempsey, I think, endorsed the Ribicoff bill, although he did not express any opposition to the Javits bill.

I am not trying to make an argument out of this. I am merely explaining this may be the reason why Mr. Javits did it that way.

I will grant you, it does not give the States much latitude. They have to work, within that framework.

I think this is the reason.

Professor ZIMMERMANN. Yes, Senator; I submit that it would be a completely new departure. However, this is a precedent that we never had before.

Senator PASTORE. There have been one or two other cases, but it has been rather rare.

Professor ZIMMERMANN. Never in any absolute terms as this.

And the thing is, that I worry about, in workability, the fact that there is no room for the States to do the job which they are trying to do.

You are talking about States' authority. There are other things that can be improved about the bill. There are other comments that can be made about the bill. And I think the same thing is true, in my experience, in drafting many interstate compacts.

When the Federal Government grants consent, in advance, which is what the Javits bill is supposed to be doing, when it grants consent in advance, if it attaches conditions, we sometimes have difficulty.

If we make the compact with the Federal Government, the Federal Government has just as much range of freedom, but when it does, this involves-it kills the chances of negotiation.

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

Senator PASTORE. I don't want you to be swinging in a paper bag. 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.

(The statement by Fred Zimmermann follows:)


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

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