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heaviest day, it wasn't the lightest day. It was just another day in a steady flow of mail I have received from my constituents.

By no stretch of the imagination are my constituents indifferent. They want the railroad and they make no bones about it.


I appreciate the opportunity to express my concern to this committee about the reported threat of the termination of commuter service in the Boston area by the New York, New Haven & Hartford Railroad. Although I am fully aware of the serious, even desperate plight of this railroad today, I wish to state my unequivocal conviction that it would be the utmost folly to allow commuter service to Boston by this railroad to be abandoned. On the contrary, there is growing evidence that there is a need for improved and expanded commuter service in the Boston metropolitan area.

We are witnessing, year by year, the growing strangulation of the central city of Boston by ceaseless influx of more and more automobiles. Of all American cities, Boston is second only to Los Angeles in its per capita use of private automobiles, this despite its excellent subways and other means of mass transit. Vehicle traffic over the highways increased at double the national rate during the decade of the 1950's. This traffic congestion has been a major factor in downtown Boston's losing 15,000 jobs and over $20 million in retail sales since the end of World War II.

At the same time railroad's volume of traffic has been declining steadily, so that in 1962 the railroads carried into Boston only about 20,000 persons a day, compared to 80,000 a day in 1949. But the capacity for increased traffic is there. In fact, Boston's suburban commuter railroad mileage is second only to New York's. The trend can and must be reversed.

Anyone familiar with Boston knows about the growing seriousness of its traffic jams. Traffic is chaotic at many points, but at none more so than around South Station. If the New Haven trains now coming into South Station are discontinued, this congestion will be incalculably increased. Even more serious in the long run, businesses in the central city will be more and more handicapped in comparison to those in the suburban areas which have developed in large measure as a result of the use and adaptability of the motor vehicle to the needs of suburbia. But the needs of a central city, the focus of commerce and industry, of retailing and of cultural and educational institutions, are not identical with those of suburbia. Commuter traffic and efficient movement of large numbers of persons in a relatively compact area require public transit and rail facilities. Boston is fortunate in having a wide network of railroads that can serve as the skeleton for a vastly improved commuter system. Such a system requires initiative, resourcefulness, and ingenuity, and a dedication to the preservation and growth of the central city. And it can be done. But not if the most basic step toward the achievement of this goal is allowed to come to an end. If we now permit a railroad to abandon its commuter service, we may all too soon reach the point where the city will not be able to recover, where it will lose out to its own suburban statellites and to other metropolises which have had the foresight to develop efficient commuter systems that preserve their downtown centers with all of their economic and civic values.

I do not claim that the solution to this problem will be easy, painless, or costless. But the sooner we arrive at a solution, the sounder will be the development of our major cities and the better will they be able to contribute to the welfare of our people and the growth of our Nation. Closing down commuter service around Boston will inevitably hurt downtown Boston and create hardships for thousands upon thousands of persons, not only those who commute on the railroad, but those who depend, directly and indirectly, on their trade. We must not permit this to happen. Thank you for permitting me to present my views.


My name is Endicott Peabody and I live in Cambridge, Mass. I am the former Governor of the Commonwealth of Massachusetts, serving during the years 1963-64. During this period of time, I was compelled to devote a great deal of

my attention to the problems of commuter and passenger transportation in Massachusetts. Like many others, I feel it is vital to obtain a solution to the problem of transportation of freight and passengers on the New Haven Railroad. failure to do so will have a disastrous economic effect on the whole of New York and New England.

I was impressed by Senator Pastore's statement at the outset of the hearings when he emphasized that unless supporters of continued passenger service on the New Haven Railroad could agree on a solution, it would be next to impossible to get a bill through the Congress in time to solve the problem.

Unfortunately, the hearings to date, far from crystalizing sentiment, have brought out many diverse views capped by Under Secretary Martin's discouraging statement that the Commerce Department cannot support any bills which provide for Federal participation. This statement of the Under Secretary is in absolute conflict with the message of the Department to me as Governor of Massachusetts in the spring of 1964. It was very clearly stated that if we, the States, took the initiative in solving the commuter problem on our railroads, that we could count on the Federal Government to take the initiative to solve the intercity passenger problem between the States. It has kept this commitment right up through the President's message to the Congress on March 4, 1965, on the northeast corridor transportation project. To reverse Federal policy at this juncture will bring about an absolute breakdown in operations and make it impossible to consider this important corridor project.

A new approach is in order to pose the whole problem in such context that out of it we can obtain a solution.

1. The subject of intercity passenger transportation must be kept separate from commuter transportation on the one hand and freight transportation on the other. 2. In Massachusetts we have made a strong step forward by the passage of chapter 563 of the acts of 1964 whereby the State underwrites commuter transportation including commutation by rail for an entire metropolitan area. The New York commuter problem, which is made more difficult because it involves three States, can be solved in the same manner. Recent recommendations indicate a movement along these lines.

3. The freight transportation problem can be solved at the time of the proposed Penn-Central merger whereby the freight operations along the New Haven Railroad would be taken over and operated by the newly merged entity.

4. There remains the problem of intercity passenger transportation on the New Haven Railroad which suffers from

(a) A big operating deficit; and

(b) Equipment which is outmoded and antique, the cost of which booms the operating costs.

5. The Federal Government has contributed to the increasing deficit of the New Haven Railroad through the generous capital contribution in the construction of interstate highways and subsidies for the operation of airports and airlines. We are suffering from the failure of the Federal Government to have an integrated policy on transportation as a whole whether by rail, by road, or by air. This is very much needed at the present time.

6. Because of the heavy loans made to the New Haven Railroad under the Defense Production Act, 14 milion of which are in default, it should be recognized that the Federal Government has obtained a priority position amongst the creditors sufficient to enable it to take over a large part of the property in the present bankruptcy. This would be extremely helpful in setting up the Federal Authority.


A Federal authority should be created to operate the intercity passenger system of the New Haven Railroad along the same lines that the Comonwealth of Massachusetts on the State level has set up an authority to operate commuter transportation. Capital contributions should be made by the Federal Government at least on a 90-10 basis, and it should share a substantial portion of the operating deficit until such time as the northeast corridor project becomes an operating fact.

The following arguments can be made on behalf of such a proposal:

1. The Federal Authority need not itself operate the system. It could hire the Penn-Central which would simultaneously be operating the freight system on its own to carry the passenger.

2. The Nation has just as much interest in the maintenance of railroads, private or public, if necessary, as it does in the maintenance of public roads.

The breakdown and termination of passenger and freight service on the New Haven Railroad will have a deleterious if not a destructive effect upon passenger service and freight service, particularly across the Nation. The New Haven Railroad originates or terminates an extraordinary amount of railroad freight. 3. The Federal Government has in the past provided a Tennessee Valley Authority to benefit one region of the country and has just recently passed an Appalachia bill to benefit another region. While this proposal benefits, at this time, one particular railroad, it is not regional in nature; it attempts to provide a policy which can be applied wherever and whenever private railroads break down and it is in the public interest to maintain them. Failure to act on this problem now will so disrupt the economic welfare of the region that subsequently a more expensive and less beneficial proposal may be necessary to resurrect the system.

4. Since commuter lines for the most part are separate from passenger and freight lines on the rights-of-way, it would easily be possible to operate this passenger system in conjunction with the freight system and alongside the commuter system.

I attach hereto and include as a part of this proposal: (1) an analysis of mass-transportation legislation in Massachusetts by the Massachusetts Taxpayers Association which will be a helpful analogy in setting up the Federal Authority and (2) a copy of chapter 563 of the acts of 1964 providing a masstransportation program for the Commonwealth of Massachusetts.


The only feasible solution to the New Haven Railroad problem is for a Federal Authority to be created. The problem is a difficult one because it has not been done before. But the Congress has tackled problems like these before and found solutions. I am sure it can do so now.


Mr. Chairman, and other Senators who are members of the Senate Committee on Commerce, railroad labor throughout the entire Nation has read with great interest the reports in the press concerning the testimony currently being presented before the Senate Committee on Commerce as part of its hearings which began March 2, 1965 into the Northeast passenger railroad crisis. We congratulate the committee for undertaking this investigation which is focusing attention upon one aspect of the critical crisis in transportation which presently confronts the American people. While we believe that the roots of the crisis are much deeper than just the problems of the passenger train deficit of one railroad or one section of the Nation; we, nevertheless, are pleased to see that this committee is directing its attention to an aspect of the transportation situation which for several years now we have been trying to convince Congress has needed attention. In our view, any legislation which comes out of these hearings must, because of the critical situation of the New Haven Railroad at the present time, be emergency legislation designed to meet the peculiar problems needing immediate solution, but we, nevertheless, are hopeful that, as a result of this investigation, that committee will realize that further attention is required to the passenger train situation in the Nation as a whole, and that other hearings, and broader legislation than we can expect from the present investigation, will also result in this session of the Congress.

I cannot stress too strongly that the Railway Labor Executives' Association, which speaks for substantially all of railroad labor in this country, has been warning Congress for several years that a passenger train crisis was developing and that a legislative remedy is needed. Even before the enactment of the Transportation Act of 1958, we warned Congress that the provision of that legislation which later became section 13a of the Interstate Commerce Act was unsound, discriminatory in favor of the railroads against the public interest, and could not solve the passenger train problem. Moreover, in every session of Congress since the 1958 legislation became law, we have urged the repeal or amendment of that section as being essential to save passenger train service in this Nation. We believe that the present crisis which exists in passenger train service in the Northeast is convincing evidence that our position has been right, and we urge the committee to hold immediate hearings and to enact legislation

such as S. 1394, introduced by Senator Hartke, to protect the public interest in this area of transportation. Unless this is done, it is our firm belief that railroad passenger service crises similar to the one you are now holding hearings on will soon be developing in other sections of the country and ultimately will encompass the Nation as a whole.

The fact is that section 13a of the Interstate Commerce Act, which permits railroads to discontinue passenger train service on their initiative and without adequate safeguards for the public's needs, is contrary to other objectives which Congress expressed by enacting the legislation to aid mass transit. In section 13a, Congress said, in effect, that it doesn't care about the public interest in preserving rail passenger transportation in this country, yet in enacting the mass transit legislation it clearly adopted the basic principle that proper use of passenger rail transportation is essential to the Nation's long-range needs. Moreover, President Johnson only a few days ago proposed to Congress a new program of research and development aimed at establishing passenger train service at speeds of over 100 miles an hour between Boston and Washington-the so-called Northeast corridor-as a needed step forward in intercity ground transport. The Urban Mass Transportation Act of 1964 provides authorizations for loans and Federal grants totaling $375 million to be made available to States and local public bodies for capital investments in facilities of rapid transportation services. Railroad labor strongly supported this legislation, although we do not believe that it goes far enough. The limited emergency provisions of this legislation obviously are inadequate for dealing with a crisis like the one confronting the New Haven Railroad, which has been in bankruptcy since 1961, and now threatens to discontinue all of its passenger train operations which are alleged to have been a major factor in its having had an annual deficit since 1958.

Yet the vision of the future which Congress had in enacting the mass transportation bill last year, and which is the basis of President Johnson's current proposal, may well become impossible of realization if the present service of the New Haven is allowed to be discontinued sometime before the end of this year. What is needed now is an interim, emergency program of direct Federal aid to passenger carrying railroads which will preserve this service at least until the planning and development program envisioned by the Mass Transportation Act and the President become fully effective. We agree completely with Senator Pell and others who have already told this committee that it would be a deplorable frustration of national policy if the New Haven's intercity passenger and commuter service were allowed to expire virtually on the eve of the new period of railroad passenger experimentation and development which is certain to have such a bearing on the course of future transportation policy. For this reason, we feel very strongly that the Congress must enact at this session of Congress some form of immediate Federal assistance until long-range programs can be developed and put into effect, even though we also believe that the ultimate solution to the commuter and passenger railroad problem eventually must be dealt with on both a regional and national basis.

In considering the legislation before it, we urge the committee to keep constantly in mind the warning it has been given during these hearings by the chairman of the Interstate Commerce Commission that "cessation of all passenger operations by the New Haven Railroad in 1965 is a distinct possibility." To allow this to happen would bring about a disaster in terms of economic losses far greater than any Federal subsidy proposed by the pending bills. Moreover, it undoubtedly would have adverse effects upon other railroads, for the so-called feeder value of passenger traffic from a railroad as large as the New Haven is not inconsiderable. In addition, the demise of the New Haven passenger service would bring about further traffic congestion on our highways which also would take many more hundreds of millions of dollars to cure than would be needed in any subsidy program designed to save its passenger operations.

Railroad labor is fully aware that there are Members of Congress who are opposed to programs of Federal subsidies in principle. We recognize that reasonable arguments can be advanced against the initiation of new programs of subsidies. In the present situation, however, we do not believe that such arguments can be justified. While it is true that, in recent years, the Federal Government has not tackled the problem of meeting operating costs of passengercarrying railroads, it also is true that Congress has had a very direct hand in creating this problem as the result of the subsidies it has authorized for competing forms of transport. Subsidies to encourage the development of new forms of carriage have, in fact, been an integral part of the history of transportation in this country, and the railroads, in the early days, received their share in the

form of land grants and other benefits. More recently, the Federal subsidies to motor carriers in the form of the great highway program, and to airlines and water carriers, while the railroads were receiving comparatively little Federal help, have resulted in lower railroad earnings. This has been particularly true in the case of the New Haven, the route of which parallels Government-built highways and subsidized water carriers. A subsidy to needy railroads-particularly when their plight has been in large part brought about by actions of the Congress in subsidizing their competitors-therefore would seem to be essential if justice and fair treatment in our transportation policies ever is to prevail.

Railroad labor has much sympathy for Senator Pell's bill, S. 348, which would set up a four-State public authority to permanently run the New Haven Railroad. We favor the regional approach based upon a partnership among the States affected with assistance from the Federal Government. However, before this approach could be put into operation, the New Haven's passenger train operations might well be abandoned. What is needed right now is direct Federal assistance, while more permanent programs and policies are being worked out. For this reason, we favor S. 325, introduced by Senator Ribicoff, which would aid any railroad suffering an undue burden from its passenger and commuter operations through direct Federal assistance. Such aid would be granted when the railroad had demonstrated to the Interstate Commerce Commission that (1) the continuance of passenger train operations specified in the application is required by the present or future public convenience and necessity, and that (2) the granting of aid requested is necessary to carry out effectively the public convenience and necessity. S. 325 would also authorize the Interstate Commerce Commission to grant funds to a qualifying railroad applicant to assist in the acquisition and modernization of passenger cars. We believe that this is a good feature, because any realistic attempt to deal with the problems of passenger railroads must take into account the present generally deteriorated condition of the passenger car fleet. We agree with Senator Ribicoff that operating subsidies are not enough, and that some provision must be made for funds to modernize and replace the many passenger cars which are now outdated, uncomfortable, and even unsafe.

The requirement of this legislation for matching grants from the States seems to us to be desirable-provided that it does not delay aid too long. For this reason, it may well be necessary for the committee to consider, perhaps as a shortrun approach for meeting the problem in the first year, the proposal by Senator Dodd in his bill, S. 1289, for direct Federal grants without matching provisions. As a short-term approach, if it is absolutely necessary to save the New Haven's passenger operations, we see nothing wrong with Senator Dodd's proposal and would favor it if the circumstances, in the judgment of the committee after its investigations, make such direct and unmatched subsidy essential to the survival of this service. In the long run, however, we believe that any Federal program to ameliorate the railroad passenger train problem should also encourage assistance by State and local governments. Nevertheless, we feel that it is imperative to the interests of the Nation that the Federal Government provide whatever assistance is necessary to insure that vitally needed passenger train service is continued until such time as long-term solutions can be found.

One thing which disturbs us about S. 325 is that the initiative for seeking Federal grants rests with the railroads rather than with the using public. It has been our experience that too many railroad managements today simply do not want to continue passenger train operations, and this has been underscored by the fact that, under section 13a of the Interstate Commerce Act, railroads have even sought permission to drop prominent, well-patronized passenger trains on which they were admittedly making a profit. The fact is that the first Federal court which considered this legislation found that section 13a is not only a direct delegation of authority to the railroad industry to discontinue interstate passenger service, but that it also is an "invitation" to the railroads to abandon it. Because it lacks any safeguard to protect the quality of passenger train service provided, the statute has served as an inducement for management to deliberately downgrade the service it provides to justify subsquent abandonment. A continuing and consistent process of deterioration in the quality of most passenger train service has followed the enactment of section 13a. For this reason, we believe that any legislation in aid of passenger train service should contain specific safeguards to insure the continuation of that service insofar as reasonably possible. For example, in S. 325 we believe that section 606 should be amended to include a provision to the effect that in cases arisi

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