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ICC is given a definite, positive roll here as to how much it should allocate.
Now, section 605 is the provision which can do what must be done to bring railroads up-to-date. Section 605 would make it possible for the ICC to aid in the acquisition of new passenger cars and put old equipment into condition.
So what I am trying to work out under my bill is to give the ICC the authority and the power to move in on emergency situations, on a short-range basis, to save the railroads until the public authorities come into existence, and then the public authorities with the longrange plan can make their own arrangements and then go to HHFA under the Mass Transportation Act that we passed. In other words, I believe that my bill, S. 325, Mr. Chairman, is the missing gap in the Mass Transportation Act objectives which Congress passed and that the President signed.
Senator PASTORE. But the point that the Senator from Rhode Island makes is this—and I am looking at your bill now under "Definitions" on page 2.
Are you actually saying that this money is to be allocated for the maintenance of these projects that you have talked about and that because the railroad annually has to spend that amount of money anyway for this maintenance, it could use the money that it ordinarily spends, let's say, for payroll purposes?
But under your definitions section 602 on page 2, it reads:
(b) The term "expense" means expenditures for labor, materials, services, and other costs incurred in maintaining, repairing, or renewing road property used in transportation service *
Now, the question that the Senator from Rhode Island is asking, in order to crystallize this, can any of this money under your bill be used for payroll purposes? Let's say for an engineer who has to be given his week's pay, or is this money used exclusively for maintenance?
Senator RIBICOFF. I would say, being very practical, it comes to the same thing. Because you are adding to the amount of money available to the railroad-yes, it could.
Senator PASTORE. I know it is the same thing, but I want to clarify for what purpose the Federal money is being given, the Federal money is being given for maintenance.
Senator RIBICOFF. In order for the railroad to stay in existence. Senator PASTORE. And in order that they might use possibly the money that they would themselves have to use for maintenance for other purposes?
Senator RIBICOFF. They could, Mr. Chairman. Senator PASTORE. That is all I wanted to clear Senator RIBICOFF. Thank you, Mr. Chairman. Senator DOMINICK. Mr. Chairman, could I ask one more question? I don't mean to be unsympathetic, because I am not. I have ridden on the New Haven Railroad on many occasions. I have great sympathy for the commuters who do this regularly.
But, has any exploration been made of what the effect would be on these 25,000 passengers a day that you say go one way and then go back the other way, of simply raising the fare 50 cents a day? This would provide a half million dollars a month, according to a quick
computation. Is this going to reduce the service, or what is this going to do?
Senator RIBICOFF. I would say this: The fares keep going up and up and up.
Senator DOMINICK. And the service down?
Senator RIBICOFF. You reach the point of diminishing returns. The cars are ancient and antiquated, and you could raise the fares so high that you would drive away passengers, thus requiring even higher fares. You would have more and more of them pooling automobiles, hiring taxis or buses, to get into New York. It could lead to the ultimate destruction of the railroad.
Now, let me give you an example-and maybe you understand this, Senator Dominick. I was curious about the money we spend for roads. And the chairman didn't mention one item I would like to mention, because it is fascinating. We are asking $100 million to use for the railroads of the entire country-and perhaps none of it will have to be used. The Department of Agriculture spends $85 million a year on forest roads and trails alone. Now, those are not the forest roads and trails used by hikers going into the woods. That $85 million is used mostly to harvest timber in the Western States-$85 million.
I think it is important to harvest timber; we need timber to build houses and build buildings. But if we can spend $85 million, Mr. Chairman, for forest roads and trails-and that means roads available to harvest timber, I think the Federal Government can put up $100 million to move millions of Americans from the suburbs into the cities, and from the cities back home again.
I think this is important. I think what we have to recognize is this: This country is changing, and transportation is the lifeblood of movement in an urban society. Maybe we wish we could go back to the 19th century, but we can't. We are 35 years away from the 21st century and these problems are not going to diminish; they are going to multiply. We must be realistic. The lifeblood-the money that is being raised to pay the taxes for all of these programs-for forest trails and for agriculture, and Appalachia-is coming out of these regions called New York and Connecticut.
I am proud that the State of Connecticut and the State of New York paid large sums of money to the Federal Government out of their earnings, but I think the time has come to recognize, Mr. Chairman, that we in the Eastern States and the urban areas who pay such large sums of our tax revenues and tax earnings to build up the rest of the sparsely settled area, have a right to expect that the Congress of the United States will also be sympathetic to our problems.
The plea that I make before this committee, and the plea I make to the country is this: The time has come to be realistic. Year in and year out, urban State Senators have made it possible for the West and the South to grow and prosper. And I say to the rest of the Senators who come from these States, that since we have helped you, the time has come to take into consideration the basic economic and social problems that we face in our States. And I think we have a right to expect the western and southern Senators to be sympathetic with the basic urban problems faced by states like Connecticut, New York, Rhode Island, and Massachusetts.
Senator PASTORE. Amen. I say Amen.
Senator LAUSCHE. Senator Ribicoff, President Kennedy, recognizing the plight of the railroads, recommended that user charges be placed against the various competing modes of transportation. He recommended user charges on the inland water carriers. I believe he also recommended a recoupment of the vast sums that are provided as a subsidy to the airlines.
Now my quandary is, if it is wrong to subsidize, as we have the inland water carriers and the implication that we are subsidizing the truckers by the building of these freeways, and the airlines, why should, we expand the wrong by also subsidizing the railroads?
Senator RIBICOFF. The answer is very simple. If you eliminated all the subsidies, then the railroads would have no complaint. But you know and I know that the Congress of the United States is not going to take present subsidies off other modes of transportation and I think it is unfair to penalize the railroads waiting for the day when all subsidies will be limited to one basic part of our society and
Now, we have reached the stage where railroads are some of the most important parts of American life. I don't think American society can continue to grow without mass transportation. I think they are so important and so necessary to our future that until that day comes when they are fully modernized, we ought to preserve what we now have.
I am being as candid as I can with you, Senator Lausche.
Senator LAUSCHE. I thought by the statements that have been made there has at least been an implication that a wrong is being perpetrated upon the railroads, and I think it is a wrong, but do I understand the Senator from Connecticut now to take the position that we should not anticipate that the Congress of the United States will take action to rectify the wrong and eliminate the wrong?
Senator RIBICOFF. The wrong gains by the other means of transportation?
Senator LAUSCHE. Yes, sir; that is if it is wrong to subsidize the airlines and inland water carriers and the truckers, shouldn't we rather remove that wrong by eliminating the subsidy instead of piling up another wrong by granting subsidies to the railroads?
Senator RIBICOFF. Well, having been in the field of Government and politics many years, as the Senator from Ohio has been, my guess is that if you could get 10 votes to eliminate all subsidies in the Senate of the United States, you would be getting a lot. I wouldn't want those 25,000 commuters waiting to be equalized until you were able to get a majority of the Congress of the United States to pass such a measure.
Now, the idea is this. I think that Government and politics is the art of the possible and we are talking about the art of possible. While I realize the philosophy of the Senator from Ohio and I respect it, because you have been consistent in your advocacy of these proposals, yet it is in the faroff future and I don't think it will ever happen. Under these circumstances, what I plead for is that the East and all other urban areas should be given the same treatment as all other segments of society. And since we in the urban areas are paying the
bill for all the other subsidies, don't make us commit suicide with our
Senator LAUSCHE. If you subsidize this railroad about which we have been discussing today, all other railroads that are running in difficulty in the carrying of passengers will be allowed to come in under this law and ask for aid.
Senator RIBICOFF. If a desperate situation arises which means the failure and elimination of a railroad, any railroad, during that interim period while regional authorities are getting together, can apply to the ICC. If the ICC believes that by giving a matching grant under the formula of S. 325 they can save this railroad, they would have this authority under S. 325. If the ICC felt that it would all be useless and nothing could be done in the long range, then the ICC should not grant it.
But what I am saying to you, Senator Lausche, is this: While the New Haven is the reason for this bill, I recognize that this is a nationwide problem. And I have drawn a nationwide bill and this is what I am supporting today. It is also my belief that the approach taken by the Pell bill is a sound and good approach.
Senator LAUSCHE. Senator Ribicoff, may I ask a few more questions, because I will not make any talks. I merely want to elicit information by the asking of questions. You say that this is an emergency with the New Haven. What if the other railroads in the country serve notice that they are going to shut down passenger service and thus create an emergency; will they then come to the Federal Government and say, "Subsidize us in the operation of this system, otherwise we close."
Senator RIBICOFF. Well, the New Haven has had this problem now since 1958. We are here now because the trustees have applied to the court for permission to start cutting down passenger service. The application sets the curtailment date as March 29, and under the law the ICC must hand down a decision within 4 months. I believe when railroad goes into reorganization or bankruptcy it does so on its overall income, its overall picture. Now, some of the railroads losing money on passengers are making large sums of money on the freight and thus can absorb the losses of passenger service. But as your distinguished chairman has pointed out, the New Haven road is now losing money on freight, too. So you have an ultimate situation, one completely closing down.
Now, if any other railroad is in such difficulty in the United States and has as a prospect the States getting together to form an authority to save the railroad and there in 6 months or a year or 2 years, then I would say there would be authority under S. 325 for the ICC to come and provide assistance for an interim period.
Senator LAUSCHE. You speak about an interim period in which the Federal Government would step in to help solve the problem. Do you believe that if we ever stepped in into the interim period that we will ever be able to pull out?
Senator RIBICOFF. Yes, I do.
Senator LAUSCHE. Do you think if we help finance for 2 years, at the end of the third year we could pull out?
Senator RIBICOFF. Yes, because it is my understanding in listening to the chairman's opening statements and to his remarks, that unless the States indicate a willingness and ability to salvage the railroad as
a going concern and to assume a long-range responsibility, no provisions will be made to help salvage a railroad.
Now, I don't look at this as a proposition where the Federal Government handles the whole burden indefinitely.
Senator LAUSCHE. Right. If you believe the Federal Government, having stepped into the interval will subsequently through action of the Congress be able to pull out, why does the Senator from Connecticut take the position that we can't pull out of subsidizing the truckers, the airlines and the waterlines?
Senator RIBICOFF. Because this has been a policy established for many, many years and we have adopted it as a policy and are living by it. You are now considering an entirely new proposal, and with the Senator being on the committee and the other members of the committee, you can write the conditions as you desire them in any legislation that comes out of this committee.
Senator LAUSCHE. Well, I merely wanted to include-I have sympathy for the problem, but I run into an impasse when I contemplate what the end will be. Once you start subsidizing, you will never pull out. The subsidy will grow greater. Every time there is a dispute between labor and management, labor makes the threat that they will ask the Federal Government to take over. Well, the more the Federal Government takes over, the worse the situation will be. Subsidizing is a partial taking over, the beginning in all probability of a constant growth in that control by Government of the railroad system.
I want to point out, as I did on the floor of the Senate last week, in Argentina they are carrying passengers 60 kilometers for 212 cents, Government operation. They, of course, can't do it and run it on a self-sustaining basis. It is Government subsidy.
I don't want this to be construed as my ultimate judgment on what I am going to do on this matter. I will want to hear the whole story before I finally conclude.
That is all, Mr. Chairman.
Senator PASTORE. It does point up what the chairman said a while ago, this is not going to be smooth sailing at best.
Senator DOMINICK. Mr. Chairman, I wonder, not to prolong this, but just to keep my own record in context here: I have some figures which show that the New Haven Railroaod in 1963 carried about 26 million passengers. And the passengers paid a total of $41 million in revenue, which makes an average fare of $1.60 per passenger.
Now, they sustained a net loss of only 34 cents per net passenger. In other words, a 34-cent increase per passenger would seem to break them even on the basis of the 1963 figures.
Senator LAUSCHE. Just one more question. I have a piece here that appeared on February 15, "Circuitous Route, the Boston & Maine Is Seeking To Capitalize on Failure." And this article points out that certain interests in the country are beginning to buy up stock of the Boston & Maine at low prices anticipating that the Federal Government will begin to subsidize and when it begins to subsidize all will be flowery and glorious.
Also, there is an article, "Rags to Riches." This deals with the $350 million subsidy that we have given to the cotton manufacturers of goods. The moment they got the $350 million out of rags, they moved in to riches. And I suppose that will be the situation that