STATEMENT ON BEHALF OF AMERICAN TRANSIT ASSOCIATION BY GEORGE W. ANDERSON, EXECUTIVE VICE PRESIDENT The American Transit Association is a voluntary trade association comprising in its membership companies operating motorbuses, streetcars, trolley coaches and rapid-transit facilities, or various combinations thereof, in urban and suburban areas in all parts of the United States. The association's operating member companies annually transport more than 80 percent of the transit passengers carried in the United States. About 14 billion passengers were carried by the transit industry in 1953 and approximately 81,000 passenger vehicles of all types were owned by the industry as of December 31 of that year. The purpose of this statement is to point out a conspicuous inequity presently existing in the Federal-Aid Highway Act of 1944 (58 Stat. 838; U. S. Code Cong. Service 1944, p. 840). This act, in substance, authorizes the use of Federal funds to pay the cost of relocating facilities of railroads when such facilities are located within a highway right-of-way and are involved in a Federal-aid grade crossing project. The act authorizes the promulgation of rules and regulations by the Federal Bureau of Public Roads. Regulations promulgated pursuant thereto relieve railroads from the cost of removal or adjustment of their facilities in the elimination of railroad grade crossings, notwithstanding State statutory liabilities imposed on the railroad to contribute toward the cost of removal or adjustment of such facilities. The same result does not obtain with respect to urban transit utilities. It has been the practice of the Bureau of Public Roads to disallow reimbursement to those other than railroads unless it is determined that the nonrailroad utility is, by reason of State statute, under no obligation to absorb the cost involved. Moreover, the Bureau has followed this practice even though the nonrailroad utility's facilities must be removed or adjusted because of the elimination of grade crossings of the railroad. This obvious discrimination and inequity is palpably wrong. The accepted theory of the expenditure of Federal funds on interstate highways is justified by reason of the requirements of the national defense and in travel in the promotion of interstate commerce. Benefits from such expenditures of Federal funds accrue to the general public whose tax contributions make such expenditures possible. It is inequitable to levy taxes upon the public in general, including the nonrailroad utilities, and thereafter require such nonrailroad utilities to absorb the cost of removal or adjustment of their facilities to make way for a Federal-aid highway or railroad grade-crossing project, thereby subjecting nonrailroad facilities to double taxation. Persons who use the services of the nonrailroad utility must pay a rate or tariff sufficient to cover the cost of removal or adjustment of the nonrailroad utility's facilities this in addition to paying their fair share of general taxes levied. Let me cite an experience of the Birmingham Transit Co., Birmingham, Ala., as an example of the inequities arising from the act. In the city of Birmingham, substantially all the vehicular traffic from the downtown area to the eastern part of the city, and vice versa, travels over and along First Avenue North. The avenue is some 10 miles in length and is designated U. S. Highway No. 11. In 1914 a viaduct was constructed along this avenue between 26th and 35th Streets to overpass railroad facilities of the Birmingham Belt Railroad, the Louisville & Nashville Railroad, the Southern Railway System, the Seaboard Airline Railroad, the switching tracks of the Birmingham Terminal Co., the private railroad facilities of the Sloss-Sheffield Steel & Iron Co., and the furnace operations of the latter company. The predecessor company in the urban transit business installed double street railway tracks over and along this viaduct as a part of its transit system from the downtown area to the eastern part of the city. In 1948 some 30.000 persons were daily being transported by trolley car to and from the downtown area to the eastern part of the city over this viaduct. Authorities concluded that the structure was unsatisfactory and decided to replace it with a longer, wider, higher viaduct. The project was in the nature of reconstruction of a grade-separation structure, to be partly financed with Federal funds. Forthwith, the city and State entered into a contract with the railroads whose facilities were to be overpassed. The contribution of the railroads toward the cost of demolition and reconstruction was nominal, being restricted to permanent benefits accruing to them. A municipal ordinance was adopted (No. 639-F) directing the transit company to forthwith remove its facilities from the existing structure at its own expense (sec. 6); and that upon completion of the new structure it might reinstall its facilities thereon at its own expense (sec. 10). In order to continue to serve the public, the transit company was compelled to substantially increase its expenses of operation by storing its new electric streetcars, renting gasoline motorbuses, and following a circuitous routing in order to carry its passengers between the downtown area and the eastern section of the city. The old viaduct was closed to traffic in March 1949 and the new structure opened to traffic in September 1950. The transit company's net expense of removal, adjustment, and restoration of its facilities was $112,564.85. There was also a levy of $69,105.57 representing additional integral cost of the new viaduct in providing for additional structural strength. Additional operating expenses directly attributable to the demolition and reconstruction of the gradeseparation project were in excess of $225,000 a year. As the transit properties were at the time operated as a department of Birmingham Electric Co., we could not, without going into lengthy detail and the various accounting complications, give you precise figures as to the net financial effect of the costs and expenses related. We can assure you that the entire period was one of grave financial difficulties, and that the viaduct problem accentuated such difficulties tremendously. We can also assure you that the company's passengers were ultimately required to pay higher tariffs because of the increased expenses growing out of additional operating cost and the cost of removal and adjustment of facilities. These higher tariffs were in addition to taxes levied upon them as part of the general public. Only 53 privately owned transit companies and 7 publicly owned transit systems located in major cities in 28 different States are operating 1 or more of several different types of electric transit vehicles. They are very vitally concerned with the inequities which exist with respect to bearing the cost of removal and adjustment of their facilities in areas where Federal-aid highway and railroad grade-separation projects are in progress or in prospect. Urban transit companies in the United States, by and large, have an extremely difficult financial problem growing out of constantly declining passenger travel and constantly mounting operating expenses. Municipal authorities and others have given a great deal of thought and have expressed considerable alarm and concern with respect to the future of urban transit systems. The inequities existing with respect to the Federal-Aid Highway Act subjects those companies unfortunate enough to be caught in a highway project to financial blows which the majority are ill-prepared to weather. To companies without large retained earnings, particularly the smaller ones, the direct and indirect costs of a highway project can well be the straw that breaks the camel's back. This is true, even though the total annual costs to transit companies as estimated on a nationwide basis do not appear large. Another difficulty lies in the fact that it is seldom possible for a company to make financial plans to meet such costs, as they may be nonexistent or negligible year-after-year and then suddenly appear as a major or even disastrous financial burden which the company can only seek to transfer, at least in part, to its customers in the form of increased fares. In conclusion, it seems to us that the cost of removal and adjustment of nonrailroad utilities' facilities in the area of Federal-aid highway construction or reconstruction, including railroad grade crossings, should be considered as much a part of the construction cost of the highway or railroad crossing project as any other cost when such improvements are accruing to the benefit of the general public. We respectfully request this committee to give due consideration to removal of the existing inequities in their deliberation concerning amendments to this said act. STATEMENT OF FREDERICK J. BELL, EXECUTIVE VICE PRESIDENT, NATIONAL AUTOMOBILE DEALERS ASSOCIATION Mr. Chairman, my name is Frederick J. Bell and I submit this statement in my capacity as executive vice president of the National Automobile Dealers Association. I wish to thank the Committee on Public Works for this opportunity of presenting our views on the expanded Federal-aid highway program now under consideration by Congress. In this very short statement I desire to present for your consideration these basic propositions: 1. The automobile is essential to the life and economy of America. 2. Adequate highways are indispensible to a full realization of the potential utility and enjoyment of the automobile. 3. The need for an immediate improved and expanded highway system is imperative. 4. The Federal Government will have to bear the primary burden of accomplishing such a program. 5. The Federal Government must continue its present and increase its future support to federally aided State highway programs. 6. A sound businesslike method of financing should be adopted by Congress but in no event should the program be deferred or defeated because of insistence upon any particular method of financing to the exclusion of all other reasonable ways of accomplishing the desired results. I speak for the more than 30,000 new-car and new-truck dealer members of our association, who are specially authorized to sell and service the new cars and new trucks which provide essential over-the-road private transportation to millions of American citizens. I speak, also, I am sure, for the 58-million car owners and users who depend upon the automobile and truck and adequate, safe highways in earning their living and making their contributions to the economic growth and security of our Nation. The automobile is essential to the life of America. It provides transportation for at least one-half of the people of America, in going to and from work, to and from school, to and from church, and to and from areas of recreation. The automobile industry is the largest single industry in the United States and, in fact, the world. It is the largest single industry from the point of view of the amount of capital invested, the number of employees employed, the amount of salary and taxes paid, and the number of people who are directly and indirectly influenced by its existence. The ultimate future of this great industry and the economy based upon it are largely dependent upon an ample and adequate system of highways. It is apparent that, in order to accommodate so vast a number of vehicles in a safe and efficient operation, adequate highways are required. The deficiencies in the existing highway system are resulting in an annual loss in terms of life, property damage, and unnecessary fuel and equipment consumption and loss of time valued at more than $5 billion a year. Any system of highways that results in this staggering waste in such irreplaceable commodities as human life, property, and time is obviously inadequate to serve the best interests of the public. This unnecessary loss would be eliminated by the construction and maintenance of an adequate highway system. If for no other reason, the removal of this appalling and wasteful burden on the life and economy of America will justify congressional action to cure the situation. When coupled with the ever-increasing population and expanding economy of the Nation the present highway structure is becoming all the more inadequate with each passing day. Not only is this condition stifling the present growth of that phase of American life dependent upon and related to the use of our national highway system, but, because of the limitations in the present system, its continued use is hazardous and costly. In the event of a national emergency it would be woefully wanting. In light of these factors it is our firm belief that an improved and expanded system should be accomplished at the earliest possible date. The minimum requirements of an improved highway system are of such magnitude that it must be recognized at the outset that the primary responsibility for financing these needs must be borne by the Federal Government. In discharging this responsibility the Federal Government must at the same time continue its present aid to the States in their highway development activi ties and accelerate and expand their aid. In an association comprised of so many members who are situated in every State and almost every county in the United States it is only natural that there would be a diversity of viewpoints as to how such a major national program should be financed. There is unanimity, however, in the recognition of the need for an improved and expanded national highway system. The feeling of the association is so strong as to the desirability and even necessity for a highway program such as that which is under consideration by this committee that we are able to say that the need far outweighs any individual differences of opinion among our 30,000 members as to how that need should be financed. However, the many independent businessmen comprising our association have expressed themselves to the effect that any financing program designed by Congress should follow a businessman's approach to the problem. The two general categories into which their recommended financing methods fall are these: The first group have expressed themselves as favoring a financing program which would involve a long-term bond issue. Money to pay the interest on those bonds and to retire them should come primarily from present Federal gasoline and oil taxes. If additional funds are necessary beyond the bond issue, such funds should come from a limited number of toll roads. The other group has suggested a financing program which would require the imposition of a small additional tax burden on the primary users of the improved highway system. While NADA is traditionally opposed to unjustified increases in individual tax rates or increases in commodity taxes, the dealers favoring the combination plan have indicated that if Congress in its wisdom determines that the imposition of additional taxes is necessary then those dealers will favor an increase in the present Federal gasoline-tax rates of not more than 1 cent per gallon. This increase should be coupled with a long-term bond issue in a greatly reduced amount as a means of financing this improved highway system. It is our further belief that the bipartisan legislation under consideration by this committee will accomplish the desired highway system. The compelling need so dominates all other considerations that we defer to the desires of the committee and Congress as to how such a system should be financed. Various views have been advanced both before your committee and in the Senate as to how the financing of the Federal highway system should be accomplished. If Congress resolves upon any one of these methods or any combination as being the appropriate way of financing the program NADA dedicates itself to support the successful execution of such a program. We sincerely believe the facts dictate a clear and immediate need; that the primary responsibility for meeting that need is the Federal Government's; that there is available a sound businesslike way to finance the discharge of this responsibility and that Congress should select the plan and put it into execution. In conclusion may I again thank this committee for the privilege of presenting to it the views of the National Automobile Dealers Associaton with respect to the highway legislation under consideration by the Congress. STATEMENT OF S. E. WISEMAN, EXECUTIVE DIRECTOR, THE AMERICAN TOLL WAYS AUTHORITY, SUBCOMMITTEE ON ROADS OF THE HOUSE PUBLIC WORKS COMMITTEE My name is S. E. Wiseman, executive director of the American Toll Ways Authority, a coordinating research organization, nonprofit, dedicated to the earliest possible designation, construction, and operation of an interregional system of toll traffic ways. After thoroughly reviewing and analyzing approximately 90 percent of the evidence and statements presented and considered by the members of this committee, we wish to affirm the competent evidence presented by the representatives of the groups who appeared. They all support the very great and urgent vehicle requirement in our highway system for the future defense and progress of the Nation. With the passage of Senate bill 1048 by that body on May 25, 1955, providing for the matching of funds basis for the primary, secondary, urban, and interstate systems and the amounts of authorizations of funds therefor, the Congress may now more clearly foresee the great and pressing need for an interregional system of toll traffic ways for the national defense and nutritional needs of the Nation, including the impounding of waters as part of the ways, to raise the water, a most crying need of the Nation. The Senate is to be commended for approaching the betterments of our presently established highway systems, thus confirming more quickly how little even these additional authorizations will meet our travel needs. The authority directs your special attention to the section of the above bill which makes provision for the States to join each other for an interregional system of toll traffic ways. Please be assured that we will be at the service of your committee in the early recommendation of such helpful legislation which will expedite such an interregional toll-way system. Hon. CHARLES A. BUCKLEY, NEW YORK STATE TELEPHONE ASSOCIATION, House of Representatives, Washington 25, D. C. DEAR CONGRESSMAN BUCKLEY: During a regular quarterly meeting held on May 13, 1955, the officers and directors of this association unanimously adopted a resolution with respect to pending legislation which would authorize the expenditure of billions of dollars in Federal aid of the highway programs of the various States. This resolution should be of great interest to you. A copy is enclosed herewith. The financial authorization for highway projects which are projected for the benefit of the public generally should include all costs directly resulting from such construction and improvement, including the relocation of physical facilities involved. Telephone companies and their subscribers should not be required to assume any portion of the cost of the project from which they derive no special benefit. The typical independent telephone company, being limited with respect to earnings and accumulation of reserves by the Public Service Commission, would find its financial structure seriously impaired in being forced to bear the cost of an accelerated highway construction and improvement program. Furthermore, the typical independent telephone company and its subscribers are contributing through taxes their just portion of the cost of public highway improvements. The further imposition on them of additional direct costs is punitive and discriminatory. Congress has recognized the injustice of forcing one industry to bear unusual and extraordinary expense resulting from federally aided highway construc tion projects. Railroads are reimbursed for costs incurred in grade-crossing eliminations made necessary by such projects. We do not dispute the justice of immunizing railroads from such costs, but rather contend that other regulated enterprises, likewise disturbed and dislocated by highway programs, should be extended the same treatment, and given equality under the law. We earnestly solicit your active interest in behalf of our beleagured industry. The improvement of service and the protection of the independent telephone industry should be fostered by Congress, since it is one of the last strongholds operated in the best traditions of free enterprise. This can be accomplished by affording the industry protection against additional, inequitable, and discriminatory costs. Please exert your best efforts to make certain that any highway improvement or construction legislation enacted will provide for the authorization of all costs, including reimbursement to utilities companies for costs incurred in the relocation of physical facilities made necessary by federally aided highway construction and improvement programs. Yours very truly, HAMILTON A. CUNNINGHAM, Executive Secretary. Whereas pending before the United States Senate, and under consideration by the Subcommittee on Roads of the House of Representatives, are certain bills which are designed to provide greatly increased amounts of Federal moneys for the assistance of the various States in highway construction and improve ment programs; and Whereas the availability of such greatly increased amounts of Federal moneys in assistance will give impetus to State highway programs and cause them to expand; and Whereas utilities companies, having facilities located generally along highways and other public thoroughfares, are sorely aggrieved in being forced to relocate their facilities to the benefit of the general public in connection with the highway construction or improvement project, and without hope of reimbursement for the extraordinary associated expense; and Whereas subscribed rates for independent telephone company services, borne largely by farmers and other persons or businesses located in the rural areas served by independent telephone companies, are directly and adversely affected; and Whereas, precedent has been established particularly for railroads, for the reimbursement of costs associated with a relocation of facilities in connection with federally aided highway programs: Now, therefore, be it |