program is in. You and your organization are objecting to any indication of earmarking. Yet, if we go through a borrowing program without any additional taxes, we have $11 billion worth of interest to pay. That is equal to the construction of 13,000 to 15,000 miles of roads. Knowing some of your association members, and you and your group are successful, they would rather build the roads and pay for them rather than pay interest.

I am wondering why you are going to object to a program that this committee feels is advisable, to borrow some money and then make definite arrangements to see that those notes are going to be paid off. For instance, we would have a joint sponsorship of a new tax and, like Jack Dempsey said, when the road is finished, it is paid for.

go

Would not your association reconsider the statement you made and along with us on a program so that when the roads are worn outand you know they are going to wear out in approximately 20 yearsthey would be paid for and we would have the money for further construction.

Mr. ROBERTSON. I am appearing here for the American Road Builders as their spokesman and I would not want to commit them in any way without authority.

Mr. McGREGOR. I do not want to put you on the spot, but I know a good many of your members and they are successful businessmen. I know they never borrow any money until they know they can pay the

note on it.

Mr. ROBERTSON. That is so, but they also borrow money to keep their business going.

Mr. MCGREGOR. I am completely in accord with that because I think at times borrowing money is a worthy object. I would like to ask one more question. You recommended provision for the extension of Federal credits. Are you referring there to credit for land acquisition specifically?

Mr. ROBERTSON. Mostly, Mr. McGregor, but it could be used for other things. But mostly for land acquisition.

Mr MCGREGOR. I think you are correct. Like my friend from West Virginia has said, I think we will have to face reality. I am talking probably against my own State. We will probably be able to match without Federal intervention, but there are other States which are not as fortunate as Ohio. I have one more question. I received a telephone call last night which informed me that we are having difficulty in getting cement for contractors, and cement is now being allocated.

Does your task force committee refer to a statement relative to cement?

Mr. ROBERTSON. It does, sir.

Mr. McGREGOR. Is it the same statement that was made before the Senate committee?

Mr. ROBERTSON. Yes, sir.

Mr. McGREGOR. Then could you inform us why cement is being allocated now?

Mr. ROBERTSON. I could not, sir.

Mr. McGREGOR. Do you have any knowledge that it is being allocated?

Mr. ROBERTSON. I know that the contractors in this area have just enough to do the work we have put under contract. I have heard

the same thing you have heard-that cement is scarce. But if this program is firmed up by this Congress and the cement people know we are going ahead with the program, they will tool up and build the necessary mills and plants to do the work.

Mr. McGREGOR. I am glad to hear you make that statement. We dot not want to get into the position we were in when we came along with the 1954 act, which doubled the amount. Now if we find ourselves with a shortage of cement it is time we found out why. I do not want to add a new burden on top of it when we find there is a shortage.

Mr. ROBERTSON. Could I say one thing off the record?

Mr. MCGREGOR. Yes.

(Discussion off the record.) Mr. McGREGOR. That is all. Mr. FALLON. Mr. Gentry.

Mr. GENTRY. Mr. Robertson, we have had Secretary Humphrey as a witness. He has said for the new Federal corporation to issue and sell these bonds under the bill we are considering would cost the taxpayers of the country at least one-eighth of 1 percent more. That would be the least amount. He felt it might go up to one-half of 1 percent more. It would be in that range. It would not be under one-eighth of 1 percent and he did not believe it would be over one-half of 1 percent.

of

One-eighth of 1 percent on that tremendous issue for that number years would amount to $475 million. That is what it would cost the taxpayers. But one-half of 1 percent would amount to $1,900 million.

Do you think there is anything in the Federal corporation plan that would justify paying possibly $1,900 million more of the taxpayers' money in order to float the bonds that way, provided it is decided to issue bonds by credit financing?

Mr. ROBERTSON. The Secretary knows a whole lot more about it than I do, and his figures are probably correct, but if we go to credit financing

Mr. GENTRY. Do you have different figures on that?

Mr. ROBERTSON. No; I do not have any figures on that. I have not gone into it.

Mr. GENTRY. Your policy on that is what?

Mr. ROBERTSON. It was decided that a resort to credit financing should be considered.

Mr. GENTRY. Are you opposed to the Federal corporation idea? Mr. ROBERTSON. Yes, sir. We would rather have the Bureau of Public Roads and the Treasury Department take over the whole thing. Mr. GENTRY. That is my idea. I do not think it is justified to have a Federal corporation, even if we do have credit financing, because I cannot see where that much purpose is to be served by it. As a matter of fact, I do not see where any purpose is to be served by the Federal corporation, and certainly no reason is advanced that is worth possibly $1,900 million of the taxpayers' money.

Let us go to the next thing. I am in this position. I oppose 2 of the features of the administration plan and oppose 3 or 4 features of the Gore plan. So I am not in favor of either plan, although I am in favor of building these highways. I am very much in favor of building them and I say that your outline is thoroughly justified

from the standpoint of economics. I think it is and I think it would pay off if the money could and was raised to do it.

But here is the big difference of opinion in this committee as I understand it. The Clay plan would have the Federal Government— and we will say it does not make any difference whether it is the Federal corporation or the Secretary of the Treasury-borrowing $21 billion, on which almost $12 billion would be paid in interest. They would borrow about $20.5 billion and pay about $11.5 billion in interest, which would be interest amounting to about 55 percent of the principal amount.

It is my feeling that to do that you certainly do not solve any problem at all financially. You make your problem worse. You compound it. You simply delay the solution and when you finally reach the solution, which is not actually raising more money, it will be a much bigger problem than if this committee and the Congress would solve it now. That is my feeling about it.

What is the feeling of your group as to whether we should in some way get more tax money, or do you feel that we should go ahead and do this by deficit financing and borrowing of money?

Mr. ROBERTSON. I think the group feels that the need is there, and either way would be acceptable to them; but I would say personally 1 hate to pay interest, and if you could hold it down as low as you can, you get more roads for your dollar instead of paying it out in interest.

Mr. GENTRY. Yes. That is all.

Mr. FALLON. Mr. Scudder.

Mr. SCUDDER. I was very much interested in your statement, but I believe you have taken a position on financing that would be very unpopular. I find there is a great reluctance, throughout the country, to raising the debt limit. They want us to live within the present debt limit. But I can find nobody who is in disagreement with paying for this program with the tax programs that now exist.

I believe we should play down the $101 billion figure. I think the sooner we stop talking about $101 billion and talk more about $27 billion, then we will not scare people to death about the burden of taxes they will have inflicted on them to pay.

I believe this program is sound and can be financed from the present gasoline taxes. I believe in linkage, because long since in California our people voted to freeze all of the gasoline tax money into the program for building highways. I believe other States have done the same thing, and everybody is very happy about it. People do not grumble when they drive up to a gas station and pay the added tax, because they know it is going on the highways for their benefit.

I believe that the taxpayers generally feel that the 2 cents tax that is being paid at the pump when you get your gasoline is going for highway purposes. I know they do in my State. As long as we can finance this program and do the job we set out to do and keep away from the $101 billion and talk about $27 billion, and finance it in a manner which is not going to increase taxes, I think we will be all right. Then if we need more money from primary and secondary highways, 2 or 4 or 6 years from now, or whenever it is needed, then let us put on an increase of 1 cent in the gasoline tax to meet the situation. But I believe there should be a very definite linkage between gas taxes and road appropriations.

I am afraid we will lose our bill if we continue taking too many different courses. I think we have a logical plan, and if the applecart is not upset we will have highways. If we get too many conflicting opinions we are going to lose the whole program.

That is all I have to say. I appreciate very much your very

fine

Mr. BURNSIDE. Under any circumstances the Government eventually will have to pay for the roads. Otherwise the taxpayers will have to pay for it.

Mr. ROBERTSON. Yes.

Mr. BURNSIDE. Under any circumstances if we can save 55 percent of the cost, or part of that, we will build that much more roads. So I am definitely in favor, as Mr. Scudder says, of freezing all tax money from the gasoline tax for use on roads. I do not think we will run into too much opposition there.

That will still not be enough. We go still farther and have a 1-cent additional gasoline tax so that we can get the roads that are needed and face this problem now. None of us can keep on fooling the public that we can build roads without money. We just cannot do that. We might get away with it for a short while, but the American people are not that dumb. They keep up with things. We cannot keep on fooling them and keep our debt going up.

I think all of us are in favor of building roads. We need them very badly for civil defense. I wonder if you would be in favor of a 1-cent additional gas tax and freezing the amount we are already collecting, plus the additional amount to be used for road construction, and put it all into highways and say that is the way it will be.

Mr. ROBERTSON. I canot speak for the board of directors of the American Road Builders Association, but I would say we do not have any policy on that. However, the money has to be raised some way.

Mr. BURNSIDE. That is right. And we cannot keep on putting off paying our debts. Any private person would go broke, just like the Government will go broke, if we keep on putting it off.

Now, concerning the cement shortage mentioned by my colleague from Ohio.

Mr. McGREGOR. That was off the record.

Mr. BURNSIDE. Off the record.

(Discussion off the record.)

Mr. BURNSIDE. We do have to face this problem of repairs. If we build the roads we have to think about repair because we have enough of a problem building roads.

Mr. DONDERO. In the last analysis, the Road Builders Association does not care too much as to just how that money is raised, as long as you are paid for the work. Is that not about the situation in your organization?

Mr. ROBERTSON. I imagine that is the human way to look at it, Mr. Dondero. Speaking about the cement problem, the task force committee of the American Road Builders in their report say

It is reported at the present time the cement producers are contemplating the installation of additional facilities and the installation of these facilities will raise the cement production capacity to 338 million barrels per year by 1956 and to 407 million barrels by 1950. Since the total estimated requirements amounted to only 380 million barrels, this increase in capacity should provide the cement needed for the expanded highway program.

That is the report we have on that.

Mr. FALLON. Mr. Alger.

Mr. ALGER. Very briefly. My colleagues belabored the point of financing. I want to add only this thought. I am a newcomer and a businessman. I put in roads myself in residential development work. I am very close to your type of work. You have joined many others who have gone before you. Your presentation was very good, but you say that somebody has to take a responsible stand on financing. You say the question of increasing motor-fuel taxes is one for the sole determination of the Congress. And in the other things you said. about the financing you just let it hang.

I want this on the record as to why I am speaking at this time. I am interested in these roads very much. Only, however, up to the point of deficit financing. There I stop because deficit financing is not necessary. We can pay for these as we go.

I see further and bigger programs ahead as this great country grows. This is only one of a series of programs. We are recognizing the need rather late, but it is no reason why we should pass on the debt to our children.

As a fellow businessman I am belaboring you only to the point. where I wish you had come in here and put in your presentation-— even though we would have torn it apart and criticized it-I wish you had a financing scheme. But I have enjoyed your testimony very much. Thank you.

Mr. ROBERTSON. Thank you.

Mr. FALLON. Mr. Rogers.

Mr. ROGERS. Mr. Chairman, I wanted to commend the Road Builders Association for their suggestions here. I think it is interesting to note you have concern for the taxpayer in that you have agreed with the Comptroller General of the United States it is a useless procedure to go through to set up a corporation, when the Government already is set up to do the borrowing. You do not want this corporation to have any control because you think that the Government already is set up to control the program through the Bureau of Public Roads. So, in effect, it is a useless organization which would cost the taxpayers anywhere from half a billion dollars to about $2 billion.

I want to commend you for your stand on that. Thank you, Mr. Chairman.

Mr. FALLON. Mr. Cramer.

Mr. CRAMER. I have one or two thoughts I woud like to have your comment on. That is, the suggestion has been made by some of the members here that perhaps the 2 cents gasoline tax, pay-as-you-go program might be the way of solving this. I would like to ask you for your comment.

If the Federal Government increases the gasoline tax by 2 cents it has already been shown even under the Gore plan many States cannot match those funds even for a 5-year period. For instance, the State of Florida could not match those funds even under the Gore plan. Where will the States get matching funds for the 50-50 matching basis under this grandiose 10 year plan you have suggested on page 8, which would require the States to put up $22.5 billion? Where will they get the money if the Federal Government increases the tax 2 cents, which means the States will have to increase it by an

63235-55-56