sulted in a material reduction in the size of the utility relocation job. In other cases a design calling for an elevated expressway instead of an underpass would have substantially reduced the cost of relocating utility facilities. By including relocation costs as a part of the total cost of the highway project, the engineering planning will inevitably result in the most efficient and least costly solution. This is worthwhile not only as a matter of equity, but from the standpoint of obtaining the most economic overall costs for the benefit of our national economy. Congress has long recognized that the cost of relocating railroad facilities should be considered a part of the construction cost of a Federal-aid highway project. All that we are recommending here is that utilities be treated in the same way as railroads. We therefore respectfully recommend that your committee give favorable consideration to the principle of authorizing reimbursement to utilities for the cost of relocating their facilities when such relocation has been made necessary by the Federal-aid highway construction program. The Senate Committee on Public Works has recognized the fact that inequities exist in the assessment of utility relocation costs under present conditions and that committee has recommended that 50 percent of the relocation costs be paid from Federal funds, provided that no more than 2 percent of the funds apportioned to any State for any fiscal year may be expended for this purpose. The salvage value of the old facility and the increase in value derived from the new facility are to be credited in arriving at the cost of relocation. Finally, the Senate committee has recommended that the provision for relocation apply to all utility systems without regard to the form of organization or whether publicly, privately, or cooperatively owned.

We have been highly gratified by the action of the Senate Committee on Public Works and hope that your committee will give recognition to the same principles and arrive at the same general conclusions as are set forth in Senate Report No. 350.

Mr. FALLON. Congressman Bennett of Florida.

STATEMENT OF HON. CHARLES E. BENNETT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA

Mr. BENNETT. Mr. Chairman, I appreciate this opportunity to testify before your committee on the need for Federal legislation providing for assumption by the Federal Government of its fair and just share of public utility relocation expenses necessitated by construction of Federal highways.

The need for this legislation was called to my attention by the problems which have developed as a result of the construction of a Federal highway through the center of the city of Jacksonville. In our city, the city owns the electric utility. The State road board and the Federal highway people agreed on a location which suited them fine, but it did not suit the city of Jacksonville at all, because this particular location necessitated relocation of utility facilities, at a cost of one and a half to two million dollars. If they had constructed the highway a block to the right or a block to the left, as the city requested, this expenditure could have been avoided or minimized.

Briefly, there are several reasons why cost of public utility relocation should be considered as a part of the cost of highway construction: First, the cost of alterations to railroads is already recognized as a legitimate part of the highway construction costs. There is no logical or ethical reason why such discrimination between railroad and nonrailroad utilities should be allowed to continue.

Second, the law as it now stands creates an inequality because in some States this Federal benefit is available and in others it is not. If the State would assume payment in similar cases, then the Federal Government will pay likewise under the present law. Frankly, I feel

that Florida and all States should make such contributions, but the moral obligation of the Federal Government to make such contributions is not eliminated by the State's failure. Whatever a State wants to do with its own highway system should be left up to the State involved, but a Federal benefit should not be withheld from a local utility on the basis of a State's highway policies.

Third, to allow the present condition to continue places a double burden on residents of the localities involved by requiring Federal taxation for support of the Federal highway system and also requiring increased local taxes or utility rates to pay for the Federal function of moving the utilities for the Federal highway.

Fourth, as shown by the problem in Jacksonville, the present State of the law leads to economic waste. The public utility is given no voice in determining where a highway is to be located. This means that those who make this decision may effect a small economy or acquire a minor advantage for the highway at the cost of a tremendous expenditure or disadvantage to the public utility. Since the public pays public utility expenses through its rates or, in the case of municipally owned public utilities, through local taxes, this means that a small saving to the public through Federal highway taxes is offset by a large expenditure through public utility charges or local taxes. The net effect is an economic loss,

Before I close, I would like to read a statement on this matter by Mayor Haydon Burns of Jacksonville:

On behalf of the city of Jacksonville, I strongly urge Federal legislation to include cost of removal and relocation of utility facilities such as electric and signal lines, water mains, and sewers on Federal-aid highways in the Interstate System as a part of construction costs of such highways, and to afford to these utilities similar relief to that now accorded railroad utilities. We stand on our past statements filed before committees of the House and Senate in support of justice of such legislation and are badly in need of same.

So I am here before you in behalf of having an amendment along the line of the Gore bill. I testified before this committee previously on this aspect of reimbursing them for the relocation of public utilities.

Thank you, gentleman, for permitting me to appear here today on this important problem.

Mr. FALLON. Thank you very much.

Without objection, your remarks will be extended in the record. Mr. BENNETT. Thank you.

Mr. FALLON. The next witness will be Mr. Clarence Miles. I would like to present Mr. Miles to this committee as a resident of my district in Baltimore, and also a very distinguished member of the Maryland bar. He has recently attained the great achievement of bringing a big league ball club to Baltimore. Mr. Miles is also president of the Baltimore club.

Off the record.

(Discussion off the record.)

Mr. FALLON. I understand, Mr. Miles, you will make a statement on behalf of the utilities on the relocation problem, and also have other witnesses you would like to introduce.

Mr. MILES. That is correct, Mr. Chairman.

Mr. FALLON. You may proceed.

STATEMENT OF CLARENCE W. MILES, BALTIMORE, MD., ON BEHALF OF THE BALTIMORE GAS & ELECTRIC CO.

Mr. MILES. I am a member of the bar of the State of Maryland and of the United States Supreme Court and am a past president of the Maryland State Bar Association. I served for several years as people's counsel before the Public Service Commission of Maryland and in that capacity represented the public in all matters before the Commission and in the courts involving the rates of public utilities.

For the past 20 years I have been active in the field of public utility law, representing a number of electric, gas, telephone and water companies, including the Baltimore Gas & Electric Co., in whose behalf I appear here today.

Before introducing these other speakers whose remarks will be somewhat more extended than mine, but all of whom I can assure you will be very brief, I should like to summarize very briefly my reasons for urging this committee to provide in the legislation under consideration provisions that will recognize the cost of relocating publicutility facilities necessitated by Federal-aid highway projects as a proper part of the cost of such projects. The soundness of that principle was recently recognized by the Committee on Public Works of the Senate, which reported favorably a bill wherein it was provided (sec. 11) that—

50 per centum of the cost of relocation of utility facilities necessitated by the construction of a project on the Federal primary, secondary, or interstate systems in which Federal funds have participated, may be paid from Federal funds whenever under the laws or practice of the State where the project is being constructed the entire relocation cost is required to be borne by the utility. ***No more than 2 per centum of all sums apportioned to any State for any fiscal year for expenditure on such systems may be expended under the provisions of this section.

Mr. McGREGOR. Will the gentleman yield? Is that not the very wording that was passed last night by the Senate?

Mr. MILES. Yes, sir.

Mr. McGREGOR. It was in the Gore bill?

Mr. MILES. Yes.

Mr. McGREGOR. The same wording as passed by the Senate Public Works Committee and accepted by the Senate in its passage of the Gore bill last night?

Mr. MILES. Yes. That is section 11 of the Gore bill that I just read. I have left out a couple of paragraphs that are unrelated to what we are talking about here, but that is the exact provision of section 11. In essence, it does nothing more than say that Federal funds may be used to reimburse utilities to the extent of 50 percent of the cost of relocation of utility facilities which are required to be relocated, provided, however, that not more than 2 percent of the funds allocated by the Federal Government to a State may be used for that purpose.

It seems clear to me that there are cogent and compelling reasons to support such a legislative recognition. The highways contemplated by the legislation presently before this committee are essentially interstate in character and are therefore very properly designed to fit into a national pattern of roads intended to facilitate the more rapid movement of transcontinental traffic, to promote the public

safety by minimizing the frightful loss of lives and property that occur daily on our existing inadequate national highways, and to promote the national defense and welfare. In short, their local characteristics or considerations are patently subordinate to their national aspects.

Hence, I am frankly unable to follow the argument sometimes advanced that the use of Federal funds to defray the cost of relocating utility facilities along highways conceived, designed, and for the most part financed by the Federal Government, constitutes an invasion of State sovereignty. To me quite the converse is true. The amendment which we seek would not require the States to defray any part of the cost of relocating utility facilities. The individual States would be left free to formulate their own policies in that respect. It is only the Federal funds (and not in excess of 2 percent, thereof, if the provisions of the formula adopted by the Senate committee are followed) that would be used for the cost of relocating facilities on interstate highways.

The simple truth is that existing State laws and practices whereby utilities are required to defray their own relocation expenses are the products of another era.

I might parenthetically observe that the very dates of the passage of most of these State laws and the dates when these practices came into effect originally were so long ago that I do not think anybody can reasonably argue that they were ever intended to contemplate the sort of road construction which goes on in this country today, and which is necessary in this country today.

Those laws and practices were clearly not enacted with the present methods of building and financing a far-flung system of interstate roads in mind. They came into being to meet a local problem and the comparatively few relocations required from time to time were relatively simple and inexpensive. Today's changed condiitons, whereby drastic and constant relocations are required to keep pace with an ever expanding national highway system, places a crushing economic burden on utility users.

It is inescapable that, absent this expanded Federal-aid program to promote interstate commerce and national defense, the users of utility services would not be faced with these burdensome relocation costs. Of course, it should always be borne in mind that it is the rate payer who, in the final analysis, must bear the cost of relocating facilities under the existing laws and practices.

With your permission, I should like to emphasize that point. This is not a question, if the committee please, of whether these companies, by client, the Baltimore Gas & Electric Co., or the clients of any of these people who are there today, are going to pay the cost of these relocations or the Federal Government; but it is a question of whether the rate payer is going to pay it. Because obviously, if the cost must be incurred by the utility company, there is no source from which they can get the money to pay those costs of relocation except from the rate payers as part of their operating expenses. So that is the basic question which is involved here.

I respectfully submit that the Federal Government should at least recognize the proportionate share of these costs which its own sponsored road program creates.

The expense of relocation, as a percentage of the total cost of the highway program, is insignificant, but the impact on affected utilities can be disastrous.

There are a couple of witnesses here today representing very small companies. The effect on them of the cost of relocation has indeed been most drastic. It could very easily wreck some of the smaller operating utilities.

The use of public rights-of-way, in countless instances, makes possible the rendition of vital utility services that could not otherwise be provided if private rights-of-way had to be purchased. That is particularly true in the rural areas, where you have very few customers to the mile.

I earnestly submit that the rate payers of utilities should not be required to subsidize highway projects because of such use.

Mr. Chairman, I appreciate the privilege of being permitted to make this statement today, and may I introduce to the committee the speakers who are to follow me, identifying each person and the aspect of this matter which he will cover.

Mr. Chairman and members of the committee, there are here today for the purpose of being heard very briefly these gentlemen:

Mr. Paul L. Weir, Atlanta, Ga., who is general manager of the Water Works Department of the City of Atlanta.

Next is Mr. E. C. Yokley, of Nashville, Tenn., for the National Institute of Municipal Law Officers;

Mr. Harold Peterson, of Roosevelt, Okla., who is the owner of a small independent telephone company, the New State Telephone Co.; Mr. E. C. Houck, from Warriors Mark, Pa., who is manager of the Huntingdon and Center County Telephone Co., another small independent telephone company;

Mr. J. Theodore Wolfe, of Baltimore, the executive vice president of the Baltimore Gas & Electric Co.;

Mr. John A. TenBrook, of Philadelphia, appearing in behalf of the Edison Electric Institute;

Mr. John M. Veale, of Detroit, Mich., a former distinguished member of the Michigan Public Service Commission, who appears here in behalf of the gas companies; and

Mr. Austin L. Roberts, Jr., of Washington, D. C., the general solicitor for the National Association of Railroad and Utilities Commissioners, who is here because of his concern, and only because of his concern, with respect to the impact upon the rate payers, to which I have referred.

In addition to these gentlemen, who would like to be heard, the following people are present, and with the permission of the committee we would like at the appropriate time merely to file their written statements. They are:

Mr. George Anderson, of New York, for the American Transit Association;

S. M. Barr, of New York, vice president of the Western Union Telegraph Co.;

Mr. Herman W. Boozer, of Atlanta, Ga., vice president in charge of finance of the Georgia Power Co., who also wishes to file and has filed, I believe, a statement in behalf of the Alabama Power Co., by Mr. Walter Bouldin, the executive vice president of that company, who is unable to be present on account of illness;