the various provisions of the Federal-Aid Road Act of 1916, as amended and supplemented. This report has been coordinated among the Departments in the Department of Defense in accordance with procedures prescribed by the Secretary of Defense. The Bureau of the Budget advises that there is no objection to the submission of this report for the consideration of Congress. Sincerely yours, Hon. ALBERT GORE, ROBERT T. STEVENS, THE SECRETARY OF COMMERCE, Chairman, Subcommittee on Public Roads, Senate Committee on Public Works, Washington, 25, D. C. DEAR MR. CHAIRMAN: This is in reply to your letter of February 14, 1955, inviting me to testify at hearings on February 21, 1955, on S. 1048, and other Federal highway bills which may be pending before your committee at that time. Your invitation is greatly appreciated, and I regret that other matters will require me to be absent from the city on the date of the hearing. I am, therefore, asking Mr. F. V. du Pont, a former Commissioner of the Bureau of Public Roads and now assigned to my office as a special assistant, and Mr. C. D. Curtiss, present Commissioner of the Bureau of Public Roads, to appear in my behalf. With respect to your request that your committee be furnished with the reports, studies, and recommendations provided by the Federal-Aid Highway Act of 1954 prior to the hearings on February 21, I regret to say that all of such reports, studies, and recommendations will not be available at that time. As you know, a draft bill for a Federal-Aid Highway Act was submitted to your committee on December 30, 1954, pursuant to section 12 of the Federal-Aid Highway Act of 1954. It has not been possible, however, to complete the studies authorized by sections 11 and 13 of the Federal-Aid Highway Act of 1954, relating to the problems posed by relocation and reconstruction of public utilities services resulting from highway improvements, and to all phases of highway financing, respectively. These latter reports required the collection of extensive data from State highway departments, public utilities, and utility regulatory agencies in all parts of the country, and the preparation of numerous statistical analyses, maps, charts, and diagrams. Completion of the reports has also been delayed by the demands made by the President's Advisory Committee on a National Highway Program and the governor's conference on the staff of the Research Department of the Bureau of Public Roads. As soon as it became apparent that it would not be possible to complete the reports within the time designated by the Federal-Aid Highway Act of 1954, requests for extensions of time were submitted to the Vice President of the Senate and the Speaker of the House of Representatives. The Committee on Public Works of the House has granted a 60-day extension of time for submission of the reports. Please be assured that every effort is being made to transmit these reports to the Congress as soon as possible. Sincerely yours, SINCLAIR WEEKS, Secretary of Commerce. EXECUTIVE OFFICE OF THE PRESIDENT, Hon. DENNIS CHAVEZ, BUREAU OF THE BUDGET, Washington 25, D. C.. March 21, 1955. Chairman, Committee on Public Works, United States Senate, Senate Office Building, Washington 25, D. C. MY DEAR MR. CHAIRMAN: This will ackowledge your letters of February 12, 1955, and February 23, 1955, inviting the Bureau of the Budget to comment on S. 1048, the Federal-Aid Highway Act of 1955, and S. 1160, the National Interstate Highway Act. In his highway message of February 22, 1955, to the Congress the President emphasized that the Federal Government should give top priority to completion of the National System of Interstate Highways. With respect to financing, he recommended "planned use of increasing revenues from present gas and diesel oil taxes, augmented in limited instances by tolls." Since the above principles are embodied in S. 1160, I am authorized to advise you that its enactment would be in accord with the program of the President. By the same token, since S. 1048 does not incorporate these principles, its enactment would not be in accord with the program of the President. Sincerely yours, HAROLD PEARSON, Assistant Director. DEPARTMENT OF THE ARMY, March 23, 1955. Hon. DENNIS CHAVEZ, Chairman, Committee on Public Works, United States Senate. DEAR MR. CHAIRMAN: Reference is made to your request to the Secretary of Defense for the views of the Department of Defense with respect to S. 1160, 84th Congress, 1st session, a bill to create a Federal Highway Corporation for financing the construction of the National System of Interstate Highways; to amend and supplement the Federal-Aid Road Act approved July 11, 1916 (39 Stat. 355), as amended and supplemented; and for other purposes. The Secretary of Defense has delegated to the Department of the Army the responsibility for expressing the views of the Department of Defense thereon. The Department of the Army, on behalf of the Department of Defense, has considered S. 1160. The objective of this bill, as stated in section 2 thereof, is to complete the construction of the National System of Interstate Highways within the next 10 years up to such standards as will produce safe highways adequate to handle traffic needs for at least the next 20 years. This would implement the recommendations of the President's Advisory Committee on a National Highway Program, which was transmitted to the Congress by the President on February 22, 1955. This Department favors the enactment of legislation which would accomplish this objective. However, it is believed that agencies other than the Department of Defense could more appropriately comment on the establishment of a Federal Highway Corporation and the financing provisions, as means for accomplishing this objective. The bill would create a Federal Highway Corporation for financing the construction of the National System of Interstate Highways, within the next 10 years. The authorized expenditures would be limited to $25 billion. The Corporation would be subject to the direction and supervision of the President. Its management would be vested in a Board of Directors composed of five members. Three of these members would be public members appointed by the President, by and with the advice and consent of the Senate, without regard to political party affiliation. The President would designate a full-time Chairman of the Board from one of the public members. The remaining two members would be the Secretary of Commerce and the Secretary of the Treasury, or their representatives. The bill sets forth the management and general responsibilities, duties, powers, and financing procedures of the Corporation. Among other things the Chairman of the Board would be responsible for maintaining "liaison with the representatives of the States with respect to the policies set forth in this In addition to managing the Corporation the Board is authorized to resolve divergencies of views concerning the interpretation or application of the policies under this act which it considers will have significant effect upon the program, excluding (1) divergencies between two or more Federal agencies. Within this limitation, the Board shall have the right to determine the matters which it shall consider and act upon, under such rules and regulations as it may prescribe." Under its powers the Corporation "may take such actions and exercise such other powers as may be necessary, incidental or appropriate to carry out the function of the Corporation, and to further the objectives of this act." act. The Secretary of Commerce would have responsibility for designating routes to take up the mileage still undesignated so that the entire 40,000 miles of this National System of Interstate Highways would be designated. In approving any undesignated mileage, the Secretary shall designate those routes which con tribute most to the benefit of the system as a whole and are most important from the point of view of national defense. The standards to be used for the Interstate System would be those approved by the Secretary of Commerce after consultation with the Department of Defense, the Federal Civil Defense Administration, and the State highway departments. The Secretary of Commerce is authorized to make the final determination of the standards to be used, except that where there are divergencies of views the Board would resolve them in accordance with the management responsibilities above quoted. The Secretary of Commerce would be further responsible for distribution of funds to the States; scheduling of construction and participation by the States after consultation with the States, the Department of Defense, and the Federal Civil Defense Administration (except that the Board would resolve divergencies of views in accordance with the provisions above quoted); establishing credits of the States for existing roads and toll roads; and obtaining under the provisions of the bill the necessary rights-of-way for projects on the National System of Interstate Highways. The Department of Defense particularly favors the objectives of the bill insofar as they would effect a specific program for completion of the National System of Interstate Highways in approximately 10 years. It also particularly favors the provisions for insuring uniform design standards and limited or controlled access. These are considered minimum requirements of any sound program for improvement of the major arterial routes which make up the National System of Interstate Highways. The fiscal effect of the bill cannot be estimated since the payments authorized to be expended depend upon estimates by the Corporation based upon prospective revenues. However, section 204 specifically states that expenditures will not exceed $25 billion. This report has been coordinated within the Department of Defense in accordance with procedures prescribed by the Secretary of Defense. The Bureau of the Budget advises that there is no objection to the submission of this report for the consideration of Congress. Sincerely yours, ROBERT T. STEVENS, Secretary of the Army. TREASURY DEPARTMENT, March 28, 1955. Hon. DENNIS CHAVEZ, Chairman, Committee on Public Works, United States Senate, Washington, D. C. MY DEAR MR. CHAIRMAN: Reference is made to your request of February 23, 1955, for the views of the Treasury Department on S. 1160, a bill to create a Federal highway corporation for financing the construction of the National System of Interstate Highways. The financing plan of the bill embodies the general financing principles contained in the Clay committee's recommendations, and we believe that this is a feasible plan. The approach used in the bill is fully consistent with our belief that funds for highway purposes should be provided out of highway-user revenues. The Department has been advised by the Bureau of the Budget that there would be no objection to the submission of this report to your committee, and that enactment of the bill would be in accord with the program of the President. Very truly yours, G. M. HUMPHREY, Secretary of the Treasury. AMERICAN ASSOCIATION OF STATE HIGHWAY OFFICIALS, 1955. Hon. DENNIS CHAVEZ, M. C. Senate Office Building, Washington 25, D. C. DEAR SENATOR CHAVEZ: Please find enclosed herewith the policy statement of the American Association of State Highway Officials dealing with the subject of Federal-aid highway legislative proposals. This policy was developed in Chicago on March 13, 1955, by the chief administrative officers of the State highway departments. Forty-eight of the fifty-two member departments answered the roll call and took part in the discussions and policy formulation. At the meeting the various current legislative proposals were thoroughly analyzed and studied. Under the constitution of this association, which is composed of the highway departments of the 48 States, the Territories of Hawaii and Puerto Rico, the District of Columbia, and the Bureau of Public Roads, legislative policy must be approved by two-thirds of the membership, or by 35 members. The voting varied on the 16 topics considered and used in formulating the policy from 40 for and 3 against to 46 for and none against, with the Bureau of Public Roads recorded as not voting in all cases. We believe you will find this policy statement interesting, since it comes from the group that has been the partner of the Federal Government in building the Nation's Federal-aid highways. Yours very truly. A. E. JOHNSON, Executive Secretary. POLICY STATEMENT OF THE AMERICAN ASSOCIATION OF STATE HIGHWAY OFFICIALS AS DEVELOPED BY THE CHIEF ADMINISTRATIVE OFFICERS OF THE MEMBER STATE HIGHWAY DEPARTMENTS, MEETING IN CHICAGO, MARCH 13, 1955 To insure an expanding and sound national economy, the Federal-aid highway program should be continued and enlarged to more nearly meet the demands both current and future. The program should be administered and constructed by the Bureau of Public Roads and the State highway departments as in the past-a Federal-State relationship that has been highly efficient and outstandingly successful. Should future Federal road legislation create a national highway corporation, commission, or authority, its duties should be fiscal only. Considering the civil and the national defense, as well as the overall economic well-being of the Nation, the Interstate System of Highways should be accorded priority treatment and its completion accomplished within a period of 10 years. A substantial, balanced construction program, however, must not be sacrificed on the other Federal-aid highway systems. The Interstate System should be built to meet the anticipated traffic demands of 20 years hence, and constructed to design standards promulgated and approved by the American Association of State Highway Officials, and with the application of, and the provision for, access control features in accordance with warrants promulgated and approved by the American Association of State Highway Officials. The location and design of the Interstate System should be the joint responsibility of the State highway departments and the Bureau of Public Roads. The actual determination of the location of the routes between control points should be based upon engineering studies, traffic analyses, and economic comparisons. The building of the Interstate System would be jeopardized if it were redesignated or extended beyond its 40,000-mile statutory limitation. The Interstate System program should be accelerated, and the Congress, in its good judgment, should determine the method of financing. If it is decided that it is necessary to finance the work by credit financing, the association approves such action. Because of the need for expediting the construction through all States simultaneously, provision should be made for the Federal Government, upon petition of the State and in the interest of national defense, to procure the necessary rights-of-way and access control on the Interstate System. Because of the heavy demands made upon the States for financing roads having more local interest than the Interstate System, and because of the national interest and responsibility of the Federal Government in the Interstate System, the association recommends that the Federal contribution to the cost of the capital improvements on that system be between 90 and 95 percent, and that these funds be apportioned to the States on the basis of need. The State highway departments should be responsible for the design, letting of contracts, supervising construction, and, upon completion, should have the sole responsibility, at State expense, of maintaining, policing, and operating the facility. As a matter of equity and so as not to discriminate against the States that have already constructed a portion of the Interstate System, the association recommends that a credit reimbursement should be allowed for any road that is properly located, designed, and constructed to be incorporated into and become a portion of the Interstate Sytem, whether the road be free or toll, in accord with the following procedure: (a) Existing free roads.-Existing free highways measuring up to standards of the Interstate System should have the depreciated value determined from which would be deducted 10 percent thereof and the total amount of any Federalaid funds used in constructing the highway. The result then should be the credit to which the State is entitled. (b) Existing toll roads.—A State should be entitled to credit for an existing toll road, excluding the cost of financing thereof and of any facilities not of a highway character, that is properly located and constructed to meet the requirements of the Interstate System, and the amount of credit so allowed should be the depreciated value, not to exceed 40 percent of the original cost where the road was completed prior to December 31, 1951, and not to exceed 70 percent when completed between December 31, 1951, and December 31, 1955. (c) Future toll roads.-A State should be entitled to credit on a future toll road, when built to approved interstate standards, in the amount of 90 percent of the original cost, less the cost of financing thereof and of any facilities not of a highway character, provided the project has progressed to the point that its financing has been arranged and completed by December 31, 1955. There should be no credit reimbursement for future toll roads after that date. In the continuation of the Federal-aid highway programs on the primary. secondary, forest highway, and urban systems, authorization should be for a period of at least 6 years to allow the States to adequately plan and staff the programs. The current apportioning formulas and public lands sliding scale matching provisions should be continued with a 25 percent transfer provision allowed between the primary, secondary, and urban allocations to make the program flexible enough to meet the most pressing needs of the individual States. Assuming an accelerated and enlarged interstate highway program should be authorized by the Congress, the first authorization providing for funds on the primary, secondary, and forest highway systems should be in at least the amounts provided in the act of 1954. The urban authorization could be decreased below the amounts provided in the act of 1954 in proportion to the amount of urban aid authorized under an enlarged interstate highway program. The subject of labor relations and requirements should not be included in Federal statute, but should be a matter to be determined at the State level. SUPERHIGHWAYS AND NATIONAL BANKRUPTCY The proposed $101 billion superhighway program figures out about $200 per employed person per year for 10 years on a cash basis. The bonded debt approach will probably double the cost but spread it over 30 or 40 years. This means that the average wage earner is going to work 2 or 3 weeks a year to pay for a highway building program of very dubious value. The fantastic possibilities of railroad piggy-back (trailer or flat car) service are such that almost all long haul trucking (over 150 miles) will be eliminated if a competitive system is allowed to evolve. This is because railroad unit costs are about one-third those of trucking. This development would eliminate the biggest potential source of revenue for superhighways. In the passenger field the possibilities of aviation (airplanes, convertiplanes, and helicopters) are such as to make an expensive superhighway program appear to be 20 years out of date from this angle. There is also the possibility that the railroads, by using modern cars and motive power equipment such as that used in Denmark and other parts of Europe, can cut their passenger costs by 50 percent thus eliminating long haul bus service and cutting rather deeply into long haul automobile traffic. This can be done quite quickly and cheaply largely with second-hand equipment. There is good reason to believe that the railroad facilities of this country have not been fully exploited for more than 50 years. The proposed expansion of highway facilities could cause such an over-expansion of the total transportation plant as to plunge the whole industry into bankruptcy. An impartial study should be made of the hidden potential of the railroad industry before hundreds |