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remove bottlenecks such as those discussed herein and in the report of the other task forces should be taken immediately. These actions will require the collaboration of all facets of the economic life. The engineering section of the ARBA stands ready to assist in this endeavor.
There are in addition to that a series of findings of 3 or 4 pages with respect to other phases of whether or not the highway industry could absorb it. In general they do give an affirmative answer.
Senator GORE. Do you have any questions, Senator Case?
Mr. Halvorson, I am interested in your observation and your emphasis on the possibility of refunding the gas tax for nonhighway use, the same as you presented last year. Do I understand that the latter part of your sttaement is to be regarded as a pretty strong hint that if linkage is definitely established that you will seek refunds ?
Mr. HALVORSON. That is very true, that is exactly our position.
Senator Case. You recall last year linkage was provided in the version of the bill as it was passed in the House, but we eliminated that in the Senate.
Mr. HalvorsON. I very definitely remember that.
Senator Case. Did that meet your objections at the time, the fact that we did not establish linkage? You haven't sought to repeal the gasoline tax.
Mr. HALVORSON. Even though that was taken out of the language of the bill we feel that implicitly Congress has established linkage between the Federal-aid to road programs and the Federal automotive excise taxes. I am quite certain that I am right that the National Grange will, especially if there is any definite linkage as indicate in the Clay report, we will then definitely seek refunds. But we probably will anyhow.
Senator Case. You probably will anyhow?
Senator Case. Then how would you propose justifying the expansion of the highway program which you endorse! ?
Mr. HALVORSON. We feel that the roads of the Nation are of sufficient importance to all the taxpayers, to all the people in the United States, whether they have an automobile or not, and especially to national defense, that we feel justified in asking that the money come out of the general funds of the Treasury without having an automotive excise tax as a sort of a user tax.
Senator Case. Of course I would object to any interpretation that we implicitly linked, because we explicitly deleted linkage. We did say that we were trying to be sure that the Federal Government provided for highway purposes as much as was collected. It might have Leen in the nature of a yardstick. But by explicitly deleting that provision we certainly did not implicitly use it.
Mr. HALVORSON. But the very fact that this tax has been in existence this length of time, and the very similarity in the amounts appropriated for Federal aid and the Federal gasoline tax, establishes, we think, a pretty clear-cut connection.
Senator CASE. Did you feel better about it when we were collecting a 2-cent gas tax and yet not providing for roads as much as was being collected? It is only in this new act that we come up to that amount. Ever since we had that additional half cent, making it 2 cents on the Federal gas tax, up until the new law came into play we had been
collecting that on nonhighway use or highway use alike and putting it into the General Treasury. Of course it will still go into the General Treasury. You did not protest the 2-cent gas tax at that time, did you, or seek its repeal?
Mr. HALVORSON. We have continually sought the repeal of the Federal automotive excise tax as a tax that really should be reserved to the States so that they could do their part of the highway program. They are going to have a very big problem trying to raise this money. They certainly will need that. We feel that the general taxpayers, for reasons of national defense and other reasons, should contribute some, and that the Federal contribution should not only come from the Federal highway users groups in building this highway system.
Senator CASE. The last sentence of your statement says:
If Federal funds are to be linked to the Federal automotive excise taxes or if the Federal gasoline taxes are not soon repealed, we shall seek refunds on gasoline and automotive parts or accessories used in connection with agricultural tractors and machinery.
Does that indicate some more aggressive policy or what?
Mr. Halvorson. That is more aggressive than last year, yes. This year our executive committee did discuss this matter when they were here about a month ago, and we now have instructions to go ahead and draft a bill or find a bill that is satisfactory to us.
Senator Case. As long as we collected the 2 cents gas tax but did not try to make the funds for roads approximately that same amount, you were not so aggressive?
Mr. HALVORSON. Oh yes. We have always been aggressive in trying to get the Federal automotive excise taxes repealed, but until we became convinced that the Congress had this linkage in its mind, even though it did not say so, we just worked on the repeal. But now we feel that Congress has linked it too implicitly, we are ready to seek an exemption for gasoline used in farm tractors.
Senator Case. I would have thought that you would have felt worse about it when we were collecting that much and not putting an equal amount into roads.
Mr. Halvorson. We are feeling just as bad but our effort, our strategy then was to repeal the tax rather than get an exemption. Now we feel that the only hope is to get the exemption. I have made a rough calculation and figured out that farmers are paying Federal gasoline taxes amounting to about $75 million a year on gasoline used in their farm equipment.
Senator Case. We really did not intend to excite you by increasing the amount that we made available for highway construction. We were rather seeking to make you feel better about it, I think, rather than worse.
Mr. HALVORSON. I do not think you made us feel worse. We were very glad that you did take out the explicit linkage because that still left us some hope that we might be able to get the automotive excise tax repealed.
Senator Case. That is all, Mr. Chairman.
Senator KERR. I gather from your statement first that you endorse the proposal to complete the National Interstate Highway System of 40,000 miles within the next 10 years?
Mr. HalvorsOn. That is right. We do have some words in here cautioning us against possible inflation, that we would not want to try to build this highway system so fast that cement would go up and equipment would go up, and we would get less road for our money. But if we can do it without inflating the cost, we would be for it.
Senator KERR. And you believe that you can?
Mr. HALVORSON. We have not looked into that, but I did hear Senator Case say that it seemed as if it were possible. I have heard comments in groups that I have been with to the effect that we possibly could do it without getting into inflation.
Senator KERR. I understood you, with reference to your statement to S. 1048, that you were in accord with the provisions of S. 1048 which increased the Federal aid for the primary, secondary, and urban systems?
Mr. Halvorson. It did not go so far as doubling, as we had hoped, but we are in accord with going this far.
Senator KERR. You approve of S. 1048 to the extent that it increases the Federal aid for the primary, secondary, and urban systems?
Mr. HALVORSON. Yes, sir.
Senator KERR. However, you go beyond that and make the increase insofar as main rural farm-to-market and main rural roads are concerned by doubling the amount presently being provided by the Federal Government?
Mr. HALVORSON. That is right.
Senator KERR. You would then provide that that be matched 50-50 by the States?
Mr. HALVORSON. That is right. The present formula.
Senator GORE. The committee wishes to thank you for your helpful suggestions and for your appearance.
Mr. HALVORSON. I thank you for the privilege of appearing.
Senator GORE. The witnesses scheduled to appear on Friday at 10 a. m. are officials of the Association of State Highway Officials: Commissioner McCoy of California, Commissioner Merrill of New Hampshire, Commissioner Anderson of Virginia, and Commissioner Baldock of Oregon. Also, Mr. John Baker, assistant to the president of the National Farmers' Union.
Senator KUCHEL. Is that Friday?
Senator KERR. May I ask the chairman how long he thinks the hearings on this bill will continue?
Senator GORE. The Chair is unable to express an opinion now, Senator Kerr. During your absence and also the absence of Senator McNamara, the committee determined to instruct the staff to make an analysis of S. 1160, and also to request the appearance of the Secretary of Commerce and to submit to him certain questions which the committee would desire that he answer.
After he has appeared then the suggestion was made, which was acceded to, that General Clay be invited to appear. There are numerous requests pending before the committee for an opportunity to be heard. So it would be a little difficult to predict at this time. It is of course within the control of the committee. To press a general opinion I would say no less than 3 weeks.
Senator KERR. I am not a member of the committee. I appreciate the opportunity to meet with it when possible. The chairman is keenly interested in some matters before the Finance Committee which soon will be coming up. It would be my sincere hope that the hearings could be extended until the fullest deliberation could be had, and also until representatives of State highway commissions of States interested could be heard as to their viewpoint.
I would especially request that before the hearings end that the representatives of the Governor of Oklahoma and their highway department might be heard.
Senator GORE. If there is no objection on the part of this committee, an invitation will be extended to the Governor of Oklahoma and the commissioners.
Senator Case. There is no objection except to that part of the Senator's statement when he said he was not a member of the committee. Did you mean of the subcommittee?
Senator KERR. I am not a member of the subcommittee.
Senator KERR. I had understood that I would be, Senator Case, but when the announcement was made I learned that I was not, and so far as I know that still stands.
Senator GORE. The committee will welcome you and your participation at any time, Senator Kerr. We are thoroughly aware of your deep interest in and broad knowledge of the highway problems of the country. I think your suggestion is well that we do not rush this. It had not been the purpose of the chairman of the subcommittee to rush it.
Senator KERR. I didn't so indicate. I was asking for information.
Senator GORE. I did not understand you to so indicate. I do not know when we can conclude hearings. As of now witnesses are asking to testify that would at least extend it to 3 weeks.
Senator CASE. Mr. Chairman, Senator Kerr was a member of the subcommittee which handled the road question last year. His counsel and help can be invaluable to the committee. I hope he will feel free to be here at any and all sessions. He is a member of the full Committee on Public Works.
Senator GORE. Do you need any further invitation?
(Thereupon, at 12:05 p. m., the subcommittee was adjourned, to reconvene at 10 a. m., Friday, February 25, 1955.)
UNITED STATES SENATE,
Washington, D. C. The subcommittee met at 10:08 a. m., in room 412, Senate Office Building, Senator Albert Gore presiding.
Present: Senators Gore (presiding), Symington, Thurmond, McNamara, Neuberger, Martin, Case, Bush, and Kuchel.
Also present; Senator Kerr. Senator GORE. The committee will come to order. The committee is pleased and honored to have as witnesses today Mr. John Baker, assistant to the president of the National Farmers Union, and three highway commissioners representing the American Association of State Highway Officials who will be introduced in turn as they appear as witnesses.
The committee will first hear Mr. Baker.
STATEMENT OF JOHN A. BAKER, ASSISTANT TO THE PRESIDENT
OF THE NATIONAL FARMERS UNION
Mr. BAKER. Mr. Chairman, I appreciate being invited to appear before your committee. Mr. Patton asked to be specifically remembered to you and Senator Symington and gave his personal regards.
Senator GORE. Thank you. I wish you would thank him for us.
Mr. BAKER. For the record I am John A. Baker, assistant to the president of the National Farmers Union. I have a brief statement of James G. Patton, president, National Farmers Union, which I shall read at this time.
There ought to be a hard surfaced, all-weather, farm-to-market road network designed to serve every family-type farm in the United States. The time, in fact, is long since past when we should have attained this objective.
No single group in the United States is more cognizant of the needs for improved roads than are our family-sized farmers. These families are dependent on roads for transportation of their children to and from schools, for movement to the farm of the numerous supplies necessary to the operation of a successful farming business, and for transportation away from the farm of produce to feed our growing population.
Delegates to National Farmers Union convention at Denver, Colo., in March 1954 drafted a statement of policy which illustrates the