10. In the event highway construction is expanded at the rate of $2 billion per year, shortages in certain equipment categories may develop, particularly in the second expansion year, after the additional work potential of existing equip ment has been taken up. Such categories include contractor-type wheel tractors, off-highway hauling equipment (trucks, trailers and wagons), aggregate production machinery, and bituminous and concrete paving equipment.

CONCLUSION

Task Force No. 4 has studied the impact of the proposed expanded highway program on the construction machinery and allied equipment industry and concludes that the industry has, now is providing, or can provide sufficient capacity to meet the high-level needs of the proposed 10-year expanded roadbuilding program, and at the same time fill all normal needs of other claimants for the industry's equipment.

(The table "Estimate of equipment requirements" is as follows:)

TABLE I.-Estimate of equipment requirements, (major units), for expanded highway construction program-Continued

Senator GORE. Senator Martin?

Senator MARTIN. I have no questions.

Senator GORE. Senator Case?

Senator CASE. I wonder if Mr. Salditt can give us an idea of the percentage of cost which equipment represents in a highway project, and whether there has been any change in that in recent years?

Mr. SALDITT. Of course, in giving this estimate I will have to use the replacement value of the equipment, and assume the construction of highways as now envisaged in the Interstate Highway System. It is estimated by the industry that equipment required for $1 billion worth of new highway construction, in accordance with the designs as they are now standard for the Interstate Highway System, has a replacement value of $472 million, exclusive of over the highway automobiles and pickup trucks and motor vehicles.

That is the estimate of the industry based on its own observations of such projects as the Ohio Turnpike, the New York Thruway, and estimates also furnished by the Bureau of Public Roads.

Senator CASE. That would be 47.2 percent?

Mr. SALDITT. Of the actual construction value of the project, exclusive of the cost of engineering and right-of-way of course. I am speaking of actual construction value.

Senator CASE. Has there been any change in that in recent years?

Mr. SALDITT. Yes; the equipment population has increased in proportion to what has been used in equipment as late as 10 years ago, 20 years ago, and 30 years ago. Labor has been decreased and the use of equipment and therefore the value of equipment on construction has increased.

Senator CASE. Has that added to the cost of constructing roads or has it helped to offset the difference in the purchasing power of the dollar?

Mr. SALDITT. It has very materially decreased the cost of construction of roads, and perhaps I may quote from the full report in this connection:

As an example, in 1923, he average unit cost of excavation on Federal-aid projects was 47 cents per cubic yard. In spite of the steep rise in the cost index since 1923, average excavation costs were only 38 cents per cubic yard in 1953. Senator BUSH. What were they before that?

Mr. SALDITT. Forty-seven cents in 1923, and down to 38 cents. Senator BUSH. Due to the efficiency of Harnischfeger and other equipment.

Mr. SALDITT. In further support of that contention I refer to an article written by Mr. M. D. Christenson, Assistant Deputy Commissioner, Division of Engineering, United States Bureau of Public Roads, in November 1954, to which there are attached very competent curves indicating not only the decline in cost relatively speaking of excavation, but also proving that other items of highway construction, such as surfacing costs have not risen in the same proportion as overall highway costs have risen, with the conclusion being reached that it is because of the tremendous advances that have been made in the design and construction of equipment that it was possible to accomplish that

purpose.

Senator CASE. Mr. Salditt, have the prices of machinery gone down?