relocation costs account highway construction, from which the rate payers receive no benefits as users of utility services.

It is a misnomer, therefore, to term this a proposal to reimburse the utilities. Such terminology suggests that they are being relieved of an expense incident to their utility operations without any corresponding benefit to the utility user. Actually what happens both from an accounting and legal standpoint is that the utility user is relieved of a charge presently being assessed against him not on account of his use of utility service but as a result of the general public's action in the construction of highways. It is true that from a standpoint of mechanics the law would provide that the utility be compensated for the expense of relocating its facilities. The same general effect, however, is achieved as though the charge for relocation were divided by the number of utility users who had been assessed and their proportionate amount paid directly to them.

The real problem thus is not one of reimbursing the utility involved but of eliminating a charge to the utility user of a cost element which bears no relation to the utility service provided. There is no logical reason why the utility user ought to make a double contribution to the Federal-aid highway program, once when he pays his tax bill, and a second time when he pays his gas, light, telephone, or water

bill.

I should at this point like to emphasize that adoption of the pending proposal would in no wise result in a "windfall" to utilities. Wherever there is a reduction in operating expenses, not offset by any increased expense, regulatory commissions pass on such reductions by way of reduced rates. From experience I am certain that the Michigan Commission, as well as all other State commissions, would be most diligent to pass on to utility users any rate reductions made possible through reduced operating expenses.

I should also like to point out that in most instances the construction is of little or no benefit to the immediate locality in which the utility is collecting its rates. Federal funds are not normally expended for the improvement of purely local roads handling traffic confined to the service area of the utility in question, but are normally expended for the improvement of roads designed to accommodate long-haul motor vehicular traffic moving through the utility service area or between the utility service area and distant points. In either instance no good reason appears why the cost should be imposed solely upon the utility user in the affected area rather than being shared by those using the highway to travel through the area, or to and from the area from outside points.

A particular illustration, of course, is the development of so-called expressways which are designed to expedite the movement of motor vehicular traffic to and from metropolitan centers such as the city of Detroit and benefit primarily nonresidents who do not use utility services in the area and hence share none of the added cost. In such cases it is clear that the added cost is imposed upon the utility users within the city and results in a subsidy for the benefit of those not located within the utility service area.

Even those persons residing within the service area who have occasion to use the highway do not receive any benefits there from not received by the public as a whole. The funds expended for the highway construction are derived from taxes levied on the general public and the benefits of the highway construction flow to the public at large. Utility users, as members of the general public, pay their share of Federal taxes and thus contribute their full portion of the cost of the project. It is inequitable, therefore, to impose on such utility users an additional proportion of the cost simply because their utility service happens to be received in an area traversed by the highway. The end result is a subsidy paid by the rate payers in the affected area, like Detroit, for the benefit of the general public who in most cases reside beyond the limits of the utility service area.

As the Federal-aid highway program is expanded the burden cast on the rate payer cannot help but increase. The inequity of the double charge to the utility user will be accentuated. We here suggest, on the basis of the foregoing analysis, that it is time the law be brought in accord with the existing physical conditions. The expense of relocating utility facilities, when such relocation is required by present-day highway design and construction, should be specifically recognized as a proper cost of Federal highway construction rather than an operating expense of the local utility. In such manner users of nonrailroad utility services will be accorded the same treatment as users of railroad service.

In conclusion I wish to thank the chairman and members of this committee for the opportunity to appear, and urge on you your most serious consideration of this problem.

Senator MCNAMARA. Mr. Veale, you mentioned the expressways in Detroit. That is a new project recently completed. Do you have the total cost to Michigan Consolidated Gas Co. in relocating services there, and were they paid for by your company or were the costs split?

Mr. VEALE. For the last year in which the costs are available, Senator, a little over $100,000 was expended for relocations within the city of Detroit. None of that was reimbursed to Michigan Consolidated Gas Co.

Senator MCNAMARA. How many miles was that? I am trying to get it on a per mile basis.

Mr. VEALE. I do not have the actual mileage, Senator. I would be happy to furnish you that information.

Senator HRUSKA. Is that in connection with this expressway or all relocations within the city of Detroit, the $100,000 figure?

Mr. VEALE. I would say better than 95 percent of it had to do with expressways because, that is, as the Senator knows, the primary highway construction presently within the city of Detroit.

Senator MCNAMARA. We have a figure not directly from the Detroit Edison Co., but they have used the figure in explanation of this, that it cost them more than a million dollars for these new highways, the John Lodge and Edsel Ford. So we are dealing with big business when we get into this. I thought I might point that out.

Mr. VEALE. I might say that the prospective increase, as a result of the bills pending before the committee, is of course of great concern because that million dollars may be doubled if the pending bills become law.

Senator MCNAMARA. Senator, do you have anything?

Senator HRUSKA. No, thank you.

Senator MCNAMARA. Senator Gore?

Senator GORE. No, thank you.

Senator MCNAMARA. You did a fine job and we appreciate your testimony. It will be very helpful to the committee.

Mr. VEALE. Thank you.

Senator GORE (presiding). The committee will next hear from Mr. Paul Weir, vice president, American Water Works Association, Atlanta, Ga.

STATEMENT OF PAUL L. WEIR, GENERAL MANAGER OF THE WATERWORKS DEPARTMENT, ATLANTA, GA.

Mr. WEIR. I am Paul Weir. I live in Atlanta, Ga. I am general manager of the waterworks department of the city of Atlanta. I am first vice president of the American Water Works Association, which has 10,000 member companies from all parts of the country. I am a civil engineer from Georgia Tech, with 19 years of experience as an engineer. I have served 19 years as an engineer and 8 years as general manager of the waterworks department of Atlanta. I am familiar with the practices of water and sewer systems, and gas, electric, communication, and other companies in locating facilities needed to provide service to the public.

For the most part, these utility facilities are located in or on the rights-of-way of public streets, alleys, and highways, since this is the most practicable way and in many instances the only way of serving customers in both urban and rural areas.

As the use of the automobile has grown and roads have been improved, it has been necessary for utilities to adjust their facilities to permit these improvements. In the past the expense for such adjustments has been, for the most part, not too great. However, in recent years, particularly since the war, with automobile registrations increasing at an unprecedented rate and traffic clogging the existing streets and highways, the character of highway construction and improvement has changed. Automobile registrations in 1920 were approximately 10 million: in 1944, 30 million; at present about 57 million, and it is now predicted that a figure of 81 million will be reached by 1965.

It is no longer adequate to improve the surface of a road and make minor changes in grades and curves. Vehicular traffic now requires more traffic lanes and high-speed roads. The modern divided highway with 4 and 6 lanes and grade separation is causing a vastly increased amount of relocation of the facilities of utilities and at greatly increased cost.

Mr. Chairman and gentlemen, I have a few maps here, and I will go through them hurriedly to tell my story.

(The charts referred to are as follows:)

Mr. WEIR. This is a typical intersection of a city's busy streets. This happens to be the Washington, D. C., district. Notice that every city is built like the hub of a wagon wheel. You have the hub in the middle with the spokes radiating out to the suburbs and finally tying together with a wheel.

That is the same pattern in every large city, whether Atlanta or Detroit. Detroit has done a magnificent job in the so-called belting of water mains and utilities.

Let us take this and superimpose on the map of the District plans that have already been approved. You will notice here we have our belting system, as we have in Detroit and other cities. The moment you belt a city to carry the traffic away from the heart of the city, people begin to build homes and industry takes up, and therefore the utility must follow.

In every street you can visualize underneath the street from 5 to 10 utilities.