CHART 3

1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978

FISCAL

YEARS

fund with revenues accruing to the trust fund, and authority to build the Interstate System over a longer period of time.

Under those assumptions, this chart shows the pattern of expenditures for the ABC and the Interstate Highway Systems. The big jump in ABC expenditures occurring between 1961 and 1962 results from resumption of the program after the moratorium, when we would obligate and expend the amount of money that is available in those periods for ABC work.

You remember the other charts show that under the moratorium plan the trust fund can support and cancel out all deficits by 1961, and we take advantage of that in expediting the ABC program as shown by the larger expenditures during 1962 and 1963.

The remainder of the program would indicate annual ABC expenditures of $930 million. In my statement I indicated that we would have $925 million. The difference between the $925 million and the $930 million is flood control and miscellaneous items.

Total expenditures would drop from $2.8 billion, roughly, in 1960 to $2.04 billion in 1961, jump up to $2.3 billion in 1962, and then gradually increase, as indicated on this chart, to a final amount of about $313 billion in 1977. That gradual increase reflects the increase in revenue going into the trust fund, and which would balance out the expenditures from the trust fund.

The tabulation indicated in this chart shows that between 1957 and 1972 there will be $23.6 billion for the Interstate System and $14.9 billion for the ABC program, or a total of $38.5 billion for the two programs, against a revenue of $38.5 billion, which balances.

From 1972 to 1978 the interstate will be $12.4 billion and ABC $5.7 billion, for another $18.1 billion against a revenue of the same amount, making a total for interstate of $36 billion Federal funds, $20.6 billion ABC, and balancing out at $56.6 billion.

That concludes the charts, Mr. Chairman.

The CHAIRMAN. Mr. Tallamy, before you proceed further, without objection, each of these charts and the explanation of the chart which we have before us will appear in the record at the point where you referred to each chart.

Mr. TALLAMY. Thank you, sir.

Now Mr. Chairman and gentlemen of the committee, I note you are interested in the difference between the estimated cost of developing the Interstate System that was prepared in 1955 as compared to the one in 1958. I have a statement regarding that, which I think may be helpful to your committee.

In 1954 the State highway departments, at the request of the Bureau of Public Roads and pursuant to a directive of the Congress, prepared an overall highway needs estimate. It was broken down into several parts and showed the ABC needs, those of other roads and streets and the estimated cost of building the Interstate Highway System as conceived at that time. Only 6 weeks' time was available to the States for the development of this estimate. It is obvious that while a good job was done under the circumstances, it could not have been anywhere near as precise as the later estimate made during 1957 which was submitted to the Congress in January 1958. That estimate was undertaken with meticulous care. Specific lines were laid down, tentative profiles established, and probable cross sections made for estimating

purposes to determine quantities of excavation and fill. Bridges were located, their probable spans estimated, and the cost of each individual structure established, together with extensive investigations into probable traffic flows and characteristics, the topography of the country, and the location of interchanges. It is the most precise and comprehensive estimate for a huge construction program ever undertaken in the highway field. It required more than a million man-hours to develop.

The 1958 estimate indicates that the cost to complete the system as was contemplated in 1955 would be $37.6 billion, of which $33.9 billion would represent Federal funds. This Federal fund amount compares with $25.6 billion in the original estimate and is an increase of $8.9 billion.

There are two basic reasons for the difference between the estimate made in 1955 and the one submitted to the Congress in 1958. First, the 1955 estimate was of necessity a preliminary estimate because of the limited time available to prepare one prior to consideration of the 1955-56 legislation.

Second, they are not comparable in all respects. They are not always identical in location, design, or function because of traffic increases, change in concept required by the 1956 legislation to provide greater servicing of local needs, and physical adjustments required when the topographic and foundation conditions were better determined by the more detailed surveys and studies secured as part of the 1958 estimate. Also there was a lifting of standards in the design of the Interstate System in some States which previously were not contemplating the elimination of crossings at grade and other factors to the extent required by a modern express highway designed for 1975 traffic.

Further, the 1955 estimate did not have the advantage of developing traffic estimates in the light of the extraordinary increases in traffic experienced in the last few years. It was based upon traffic data and information of several years prior to 1955; whereas, the 1958 estimate was based upon a broader knowledge of traffic increase brought about by the recent-year increases and the altered concept. of the 1956 act which required a greater assignment of local traffic than had previously been done. An analysis of the number of traffic lanes, in the two estimates, which affect the road base, shoulders, and other roadway features, indicate the 1955 estimate was inadequate by $1.3 billion because of these requirements.

Also, the provision of the Federal-Aid Highway Act of 1956 which declared that the local needs to the extent practical and feasible should be given equal attention to those of interstate traffic substantially changed the concept of the location and number of interchanges and frequently the location of the highway itself, particularly to serve local needs of the small cities and communities throughout the country.

An analysis of the additional structures, interchanges, and supporting items to serve local needs as required by the 1956 legislation indicates that the 1955 estimate was inadequate by $3.8 billion to properly serve that purpose.

There are other factors for which the 1955 estimate had to be adjusted to meet the requirements of the 1956 act and modern freeway

operation. Items not included in the 1955 estimate, such as utility relocations, uniform signing of the Interstate System throughout the entire United States according to modern freeway standards, lighting under certain conditions, and other incidental items, such as delineation, all of which are essential for proper operation of the Interstate Highway System, amount to $800 million.

Highway construction costs of the Interstate System type rose 12 percent as a result of general nationwide price increases during the interval between mid-1954—that was the time we took the estimates of cost of doing work to determine the overall estimate and the last half of 1956-which was the period we had to use in determining the cost of the 1958 estimate-as reflected by the Bureau's price index for Federal-aid highway construction; in other words, a 12 percent rise in this period.

This increase is applicable, of course, to all items and represents a total $4.1 billion increase in construction costs in the 1958 estimate. All of these items totaling $10 billion represent the differences between the 1955 estimate and the 1956 act design concept and the construction price rise occurring in the interval, or a Federal cost differential of $8.9 billion.

While the 1958 estimate indicated that it would cost $37.6 billion to construct the Interstate System between the same cities and border points used as the basis of the 1955 estimate, the actual measured miles by those detailed estimates was found to be 38,548 as compared to the 1955 figure of 40,000. Thus, if the location of the Interstate System were to follow the alinements originally contemplated requiring 40,000 miles to establish the system connections as planned in 1955, the 1958 estimate of cost would undoubtedly have been still greater. In: our judgment the 1958 estimate is sound. As a matter of fact an examination of contract awards demonstrates its accuracy. Projects. costs have averaged about 5 percent below the estimates, and in view of the detail with which the 1958 estimate was made we have every reason to expect that this condition will continue to prevail based on present construction price levels.

In October of 1957 the Secretary of Commerce made available for designation 1,102 miles of routes out of the 1,452 miles which had not been included in the system as it was estimated in 1955. The remaining 350 miles is held in reserve to be certain the 40,000-mile limitation is not exceeded during actual construction. The Interstate System highway legislation of 1944 established the basic policy that the system shall, among other things, connect the principal metropolitan areas, cities, and industrial centers of the United States with a system properly integrated and serving the national defense. To fulfill this requirement to the maximum extent practical within the 40,000-mile limitation, city-to-city routes totaling 886 miles and 216. miles in and around metropolitan areas were designated in 1957. These designations were made from recommendations presented by the State highway departments totaling over 13,000 miles. They were made after consultation with the Department of Defense and after a study of their importance with respect to system integration, and the population, farm production, manufacturing, and economic values had been considered. The designations were not made, however, in time to be included in the 1958 estimate, but for the purposes of con