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Our company has an investment of about $400 million in the line between New York and Washington. There is, however, little inducement to add to this investment. The amounts required and the prospective low rate of return, particularly in view of the continuing probability of ever-increasing Government expenditures for paralleling highway and airline facilities, make the venture too speculative for private enterprise.

In this connection, I may say that while this project is too large for any particular railroad to undertake alone, I am convinced that it will be a great success, that it will show that high-speed rail transportation can make a real contribution to the solution of our mass transit problems, and that the Government and the public will receive substantial benefits from the expenditure of the relatively small amount of money here involved.

The Pennsylvania Railroad between Washington and New York was constructed at a time when the Government was not subsidizing our competition. Such subsidy has enabled this competition to siphon off a large proportion of our rail patronage. The railroad today represents what we could preserve under private enterprise and despite the economic disadvantages of operating against massive aid to our competitors.

Federal funds of almost $4.5 billion have been apportioned in the northeast corridor States for the Interstate Highway System alone in the 10 fiscal years since the program began. Highway expenditures in these States are now running at a rate in excess of $3 billion annually.

Last year the Pennsylvania operated its passenger service at a loss of more than $34 million, and a half of this deficit was incurred in connection with operation of intercity trains.

The Pennsylvania is prepared to cooperate fully in order to assure the success of the demonstration project and of the entire program. We already have worked closely with the Department of Commerce in formulating the high-speed test project for which funds are requested. If the project is approved, we will continue to render staff and administrative assistance. In fact, we will cooperate in every way we can. We will agree to provide the right-of-way, tracks, and supporting facilities in which we have invested millions of dollars, and to upgrade these for the proposed tests. This will include substantial improvement of our trackage, revising the signal and catenary systems, and strengthening bridges.

Likewise, we will participate in the acquisition of a fleet of as many as 50 self-propelled electric passenger cars of a design satisfactory to both the Government and the railroad.

With these cars, we can within a relatively short period of time inaugurate safe, comfortable, and reliable Washington-New York service at 100-mile-per-hour speeds, with a maximum elapsed time of 3 hours, making four intermediate stops. Thus, the demonstration project will produce beneficial results very quickly.

The new cars will be the finest passenger equipment in the world, electrically powered and capable of accelerating to 125 miles per hour in 150 seconds, and of operating in the future at speeds up to at least 150 miles per hour. They will embody the latest concepts in propulsion systems, structural design, and passenger comfort.

Four high-performance motors in each car will provide uniform power throughout the train and assure maintenance of schedules even if a unit should fail.

for example, has increased to an average of more than 166,000 vehicles daily. With the projected 40-percent increase in automobiles in the next 10 years, it is extremely doubtful that new road construction can keep up with demand.

Airspace is already in short supply at major airports. Between Washington and New York alone, there are 155 scheduled flights daily, each requiring the same amount of conrolled-approach airspace as the longer distance transcontinental and intercontinental flights. Moreover, both highway and air travel are subject to disruption because of weather conditions. On eight occasions in a 2-month period last fall, the New Jersey Turnpike was closed to traffic for substantial periods ranging from 2 hours to half a day. During one day, during the Christmas holiday season last year a major airline was able to complete only 18 of 126 planned shuttle flights in the Washington-New York-Boston area.

Instances of this sort underscore the suitability of the northeast corridor as a laboratory in which to examine transportation problems and seek their solutions. But there is an even more compelling reason why it is the ideal location for conducting the Government's study and demonstration of high-speed passenger service.

The Pennsylvania Railroad's main line between New York and Washington is one of the Nation's greatest transportation assets. It provides a readymade base on which to develop the operation of fast, high-volume passenger service quickly and economically.

The existence of this railroad minimizes the costly necessity of doing in this area what the Japanese Government had to do in constructing their new Tokaido line for a distance of 320 miles at an expenditure in excess of $1.5 billion. The tremendous cost of starting from scratch where rail lines do not exist is also illustrated in the case of San Francisco. There a metropolitan transit system only 75 miles in length is being built at an outlay of $1 billion, or an average of $13 million a miles.

The Pennsylvania's line between New York and Washington could not be reproduced today for less than $1 billion.

By way of comparison, it would cost $1.6 billion to build a new highway between New York and Washington, with all supporting facilities.

Furthermore, our line is in good physical condition for the type of service currently performed. On the New York-Washington roadway alone in the past 4 years we have laid 25,000 tons of new rail, renewed 400,000 crossties, and rebuilt most of the track, requiring some 850,000 tons of stone ballast. These projects represent an expenditure of $15.5 million in this short period.

During that time we also spent $4 million on the rehabilitation of main line bridges and $6 million on repairing the catenary system. In the past 2 years, we have added 70 modern stainless steel coaches to the New York-Washington service at a cost of almost $10 million. Between terminals at New York and Washington, this line intersects five major cities-Newark, Trenton, Philadelphia, Wilmington, and Baltimore. It is directly available to serve some 25 million people. Here, if anywhere, the market potential exists to prove that high-speed intercity rail passenger service can provide the safe, reliable transportation that the eastern corridor and the Nation will increasingly require.

Our company has an investment of about $400 million in the line between New York and Washington. There is, however, little inducement to add to this investment. The amounts required and the prospective low rate of return, particularly in view of the continuing probability of ever-increasing Government expenditures for paralleling highway and airline facilities, make the venture too speculative for private enterprise.

In this connection, I may say that while this project is too large for any particular railroad to undertake alone, I am convinced that it will be a great success, that it will show that high-speed rail transportation can make a real contribution to the solution of our mass transit problems, and that the Government and the public will receive substantial benefits from the expenditure of the relatively small amount of money here involved.

The Pennsylvania Railroad between Washington and New York was constructed at a time when the Government was not subsidizing our competition. Such subsidy has enabled this competition to siphon off a large proportion of our rail patronage. The railroad today represents what we could preserve under private enterprise and despite the economic disadvantages of operating against massive aid to our competitors.

Federal funds of almost $4.5 billion have been apportioned in the northeast corridor States for the Interstate Highway System alone in the 10 fiscal years since the program began. Highway expenditures in these States are now running at a rate in excess of $3 billion annually.

Last year the Pennsylvania operated its passenger service at a loss of more than $34 million, and a half of this deficit was incurred in connection with operation of intercity trains.

The Pennsylvania is prepared to cooperate fully in order to assure the success of the demonstration project and of the entire program. We already have worked closely with the Department of Commerce in formulating the high-speed test project for which funds are requested. If the project is approved, we will continue to render staff and administrative assistance. In fact, we will cooperate in every way we can. We will agree to provide the right-of-way, tracks, and supporting facilities in which we have invested millions of dollars, and to upgrade these for the proposed tests. This will include substantial improvement of our trackage, revising the signal and catenary systems, and strengthening bridges.

Likewise, we will participate in the acquisition of a fleet of as many as 50 self-propelled electric passenger cars of a design satisfactory to both the Government and the railroad.

With these cars, we can within a relatively short period of time inaugurate safe, comfortable, and reliable Washington-New York service at 100-mile-per-hour speeds, with a maximum elapsed time of 3 hours, making four intermediate stops. Thus, the demonstration project will produce beneficial results very quickly.

The new cars will be the finest passenger equipment in the world, electrically powered and capable of accelerating to 125 miles per hour in 150 seconds, and of operating in the future at speeds up to at least 150 miles per hour. They will embody the latest concepts in propulsion systems, structural design, and passenger comfort.

Four high-performance motors in each car will provide uniform power throughout the train and assure maintenance of schedules even if a unit should fail.

Each car will be wider than convention equipment and will seat 80 people in reclining seats. The noise level will be about that of a modern executive office, and there will be electrical heating and nodraft air conditioning. Food service will be provided.

These units will be the first in the country in long distance intercity service with remotely controlled sliding doors facilitating loading and unloading with minimum delay.

Under the present plan, based on 100-mile-per-hour operation_in the first stage, these cars will operate alternately with our regular trains between New York and Washington.

Daily trains will be increased from the current 50 to 72 in order to provide hourly service between Washington and New York and halfhourly service between Philadelphia and New York from 7 a.m. to

12:15 a.m.

We will cooperate with the Government in testing patronage response to the improved service by adjusting speeds, schedules, and fares, and by assisting in the collection and analysis of statistical information.

The expenditures to be made by the Pennsylvania in helping carry through a valid demonstration under the legislation are contemplated to be comparable to the Government's expenditures. This is not money we would spend in any event, but funds specifically required to support the Federal program. In addition, the Pennsylvania will bear its normal operating costs of other portions of its Washington-New York service.

Although the amount of money involved is extremely modest in comparison with Government spending for highways and airways, I would suggest that you do not underestimate the significance of what can be accomplished under the legislation you are considering.

This measure will provide an incentive and an example to show what rail service, with its extremely high capacity for transporting large numbers of people safely, comfortably and efficiently, can do to relieve the necessity of spending by Government of additional vast sums on less economic forms of transportation.

But it will do far more. One of its most important byproducts will be to stimulate innovation and experimentation in the railroad industry just as the Government has spearheaded and encouraged progress in the aircraft industry, in highway development and in many other fields of technology.

Meager earnings have severely restricted research and development in our industry. What the railroads are spending is infinitesimal when compared with the billions the Federal Government spends each year for research and development in other fields, including more than $300 million on projects related to air transportation, highways, and waterways.

The legislation you are considering, Mr. Chairman, marks the first. real effort by Government-which has done so much to assist so many to participate in research and development in behalf of improved intercity rail service. Like all efforts, if constructively pursued with vigor and determination, it will bring on advances far beyond any of those we can now foresee.

As a practical step to solve a critical national problem of mobility in highly populated areas, it has tremendous potentialities.

As a step aimed at strengthening the Nation's transportation system in the years of great growth ahead, it is manifestly in the public interest.

I therefore respectfully urge this committee and the Congress to approve at this session legislation necessary to make this proposal a reality.

Senator LAUSCHE. Thanks very much, Mr. Saunders, for your very enlightening paper. Can you tell me whether the Pennsylvania is now participating in any test program under the mass transportation bill presently administered by the Housing and Home Finance Agency? Mr. SAUNDERS. We are participating in only one, and it is in connection with commuter service between Levittown and Philadelphia. Senator LAUSCHE. How long has that been in progress? Mr. SAUNDERS. It has been in progress 3 years.

Senator LAUSCHE. Your assistant may answer if he wishes.

Mr. MORRIS. It is of 3-year duration, ending October 27 of this year, at the completion of the third year.

Senator LAUSCHE. Can you tell me just what type of improved service was to be provided by that project?

Mr. MORRIS. New cars, greater frequency of service, for example an increase in the number of trains from 15 to 37, and the new cars are air conditioned, the elapsed time was reduced, and of course the cars are more comfortable in every way, shape, and form.

Greater frequency of service, new cars, and faster speeds.
Senator LAUSCHE. And reduced fares?

Mr. MORRIS. Reduced fares; yes.

Senator LAUSCHE. What has been the result of that test?

Mr. MORRIS. A terrific increase in ridership, sir, but not enough to take care of the expenses.

Senator LAUSCHE. Have the losses been greater or less?

Mr. MORRIS. The losses have been much less.

Senator LAUSCHE. Would you mind providing for the record by letter the figures showing the increase in passengers, and the decrease in losses and also in the letter indicate what innovations were introduced in the test?

Mr. SAUNDERS. If I may add, in that connection, Mr. Chairman, we have also participated with the city of Philadelphia over a period of several years now in similar projects, and we have found on some of the other lines the ridership has been increased even more, as much as 200 percent. Even in those cases it has not taken care of the losses, or brought it onto a break-even basis, but it has reduced the losses very substantially. So if we may, we will supply that for the record,

too.

Senator LAUSCHE. Yes. Would you also state in your letter how much money the Federal Government provided to develop this test? Mr. SAUNDERS. Yes.

(The information requested follows:)

PASSENGER SERVICE IMPROVEMENT CORP.

The first suburban transportation experiment on a contract basis with the city of Philadelphia began October 26, 1958, on our Chestnut Hill branch for the purpose of determining if the congestion in midcity metropolitan areas could be relieved by stimulating use of suburban rail transportation. Fares were reduced as much as 45 percent and service was increased from 48 to 72 trains on weekdays with some additional service on Saturdays and Sundays.

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