Mr. WHITENER. Well, I note that in the act, the National Capital Transportation Act of 1960, Public Law 86-669, that in section 205, subsection 3, it said that the Agency

shall encourage private transit companies to provide needed services in a manner consistent with the transit development program.

And in the subsection immediately preceding that it says thatthe Agency shall not acquire the facilities, property, or rights-of-way of private motorbus companies and persons or operate buses or similar motor vehicles or make agreements for the provision of motorbus services competitive with the private transit company, but may make agreements for the provision of service which is not competitive with services of private transit companies and persons. Now, I am not familiar with the terms of the charter or the law with reference to the rights of the D.C. Transit Co., but it would seem to me that the language of Public Law 86-669 would imply that perhaps whatever rights the private companies now have, would be preserved.

What do you say to that?

Mr. SEEGER. Mr. Chairman, as I read that section, it is designed to prohibit this agency or any successor from getting into the bus business. But I think that section and our act is silent on the question of who should operate the rapid transit system.

We have not expressed any views on that question.

The only point we make is that during the period of construction Congress and this committee will have continuing jurisdiction over the question of what shall be done with respect to the organization for providing this transportation service and that this is a question which the Congress can decide.

Mr. WHITENER. Well, how do you construe these words in Public Law 86-669 where it says "or similar motor vehicles"?

Mr. SEEGER. I interpret that to mean something like a bus.

Mr. WHITENER. All right, but

Mr. SEEGER. But something short

Mr. WHITENER (continuing). What is something like a bus that isn't a bus?

Would it be a single unit car operating on a track or in the air over the water?

Mr. SEEGER. It could be, Mr. Chairman. I don't know what that would apply to.

But I would think that if the act were meant to say that the rapid transit system should be operated by a private operator it would have said precisely that.

Mr. WHITENER. Well, that is the next question I wanted to ask you. You gentlemen have referred to "us" when you were talking about this rapid transit system which you envison.

I take it from that that you imply the Agency will not only be a planning organization but it will also be an operating company?

Mr. SEEGER. No, sir. We propose that the Agency engage in the construction of the system but we have made no proposal as to who should operate the system.

The Federal corporation for example or an interstate agency could own the system and market bonds but the system could be contracted out to a private operator if that is the course that Congress wants to follow.

Mr. WHITENER. A lease operation?

Mr. SEEGER. Yes, sir. This is done.

Mr. WHITENER. So, I take it from that statement that the officials of the Agency have not precluded the possibility that this would be a private enterprise operation?

Mr. SEEGER. That is perfectly correct.

Mr. WHITENER. Well, now, everything considered that and having testified that the fare box would carry the debt of the inequity payment by the various governments, it is the opinion of the agency that if private enterprise were operating the system that it could be done profitably?

Mr. SEEGER. A measure of profit could be taken out of the system each year for the private operator and the net result of that would be to

Mr. WHITENER. You are suggesting

Mr. SEEGER. Extend the bond period somewhat further than the period we are talking about.

Mr. WHITENER. Then the fare box would not compensate a private operator but it would compensate the Government operator?

Mr. SEEGER. Sir, my point is this: There is nothing profitable about. this system. That is the last thing that we have suggested.

All we have ever said is that it would pay its capital cost which isn't very exciting to an investor

Mr. WHITENER. Well, if it paid it out in 36 years it would be rather attractive, wouldn't it?"

Mr. SEEGER. Well, there is no profit to be taken out during each of those 36 years.

My only point is that you could enter into a management contract with a private operator and meet the management costs out of the fare box.

The net result of that would be that you would have to pay off your bonds a little bit later in the game, but it can be done and I don't mean to suggest that there is anything that would be so terribly hard about that.

Mr. WHITENER. Well, how do you, as general counsel for this Agency, construe the language "shall encourage private transit companies to provide needed services in a manner consistent with the transit development program"?

Mr. SEEGER. I interpret that as meaning that we ought to make a maximum use of private operators, particularly insofar as bus service is concerned, but I interpret the whole act as being a hedge on the question of operation of the rapid transit system.

Mr. WHITENER. It seems to me, as a lawyer, that when they say "provide needed services" that that language clearly indicates that the service is needed to meet the public convenience and necessity. Mr. SEEGER. I would not quarrel with that, Mr. Chairman. You are in the wonderful position of being both the lawyer and the judge in

this case.

Mr. WHITENER. Well, I have never tried willfully to be in a dual role in that situation. But I think that these questions that Mr. Broyhill has raised with reference to the effect of this proposal upon the private operations necessarily takes us back to the basic law upon which or from which you derive your authority as an Agency as well

as the existing law with reference to the present transit operator, and that some question arises as to whether or not it was not the intent of Congress at the outset to first preserve existing transportation facilities, and secondly, to encourage existing, taxpaying, transit operators to operate a system required to meet the public convenience and necessity here in this area.

It seems to me that this is a right basic thing that will have to be determined and that you folks no doubt have given a lot of thought to it.

Mr. SEEGER. The only thing that I would add to that is that, as far as we are concerned, if the committee interprets that section of the act in the manner you suggest, that is dispositive.

We certainly would not argue for a contary interpretation.

Mr. WHITENER. Of course, this committee is not the Supreme Court. Now, the report from the D.C. Transit Co. to the President indicated that, in their opinion, your report was not consistent with the thinking or at least with the studies being made by the Housing and Home Finance Agency because they say that you have-I am interpreting now-they say in fact that you have confined yourself to the prospect of operating on two rails underground which would be the basic system.

And they say that you have overlooked some of the new developments in the transit field and they list them as pneumatic tube systems, ground effect machines, superrail, monorail, monobeam, hydrofoil, and carveyor.

You say in your report on the proposal of the D.C. Transit Co. to operate from the outlying area to Dulles Airport that you don't think that that is a feasible operation.

Isn't that what you said?

Mr. STOLZENBACH. That is right.

Mr. WHITENER. Because you said it would cost more money because, as I remember, the tube would have to be 8 inches higher for a monorail underground than would be required for a subway train. Mr. STOLZENBACH. That is correct.

Mr. WHITENER. Well now, just the general tenor of this D.C. Transit report would indicate that they do not agree with you and that it would be less expensive to have the monorail or super-rail running as a tube under the ground.

Mr. SEEGER. Mr. Chairman, I don't know what their reasons are but this isn't a matter of speculation.

Our enginers took the precise measurements of a monorail vehicle and came to the conclusion that it would require a larger tube than a rapid transit vehicle.

You would be spending more money and you wouldn't get anything back in exchange for the additional money that you are spending.

In other words, you don't have a vehicle that is cheaper to operate or faster to operate or anything else.

Mr. WHITENER. Well, I take it that the import of their publication is that you gentlemen have failed to take into account studies, research and planning, which are being made by private industry and others in the mass transit field.

And my question is: Did you take into account these seven systems of the future which are referred to in this report?

Mr. STOLZENBACH. Yes, we did.

Mr. WHITENER. And was it your judgment, after making a study of these systems of the future, that they did not meet the needs of this community as adequately as the rail system?

Mr. STOLZENBACH. Yes. The study has been supplied to the committee for the record. It is entitled "Comparative Analysis of Rapid Transit Vehicle Systems."

Mr. WHITENER. Now, they also make the statement in this report that your Agency has cited other transit systems in the Nation and cited them in support of your proposal.

And the D.C. Transit people say that a majority of those cited are deficit operations and are publicly owned and operated. What is your answer to that?

Mr. STOLZENBACH. Well, that is true.

Mr. WHITENER. Well, if that is true then why are you gentlemen so confident that the fare box will take care of the situation once this Government equity is received?

Mr. SEEGER. Mr. Chairman, I testified on that point the other day, and I tried to face up in that testimony squarely to the fact that rapid transit systems in other cities weren't paying the full capital

cost

Mr. WHITENER. Yes, but your testimony the other day was given before this report was brought to our attention.

Mr. SEEGER. Yes, sir.

Our point is that in other cities rapid transit fares are kept low as a matter of city policy, that in this city there already exists a zone fare, that the policy established by the Congress was not to keep fares low but to charge a fair price for service and that the result is that we will be different from the other cities.

Mr. WHITENER. And your statement was, I believe, that you have a 25- plus 15-cent fare for beyond certain points?

Mr. SEEGER. Yes, sir.

Mr. WHITENER. And that that fare, from where the feeder line would join in, would be the fare now charged by the transit carrier? Mr. SEEGER. Slightly less outside the 25-cent zone.

Mr. WHITENER. And you national analyst group says that the public his overwhelmingly expressed a preference for the rail transportation even if the bus service were equally convenient and that 80 to 90 percent of the people would be using this service.

Yet you gentlemen tell us you don't see how it would have any harmful effect in the final analysis upon the present transit operations. How does this work out?

They lose 90 percent of their business but they still get along just as well?

Mr. SEEGER. What we have said is this: That first of all the net effect in having a combined rapid transit system with buses will be a lot more public transportation patrons than you have today. In other words, the whole market will be larger.

Mr. WHITENER. I probably didn't make myself clear, Mr. Seeger. The D.C. Transit people in this report say that they have certain legal rights and responsibilities within the area known as the District of Columbia by reason of legislation enacted by the Congress.

Now, this benefit, this new benefit, that you are talking about that may derive from this program would come in an area outside of the

District of Columbia, an area which does not fall within the scope of the jurisdiction of the Congress as that jurisdiction was exercised in the legislation to which they refer.

So, you can't ever say accurately, it seems to me, that this would be a system consistent with the language of your act which says that "facilities, property or rights-of-way of private motorbus companies should not be acquired."

Well, now, this most valuable property I would assume is their franchise. They could have 10,000 buses but if they didn't have the franchise they wouldn't have anything.

Mr. SEEGER. That is correct.

Mr. WHITENER. Well, how do you get around this? I am not arguing about it but I am seeking information.

How do you get around this provision in the law?

Mr. QUENSTEDT. Well, Mr. Chairman, there is one note I might introduce at this point

Mr. WHITENER. If I may say this: I feel certain that if I were the D.C. Transit Co., some court would make this decision before I were knocked out of the box.

Mr. QUENSTEDT. That may very well be where we wind up.

With regard to the operations involved as Mr. Seeger pointed out, we are confident that there will be a great deal more business.

The D.C. Transit operates very extensively in Maryland where, as you mentioned a moment ago, the stimulation of traffic may be located and very recently in the newspapers D.C. Transit announced that they are purchasing one of the Virginia bus companies.

So, conceivably they agree with this idea that there will be stimulation and that it will occur in the suburbs and they are placing themselves in a position to profit from it.

In other words, what is their long-range estimate of this? I don't think that they reveal that clearly in the document that you have there. Mr. HARSHA. Will the gentleman yield?

Mr. WHITENER. Yes.

Mr. HARSHA. You say you conceive of more transportation patronage than you have today?

Mr. QUENSTEDT. That is correct.

Mr. HARSHA. Well, you conceive of that because your program curtails the highway development program and that is the way you are going to get more transportation patronage, isn't it?

Mr. QUENSTEDT. Mr. Harsha, there is an unfortunate identification of this agency with regards to the highway program.

We do propose something considerably less than the mass transportation survey.

But I should like to point out that the District of Columbia Highway Department proposes something considerably less than that also. And I would like to also point out that we don't propose to reduce the highway system in the suburban areas as it approaches the District of Columbia.

We do say that the Three Sisters Bridge is not necessary.

But even with the construction of this highway program it is essential to point out that there is a need for transit. I believe everybody is agreed on that.

We then get down to a disagreement as to how many people will ride the transit and our proposition is very simple. Based on our