For they involve a highly unreliable complex of mutually interdependent conjectures and deprive the Congress of any rational basis for review and verification of reports submitted. Thus in order to apply these criteria, the Corps of Engineers must develop the following data: (a) As in the past, a forecast of tonnages via the proposed improvement on the basis of existing rates by alternative modes. (b) A forecast with respect to each commodity movement of how much the railroads may be expected to reduce rates in response to the traffic volumes forecast on the basis of existing rates. (c) A forecast as to which of the projected rate reductions will be disallowed by the Interstate Commerce Commission. (d) A forecast of the tonnages for each commodity movement which shippers will redirect from water to rail in response to hypothetical rail rate reductions. Only by such a procedure as this can the waterway tonnage forecast be adjusted for future water-depressed rates of alterative modes. It necessarily involves modifying conjectures with conjectures which could only yield highly unreliable results, tending to discredit the entire evaluation process and to place data before Congress for which no acceptable standards of verification and review would be available. It is not surprising, therefore, that the Corps of Engineers itself has admitted that no dependable technique has been devised for determining the theoretical water-compelled rates, which can be uniformly applied to all parts of the country. As a former Chief of Engineers put the matter in his 1951 annual report: "Carriers indulging in competitive ratecutting lose money as long as the practice is continued. The only conceivable object of these tactics on the part of the high-cost agencies is to force the water carriers into final bankruptcy and to eliminate their competition followed by restoration of former high, monopolistic freight rates. For the foregoing reasons the Corps of Engineers is not content to measure the justification of navigation improvements in terms of depressed rate differentials, nor to assign to the project only that portion of potential water-adapted tonnage that might find its way to the improvement in spite of the uneconomic measures taken by competitors to discourage it." Consistently with this view, it is our considered opinion that traffic for waterway improvements should be estimated on the basis of competitive rates prevailing at the time of the study. This, we believe, is the most practical and valid method of estimating the total of benfited traffic currently available. While it may not represent theoretical perfection, it has resulted in highly conservative evaluations of waterway improvements on the basis of which Congress has authorized practically our entire inland waterway system and it has permitted at least a reasonable degree of progress. It avoids the grave deficiencies of the criteria promulgated in November 1964 and errs only on the side of understatement. While we hope for the eventual development of criteria, with the approval of Congress, which will truly reflect the realities of a dynamic economy and correctly identify all benefits and costs, we think it imperative that pending such development, the former criteria, tested by experience, be restored. The obstruction to waterway improvement and other water resource development created by the November 1964 criteria must be removed. To that end we most urgently recommend an amendment adding a new subsection (c) to section 7 of the pending bill reading substantially as follows: "(c) For the purposes of principles, standards and procedures for the formulation and evaluation of Federal water and related land resources projects established by the Water Resources Council with the approval of the President under the Water Resources Planning Act, the primary direct navigation benefits of a water resource project are defined as the product of (1) the savings to shippers using the waterway and (2) the estimated traffic that would use the waterway, where the savings to shippers shall be construed to mean the difference between the current freight rates or charges for the movement by the alternative means and those which would be charged on the proposed waterway, and where the estimate of traffic that would use the waterway shall be based on existing freight rates, taking into account projections of the economic growth of the affected area." We wish to express to the committee our sincere thanks for this opportunity to present our views on these vitally important issues. STATEMENT OF CHARLES E. SHUMATE, PRESIDENT OF THE AMERICAN ASSOCIATION OF STATE HIGHWAY OFFICIALS Mr. Chairman and members of the subcommittee, I am Charles E. Shumate. president of the American Association of State Highway Officials and chief engineer of the Colorado Department of Highways. Our association is composed of the State highway departments of this country, and it is our policy to speak to Congress through our elected officials. I have the privilege of presenting the views of the State highway departments and, I believe, this is the first time that they have been represented before your committee. We appreciate the opportunity and privilege of presenting these views for the consideration of your subcommittee as you address yourselves to the proposal for creating a new Department of Transportation in the executive branch. We hope that some of these views may find their way into whatever bill that you might report out of the full committee, or that they be reflected in some of the legislative history so that it might influence the reorganization and operation of the new proposed Cabinet-level Department. Like everyone else, we had very little knowledge of the details of what was to be contained in President Lyndon B. Johnson's proposal for the creation of a Department of Transportation until his message and draft legislation were released. As soon as these items were available, they were sent to the several State highway departments for study. Although the time was rather short for a complete study for such an important proposition, and for the highway departments to take a position on the matter. we did get an unusually good response from our member State highway departments that forms a consensus on the points presented in this statement. As you well realize, there is no group in this Nation more vitally interested in any proposal involving the Federal-aid highway program than the State highway departments. It is up to them to carry out the program and to make it work. We point with considerable pride of accomplishment at this Nation's highway network, which is the world's best. Much of this accomplishment can be accredited to the 50-year-old Federal-State partnership in highway building. The Federal Bureau of Public Roads and all of the State highway departments have worked together well and, we believe, that the public has been the beneficiary. We have no comment on the first six sections of H.R. 13200. It would appear to us that the proposition of gathering the fragmented transportation activities and interests of the Federal Government into one coordinated department makes sense, especially if the Federal Government is to give proper attention to this Nation's growing transportation needs. As we understand it, 70 percent or more of the proposed new Department's total budget would be that of the Bureau of Public Roads. In the way of historical background, we wish, at this time, to mention that during the first 40 years of our 50-year highway partnership, the Federal Government contributed only slightly over $9 billion, with the majority of construction funds coming from the States. However, the Federal contribution did much to create a nationally connected highway system and encourage stability in the State highway department organizations. Since 1956, the Federal contribution has raised percentagewise and has taken on additional importance. However, and including the 90-percent Federal contribution to the interstate program, the Federal expenditures on highways on the Federal-aid systems is still less than 50-percent of the total expenditures by the States. Of course, as you know, maintenance has been the responsibility of the State highway departments and that is what they prefer. The State highway department-Bureau of Public Roads partnership stands out as one of this Nation's finest examples of intergovernmental relationships in the public interest. It has been the basic policy of the State highway departments, operating through this association, never to advise nor prescribe how the Federal Government should organize its agencies and, in turn, that the Federal Government should never dictate such things to the State governments. There is, however, one minor but important exception to which we subscribe and that was initiated by the Federal Government. In establishing the Federal-aid highway program, the Federal Government required that the States have a duly constituted State highway department adequate and competent to carry out the program in order to qualify for participation. It also required that the State highway departments have sufficient authority to commit and obligate the State in highway matters. If that is good for one, it should be good for the other, so, therefore, we believe that if there is to be a new Department of Transportation that it should be spelled out that the Bureau of Public Roads should have sufficient delegated authority to carry out the same role on the part of the Federal Government in its dealings with the States, subject only to top policy guidance by the Secretary. We believe, further, that because of the size and the importance of the Federal-aid highway program and highway transportation in general, the Bureau of Public Roads must be at an operational level in the proposed new Department organization that will guarantee easy access to the Secretary by the Federal Highway Administrator, without having such departmental communications diluted or revised by going through intermediate administrative levels. To go through intermediate stratas involves the risk of the Federal Highway Administrator's professional recommendations being amended by lay ad ministrators. Because of the cooperative and engineering nature of the Federal-aid highway program, the State highway departments feel strongly that the Federal Highway Administrator must always be an experienced, outstanding, recognized highway administrator-engineer, who knows the program well and who is well known to, and respected by, the State highway departments. Much of the past and present success of the program is definitely attributable to the fact that such persons have always been named to the top Bureau of Public Roads position. We hope that if a new Department of Transportation is created, any legislation dealing with title 23, U.S. Code, Highways, will continue to be under the purview of the Public Works Committees of the Congress. The background, experience, and knowledge in these committees in highway matters is a valuable public asset and is highly respected and appreciated by the State highway departments. We believe that in the process of developing or reviewing national transportation policies and programs, nationally recognized State highway administrators should always be included in any advisory committees involved, inasmuch as highway transportation is definitely a major transportation form that affects the entire Nation. We prefer not to leave such matters entirely to experts in other transportation forms and to academic transportation economists. Highway transportation daily affects the travel and way of life of practically every person in this country, and will continue to do so, so long as the freedom of choice is not infringed and highway transportation is not subordinated by some revolutionary effort to artificially fertilize some other transportation mode. It is the policy position of our association that the proper role for highways in any so-called balanced national transportation system or program must be based on highway needs as cooperatively developed from documented factual information being furnished by the State highway departments and assembled by the Bureau of Public Roads. Such needs studies should always control, instead of some administrative determination that might be based entirely on the financial investment return concept, or the theoretical efficient concept that does not give adequate consideration to the public's desires or to the public convenience. Highway expenditures must continue at a high level just to protect the large investment that we have in the highway system and to give minimal service to our motoring public. Both expanding urban and rural areas have transportation needs that are highway oriented. We, in the State highway departments, are quite proud of the sophisticated processes that we have developed for making highway needs studies and the justification for highway improvements. We probably have reached a degree of development in this regard that has not been reached by any other transportation form. We believe that the highway trust fund must be kept inviolate and highway user revenues must never be used as a total transportation fund that could be administratively diverted for research, development, and subsidization of other transportation forms. We are not quite clear whether the proposed legislation would permit such use of the highway user revenues, and we think that probably the Congress should clarify this matter. Highway transportation is unique in that it is our only transportation mode that offers complete transportation within itself, and is the only one where the cost of the rolling stock, the upkeep of the rolling stock, and the cost of operation are supplied by the owner, and where he, together with the other users, pay completely the cost of the road system and its maintenance. This unique situation has greatly facilitated the financing of highway transportation. Other forms of public transportation must raise public funds to furnish the rolling stock, its upkeep, and operation. The fact that highway transportation financing is probably easier to accomplish should never be the basis for diverting it to other uses. The State highway departments have never considered Federal aid for highways as a subsidy for highways as is sometimes alleged, or that it gives highways an unfair advantage over other transportation forms. The highway user is just paying his own way. We do not like to see the various transportation modes being placed in competitive positions, for each is definitely designed to supply certain services. We do not believe that a transportation form should be furnished because it might be a status symbol for an urban area, but where it is needed it should be provided, if at all possible, with it paying its own way in some equitable manner. We firmly believe that transportation should be planned so that the various forms complement each other and form a connected and integrated system to serve the public in the movement of goods, people, and services. We believe, further, that highway engineering standards, geometric design policies, specifications, and signing, must continue to be developed cooperatively by the State highway departments and the Federal Bureau of Public Roads, through the AASHO process. This is in the public interest and utilizes the vast reservoir of technical knowledge that exists in the highway departments and the Bureau, brings in creative thinking, and results in the desired level of uniformity. During the 50 years of highway partnership, this process has been responsible for developing highway technology in the United States to the point that it is recognized as the world's leader. Under no condition would we want some separate group established in a Department of Transportation that might have the authority to veto such standards or policies that are cooperatively developed in the manner described. In case such a unit might be organized, we feel that it should be advisory only to the Bureau of Public Roads and not have the power to veto, or to create. If such were to be the case, the distinct possibility exists that stagnation could result in the development of highway technology because of too much emphasis being placed on the opinions of too few people. We believe that the Federal Highway Administrator should be delegated sufficient authority to act for the Secretary of Transportation in matters involving the adoption and approval of highway engineering and traffic standards, developed cooperatively between the Bureau of Public Roads and the State highway departments, as formally balloted upon by the several State highway departments through the AASHO process. We note that the proposed legislation would put the bridge clearance determinations over navigable waters within the province of the new Department. This, we think, would be a constructive and desirable thing. We have reached the point where the present and future demands and economics of all affected transportation forms involved should be considered in determining navigational clearances. In closing, we urge your committee to make a complete appraisal of section 7 of H.R. 13200 to assure that proper decisions are being retained for the Congress and that dictatorial powers over transportation planning and programs are not being left to administrative discretion. Transportation programs and authorizations must always be the subject of congressional action, and the investment return concept should never be the total criteria for developing national transportation policies, systems, and programs, but it is essential that the public's desires and convenience must always be given adequate consideration. We thank you for the privilege and opportunity of presenting these views. Hon. CHET HOLIFIELD, U.S. House of Representatives, AMERICAN TRUCKING ASSOCIATIONS, INC., MY DEAR MR. HOLIFIELD: This will confirm the conversation our counsel, Mr. James F. Pinkney, had with you and committee counsel following the May 2 morning session of your hearings on H.R. 13200. Although Mr. Pinkney advised you of our support of the proposed Department of Transportation, I would like to reiterate our position in writing. At its regular meeting in January, the executive committee of the American Trucking Associations, Inc., adopted the following statement: "We favor, in general, the President's proposal to create a Cabinet-level Department of Transportation. "The idea of bringing under one roof and vesting in one agency the Federal Government's promotional and safety activities in the broad field of transportation is entirely logical. It is equally logical that the head of such agency should have Cabinet status in view of the tremendous importance of transportation to the life of the United States and its people. "We particularly congratulate the President for the overriding emphasis he placed upon safety since it is in this area that the proposed new Department probably could make its greatest contribution. If the proposed Department of Transportation is to have jurisdiction over the safety of the other forms of transportation, as provided in the legislation, we are prepared to accept a similar transfer of jurisdiction with respect to the motor carrier industry. "We applaud the President's recognition that the economic regulatory functions of the Interstate Commerce Commission, the Civil Aeronautics Board, and the Federal Maritime Commission, should remain unaltered. The economic regulatory functions are performed by these agencies as 'arms of the Congress,' and we feel strongly that it should stay that way. "Although we can support the general proposition of establishing a Department of Transportation, we have serious reservations about some of the language contained in section 7 of the proposed bill. This section deals with "Transportation Investment Standards,' and we feel that it requires close scrutiny to make sure that it does not encroach upon the proper prerogatives of the Congress and some of the other Federal agencies." We would be most appreciative if you would make our statement a part of the record. Very truly yours, W. A. BRESNAHAN. TRUCK TRAILER MANUFACTURERS ASSOCIATION, Hon. WILLIAM L. DAWSON, Chairman, Committee on Government Operations, MY DEAR CONGRESSMAN DAWSON: We respectfully request that the enclosed copies of resolutions approved by our membership on March 30, 1966, be given careful consideration when related bills are discussed in your appropriate meetings. Sincerely yours, CHARLES J. CALVIN, RESOLUTION II.-REGARDING THE PROPOSED DEPARTMENT OF TRANSPORTATION IN THE PRESIDENT'S CABINET Whereas the President of these United States has requested the Congress to approve the creation of a Department of Transportation through the transfer of various agencies and certain functions of other agencies or departments to the proposed Department of Transportation; and |