ridership will not materialize with new equipment. It was brought out that although there has been an overall increase in ridership, there has been a 40-percent increase in the number of trains. Therefore, there has actually been a decrease in the number of passengers per car.

For those of us who have long advocated good passenger train service, Amtrak has become a major disappointment. For some, Amtrak is thought to be the only hope for enticing the American people out of their automobiles and into public transportation for intercity trips.

However, the motor bus industry has to be a part of this process of developing public transportation as well. For these private enterprise bus operators, Amtrak means unfair, predatory competition through Government support.

And, more often than not, for its passengers, Amtrak means frustration, unmet expectations and a total lack of accountability. It is because of this situation that finding answers to the Amtrak problem is so important.

Our first witness today is a very distinguished colleague of ours, and a member of this committee who has contributed immeasurably to this subcommittee, the Honorable Lionel Van Deerlin, from the State of California.

STATEMENT OF HON. LIONEL VAN DEERLIN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. VAN DEERLIN. Thank you, Mr. Chairman.

I should begin, I think, by thanking you for permitting me to become a double-dipper of this subcommittee. I was here 2 or 3 weeks ago to present the director of the California Transportation Department for testimony on this same subject, and you permitted me to voice some opinions then, in addition to introducing that lady

Mr. ROONEY. Among other countless hours I have spent with you, along with my staff.

Mr. VAN DEERLIN. I thank the gentleman, I think.

As a long-time admirer of the General Accounting Office, I must say I think the GAO has missed the boat in its testimony on the pending Amtrak bills, H.R. 11089 and H.R. 11493.

In its statement to this subcommittee on March 20, the GAO, true to its role as fiscal watchdog, was very properly concerned about the rising costs of Amtrak operating subsidies. But GAO also took what I regard as an unduly pessimistic view of the future of passenger train service. At one point in its presentation, the agency even declared that "passenger loads are not likely to go up unless a disruption occurs in another transportation "mode."

In other words, Amtrak will never amount to much unless the freeways become so clogged, and the airways so hazardous, that those modes become unacceptable and/or unusable.

I think our experience with Amtrak has demonstrated the speciousness of this type of reasoning. Rail passenger service is flourishing on the Los Angeles-San Diego run, even though it is still convenient to travel by car, bus or commercial airline between the two cities.

Last month, to cite an example, the San Diego-Los Angeles trains carried 59,537 passengers, as against 52,741 in March of 1977. Now, at first blush, this would seem like a modest increase, but you have to remember, even in sun-drenched southern California, the weather took an adverse turn this year, and the first 4 days of the month were totally washed out; bridges and track washed out, and trains were not running.

Despite this handicap and the publicity attendant, which surely discouraged people from taking the train, there was an increase which could have been 8,000 to 10,000 greater without those washouts.

It is true that a new train was added to the run in the past year, for a daily total of six, to account for part of the gain. But at the same time, fares have been rising at what I consider a distinctly self-defeating rate. As Adriana Gianturco, director of the California Department of Transportation, told you last month, Amtrak ticket costs in California have shot up by as much as 30 percent over the past 12 years.

If there is one way to assure that all the money Congress has been expending on Amtrak is to no avail, it is to keep boosting fares in a way certain to scare off all by the most affluent prospective passenger.

GAO tuts-tuts the current level of Amtrak subsidies, intimating the train service should be more nearly self-supporting.

In the best of all worlds, pay-as-you go would be the logical answer to the complaints about the Amtrak bite out of the Federal budget.

But in the real world of increasingly congested highways and a looming energy crunch, the subsidies must be measured against the social and environmental costs of allowing train service to wither and die. And let's not forget the support provided by the Government for such other transportation modes as the airlines and even the private automobile. Our primary concern should be to perpetuate passenger rail service, rather than devising means for cutting it back.

I do believe that a reexamination of the Amtrak route structure is in order, as the bills before you would provide. Routes that are clearly superfluous, as indicated by dwindling or negligible ridership totals, which are justified only by someone's political clout, should be modified or abandoned. But let's keep the good routes, expanding on them as necessary. To do less would be to renege on the commitments we made 8 years ago when we enacted the National Railroad Passenger Act.

And above all, let's hold down the costs of riding, keep them reasonable and attractive. It may be that the blanket 212-percent fare increase, scheduled to take effect at the end of this month, is warranted, but it comes at a bad time, just 6 weeks before summer "surcharges" are applied on many of the longer routes in the west. The effect of the combined increases will be to make rail fare more expensive than air fare on most of the affected routes. One example: A San Diegan who takes the train to San Francisco will pay $38.40, while flying between the two cities costs only $35.00.

We should not allow Amtrak to price itself out of business.

Thank you, Mr. Chairman, for the opportunity to present my views.

Mr. ROONEY. Thank you, very much, Mr. Van Deerlin, for your very fine statement. I commend you for your great concern about your passenger service in the San Diego area, which you have so ably represented for so many years.

What, in your opinion, would you consider to be the acceptable loss on a per-passenger-mile basis?

Mr. VAN DEERLIN. Would you give me that again?

Mr. ROONEY. What would you consider to be an acceptable loss for passengers on a per-passenger-mile? Right now, it is 14 cents. Mr. VAN DEERLIN. Obviously, while I am delighted the chairman asked me that question, I am in no way prepared to answer it. I would point out

Mr. ROONEY. This is the problem with the Chair and this committee, how far can we go. It is getting to be the big problem in Congress today, when you are talking about $510 million one year, $613 million the next year, and the projected for 1979 through 1982 is almost $1 billion, how long can we tolerate this?

Mr. VAN DEERLIN. Of course, we should try to hold that line and do it by intelligent attention to the routes that are worth saving and can become practical. Within the last half hour, before coming here, I was visiting, in our colleague's, Congressman Wiggins', office, with a number of leaders of the Los Angeles Chamber of Commerce-not on this subject alone, but on a variety of subjects-and I was astounded to hear these pillars of conservative thought all nodding and none of them disputing what I said when I talked about the essence of what I was going to testify about before this subcommittee.

They all agreed that there are some social gains here, which are absolutely essential to keep in the maintenance of Amtrak; and, of course, I would expect we wouldn't wait on hard-nosed appropriations committees, or subcommittees, to address themselves to the area that you have raised in your question to me, Mr. Chairman, but as for any precise answer as to what is acceptable. I would say I would like to see the thing become so successful, with the infusion of Government assistance that it has had, that Amtrak would eventually pay for itself.

Mr. ROONEY. That is what they said in 1971, and it has been going down ever since. I would like to reflect on the chamber of commerce people that you just talked to.

Everybody likes train transportation, and it is needed. There is no question about it. It was a fallback. But do we need the 27,000 miles? Do we need a new route structure?

Here is the poll that was conducted for Amtrak National Railroad Passenger Service by Louis Harris Associates, and these same people that you just met with, of those most likely to travel 100 miles, or more, in the next few months, "How would you like to go," the first choice was 58 percent cars; the second was 30 percent airplanes; the third choice, 6 percent buses; trains, 4 percent. Mr. VAN DEERLIN. Some of us jog.

Mr. ROONEY. Thank you very much, Mr. Van Deerlin. We appreciate your being here today. You are a fantastic jogger, I understand.

Our next witness is another colleague of ours, from the great State of South Carolina, the Honorable John W. Jenrette, Jr.

STATEMENT OF HON. JOHN W. JENRETTE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF SOUTH CAROLINA, ACCOMPANIED BY DONALD SKINNER, STAFF MEMBER

Mr. JENRETTE. Thank you, Mr. Chairman, and members of the committee: I appreciate the opportunity to be here.

Mr. Chairman, in June 1976, I requested the establishment of two "experimental" Amtrak stops when the Palmetto was inaugurated. These stations are at Dillon and Kingstree, S.C., in my district. Amtrak conducted a study of their 16 experimental passenger stops nationwide in October 1977 and discovered that Dillon and Kingstree, S.C., held the first and second positions respectively regarding daily ridership at the stations studied.

The last time I appeared before this subcommittee, also in October of last year, I expressed my concern over the reduction of service from daily to quad-weekly on the Palmetto and that continuing the reduced frequency can only damage the economics of this route. Fortunately, Amtrak's supplemental appropriation enabled restoration of daily service. Today, Mr. Chairman, I am pleased to report that the Palmetto is the second ranking long distance train in the Amtrak system outside the Northeast corridor operation. Its cost-revenue ratio is approximately 1.9. This means that for every $1 of direct cost for operation, Amtrak receives almost $2 in revenue.

It is good to know that my district not only appreciates, but utilizes the Palmetto. However, my reason for appearing before this subcommittee today-and I appreciate this opportunity-is for a much broader issue which has the potential to affect the economics of every route operated by Amtrak throughout the Nation. This issue involves the utilization of postal contracts to bring additional revenues to these routes.

Historically speaking, mail transportation has always been an instrumental part in maintaining the economic viability of passenger train operation. When passenger trains were profitable, it was due to a combination of passenger, mail and express revenues. I find it difficult to expect Amtrak to ever operate without subsidization as long as the need for additional mail contracts is not taken into account.

Presently, Amtrak does receive a marginal amount of mail contracts. If one includes revenues from terminal handling at Washington and Chicago, the total is only $14 million per year. A private study done by Frank E. Shaffer of Chicago demonstrated that coordination between the U.S. Postal Service and Amtrak for the transportation of bulk mail on what is essentially the present Amtrak system, could realize $50 million in revenue to Amtrak. Of the Nation's 21 bulk mail centers, Amtrak serves 19 and the Greensboro, N.C. BMC is served by Southern Railway. According to this study, "U.S. Postal Service has already begun to test Amtrak service. Daily cars between Seattle and Minneapolis are running 12 to 2 days faster than USPS standards." An injection of $50 million in yearly

revenues could not help but improve Amtrak's fiscal position, and certainly give us a better taste here in Congress.

In addition, the Shaffer study does not include the transportation of first-class mail as a potential revenue source. Amtrak is to be given credit for developing a plan to carry first-class mail in trays aboard the Amfleet trains of the Northeast corridor. It is my understanding that the Postal Service has agreed to institute this as an experimental program. Such a program can easily be expanded to additional routes on which there is frequent service-for example, Boston-Washington, Washington-Savannah, and Los Angeles-San Diego. First-class mail revenues would be in addition to the $50 million BMC figure.

As a member of the Government Operations Committee, I view with great concern the lack of complete coordination between two Federal instrumentalities, being the U.S. Postal Service and Amtrak, when both are under heavy subsidization from the Congress and both have the potential to reduce the total subsidy through cooperation. In June of last year, the Postal Service discontinued the Railway Post Office operations between Washington and New York. This service assured next-day delivery of mail throughout the corridor; this high service standard is no longer met. The U.S. Postal Service claimed an annual savings of $1,238,000 would be realized as a result of RPO discontinuance. I found this estimate somewhat suspicious in view of the fact that it was formulated without any contract discussions taking place with Amtrak. Furthermore, both the late Senator Hubert Humphrey and I had been informed by Amtrak that the Postal Service's savings estimate could be deflated by approximately 50 percent through technical refinements, such as containerization of Railway Post Office storage mail.

My concern regarding the RPO prompted Senator Eagleton, who chairs the Senate Subcommittee on Government Efficiency, and I to contact the Comptroller General and request an investigation in this area. I have been advised by Amtrak that they would be able to resume RPO operations in a short period of time if requested by the Postal Service or if mandated by the Congress.

One must consider the lack of a strong liaison between the U.S. Postal Service and Amtrak as critical to the marginal postal contracts Amtrak has been receiving. The 1978 authorization legislation for Amtrak should contain a reference to the special relationship between U.S. Postal Service and Amtrak and subsequently mandate coordination.

I request that your subcommittee, Mr. Chairman, along with those of us who want to help, look into this potential and assist Amtrak in saving this initial $50 million in revenue.

Mr. Chairman, I am grateful to you for the opportunity to testify here today and if there is any way I can be of assistance to you or the subcommittee, please let me know.

Again, I thank you.

Mr. ROONEY. Thank you for a very fine statement. I agree with you in trying to put more mail on the Amtrak trains, but the problem we have is the distribution centers not being near the stations that Amtrak serves. How about your district? Are there any facilities right near the station?