(b) the funds be matched by the States in accordance with statutory matching requirements; and (c) any funds not used for planning and research lapse. In addition I recommend that the Federal-aid highway law be amended to provide that, effective not later than July 1, 1965, the Secretary of Commerce shall, before approving a program for highway projects in any metropolitan area, make a finding that such projects are consistent with comprehensive development plans for the metropolitan area and that the Federal-aid system so developed will be an integral part of a soundly based, balanced transportation system for the area involved. Highway planning should be broadened to include adequate traffic control systems, parking facilities, and circulation systems on city streets commensurate with the traffic forecasts used to justify freeways and major arterial roadways. Provision for transit and highway facilities in the same roadway, permissible under present law and already tested in several cases, should be encouraged whenever more effective transportation will result. Moreover, I have requested the Secretary of Commerce to consider favorably the reservation of special highway lanes for buses during peak traffic hours whenever comprehensive transportation plans indicate that this is desirable. To permit the State highway departments greater flexibility in the use of Federal-aid highway funds to meet urban transportation needs, I further recommend that the Federal-aid highway law be amended to permit more extensive use of Federal-aid secondary funds for extensions of the secondary system in urban areas. I have asked the Secretary of Commerce and the Housing and Home Finance Administrator to consult regularly regarding administration of the highway and urban mass transportation programs, and to report to me annually on the progress of their respective programs, on the needs for further coordination, and on possibilities for improvement. (D) Relocation assistance Last year in a message to the Congress on the Federal-aid highway program, I called attention to the problems of families displaced by new highway construction and proposed that the Federal highway law be amended to require assistance to such families in finding decent housing at reasonable cost. The need for such assistance to alleviate unnecessary hardship is still urgent. The Secretary of Commerce has estimated that, under the interstate highway program alone, 15,000 families and 1,500 businesses are being displaced each year, and the proposed urban mass transportation program will further increase the number of persons affected. To move toward equity among the various federally assisted programs causing displacement, I recommend that assistance and requirements similar to those now applicable to the urban renewal program be authorized for the Federalaid highway program and the urban mass transportation program. Legislation is being submitted to authorize payments of not to exceed $200 in the case of individuals and families and $3,000 (or if greater, the total certified actual moving expenses) in the case of business concerns or nonprofit organizations displaced as a result of land acquisitions under these programs. (E) Mass transit research and demonstrations Further, I believe that progress will be most rapid and long lasting if the Federal Government contributes to economic and technological research in the field of urban mass transportation. These research activities should be an integral part of the research program described later in this message. Important parts of this program should be carried out by the Housing Administrator directly, through contract with other Federal agencies, private research organizations, universities and other competent bodies, or through the allocation of funds to local public agencies for approved programs. To facilitate this approach, I recommend that the $25 million authorized last year for demonstration grants be made available for broad research and development undertakings, as well as demonstration projects, which have general applicability throughout the Nation. That amount, plus an additional $10 million from the proposed capital grant funds for each of the years 1963, 1964, and 1965 should suffice for these purposes. These funds, together with research funds available under the Federal-aid highway program, can contribute to substantial advances in urban transportation. (F) Interstate compacts Finally, since transportation in many urban areas is an interstate problem, I recommend that legislation be enacted to give congressional approval in advance for interstate compacts for the establishment of agencies to carry out transportation and other regional functions in urban areas extending across State lines. PART III. INTERNATIONAL TRANSPORTATION We should endeavor to the maximum extent feasible, to (a) gear international transportation investments to the requirements of our peacetime international trade and travel, and (b) provide incentives to users that will channel traffic to those forms of transportation that provide desirable service at the lowest total cost. The most critical problems associated with these policies are in the national defense area. Determination must be made as to whether the number and types of ships and aircraft adequate to meet long-range peacetime needs are also adequate to meet probable military emergencies, and if they are not, how best to meet these additional requirements. (A) Merchant marine In the Merchant Marine Act of 1936, the U.S. Government made a new start on the vexing problems of the American merchant marine in the face of repeated failure to improve its condition both before and after World War I. Subsequently, other aids in the form of cargo preference legislation, various "tradeout," "trade-in," and tax incentives devised to stimulate new construction, and a mortgage insurance program with up to 872-percent Federal guarantees were added to the arsenal of protection against the industry's exposure to low-cost foreign competition. In spite of these aids, subsidies required for both construction and operations under the 1936 act have steadily increased. Operating subsidies will rise from $49 million in 1950 to over $225 million in 1963. Ship construction costs in U.S. yards are now approximately double those in Japanese and German yards. For this reason and because of an acceleration of the program beginning in 1956 to replace war-built cargo ships, Federal expenditures for new ship construction will rise to a postwar high of $112 million in 1963. At my request, the Secretary of Commerce has undertaken a study of the current problems of the American merchant marine. This review will involve such specific issues as the state of coastal and intercoastal shipping and the costs of service to our noncontiguous territories. It will also consider more fundamental questions of long-term adjustment: Are the criteria adopted in 1936 as guides to the establishment of essential trade routes and services relevant for the future? Are there alternatives to the existing techniques for providing financial assistance which would benefit (a) the public in terms of better service and lower rates and (b) the operators in terms of higher profits, more freedom for management initiative and more incentive for privately financed research and technological advance? What research and development efforts are most likely to increase the competitiveness of our merchant marine? Can defense readiness requirements be met adequately by greater reliance on the reserve fleet and the ships of our allies under NATO agreements? Would a smaller reserve fleet be adequate? Are the international arrangements pursuant to which world shipping operations are carried on conducive to the stability of the industry, fair but effective competition and adequate service? I have also asked the Secretary of Defense to provide the Secretary of Commerce with estimates, under a range of assumptions as to military emergencies, of what active and reserve tonnages of merchant shipping should be maintained in the interest of national security. In addition, I have established a Cabinetlevel committee, chaired by the Secretary of Labor, whose study will include the flags of convenience and cargo preference issues. When the findings and conclusions of these studies become available, I shall send to the Congress appropriate specific recommendations concerning our maritime program. In the meantime, I have directed the Secretary of Commerce to implement fully section 212(d) of the Merchant Marine Act of 1936, for securing preference to vessels of U.S. registry in the movement of commodities in our waterborne for eign commerce; and I have directed all executive branch agencies to comply fully with the purpose of our cargo preference laws. I have also recommended a stepped-up research program for developing ways and means of increasing the competitive efficiency of our merchant marine and related industries. Of particular significance in this effort will be the applica tion of the principles of mass production, and the standardization of ship types and ship components, for reduction in the cost of new vessel construction. Also, I am urging that sound development in technology and automation be applied to merchant shipping as rapidly as possible, fully recognizing and providing for the job equities involved, as a major program for enhancing the competitive capability of our merchant marine. (B) International aviation An interdepartmental committee, headed by the Administrator of the Federal Aviation Agency, and including representatives from the Department of State, the Department of Defense, the Department of Commerce, the Civil Aeronautics Board, and the Bureau of the Budget, was established at my direction last July to undertake a study of U.S. international air transportation policies and problems. This study is presently underway, and will be completed by late summer. Concurrent with this policy, the Bureau of the Budget is conducting a study of the organizational structure within which Government agencies carry out activities concerned with international aviation. Once these studies have been completed and evaluated, an administration policy on international civil aviation will be enunciated, with responsibilities assigned to the agencies involved according to statutory requirements. PART IV. LABOR RELATIONS AND RESEARCH (A) Labor relations Technological advance in transportation must be explored and developed if we are to meet growing requirements for the movement of people and goods. New equipment often requires new skills, sometimes displaces labor, and often requires retraining or relocation of manpower. An overall reduction in manpower requirements in transportation is not inevitable, however; and the new Manpower Development and Training Act will help those transportation workers in need of new jobs or new skills. For the long-range benefit of labor, management, and the public, collective bargaining in the transportation industry must promote efficiency as well as solve problems of labor-management relations. Problems of job assignments, work rules, and other employment policies must be dealt with in a manner that will both encourage increased productivity and recognize the job equities which are affected by technological change. The Government also has an obligation to develop policies and provide assistance to labor and management consistent with the above objectives. (B) Research To understand the increasingly complex transportation problems of the future, to identify the relationships of social, economic, administrative, and technical factors involved, to translate scientific knowledge into transportation engineering practice, to weigh the merits of alternative systems, and to formulate new, improved, and consistent policies-we need information that can evolve only from a vigorous, continuous, and coordinated program of research. Yet, in the field of transportation where we have many unfulfilled opportunities, research has been fragmented, unsteady, inadequate in scope and balance. Scientific and engineering research will bring to all forms of transportation the benefits of new high-strength, low-cost and durable materials, compact and economical powerplants, new devices to increase safety and convenience-improvements which have characterized the development of jet-propelled aircraft. Experiments in the maritime field have resulted in the development of a nuclearpowered merchant ship, the NS Savannah, which has already begun test cruises, and a hydrofoil ship, the Dennison, which is nearing trial runs. Transportation on land, as well as in the air and on the seas, can benefit from accelerated scientific research. Economic and policy research will improve knowledge about the functioning of our transportation system as a whole and about the interrelation of the major branches of the industry. It should consider the new demands for transportation, the changing markets and products being handled, and the need for speed and safety. For instance, such research can consider the handling of freight as a system beginning in the shipper's plant and ending with the delivery of goods to the very doors of his customers-using new packaging, containerization and cargo handling methods that will take full advantage of new economies and convenience. Taking advantage of new techniques that would provide convenience and efficiency, we must consider the impact of different forms of transportation investment on economic development; we must combine and integrate systems to take advantage of the maximum benefits of each mode of travel; we must now consider the Nation's transportation network as an articulated and closely linked system rather than an uncoordinated set of independent entities. Just as a transport system must be built and operated as a whole, the different areas of transportation research must be coordinated within an overall concept. With the advice and assistance of the heads of the principal Federal agencies concerned with transportation and members of my own staff, the Secretary of Commerce is undertaking a broad evaluation of research needs in transportation and of the appropriate methods to meet these needs. I look to the Secretary of Commerce to develop a comprehensive transportation research program for the Government for later consideration by the Congress. Once such a coordinated and policy-oriented research program is underway, it will produce a flow of information of the kind that we must have to implement a comprehensive public policy on transportation. Improved statistics for private and Government use are also urgently needed. The 1963 budget repeats a request made by the previous administration for funds to prepare for a Census of Transportation. This census will make an important beginning to supplying these much-needed data. I urge early favorable action on this request. CONCLUSION The troubles in our transportation system are deep; and no just and comprehensive set of goals-which meets all the needs of each mode of transportation as well as shippers, consumers, taxpayers and the general public-can be quickly or easily reached. But few areas of public concern are more basic to our progress as a nation. The Congress and all citizens, as well as all Federal agencies, have an increasing interest in and an increasing responsibility to be aware of the shortcomings of existing transportation policies; and the proposals contained in this message are intended to be a constructive basis for the exercise of that responsibility. The difficulty and the complexity of these basic troubles will not correct themselves with the mere passage of time. On the contrary, we cannot afford to delay further. Facing up to the realities of the situation, we must begin to make the painful decisions necessary to providing the transportation system required by the United States of today and tomorrow. THE WHITE HOUSE, April 5, 1962. JOHN F. KENNEDY. THE SECRETARY OF COMMERCE, Hon. LYNDON B. JOHNSON, Washington, D.C. DEAR MR. PRESIDENT: There are submitted herewith drafts of proposed bills to provide for strengthening and improving the national transportation system, and for other purposes, and to exempt certain carriers from minimum rate regulation in the transportation of bulk commodities, agricultural and fishery products, and passengers, and for other purposes. The proposed bills implement certain recommendations contained in the President's message on transportation which was submitted to the Congress on April 5, 1962. The first bill empowers the regulatory transportation agencies to sanction experimental freight rates, and modifications in existing systems of service, classification and documentation; prohibits common carriers subject to the Interstate Commerce Act from discriminating as to service or rates in the transportation of vehicles or containers tendered by shippers or carriers; declares it to be in the national interest that through service and joint rates, fares and charges between carriers of all modes of transport be encouraged and promoted and authorizes the Federal Maritime Commission to participate with the Civil Aeronautics Board and the Interstate Commerce Commission in joint boards for the review of such rates; authorizes the Interstate Commerce Commission to enter into cooperative agreements with the States for enforcement of the 86508-62-pt. I—2 economic and safety laws and regulations of the States and the Federal Government concerning highway transportation; provides for extension of civil forfeiture penalties of the Interstate Commerce Act to violations of safety regulations and involving lack of operating authority, and for increases in such penalties; requires that air carriers pay reparations to shippers charged unlawfully high rates; provides for simplification of Government transportation rates and procurement, and for greater flexibility in the use of motor vehicle common carriers for the transportation of mail; and provides for transfer to the Secretary of Commerce the powers and duties vested in the Civil Aeronautics Board and the Interstate Commerce Commission with respect to the guarantee of loans to air carriers and common carriers by railroad, respectively. The second bill exempts carriers from minimum rate regulation by the Civil Aeronautics Board, the Federal Maritime Commission and the Interstate Commission in the transportation of bulk commodities and certain agricultural and fishery products. Carriers transporting passengers are also exempted from such regulation by the Federal Maritime Commission and the Interstate Commerce Commission. Carriers exempted from minimum rate regulation who engage in any act or practice in violation of the "antitrust" laws will be subject to the proceedings and penalties specified in such laws. This Department believes that enactment of these bills, together with enactment of legislation relating to tax policies and user charges to be submitted by the Secretary of the Treasury and legislation pending before the Congress implementing recommendations in the President's message relating to making motor carrier safety regulations of the Interstate Commerce Commission applicable to private carriers (H.R. 5598 and S. 1287); repeal of the prohibition against rail carriers transporting certain commodities in which they have an interest (S. 734); making domestic trunk air carriers ineligible for operating subsidies in the future (H.R. 10813 and S. 2297); and the requirement that motor carriers and freight forwarders pay reparations to shippers charged unlawfully high rates (H.R. 5596 and S. 1283), will materially assist in the development of an efficient and dynamic transportation system, which is vital to our economic growth and progress. The Department of Commerce recommends, therefore, the enactment of the proposed bills. There are enclosed section-by-section analyses of the proposed bills. The Bureau of the Budget advises that enactment of the proposed bills will be in accord with the program of the President. Sincerely yours, LUTHER H. HODGES, Secretary of Commerce. SECTION-BY-SECTION ANALYSIS OF PROPOSED TRANSPORTATION ACT OF 1962 1. The first section identifies the act as the Transportation Act of 1962 (a separate bill is proposed to exempt certain carriers from minimum rate regulation in the transportation of bulk commodities, agricultural and fishery products, and passengers). 2. Experiments.-Section 2 would empower the three regulatory agencies, the Interstate Commerce Commission, the Civil Aeronautics Board, and the Federal Maritime Commission, to authorize controlled experiments in rate, classification, and documentation systems. Participation by common carriers in the experiments would be voluntary and the experiments may be authorized intramode or jointly with carriers by different modes. The purpose of these experiments is to determine the best service-price transportation patterns by testing new services, service combinations or arrangements, simplified documentation, and different or simplified rate bases and freight classifications. Legislation to authorize these experiments is recommended in order to provide a clear statement of congressional intent that such experiments should be authorized by the regulatory agencies. 3. Nondiscriminatory rates to all shippers.—Section 3 would require railroads or common carriers by motor vehicle or water subject to the Interstate Commerce Act, to accept shipment by any carrier, whether regulated or not, of loaded or empty vehicles or shipping containers without discrimination as to service or rates. The purpose of this legislation is to provide the carrier shipper-as in "piggyback”—with the same competitive opportunities as noncarrier shippers. Basic laws underpinning the Civil Aeronautics Board and the Federal Maritime Commission do not permit carriers regulated by these agencies |