services as new products are developed, and it would obviate the necessity of the shipper supporting a multitude of applications each time it develops a new product. It seems beyond question that a reorientation of regulatory thinking in respect to motor common carrier authorizations is long overdue. The public interest not only demands that new authorizations emphasize efficiency in our system of highway transport, but that restrictions which result in avoidable economic cost or which prevent a common carrier from realizing his full service potential be removed from existing authorizations. We recognize that rationalization of the presently fragmented and confused situation will be a long, expensive, and often painful undertaking. We believe it necessary in our national interest and that it will repay a hundred fold the effort and investment required. The regulatory agency should undertake a detailed investigation of the question of limitation of highway operating authorization and its effect upon national transportation costs under congressional requirement that a program of gradual readjustment toward maximum efficiency of operation, while preserving service to affected users, be developed. The guidelines established for such a program should include: (a) Established regulated highway carriers should have pri ority to provide any new common or contract for-hire service required in the areas or routes served by them. Kentucky law to this effect should be used as a model. (b) Commodity limitations: (1) Highway common carriers should be encouraged but not required to broaden the list of commodities carried. (2) New developments, such as collapsible bulk liquid tanks, should be recognized by appropriate changes in authorizations designed to maximize vehicle utilization. (3) Specialized authorizations should be granted only in consideration of a proven requirement for specialized vehicles. General commodity carriers should be encouraged to respond to any need for specialized service they desire to meet, if they can demonstrate fitness and ability. 3 (c) Route restrictions are in the public interest only insofar as they assure adequate competitive service along all reasonably practicable routes without permitting excessive or destructive competition. While established common carriers are entitled to a degree of route protection such protection must be accorded only after continuing consideration of the overall public interest. Protection should not be extended to preserve a carrier from the results of mismanagement or nonprogressive operation nor should it operate to deny service to a user not adequately served by common carriage. (2) Route authorizations which result in less than optimum vehicle utilization because of intermediate point or directional restrictions should be broadened. (3) Route authorizations which impose unnecessary circuity without authority or obligation to serve points along the circuitous route should be amended to authorize the more direct route, service to intermediate points or both. (4) Removal of circuitous route and point 3 See dissent by Commissioner Arpaia in MC-C-1766, Apr. 10, 1959. restrictions should not be permitted to result in deterioration of service to and from intermediate points along the formerly authorized route. Neither should such removal authorize direct service between points already adequately served by other established motor common carriers unless shown to be in the public interest. (d) Protests of other carriers of like mode against applications of an established common carrier for broadened authority should be required to support an allegation that the broader authority requested is not in the public interest. The applicant should be required to submit supporting cost evidence including better vehicle utilization and a resulting improvement of his service/price offering to the public. No greater weight should be given the competitive effect of the broadened authorization than is given to the economies made possible thereby. (e) Opposition by a carrier or carriers of unlike mode to an application by a motor common carrier for broadened authority which is based upon demonstrable operating economy should not be entertained in the absence of a positive showing by the protestant of conflict with the public interest. Cost reduction of one carrier should not be denied solely to protect the competitive situation of another. (f) Mergers and consolidations made desirable as a result of broadened authorizations should be facilitated. (g) No application for broadened authorization should be denied to protect the dormant authorization of another carrier. The review of motor common carrier authorizations is a monumental task far beyond expeditious accomplishment by the Interstate Commerce Commission under present procedures and funding programs. It is, in our opinion, a task that must be performed and one which would return to the national economy many times its cost. In the process of review, authorizations should be simplified to the end that there would be no doubt in the minds of all concerned regarding who is authorized to do what. Mechanical accounting systems to keep such information current should be designed and instituted incident to the review. It is recommended that the Congress direct the regulatory agency: (a) Effective upon the date of the directive, in acting upon applications for modification or extension of existing motor common carrier authorizations, no greater weight shall be given the competitive effect upon other carriers than is given to the effect upon the economy, efficiency and utilization of equipment of the applicant. It is not the intent of this provision to amend the requirements of public convenience and necessity nor of fitness and ability of the applicant. (b) To institute a proceeding in review of authorizations now held by motor common carriers and to submit to the Congress not later than 1 year from the date of the directive recommendation for a phased program designed to eliminate those restrictions upon motor common carrier authorizations which increase the economic cost of motor common carrier service. The program shall be so planned as to eliminate such restrictions as rapidly as may be consistent with the interests of affected parties includ ing the general public but in no case later than 10 years from the date of the directive. It is further recommended that the Congress approve the foregoing concept, authorize such expenditures as may be necessary to implement the program and appropriate funds earmarked for the project in the amount of $250,000 to initiate action thereon. Appropriate legislation to this effect will be promptly introduced by your committee. CHAPTER 7. URBAN TRANSPORTATION In the final analysis, the community has two choices: One, allow unimpeded growth to create problems, e.g., traffic congestion, then pay the heavy costs of eliminating them; or, alternatively, anticipate the problems, plan wisely to meet them, and minimize the costs by a "pay as you grow" policy.-SOUTHERN CALIFORNIA RESEARCH COUNCIL. INTRODUCTION- THE FEDERAL INTEREST IN URBAN TRANSPORTATION Our investigation of deteriorating railroad commutation services, the task assigned by S. Res. 244, revealed conclusively that the most important forces affecting these services are external to the railroads and largely beyond the control of the managements. It was found that all means of transportation within metropolitan areas are increasingly congested, overburdened and inadequate suffering greatly from a lack of coordination and long-range planning. Two of the most fundamental causes of this inadequacy are: (a) a majority of commuters from the suburbs, no matter by what means they travel, have never paid the full cost of their home-to-work transportation because of the high expense of providing the required rush-hour capacity; and (b) we do not have an element or jurisdiction of government which meets the needs of metropolitan area administration. The total cost of carrying suburbanites to and from work has risen as fast or faster than the explosive suburban population growth, and the past and present means of financing the deficits of these services through rail freight rates, city property taxes, and gasoline taxes paid by other highway users are increasingly unable to meet the need. This inability is in part due to lack of adequate organizations for financing and directing the growth of metropolitan private and public transport. The Federal Government has a vital interest in the free flow of commerce in all parts of the United States, in the preservation and propagation of national wealth and tax production, in the provision of the best living and working conditions for the majority of its citizens, and in establishing the facilities and conditions necessary for the national security. To the extent that inadequate urban transportation facilities and the decline of public transport services act to the detriment of these interests, or needlessly increase the total cost of daily conomic activities, there is cause for immediate Federal attention. The need for action is pressing because of: (a) the great increase in Federal funds expended for urban capital improvements such as highways; (b) the necessity to assure the most secure and restrictions should not be permitted to result in deterioration of service to and from intermediate points along the formerly authorized route. Neither should such removal authorize direct service between points already adequately served by other established motor common carriers unless shown to be in the public interest. (d) Protests of other carriers of like mode against applications of an established common carrier for broadened authority should be required to support an allegation that the broader authority requested is not in the public interest. The applicant should be required to submit supporting cost evidence including better vehicle utilization and a resulting improvement of his service/price offering to the public. No greater weight should be given the competitive effect of the broadened authorization than is given to the economies made possible thereby. (e) Opposition by a carrier or carriers of unlike mode to an application by a motor common carrier for broadened authority which is based upon demonstrable operating economy should not be entertained in the absence of a positive showing by the protestant of conflict with the public interest. Cost reduction of one carrier should not be denied solely to protect the competitive situation of another. (f) Mergers and consolidations made desirable as a result of broadened authorizations should be facilitated. (g) No application for broadened authorization should be denied to protect the dormant authorization of another carrier. The review of motor common carrier authorizations is a monumental task far beyond expeditious accomplishment by the Interstate Commerce Commission under present procedures and funding programs. It is, in our opinion, a task that must be performed and one which would return to the national economy many times its cost. In the process of review, authorizations should be simplified to the end that there would be no doubt in the minds of all concerned regarding who is authorized to do what. Mechanical accounting systems to keep such information current should be designed and instituted incident to the review. It is recommended that the Congress direct the regulatory agency: (a) Effective upon the date of the directive, in acting upon applications for modification or extension of existing motor common carrier authorizations, no greater weight shall be given the competitive effect upon other carriers than is given to the effect upon the economy, efficiency and utilization of equipment of the applicant. It is not the intent of this provision to amend the requirements of public convenience and necessity nor of fitness and ability of the applicant. (b) To institute a proceeding in review of authorizations now held by motor common carriers and to submit to the Congress not later than 1 year from the date of the directive recommendation for a phased program designed to eliminate those restrictions upon motor common carrier authorizations which increase the economic cost of motor common carrier service. The program shall be so planned as to eliminate such restrictions as rapidly as may be consistent with the interests of affected parties includ ing the general public but in no case later than 10 years from the date of the directive. It is further recommended that the Congress approve the foregoing concept, authorize such expenditures as may be necessary to implement the program and appropriate funds earmarked for the project in the amount of $250,000 to initiate action thereon. Appropriate legislation to this effect will be promptly introduced by your committee. CHAPTER 7. URBAN TRANSPORTATION In the final analysis, the community has two choices: INTRODUCTION-THE FEDERAL INTEREST IN URBAN TRANSPORTATION Our investigation of deteriorating railroad commutation services, the task assigned by S. Res. 244, revealed conclusively that the most important forces affecting these services are external to the railroads and largely beyond the control of the managements. It was found that all means of transportation within metropolitan areas are increasingly congested, overburdened and inadequate suffering greatly from a lack of coordination and long-range planning. Two of the most fundamental causes of this inadequacy are: (a) a majority of commuters from the suburbs, no matter by what means they travel, have never paid the full cost of their home-to-work transportation because of the high expense of providing the required rush-hour capacity; and (b) we do not have an element or jurisdiction of government which meets the needs of metropolitan area administration. The total cost of carrying suburbanites to and from work has risen as fast or faster than the explosive suburban population growth, and the past and present means of financing the deficits of these services through rail freight rates, city property taxes, and gasoline taxes paid by other highway users are increasingly unable to meet the need. This inability is in part due to lack of adequate organizations for financing and directing the growth of metropolitan private and public transport. The Federal Government has a vital interest in the free flow of commerce in all parts of the United States, in the preservation and propagation of national wealth and tax production, in the provision of the best living and working conditions for the majority of its citizens, and in establishing the facilities and conditions necessary for the national security. To the extent that inadequate urban transportation facilities and the decline of public transport services act to the detriment of these interests, or needlessly increase the total cost of daily conomic activities, there is cause for immediate Federal attention. The need for action is pressing because of: (a) the great increase in Federal funds expended for urban capital improvements such as highways; (b) the necessity to assure the most secure and |