and necessity has been made. It is true, as he states, that, were this a result of an ex parte proceeding, damage could be done to some operating carriers without their having an opportunity to be heard. We consider that in some ways the proposals contained in MC-55 go too far too fast; however, we conclude that the efficiency of motor common carriers can and should be enhanced in the public interest by judicious broadening of operating authorizations on request and where improved transportation service is indicated.

A recent example of atomized authorization is contained in the application of Alterman Transport Lines, Inc., of Miami, Fla., for extension of their frozen foods rights to permit them to serve High Point, N.C., in addition to already authorized origins (MC-107107 Sub-122). The case is summarized herein only as being typical of actions which are counter to our national economic interests:

(a) Alterman already held authority to transport frozen foods from southern origins to the Northeast and Midwest.

(b) He requested authority to add High Point, N.C., as an additional origin for frozen foods.

(c) He specialized in less-than-truckload lots of frozen foods. Evidence indicated he had frequent unutilized capacity passing High Point northbound to accommodate the traffic.

(d) The application was opposed by several motor carriers. Only two of these submitted evidence and the record states that one had a record of service unsatisfactory to the shipper and the other could not serve High Point except by interchange with

other carriers.

(e) The traffic to be served consisted at the time only of frozen hush puppies. It was expected to expand into other specialty frozen foods.

(f) Frozen hush puppies do not normally move in truckload lots.

(g) Alterman's application to transport frozen foods from High Point was denied. He was granted authority to carry frozen hush puppies but forbidden to tack his new authority to his existing authorizations.

The decision will require Alterman to request new authorization each time the shipper develops a new frozen food product. The effect of such process on the workload of the regulatory agency is apparent. The cost of such processes to the regulated transportation industry and to the public is also obvious and, of course, there is always the possibility that a different carrier might well be awarded the rights to transport the new product thus denying the user the convenience of dealing with a single carrier. A shocking implication of the decision is that we will thus require two groups of frozen food carriers, one authorized to carry frozen uncooked foods, the other frozen cooked or specialty foods.

Commissioner Goff, in his dissent, partially expresses the objections to such control of entry. He stated:

I agree that the applicant is entitled to authority to transport the abovenamed commodity. In my opinion, however, the grant is unnecessarily atomized. Since existing service is unsatisfactory and inasmuch as there is evidence that the shipper here intends in the future to produce other frozen food items, I believe it more feasible to grant a broader commodity description, namely, frozen foods. Such a grant would enable the shipper to utilize the applicant's

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.

(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

See dissent by Commissioner Arpala 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

effective long-term investment of these funds; and (c) the accelerating deterioration of commuter railroad services.)

The findings in the following report demonstrate that we are in a period of deepening crisis in metropolitan area transportation and that remedial action is urgent. The surging growth of human and automobile populations in our metropolitan areas is adding to the burden on, and congestion of, transport facilities faster than present improvement programs are giving relief.

The long-range recommendations supported by this report call for changes in organization and process rather than major new spending programs and require only relatively modest increases in the present level of expenditure. However, these modest sums would make the most important possible contribution to the soundness, effectiveness, and longevity of the multibillion dollar Federal and local investment programs. The short-range recommendations, relating only to commuter railroads, are in part changes in procedure and in part an extension of Federal credit for specific immediate needs.

Norman Kennedy of the University of California Institute of Transportation and Traffic Engineering well sums up today's problem: *

America's present concentration of people and resources in urban areas would not have been possible without the mobility and the supply lines afforded by dependable and economic transportation.

But the very technological changes in transportation that have contributed so much to greater mobility now appear to be stifling it. Street and highway traffic congestion seriously hampers the rapid, continuous and flexible interchange of services and goods by virtue of which urban economy and society exist. Capacity needs to be added to urban transportation systems to raise standards of service and to reduce transportation costs. The question isHow?

This committee believes that in many places the "how" could best be answered by giving commuters free mass transportation which would cost less than providing the additional highway and parking facilities needed for their autos. However, this report will not attempt to answer the "how" in terms of systems and hardware but will propose a method for reaching this complex investment decision through joint Federal-local action and will recommend the appropriate Federal actions.

1. The rail commutation problem

Commutation service by privately owned railroads is provided at serious financial losses which prompt railroads to discontinue commuter trains. This action conflicts with the public need for this service. A balanced efficient mass transportation system in our large metropolitan areas must include rail transportation. The problem of commuter service is an integral part of the policy considerations for the kind and amount of railroad passenger service necessary to serve the public and provide for national defense. Automobile, rail and bus are the major means of transportation in metropolitan areas. Automobile and bus commutation is tied in most directly with highway, street, parking area, and bridge planning

Address to the Governor of California's Commission on Metropolitan Problems, June 20, 1959, p. 2.