to have jurisdiction over the safety of other forms of transportation, as provided in the legislation, it is prepared to accept a similar transfer of jurisdiction with respect to the motor carrier industry." We request that this letter be made part of the official record on S. 3010 and, if possible, shown as a supplement to our letter of June 6. Sincerely, Attachments. DECLARATION OF PURPOSE HAROLD F. HAMMOND. SEC. 2. The Congress hereby declares that the general welfare, the economie growth and stability of the Nation and its security require the development and implementation of national transportation policies and programs conducive to the provision of fast, safe, efficient, and convenient transportation at the lowest cost consistent therewith and with other national objectives, including the efficient utilization and conservation of the Nation's resources. The Congress therefore finds that the establishment of a Department of Transportation is necessary in the public interest. [and to assure the coordinated, effective administration of the transportation programs of the Federal Government, to facilitate the development and improvement of coordinated transportation service, to be provided by private enterprise to the maximum extent feasible, to encourage cooperation of Federal, State, and local governments, carriers, labor, and other interested parties toward the achievement of national transportation objectives, to stimulate technological advances in transportation, to provide general leadership in the identification and solution of transportation problems; and to develop and recommend national transportation policies and programs to accomplish these objectives with full and appropriate consideration of the needs of the public, users, carriers, industry, labor, and the national defense.] [GENERAL PROVISIONS] DUTIES AND POWERS OF THE SECRETARY SEC. 4 (a) The Secretary in carrying out the purposes of this Act shall, among his responsibilities: [exercise leadership under the direction of the President in transportation matters, including those affecting the national defense and those involving national or regional emergencies, develop national transportation policies and programs, and make recommendations for their implementation, promote and undertake development, collection, and dissemination of technological, statistical, economic and other information relevant to domestic and international transportation; and promote and undertake research and development in and among all modes of transportation and types of transportation services and facilities.] (1) Exercise leadership under the direction of the President in transportation matters, including those affecting the national defense and those involving national or regional emergencies; (2) Provide general leadership, within the executive branch, in the development of national transportation policies and programs and make recommendations to the President and Congress for their implementation. (3) Encourage the development and improvement of transportation services and facilities by private enterprise to the maximum extent possible; (4) Coordinate Federal planning for the development of transportation facilities; (5) Encourage safety and develop standards and regulations in those areas of transportation safety specifically assigned to him by law; (6) Coordinate and promote research and development in and among all modes of transportation and types of transportation services and facilities, including coordinated transportation service; (7) Undertake the development, collection, analysis, and dissemination of technical, statistical, economic and other information relative to domestic and international transportation; (8) Encourage government agencies engaged in the procurement of transportation or the operation of their own transport services to establish and observe policies consistent with the maintenance of a strong transportation system operated by private enterprise; (9) Encourage cooperation of Federal, state and local governments, carriers, labor, shippers, travelers, and other interested parties toward the achievement of national transportation objectives. In carrying out his duties the Secretary shall be governed by the policy standards set forth in the Federal Aviation Act, the Interstate Commerce Act, and the War Shipping Act. * (k) In the exercise of the functions, powers, and duties transferred under this Act, the Secretary is authorized the same authority as vested in the agency originally exercising such functions, powers, and duties, and his actions in exercising such functions, powers and duties shall have the same force and effect as when exercised by such agency. Any action brought to enforce, suspend, enjoin, annul or set aside any decision, order, or regulation of the Secretary issued in the exercise of any function, power or duty transferred under this Act, shall be brought in any court empowered to entertain such actions with respect to decisions, orders, or regulations of the agency heretofore exercising such functions, powers and duties. (m) Any interested person shall have the right to participate before the Department of Transportation, or any of its component organizations, in rulemaking, hearings, and other proceedings, and to appeal from decisions. The term "agency" in the Administrative Procedure Act shall be deemed to include the Department of Transportation. Nothing in this subsection shall diminish the functions, powers, and duties of the Interstate Commerce Commission [under sections 1(6), 206, 207, 209, 210a, 212, 216,] not otherwise specifically transferred. [of the Interstate Commerce Act or under any other section of that Act not specifically referred to in the first paragraph of this subsection * *1 # TRANSPORTATION INVESTMENT STANDARDS [SEC. 7. (a) The Secretary shall develop and from time to time in the light of experience revise standards and criteria consistent with national transportation policies, for the formulation and economic evaluation of all proposals for the investment of Federal funds in transportation facilities or equipment, except such proposals as are concerned with (1) the acquisition of transportation facilities or equipment by Federal agencies in providing transportation services for their own use; (2) an interoceanic canal located outside the contiguous United States; (3) defense feature included at the direction of the Department of Defense in the design and construction of civil air, sea, and land transportation, or (4) programs of foreign assistance. The standards and criteria for economic evaluation of the transportation features of multipurpose water resource projects shall be developed by the Secretary after consultation with the Water Resources Council, and shall be compatible with the standards and criteria for economic evaluation applicable to nontransportation features of such projects. The standards and criteria developed or revised pursuant to this subsection shall be promulgated by the Secretary upon their approval by the President. [(b) Every survey, plan, or report formulated by a Federal agency which includes a proposal as to which the Secretary has promulgated standards and criteria pursuant to subsection (a) shall be (1) prepared in accord with such standards and criteria and upon the basis of information furnished by the Secretary with respect to projected growth of transportation needs and traffic in the affected area, the relative efficiency of various modes of transport, the available transportation services in the area, and the general affect of the proposed investment on existing modes, and on the regional and national economy, (2) coordinated by the preposing agency with the Secretary and, as appropriate, with other Federal agencies, States, and local units of government for inclusion of his and their views and comments, and (3) transmitted thereafter by the proposing agency to the President for disposition in accord with law and procedures established by him.] SEC. 7. The Secretary of Transportation shall study and recommend to Congress the manner in which standards and criteria for the formulation and economic evaluation of proposals for the investment of Federal funds in trans 61-552-66-pt. 4- -7 portation facilities or equipment, consistent with national transportation policies, should be established and applied. [AMENDMENTS TO OTHER LAWS [SEC. 8. (a) Section 406 (b) of the Federal Aviation Act of 1958, as amended (72 Stat. 763), is amended by adding the following sentence at the end thereof: "In applying clause (3) of this subsection, the Board shall take into consideration any standards and criteria prescribed by the Secretary of Transportation. for determining the character_and quality of transportation required for the commerce of the United States.] Hon. JOHN L. MOCLELLAN, TRINITY IMPROVEMENT ASSOCIATION, Chairman, Committee on Government Operations, The U.S. Senate, Washington, D.C. MY DEAR SENATOR MCCLELLAN: The members of the Trinity Improvement Association are most appreciative of your response to our request to be heard in opposition to the Transportation Bill (S. 3010). As you suggested, we are submitting the attached statement to be filed in lieu of personal appearances. Sincerely yours, H. S. MILLER, Vice President and General Manager. STATEMENT SUBMITTED TO THE COMMITTEE ON GOVERNMENT OPERATIONS, U.S. SENATE The Trinity Improvement Association submits the following statement in opposition to certain parts of the Transportation Bill (S. 3010). This Association has a membership of several thousand people representing industry, agriculture, professional and governmental interests. Its primary objective is to secure the comprehensive development of the water resources of this area for all purposes, including navigation. After carefully reading S. 3010 it appears that certain provisions of this Bill would seriously impede the comprehensive development of our most valuable national resource-water. We are familiar with statements recently made before the Senate and House Committees in opposing this bill by Mr. A. C. Cocke representing the Mississippi Valley Association, Mr. J. W. Hershey of the Common Carrier Conference of Domestic Water Carriers and Mr. Harry M. Mack of the Ohio Valley Improvement Association. We wish to record our general agreement with the major points of these statements and will not repeat the details there presented. The substance of our objections lies in two points. First, S. 3010 conflicts with the objectives of the Water Resources Act (Public Law 89-80, 89th Congress, July 22, 1965) and other Congressional documents which clearly define the policy for comprehensive and coordinated river basin planning. We believe inland navigation is an inseparable element of such comprehensive planning and cannot be considered as purely a transportation function. Our greatest concern over this point lies in Section 7 of this bill although Seetions 2 and 4 might be interpreted to have a similar effect. To these sections we particularly take exception. Our second major objection to S. 3010 is a fundamental issue of governmental operation. We believe the final decision on policies for developing our national resources lies with Congress. It appears that this Act, particularly sections 2 and 4 would, in effect, place this responsibility elsewhere. We are familiar with the suggested amendments to S. 3010 which will be presented to the Government Operations Committee by Mr. Arnold Sobel of Chicago, Illinois, President of the Mississippi Valley Association. The Trinity Improvement Association desires to go on record in support of these constructuve suggestions proposed by the Mississippi Valley Association. Sincerely yours, We appreciate the opportunity of submitting our views to this Committee. H. S. MILLER, Vice President and General Manager. WABASH VALLEY ASSOCIATION, INC., Hon. JOHN L. MCCLELLAN, Washington, D.C. DEAR SENATOR MCCLELLAN: Thank you for the opportunity of submitting a statement on S. 3010. In reviewing the testimony of other individuals and organizations I find that most all of the points I was concerned with have been ably covered. Therefore, to save your time I have briefly summarized the high points that my organization was primarily concerned with in the attached statement. Cordially yours, HOWARD MENDENHALL, STATEMENT TO THE COMMITTEE ON GOVERNMENT OPERATIONS ON S. 3010 Mr. Chairman, I am Howard Mendenhall, Executive Vice President of the Wabash Valley Association a voluntary citizen membership group from Indiana and Illinois. Our interest in Senate Bill 3010 lies primarily in the effect it may have on restoring navigation to the Wabash River. This could connect the Ohio River at a point near its intersection with the Tennessee and Cumberland Rivers to Lake Michigan and Lake Erie as per the attached diagram.' Our principal question on this bill was the method and criteria by which future navigation projects such as ours would be judged. The recent fiasco that permitted a capricious ruling on navigation criteria by the bookkeepers of the Budget Bureau to upset and demoralize long range navigation plans in several other River Basins leads to the question at hand. What provisions does this bill make to assure us that the tried and tested evaluation system for the continued development of our inland waterways will continue to be used? I would like to suggest that the bill be amended to provide that the Secretary of Transportation be authorized to submit the economic evaluation of navigation projects to the Water Resources Council for consideration and that the final decision regarding the determination of a workable critera be made by Congress. To: Senator John L. McClellan, WABASH VALLEY INTERSTATE COMMISSION, Chairman, Senate Committee on Government Operations, Senate Office Building, Washington, D.C. From: Wabash Valley Interstate Commission, Terre Haute, Ind. Subject: Statement re standards and criteria governing public investment in transportation facilities as proposed in Section 7, S. 3010. The Wabash Valley Interstate Commission is currently conducting a study to determine the economic impact on the Wabash Valley of a waterway which, if constructed, would connect the Ohio River with Lakes Erie and Michigan. In this study, we are attempting to determine the impact of this rate structure on the movement of commodities; the change in price structure for goods received in and shipped from the impact area; the potential effect upon industrial development; possible advantages for employment; changes in tax base; the effect upon other modes of transportation; as well as the influence, both direct and indirect, of freight rate change upon other facets of the economy of the Valley. It is the considered opinion of this Commission, that regardless of the benefits indicated by this study, without the existence of the suggested water transport route there would be no significant variance from existing freight rates. It is with difficulty that we envision compulsive reaction in the absence of a compelling force. We are in full accord with the concept of evaluating transportation benefits in terms of savings in the economic resources required to obtain these benefits. We cannot, however, subscribe to the proposal of using the "water compelled rate" method as a means of determining the relative benefit to be achieved. 8 Placed in the committee files for reference. There is apparently little evidence that rail freight rates necessarily reflect a direct relationship to costs of providing the transport service. Also, there is at least some evidence that rail freight rate regulation is based upon judgment which places little emphasis upon competition as a factor in serving the shipper interests. In dissent of the decision served January 28, 1965, by the Interstate Commerce Commission in the existence of the Monon Railroad petition in Finance Docket 21797, Commissioner Brown cites: "The role of regulation is presented in sharp focus here. For we are confronted with a fundamental policy question. In denying or granting these applications the choice must be made, in the last analysis, whether the ultimate decision should rest in the finite judgment of the regulators or elements of the market place. "In short what the majority has really determined here is that no reliance can be placed on the forces of competition. For the controlling consideration is the protection of existing carriers who care not to innovate for shippers." Being concerned not only for shippers in this Valley but also for recipients of shipments and for the benefits to accrue to the regional economy, this Commission can see little value in the decision to change the basis for evaluation of benefits to be credited to navigation projects from the "current rates" method to a basis so nebulous as a "compelled rate" method. It is difficult to conceive anticipated competition as a compelling force in decisions affecting intermodal transport questions when competition has been ignored as a desirable factor in intramodal transport facilities evaluation. It is the suggestion of this Commission that the "current rates" basis for evaluating navigation benefits be re-established until clearly superior criteria can be developed to appraise the cost factor. Recognizing that the cost method of evaluating navigation benefits may well be the most desirable method to determine that share of the economic factors of production necessary to be expended to provide the transportation service, we suggest the initiation of a study program to establish methods of fully determining these costs. However, if the cost to society is to be a basis for evaluation the comparative benefits to society must also be evaluated, these benefits extend well beyond the present consideration of the degree of modification of freight rates. The effect on the economy of the impact area produced by such changes in freight rates must be evaluated to determine the total benefits attributable to the navigation project. May we recommend re-establishment of the "current rates" method of determining the benefit-cost ratio for navigation projects and the creation of a staff advisory committee to the Senate Committee on Government Operations instructed to acquire the information necessary to determine the economic costs of providing transportation services and the total benefits to accrue to the ecoNomy of the affected area. The "current rates" method should remain in effect until adequate evaluation procedures for using the cost method can be established. Sincerely, B. K. BARTON, Executive Director. STATEMENT OF PHILIP H. PORTER ON BEHALF OF WISCONSIN MANUFACTURERS' ASSOCIATION This statement of position with respect to the pending Bill S-3010 is submitted on behalf of the Wisconsin Manufacturers' Association by its General Traffic Committee. The Wisconsin Manufacturers' Association is a voluntary organization of industries located within the State of Wisconsin. Its membership comprises more than 1,000 manufacturers with plants located throughout the State. The common interests of these members in traffic and transportation matters are handled by a General Traffic Committee composed of some 60 industrial traffic managers. After thorough discussion of the provisions of Bill S-3010 this Committee has adopted the following position with reference thereto and has authorized the same to be submitted to the Senate Committee for its consideration in determining its recommendations to the Senate. Recognizing the tremendous importance of transportation and our transportation system to the Nation's economy and the complexity of the problems which are involved in the maintenance of adequate, efficient transportation under pri |