Volpe, Hon. John A., Secretary, Department of Transportation; accom- panied by James M. Beggs, Under Secretary of Transportation; Charles D. Baker, Assistant Secretary of Transportation; and Carl Lyon, Deputy Administrator of the Federal Railroad Administration__ Volpe, Hon. John A., Secretary, Department of Transportation; accom- Stafford, Hon. George M., Chairman, Interstate Commerce Commission; accompanied by Fritz Kahn, Deputy General Counsel; Howard Domin- gus, Assistant Director, Bureau of Accounts; John Grady, Chief, Field Service; Edward Margolin, Director, Bureau of Economics; Robert G. Rhodes, Bureau of Economics; Thaddeus W. Forbes, Associate Di- rector, Office of Procedures; John Mattras, Office of Proceedings; and William J. McCormick, Chief, Section of Financial Analysis, Bureau Letter with questions of Senator Hartke and Mr. Stafford's answers Javits, Hon. Jacob, U.S. Senator from New York....... 285 ICC Finance Docket No. 25932, Pennsylvania Co. Debentures. ICC Reports, Finance Docket No. 25854, Penn Central Transportation Penn Central Investigation (Docket No. 35291), Interstate Commerce 163 Pennsylvania Co. perspectus _ _ 101 Review and Outlook-Bailing Out the Penn Central, article from the Wall 296 FAILING RAILROADS THURSDAY, JUNE 25, 1970 U.S. SENATE, COMMITTEE ON COMMERCE, The committee met, at 11:15 a.m. in room 5110, New Senate Office Building, Hon. Warren G. Magnuson (chairman of the committee), presiding. Present: Senators Magnuson, Pastore, Hartke, Moss, Spong, Cotton, Prouty, Baker, and Cook. OPENING STATEMENT BY THE CHAIRMAN The CHAIRMAN. The committee will come to order. The Chairman has a very short statement before the Secretary testifies. These hearings are for the purpose of opening this committee's examination of various measures designed to provide railroads with financial assistance in the form of loan guarantees. We have now before us three bills, one commonly known as the administration bill, which Senator Cotton introduced by request, a bill which the Chairman introduced by request, which revives title V of the old 1958 act, and then a bill submitted by Senator Javits, cosponsored in the House by Congressman Reid, I understand, which is a little different approach to this problem. These hearings have been scheduled not necessarily at the request of the administration, but scheduled because all of us, after some preliminary meetings, have become acutely aware of the seriousness of this problem. And so we are happy to honor the request, too, of the administration that we take a look at this matter to see what role the Congress should take in trying to solve the problem. I hope it will be possible to thoroughly discuss the various proposals. It will be necessary to have adequate justification of the need for action. It will also be necessary to show that the bill, a particular bill, or a combination of these bills, fulfills the need may exists. It is my desire to have answers to these questions in particular. Transportation is the responsibility of this committee in the Senate, as it is of the House Interstate and Foreign Commerce Committee, and we are deeply concerned about anything that may adversely affect the transportation pattern of these United States. If there is any way that Congress can act and be helpful to avoid any drastic disruption in our transportation system or some catastrophe, we are perfectly willing to entertain these ideas. In 1958 we had a similar Staff members assigned to these hearings: A. Daniel O'Neal and John Cary. situation. It mainly involved the New England railroads, particularly the New Haven and other railroads and we put in the 1958 Transportation Act what is known as title V which guaranteed loans for equipment and rolling stock for these railroads on the theory that if they did that, their business would increase and, therefore, they would be able to be in a better financial position. It turned out under title V, I think there were 11 requests for guaranteed loans and they were made. The largest one was for the New Haven and there were smaller ones for other roads. They have all been paid back, but two, and those two were 15-year loans that will not come due until 1973. We have no indication that they will not be paid also. But title V was for 5 years and it expired in 1963 because there was no indication then that the railroad business wanted to apply for any more loans. So we are coming back a little bit to what we talked about in 1958. (The bills, agency comments, and Congressional Record article follow :) |