-port have declined from $4 billion in 1966 .

Transit expenditures,

however,1945, to only $1 .6 billion in 1966, in con- have increased more rapidly than rev-stant dollars (see Table 3) .

- enues since the laid-1950'x, Operatingincome, or net revenue after taxes, ha s

In relative terms, consumers have accordingly shown successiN a declines ,been spending consistently less of each with deficits appearing in i ; cent years .transportation dollar on mass transit . As The ratio of operating expense to oper-indicated in Table 4, almost 58 cents of ating revenues, while only about 77every transport dollar went toward local percent in 1945, rose to more than 96mass transit in 1929, whereas only 30 percent in 1964. Table 5 presents finan -cents was spent that year on automobile vial lata on the industry beginning .;with "`travel. By 1966, the situation was com- 1945 . 8pletely reversed, and automobile expen -ditures consumed more than 70 cents of Many transit companies have beenevery transport dollar, while mass trans burdened with a variety of locally de-it accounted for less than 15 . cents . . termined fees and charges . The most

frequentlY imposed levy has been th e

Revenues and Expenditures franchise tax. In the past, the franchisetax has accounted for about 25 percent

Despite the

decline in patronage, of all taxes paid by the industry . The taxhowever,

transit

revenues

generally has been levied on gross revenues, withhave not suffered in proportion . The rates varying from 2 percent to 5 per -main reason has been the substantial cent, regardless of the net financial posi -rise in fares . The average fare per rev- -tion of the company. Some localitiesenue passenger in 1945 was only 7 have also imposed levies of various type scents compared to about 20 cents in for snow 'removal, street cleaning, th e8 . : ?5ome caveats about the financial data are in order . The data are based on company financial reports which

are not always uniform, and which often exclude Items that later have to be estimated . The totals reported als orepresent only 85 percent of the industry . Finally, the aggregates presented are influenced by the large rtransit operations in major cities, and in fact, the industry "deficits" since 1964 are substantially the result-of , "

difficulties of public transit In one of the larger urban centers .

+

Table 4Percentage Distribution of Consumer Transportation Expenditure s

Selected Calendar Years, 1929 .1966(Billions of 1958 dollars)

_

Local public

intercityWir

Total

Automobile

transportation

transportation

1929

10010%

29.8%

57.5% -

12 .8%_ .

1939

100.0

37.2 48.8

14.01949

10010

48.8 38.4

12.81959

10010

68.0 19.6

12 .41965

10010

71 .2 14.4

14,41966

100.0

71.0 14.0

15 . 0

Source : Computed from data published by U, S, Department of Commerce, Office of Business Economics .

17

Table 5Transit Finances of Public and Private Companies in the United States(a )

Selected Calendar Years, 1945 .1966(Dollar figures in millions)

Ne tOperating

Operatin

revenue sYear

before taxesrevenues

expenses&Percent of operating revenue s

All

Operatin

0peratin9

Operatingtaxes(c)

Income(t~

income expense s

-

1945

$1,380.4

$1,067.1

$313.3 $ ;1.64.5

$148.7

10,8%' .

77.3%1950

1,452.1 .

1,296.7

155 .4 89.0

66.4

4.6

89.3 ,1955

1,426.4

1,277,4

149.0 93.3

155.7

3.9

89.5;- 1960

1 1407.2

1 1 289.9

117.4 86.7

10.7

2.2

.91 .71964

1,408.1

1,342 .6

, 65.5 77.9

(12 .4)(e)

_

95 . 41965

1,443.8

1,373 .8

70.0 80.7

(10.6)(e )

-

95.2

i1966

1,478.5

1,423.8

54.7 9118

(37.1)(e )

-

96 . 3

"a. Based on financial and statistical reports from 85 percent of the transit industry as defined on page 12 ,, : .b, Includes depreciation which la generally valued on original coat .

Ic . Includes Federal and state <inccme .taxes, an,d :a variety of~local .'taxes,.In,cluding, primarily,40ranchise tax, 'd, Net revenue after taxes.e .

Deficit, I: Source : American Transit Association ,

support of local police and fire services,- i

cant revenues, though insufficient toand the financing of construction and change the over.-all financial picture ,maintenance of various public facilities, : .

To supplement "fare-box" revenues, Ownership and Financing Methods

many transit companies have offered Local intra-urban mass transit is pro -special services at separate rates . Two vided by about 80 publicly owned and/

-of the most common, among bus com- or operated systems, and some 1,080 pri-panies, have been school-service con- vate companies,io The governmentaltracts and charter-bus services . In the systems include rapid transit and bu slatter case, operators with I .C.C. ( inter- services in the largest cities ; New York,state) licenses have been able to charter Chicago, Los Angeles, San Francisco ,buses for long-distance trips . Special Cleveland, Boston, Detroit, San Antonio ,services have also been available on and Miami, The private firms, usually

ti:rapid transit ; one example has been the small bus companies, operate im bothsubway ride for 75 cents to Aqueduct small and large urban centers .

'race track in New York City . New Yorkhas also considered the feasibility of us- Most of the public systems are mu -ing the subways to deliver freight and nicipally owned and operated, About

t.

supplement intra-city mail service . 9 Ad- one-third are public corporations, whil evertising and concession rentals in sub- the rest are proprietary agencies or de -way stations have also brought in signifi- partments, Some systems are leased by9 . See the New York Tiones, December 15, 1966, p, 49 ,

10,

Based on data provided by the American Transit Association .

18

-- -the municipalities from private compa-nies and then leased back to the owner s

_ 'for daily operation. The "lease-back"contract may include subsidies for the

--owners in return for policy controls overservices and fares . Some municipal sys-tems are leased `for ' private ` operationdirectly.

Methods of financing the governmen-tal systems vary . In some cases, munici-palities provide most or all of the capita lfinancing, In others, only operating sub -.'sidies are provided ; and in yet others,both current operations and the con-struetion of new facilities are , munici-pally' subsidized . In New York City, forexample, capital financing has, in th epast, been entirely subsidized with tax

.,: . supported borrowing ; moreover, selecte doperating , subsidies, to cover reduce dschool fares and some power and transitpolice costs, are 'also provided by thecity. In recent years, debt-service onNew York transit bonds ,.has :run,as.highas $114., million . 1 1

As in the case of government systems ,,.the financial arrangements of privatelyowned companies also vary . Some of thelarger private corporations issue com-mon stocks . Frequently, the larger cor-

-,porations have subsidiary operations innumerous cities and towns . Many small-er firms are controlled centrally throug ha holding company. Private firms in fi-nancial difficulty have received localassistance through tax relief and othe rmeasures,

'Gross investment in facilitie,,. in 1966

totaled $4.4 billion. This total, onlyslightly higher than the amount reporte din 1944, reflected the substantial reduc-tion in street-railway plant after World

a

War II as the industry shifted fro mstreetcars to motorbuses . Data on an-nual investment in facilities are notreadily available . Some estimates haveplaced recent -amounts at , $100 million

-annually . 1 2

:Other Economic Factors

There seems to be some significanc ein the relationship between population'density and the 'financial success' oftransit operations . Cities with high pop-ulation densities seem to have financiallytroubled transit systems ; those with low'densities seem to benefit from successfu ltransit operations. Among cities with'populations exceeding 10,000 personsper square mile, many have transit op-erations that are either ir financialtrouble, or have been converted to .gov-ernmental ownership — New York, Chi-.cago, Detroit, Boston, San Francisco,Pittsburgh, and Milwaukee. On theother hand, some cities with fewer tha n8,000 persons per square mile seem tohave prosperous transit operations —Denver, :Cincinnati,. Kansas City, and E lPaso . 1 3

Where substantial investments' i nfixed facilities have been required in.larger and more densely populated 'ur-ban centers, a good deal of flexibilityhas been lost in adapting to changingurban patterns, Rapid transit tunnelsand subway cars have not been able t ofollow the "flight to the suburbs," an dadding motorbus facilities to comple-ment rapid transit has not always beenpractical, In other circumstances, oldercities which have had a history of lowtransit fares have not had the necessaryresources to finance more modern andefficient facilities .

11, The Comptroller of the City of New York, Annual Report for the Fiscal Year 1965 .1966, p, 473 .12, Lyle C, Fitch and Associates, Urban Transportation and Pubile Policy (San Francisco: Chandler Publishin g

Co,, 1964), p, 40 ,13, See Wilfred Owen, The Metropolitan Transportation Problem, revised (Washington, D . C, ; The Brookings

Institution, 1966), pp, 96.97,

19

TRANSIT'S PROBLEMS

I

The financial uncertainty faced by the preciated. World War II and earlie r.transit industry reflects a series of prob- vintage cars are not uncommon sight slems that have relentlessly plagued the on rapid transit systems . In a transitindustry, The fact that many have re- survey published in 1965, almost 30 per -mained unsolved suggests that they will cent of all subway cars in use in 8 majo rpersist

and

will

'therefore

influence cities pre-dated 1945, Even among sys -spending by one or. another level of tems where

substantial numbers

ofgovernment, subway vehicles were relatively new,

antiquated subway cars still operated i n~D.eficienciea as They Have Developed regular service, 14

Mass transit has come to suffer from The problem of ,aging equipment ha s

acombination of low average speed, in- been compounded by the lag in buildin g

convenience, discomfort, and obsolete 'new or expanded facilities . Private fi-

equipment. Urban subways during rush- nancing of new facilities has not been

hour

periods

are

significantly

over- generally available for over four dec-

crowded; the "sardine can" is an often ades. New construction is now normall y

used simile to describe the "discomfort financed with public funds, either rev-

experienced by commuters during these enue bonds or tax-supported debt, Gen-

periods . Unattia-.tive and unprotected erally, substantial risk is attached to

way stations and terminals, as well as private investment in urban transports -

_ : : . .protracted periods of standing and wait- tion. Poor earnings among many transi t

ing for service, are added disadvantages "firms are aggravated by an uneven an d

of urban transit travel . Air conditioning, ' incomplete use of plant and equipment, .• : .

one of the more important improve- .

"The Peak-Service Problemments in inter-city rail and bus transport ,

is seen less frequently on mass transit The peaking of demand for mas svehicles, transit services distorts the use of equip-

ment and labor resources by employingLow-average speed during the rush them in quantity for only short periods

hour is a particularly vexing problem on during the working day . Combined withbus transit, given the frequency of stops a general decline in patronage, the trans-and traffic congestion on urban streets, it industry has been faced with the pros -The problem is usually associated with pect of additional expenses for peakrush-hour travel, The result is frustra- service resources

(wages, acceleratedtion and inconvenience for the commut- maintenance, and depreciation of equip -er, and increased fuel and maintenance ment)

as against the uncertainty o fcosts for the transit operator . Moreover, continuing passenger revenue volumes .despite the heavy congestion on urba nhighways during rush-hour travel, the The mass transportation problem ha s

average speed of the automobile will been magnified by the fact that traffi chas continued high during peak hour s

often exceed that of buses, of the day while most of the loss o fSubstantial

arts of mass transit plan tpbusiness has been in off-peak hours ,This pattern of passenger movemen t

and equipment are quite old and de- means that the transit company mus t14,

See Robert L . Abrams, United 5tate .v Rapid Transit Systems (Washington, MC .-, National Capital Trans.portatIon Agency, September, 1965), Summary table (unpaged), The cities included in the study were Boston ,Chicago, Cleveland, Cult, New York, Pit ladelphla, Sun Francisco, South Jersey, and Washington, U,C,

20

'-still meet the high manpower and ally be large enough to meet the needsequipment requirements dictated by of the diurnal pattern of service ; forthe deeds encountered in the peak other public utilities, however, staffin ghours — generally two hours in themorning and two hours at the end of for the

k is a much . less seriouspeathe working day — despite the overall problem, ' "reduction in the number of passenger saccommodated throughouc the day ,Much of this equipment is idle during Short-run Economic Incentivesthe off-peak period, and'the workingforce that must be employed for a few

:

The tendency in the transit industr yhours to handle the peak must-,be paid! has been to .maximize short-term oppor.

`:for°a full day.

- tunities at, the ' expense of longer-term

This pattern of transit traffic poses difficulty . Fare increases, for example ,the double , threat of bankruptcy for the :-'normally produce increased revenues in -industry and prolonged deterioration itially. Since transit operators are facedof service for the customer. For the with the chronic need for more rev-decline in transit patronage has no tpermitted parallel reductions in cost, enues they are likely to increase fare s

and emergency measures designed to frequently at the expense of aggravatingbring costs more in line with revenues Ahe long-term decline in. passenger vol-'have resulted only in reducing the at- ume. The same `kind bf reasoning moti -Iractiveness of the service . The effect vates some transit operators to limithas been to create an even greater in-centive for car owners to desert rail services or abandon them entirely ; there

and bus transporation for their auto- is little doubt that restricted services o rmobiles, lS

:

'

. .

- ,the elimination of unprofitable .routes . .

Peak service problems are not uniquesaves money in the short run .

to the transit industry. Other public Transit operators are also unlikely t o:.utilities, like the gas, electric and tele- enter new areas in developing neighbor.phone industries, also have to contend hoods. A new neighborhood is unlikely,with the problems and costs of peak-use to provide the initial patronage levelsservices .

However,

these

industries necessary to cover the costs of introduc-( with customers connected by physical ing extended or expanded transit ser yattachments) have greater flexibility in " ices. If the transit company waits unti lco-ordinating a variety and quantity of the neighborhood is more developed ,services with a schedule of rates to cover transport patterns of automobile use

,~ thy; range of costs involved, These indus- have become more firmly established ,tries, moreover, axe not subject to the and mass transit finds it difficult, if no tcompetition of substitute alternatives, impossible,

to

introduce

competitiveMessenger service, or face-to-face com- services .munication, is by no means so close a n:alternative to telephone service as the Even the fact that establishing motor-

private automobile is to mass transit, bus operations requires relatively smal lcapital presents problems, In the short

Part of the seriousness of the peakproblem for transit operators is the de-gree to which labor costs, as well a scapital costs, are affected by the peak ,Transit labor for a full day must gener-15 . Owen, op, cit., pp, 81, 83,

run, with high fares and substantial rev-enues, profits can be very attractive .Investors, with the prospect of quick re-turns, can establish motorbus operation swith only limited capital resources ,

21

When, over the longer term, passengervolumes decline, bankruptcies an dabandoned services result . Long-run in-stability frequently occurs as new in-vestors, ready to impose higher fares ,seek the same short-term benefits thatmotivated previous investors .

Public Apathy

In many respects, municipalities, unti lrecently, have tended to be unsympa-

,thetic to the needs of mass transit . Manylocalities impose a variety of fees andcharges, as well as franchise taxes, whichweigh heavily on the finances of loca lmass transit . The franchise tax on gros srevenues has been levied without regar dto financial condition. In some instances ,transit revenues have been taxed to pro -vide local facilities such, as parks, play.-grounds, and schools .

Other levels of government have also;pursued policies which have not alwaysbeen consistent with a viable develop-ment of public mass transportation . Atthe Federal level, long-standing high-way-aid programs financed by user taxe spromoted road solutions to transporta-tion problems while indirectly excludin gother alternatives . An urban highwayprogram that met certain requirement sestablished for the interstate system o fhighways was eligible for Federal as-sistance for 90 percent of constructio ncosts. Urban highways that did not mee tnational standards could still be eligibl efor 50 percent Federal aid under other,programs, In contrast, and until very re -cently. Federal assistance for mass trans -it was non-existent .16 As a result, citiesfaced with increasing congestion prob-lems had strong incentives to adop thighway solutions to their problems, an dignore mass transit approaches . More-

over, in the highway solutions adopted,transit operations were often unableeven to share in the benefits. For exam-ple, in some cases buses are specificall yexcluded from expressways ; and somebus routes have actually been mademore circuitous through the blocking offof streets. Even where buses are per-mitted on expressways, there is some-times rather little net advantage becaus eof the need of :providing . intermediatepick-up points .

At the state and local levels, opposinginterests among urban versus rura lgroups often inhibited programs to solvethe transit problems of large cities . Thetraditional strength of rural interests instate legislatures made the question ofurban transit development a dormantissue in state government . Recently,however, the spate of reapportionmentdecisions have given promise of revers-ing this inaction by increasing the lever -age of urban interests. in the state legis-lative chambers .

Mass transit development has als obeen hampered by the infrequency ofregional cooperation and planning. Theproblems of local transit have not alway srespected municipal or even state po-litical boundaries . Yet, regional ap-proaches to mass transit have remainedfew.

The Pricing Problem

Transit, in the recent past, has fre-quently resorted to fare increases in a nattempt to bolster insufficient revenues .Prior to the Second World War, fare sgenerally were fixed at about 5 cents o r10 cents . With the end of the war, aseries of increases began, and sinc ethen, fares have been rising, in averag eterms, on an annual basis . In 1924, aver -

16, New Federal legislation in support of urban mass transportation Is discussed in the next section,

22

age revenues per passenger amounted to more favorable alternatives . The loss ofapproxmiately 7 cents, By 1947, this short-haul riders, however, would meanaverage fare, after some moderate flue- a corresponding increase in the averag e;tuation in the intervening period, was trip length per passenger . With a flat -still the same, By 1957, however, average fare system, the result would be a drop-fares had more than doubled to around in average revenues per passenger mile .15 cents ; presently they average about

Short-haul riders may frequently be20: cents per passenger (see Table 6) . off-peak riders . One result of encourag-

-Fare increases have contributed to the ing short-haul riding might be to ad d

decline in transit patronage since the chiefly off-peak riders who would con -end of the Second World War . The ex- tribute rather little to crowding or costs . "tent of the impact is difficult to gauge,

In terms of public finance, fares o nhowever, since fare increases have oc-governmentally operated transit system scurred during a period when war re - are classed as revenue sources based onstrictions on driving and auto production a benefit. Much must be said in favor ofhave been eliminated, when population the principle of using benefit-based rev -has dispersed to suburban areas awa y

from normal mass transit routes, and enue sources where possible . "High"

when rising incomes have offered great- 'sometimestransit fares are

criticized,

per opportunities for individual choice; 'however, as being more regressive;;than.

among transportation alternatives, -most other revenue sources .

The industry rule-of-thumb on far eincreases generally states that for any Table 6given percentage increase in fares, trans- Average Mass Transit Fares 'it patronage can be expected to declin eby one-third that percentage . The im- Selected :.Calendar Years, 1924.19.66pact of the fare increase is usually more (Cents per passenger)severe on off-peak patronage ` than o nrush-hour volumes .17 Average revenue s

Year

per passenger

Given the widespread existence of '1924

7.05"flat" fares, which 'make no distinction 1930

7 .18

between short and long trips, frequent 1935

6.57

'fare increases have served only to ag-gravate the plight of the short-haul rider .Many of these riders have turned toalternative transport modes which mak emore equitable distinctions among dis-tances traveled. Although a five-centcharge for a one-mile trip on a mas stransit vehicle would attract numerou sshort-haul riders, a 20- or 25-cent fare fo rthe same trip would alienate many o fthem. Under the latter conditions, walk-ing or using an automobile would offer

1940 6.681945 6.921947 7.241949 9.3 11951 10.961953 13.131955 14.781957 15.821959 17,101961 18,241963 19,041965 19.7 11966 20.76

Source ; American Tr; sit Association ,

17, used on information provided by the American Transit Association,

23

Suggested SolutionsFor the organizational problems of

mass transit, a variety of approacheshave been suggested including greate rstate coordination, the formation of re-gional public authorities, and, of course,'increased Federal direction and support .Some of the suggestions include, as anatural by-product, potential solutionsto tr~insit's chronic financial problems .Public authorities, for example, financetheir operations on the basis of usercharges and revenue bond issues . Specialdistricts, more comprehensive and gov-ernmental in nature, have the additiona lpower to levy taxes . Either approach hasbeen successful, in financial : :terms, innumerous ;applications . 1 8

In the case of technical problems, thenumber and variety of suggestions havebeen bountiful. Some have been adopted. . .. . . .. . . . .

.in selected cases, others still remainingon the "drawing boards ." They include :

1 A "zone" fare which would scheduletrip charges according to the dis-tance traveled.

2. -Automated signal devices, controlle dby computers, which would permi tmore frequent, regular, and reliableservice as well as increased capacity,without expanding existing facilities .

3. Scheduling devices to. further in-crease capacity (such as "stop-skip"sequences whereby a succession ofsubway trains on given routes woul dalternate station stops) .

4. Extension of subway platforms topen-nit longer trains ; modification of

commuter passageways to improv ethe flow between entrances and exits .

5. Specialized services such as specia ltrains to sporting events and beaches ,or deluxe trains featuring aircondi-tioning, less crowded seating and nostanding, and offering food and drink

provided at, higher . charges .

Technical improvements for bus trans -it have also been suggested, includin gbetter seating and wider aisles, improve dsigns to indicate destinations and stops ,-and reserved lanes on arterial street sand highways for the exclusive use o fpublic surface transit . Economic andlegal feasibility must. of course be considereaL

As yet, in fact, many of the technical"suggestions have not received wide-spread endorsement because of actual oralleged impracticalities . Excessive and

,additional costs which would not bematched or exceeded by increased rev-enues have been an often cited disad-vantage. In general, for whatever reason,implementation of new techniques ha sbeen a slow process, not least becaus eof very real financial difficulties .

Skepticism has also greeted many o fthe proposals to improve the organiza-tion, recruit 'and train more men withspecialized managerial skills, and bol-ster the finances, of mass transit systems .These proposals, however, are some-times more sensitive than the technica lones, since they involve political ques-tions of where responsibility and con-trol will ultimately rest once any of th eorganizational schemes are adopted .

18 . The general alternatives in an urban transit program are discussed in detail in section V .

24

MASS TRANSIT AND THE AUTOMOBIL E

- Mass transit uses space more inten- automobile involves acquisition andsively than the automobile, and is there- ownership for this use purpose, the con -by less costly of space requirements in cept of "full costs" is appropriate. How-densely populated urban use. Generally, ever, if the use envisaged is supplemen-an automobile which travels at 20 m .p.h. tal --the car would be owned in anyuses 6 to 45 times the land space per per- case -- the appropriate cost concept i sson that a transit bus uses ; and compared "out-of-pocket, " "marginal," or incre-#o a multiple unit rail car, automobiles mental . The latter, out-of-pocket, isconsume 10 to 90 times more land space defined to include expenditures on gaso -;per person. Although the wide range of line, oil, maintenance, and tires — all o fthe figures must suggest differences i n,view about the best bases of estimation, `the general conclusion of appreciably;greater intensity of use by mass transi t"has great significance for public policy . fees,

travel between centers of low den -sity, or for movement of a highly ir-regular character, the automobile isunbeatable in efficiency and conven-ience. For mass movement, however ,automobiles are inefficient users o f'space when consideration is given to,heir average passenger load, and tothe parking space required at the en dof the trip to work . . . . The mass move-ment of people to a common destina -tion can be most efficiently performe dby a public transit vehicle that use sspace more intensively than does a nautomobile, and that can thus mov e-many rr:~re people in a given amount -of travel space . 1 9

A comparison of the costs of using an les swith the costs of using a

transit mode raises several problems, forsome of which no one answer will b eaccurate . Much will depend on whether

..:which vary with the amount of use of:the car. Full cost includes, in addition t oout-of-pocket costs, those of ownershi psuch as interest and depreciation, license

and insurance.

In attempting to predict the extent to-which individuals will use private auto-mobiles rather than transit, it is the cost sto the user that are relevant . Where useof thane is supplemental, the non the basis of the typical range of mar-

. ~;inul costs per passenger mile, an auto -the with two or three passengers

generally provides a less expensive tri p-than a mass transit mode under the usualrange of fares. If, however, the cost ofhaving the automobile available canno tbe charged off to other uses, then on th ebasis of the typical range of full costsper passenger mile, mass transit will b e

expensive (unless, indeed, the ca rcan be loaded with four or five passen-gers) . 21 Moreover, if the costs of parkin gare included, the cost advantage shift s

one considers only the costs borne b ythe user himself, or whether, in addition ,one includes the costs shifted to others?0Looking at the first alternative, the costsborne by the user only, two importan tdistinctions must be made . If use of an

even more favorably toward mass

19. George M . Smerk, Urban Transportation : The Federal Role (Bloomington ; Indiana University Press, 1963) ,p . 4 320. The value of differences in rider time is not considered here .21. Regular use of car pools with as many as five or four members will likely involve loss of sonic of the flexibilit y

and convenience of use of the private auto .

transit .

The analysis must, however, shift t othe broader perspective if wisest publicdecisions are to be reached. Under cer-tain circumstances — for example, "par k

25

and ride" situations — the cost of main -;staining a car, axed even parking charges ,may be involved in the use of commute ror rapid transit service . Invariably, too ,the costs involved must be weighe d

`,against differences in comfort, conven -ence, and the value of time . Account

must be taken of total costs, includingall those which involve the over-all corn-munity . Then the cost comparison canbe quite decisive and , particularly withrespect to rush-hour travel . For example,if additional lanes of expressway are re-quired to- :accommodate rush-hour ;auto-

SUBURBAN RAIL

Many cities have suburban rail com-muter services on a regular basis, butonly five are of any significance ; theseare New York, Chicago, Philadelphia ,Boston and San Francisco. (One-waytrips on commuter lines for all cities areiestimated at more than ,800,000 for anaverage weekday, and of that tota l:.amount, New ' .York .accounts for `aboutone-third),.

Suburban commuter services, whichdate to the middle of the 19th century,came about as a by-product of main -Iine services .. Commuter lines comple-mented the main-line services by help-ng to fill empty seats on main-line runs ,

by providing return loads for express andmail trains, and by helping to reinforc ereal-estate development. As suburbancommunities were formed around corecities, many main-line railroads pro-vided express and mail trains to servemost o :the new communities . Trainswould leave in the morning and returnin the evening, analagous to the presen tpeak. load services during rush hourperiods.

The horse car, at the turn of this cen-tury, and later the electric streetcar, in-

mobile commuters, the cost per car-mil ecan easily range from 5 cents to 25 cents .This cost can be compared with an aver-age — for gasoline and other taxes — o fless than 1 cent per car-mile on existin ghighways . The cost of accommodatingpeak mass transit service is also muc hhigher than for service as a whole, bu tthe difference is not nearly so extreme .One reason is that on an over-all averag ebasis the peak riders are already chargedwith most of the, special peak costs —there is relatively little off-peak ; trafficto share- in bearing these ,costs .

TRANSPORTATION

troduced important competition to the;;commuter lines . Many streetcar lines:connected the core cities with :suburbanrail stations. In some cases, suburban:transit companies developed streetcarlines that went beyond the railway sta-tions, helping to spread new communit ydevelopment away from, establishedcommuter lines.

The most severe competitive blow,came from the automobile, however .The railroads, which once exercised;great political influence in the area o ftransportation, were now being dis -'placed by the increasingly powerfulhighway and automobile interests ; mo-tor license and motor fuel taxes providedfunds which, being related to highway.use, helped justify expansion of the high -way network. The Federal government ,starting in 1916, began to spend substan-tial -,ums to develop highways . Commu-nitie:: were formed near, and around,the new and more promising roadways ,but often away from the established rail -way corridors . Land-use patterns weredetermined by the new means of trans-port; planning in urban and surroundin gareas became highway oriented .

26

The new trends in support use-:weighed heavily on suburban railwayfinances. In fact, regardless of intent,governmental actions — chiefly spendin gon highways and state-local taxation —accentuated the difficulties of the rail -roads. Deficits., 'became common, and

FEDERAL ?

A combination of uncertain industryfinances and insufficient local govern-ment action presented opportunities forFederal legislative intervention in th eearly 1960's . The transit industry wa sfaced with a series of economic andtechnological problems that were be -coming increasingly difficult to resolve,such as a chronic decline in passenge rvolumes, plant and facilities in need ofmodernization, etc. States and localities ,underwriting new responsibilities in ex-panded areas of the public interest andgeneral welfare,, were -hesitant to. take

only the larger mainline railroads wereable to absorb the net expenditures wit hrevenues from freight operations and at „the expense of stockholders and cred-itors. Prestige, once a motivating facto rin suburban operations, had become -apoor excuse: for. continuing . deficits .

TRANSIT' AID

all the rri .;asures that might have beenappropriate to modernize local mas s

`transit and give it the vital place in ur-ban life which new conditions warrant .Regional cooperation, in administrationand finances, was the exception rathe rthan the rule in transit planning . Somelocal government activities were stil lweighing heavily on the finances of loca ltransit companies . Under these circum-stances the time appeared ripe for Fed-eral initiative, and in 1961, the Federa lgovernment inaugurated a- new mas stransit aid program.

27

the Federal Role, .The role of the Federal government in be consistent with comprehensive urban

support of urban mass transportation planning by the states and localities, Di-began in 1961 with amendments to exist- rect Federal aid for urban transit's sub -ing housing legislation . In 1962, the stantial capital needs was initiated withCongress made specific provisions that mass transit legislation, in 1964. Otherfuture 'highway funds . for urban areas Federal provisions came in 1985 and 1966.

THE HOUSING ACT nF 196 1

Amendments to three then existing -

The next element of the 1961 legisla-Iousing acts comprise what 'has gener- tion, included as an amendment to the;ally become known as the "Housing Act Housing Act of 1954,4 required massof 1961." The first element of this trans- transit to be a fundamental part o fit legislation, an amendment of the "comprehensive

urban

transportationHousing Act of 1949, 1 provided Federal surveys, studies, and plans . "

-

aid;for-transit demonstration, programs,, , , to facilitate comprehensive plan-ning for urban development, including

,e

. . . The Administrator2 may , . , con- coordinated transportation systems, o ntract to make grants aggregating not to a continuing basis . . . and to . . . estab-exceed $25,000,000 for mass transpor- lish and improve planning staffs, th etation demonstration projects which he Administrators is authorized to `make'determines will assist in carrying out _

planning grants . . . .urban

transportation plans and re- Planning which may be assisted . . .search, including but not limited to the includes the preparation of compre-

;jdevelopment of data and information hensive urban transportation surveys ,of general applicability on the reduc - studies, and plans to aid in solvin gtion of urban transportation nerds, the problems of traffic congestion, facili -improvement of mass transportation tating the circulation of people andservice, and the contribution of such goods in metropolitan and other urbanservice toward meeting total urban areas and reducing transportationtransportation needs at minimum cost, needs . 6Such grants shall not be used for majorlong-term capital improvements; shall The final part of the 1961 transit legis -not exceed two-thirds of the cost, as lotion, which modified the Housingdetermined or estimated by the Ad- Amendments of 1955,7 provided forministrator, of the project for which loans for the capital

needs. investmentthe grant is made ; and shall be subjec t-

to such other terms and conditions as of mass transit, The difficulties of publiche may prescribe .' agencies and local communities yin sac "

1,

Public Law Bt-171, 81st Congress, tat Seas, (S1070), July 15, 1949 ,2 . The Housing and Home Finance Administrator .3, 42 United States Code 1453b, See also Housing and Home Finance Agency, Federal Laws : Assistance to Mass

Transportation (Urban Mass Transportation Art of 1964 and excerpts from the Housing Act of 1949 ; th eHousin

Act of 1954

h

Housing

ic nts of 1953 ; as amended through October 15, 1964, Washington ,D .C . : Government Printing Office, 1

Amendment s64)td

n

4,

Public Law 93.560, 83d, Congress, 2d, Seas., (H1t,7839), August 2, 1954 ,5,

See footnote 42 .6,

40 U .S .C . 461a .7,

Public Law 84-345, 84th Congress, fat Seas, (52126), August 11, 1955,

28

quiring low-cost loans to support transit nated mass transportation system ; (2 )development were also recognized, that the proposed facilities or equip -

The Congress finds that in many in-ment can reasonably be expected to berequired for such a system; and (3) i f

<stances municipalities, or other poli- such has not been completed, that-

tical subdivisions of States . . . which there is an urgent need for the provi-seek to provide essential public -works lion of the facilities or equipment to b eor facilities (including mass transpor- commenced prior too the time that thetation facilities and equipment), are program could reasonably be expected

. :unable to raise the necessary funds at to be completed, . . . 9reasonable interest

9rates,In summary, then, the

Housing ActThe Housing and Home Finance.Administrator is authorized

to Of 1961

provided Federal mass trans -make loans . . , to finance the acqu ,si- port aid under the following categories :

`tion, construction, and improvement of 1, Demonstration grants for experimen-facilities and equipment for use, b yoperation or lease or otherwise, in mass

tation and research-in amounts no t

:transportation service in urban areas, to exceed two-thirds of the total

ro' . .p

1 "and for use in co-ordinating high- eet cost .way, bus, surface rail, underground 2. Loans for facilities and equipmentparking and other transportation facili- bearing low interest rates .ties in such areas .

No loans may be made for transpor- In addition mass transit had to be an;cation facilities or equipment . . . un- integral part of urban planning gener-less the Administrator determines (1) ally. Funds distributed under the 1961

what there is being actively developed legislation were to be channeled through`(or has been developed), for urban or government agencies . The Congression-other metropolitan area served by theapplicant, a program, meeting criteria

, al appropriation to carry forth the pur -established by him, for the develop- poses of this legislation amounted to

.ment of 'a comprehensive and coordi- about $43 milhon, 1 0

TIM FEDERAL-AID HIGHWAY ACT OF 1962Although no funds were made avail- operate with the States . . . in the

able for mass transit under the Highway development of long-range highwayAct of 1962, 11 recognition was given both plans and programs which are properl y

for the need of coordinating all aspects coordinated with plans for improve -

of urban transportation and the desir-ments in other affected forms of trans-portation to their probable effect o n

ability of spending highway funds only the future development of urban area swithin the context of a comprehensive of more than fifty thousand population,urban transport plan .

After July 1, 1965, the secretary shal lIt is declared to be in the national

not approve [programs for spendinginterest to encourage and promote the

highway funds] in any urban areas ofdevelopment of transportation sys-

more than fifty thousand populationtems, embracing various modes of

unless he finds that such projects aretransport, in a manner that will serve

based on a continuing comprehensivethe States and local communities effi-

planning process carried on coopera -ciently and effectively . To accomplish

tively by States and local communi -this objective the Secretary shall co-

ties . . , .1 2

8. 42 U .S .C . 1491 .9. 42 U .S .C. 1492 a,d ,

10. Housing and Home Finance Agency, News Release, HHFA-OA-No . 62.174 .11, Public Law 87-966, 87th Congress, 2d . Sess . (H,R.12135), October, 23, 1962 .12, 23 U,S,C, 134,

29

The recognition of a comprehensive applications and that they would not b eurban transport plan, which included summarily abandoned in favor of alter-

-highway aid programs, would insure native highway construction. The impactthat consideration would be given to the of all transport modes on an urban areapossibility ,of,-moreuseful , mass transit was finallyrecognized .

THE 'URBAN IVZAS5 :TRANSPORTATION ACT

Passed in 1964 and amended in 1966, Federal capital grants cannot exceedThe Urban Mass Transportation Act l3 `two-thirds of the net cost of a transpor tis the most'recent climax in the devel- ` project, Net cost is defined as that por-opment of Federal aid to urban mass tion of the total project cost which can.

transportation . The purposes of the Act' not be readily financed from transit rev -include (1) coordinated assistance, be- enues. These revenues also cannot between the Federal government and pub- used for matching funds on the locallie and private transport companies, to level. All Federal funds dispersed mus thelp develop mass transit, (2) planning Abe channele& through public . agenciesand establishment of regional transit sys- only,.stems, and (3) assistance to States and .localities' in their support -of , transit fi- As in the Housing Act of 1961, thenances and needs.14 1964 legislation also calls for coordina-

The 1964 legislation continues the ~tion and planning in the development of

.program of demonstration grants and transportation in urban ares . Eligibility

loans initiated by the "1961 Housing for Federal aid is, in fact, based on th e

Act," and goes beyond it by authorizing , existence of an urban transport plan .

-a new program ~of grant s : for' 'capital ' .''Where no such plan exists, emergency

equipment, aid is available, but with only one-half ,instead of two-thirds in Federal funds .

In accordance wtih the provisions of In general, grant funds for each state are . ,this Act, the Administrator

is author-ized to make grants . . . to assist States

1limited to 12./2 -percent of. the .national

and local public bodies and agencies total. 1 7

thereof in financing the acquisition ,:,construction, reconstruction, and im- The 1964 legislation authorized ex-provement of facilities and equipment penditures of $375 million for demon-for use, by operation or lease or other -wise, in mass transportation service in

'Istration and capital grants through fiscal

.. Iurban areas . . . . Eligible facilities and 1967, In 1966, an amendment to th eequipment may include land (but not original act authorized continued grantpublic highways) , buses and other roll- expenditures through fiscal 1969 at theing stock, and other real or personal annual rate of $150 million, Also i nproperty needed for an efficient an dcoordinated mass transportation sys- eluded in the renewed grant authorize -tem . 16 tion were sums for planning, engineering

13,

Public Law 88 .365, 88th Congress, 2d, Sess, (5,6), July2d, sees, (5 .3700) . September 8, 1966,

9, 1964 ; amended by Public Law 69.562, 69th Congress,

14 .

Public Law 88 .365, sec, 2b,15, The Housing and Home Finance Administrator.16,

P. L . 88.365, sec, 3a .17, see Phil Hirsch, "New Federal Aid for Public Works" in Public Works, June, 1966, p, 79,

30

and design work; management training data on authorizations, appropriations ,'fellowships; and research grants to col- ''and expenditures for recent °Federa l

_

leges atd univers}ties 1 8 Table 7 presents mass transit legislation ,

IMPLEMENTING THE . FEDERAL PROGRA M

Numerous demonstrations examining Putnam Counties in New York, variousdifferent aspects of mass transit opera- experiments were undertaken to analyzetions have been carried out under the and appraise rail commuter services .auspices of the 1961 and 1964 transit Several experiments, in a number of`legislation. Most of the demonstration ''cities, were directed toward improvingprograms have included experiments in `local bus services particularly =ong- .thethree general areas of transit operations : smaller bus companies ,service, pricing and technology, In De -troit, Michigan, for example, experi- Pricing experiments were carried ou tments were ` performed on improving in Massachusetts and Washington, D, 'C ,local

bus

services .

In

Philadelphia, In the latter `case, a shuttle service in-Pennsylvania,

and

Westchester

and corporating small >buses and featuring18, -Public Law 89-562.

Table 7Mass :Transportation Aid by Legislative-Act

-Fiscal Years, 1964.1869

(Thousands)

Legislation

1994

less1987

19se

loselose

W,

ast,

ast ,

Urban Mass Transportation Act (1964) (a )Authorizations (b)

$ —

$75,000 $150,000

$150,000

$150,000

$150,000Appropriations

195

65 1 300 135,455

130,735

125,000

n .a .' Grants

—

`60,000 130,000

130,000125,000

230,000Loans

—

51000 5 1000

—

—

ma,

-,, . .

Administrativeexpenses

195

300 455

735

-

n .a ,Expenditures

195

11,068 18,660

56,215

110,000

n .a .High Speed Ground Transportation Study (1966) (c )

Authorizations

-

— 20,000

35,000

35,000

n .a .Appropriations

—

— 18,250

21,205

18,343

ma .Expenditures

—

— 2,351

11 1 100

19,468

n,a .

-National Capital Transportation Act :(_965) (d )

Authorizations

—

— 150,000

—

—

ma ,Appropriations

—

— 4,104

10,455

400

n,a ,Expenditures

—

— 1 1988

6 1 000

7 1155

n,a,

e, 49 U,S,C. 1801 et seq ,b, For capital and demonstration grants only ,c, 49 U .SX, 1631 et seq, The Act terminates June 30, 1989 ,d, 40 U,S,C, 861 et seq, $60 million In loan appropriations Is also provided ,Source: U, S . Bureau of the Budget,

31

reduced fares was inaugurated . A con- these experiments was to measure ridertractural-fare bus service was demon- responses to a variety of fare and serv -

I,

_

-

strated in Peoria, Illinois, ice levels at both peak and off-peak-times, over a long enough period -o f

-

Technological demonstrations to test time to establish trends ,

new ideas on the control and propulsion Among the major findings of ahis :re-of mass transit systems were demon- , port were ;strated in several places,

Alternatingcurrent, as a means of transit propulsion, The decline in public transpor-was tested on specially constructed track tation ridership is not inevitable ;

in San Francisco, California . (San Fran- can be halted and the trendreversed.reversed,

Cisco also received several grants t oexperiment with various engineering 2, , '`In increasing passenger volumeaspects of train control and design for on public

transportation,

fre-the city's proposed new rapid transit quency of service is a more im-

network) . Automated fare collection portent factor than lower fares ,

Systems at two stations of the Long Is- 3. '"Selected improvements in fre-

-land Railroad in New York were tested quency of service "can be ., madeand analyzed, A medium capacity rapid self-sustaining . 19

transit

system

was 'demonstrated

inPittsburgh, Pennsylvania, - Various eom- Capital grants under the 19641egisla- .puter applications were attempted, in . tion have been directed mainly to th ecluding computerized bus schedules, purchase of new equipment and themanpower and equipment utilization, in maintenance of transit plant and facili-experiments carried out at the Kansas ties. Many of the grants have gone t oState and West Virginia Universities . small bus companies to enable them t o

purchase new buses and construct ade -The

results

of

the

demonstration 'quite maintenance and supporting fa- "grants have been as varied as the experi- cilities . Rapid transit in many areas has.,ments, The general impression has been also been upgraded, and in New Yorkgleaned, however, that the plight of City, the purchase of 400 new subwaymass transit is not hopeless . With regard cars was partly financed with Federal_ ; .

to reversing the downward trend in grant funds.patronage levels, several experiment shave demonstrated the significance of The loan program, inaugurated in theimproved service in helping to attract 1961 legislation and extended in 1964 )

commuters back into the mass transit . has not stimulated a great deal of inter -fold, est among transit system operators . Only

three loans were transacted through th e-

'[An] experiment in the greater Boston end of 1965, including 12 commuter railRegion was conducted recently through ;cars for Philadelphia, Pennsylvania, 180contracts with two commuter railroadsserving Boston, the Metropolitan rapid transit cars for Chicago, Illinois,

-Transportation Authority, and 10 pri- and the purchase of a bus company invate bus companies . The object of Providence, Rhode Island .20

19, Selma J . Mushkin, and Robert Harris, Transportation Outlays o) States and Localitlesr Projections to 197 0(Chicago ; The Council of State Governments, 1965), pp . 26 .27 ,

20, For a list of capital grants through Oct, 1, 1966, see G, M . Smerk, "Federal Urban 'transport Policy—Hereand Where Do We Go From Here," in Traffic Quarterly, January 1967, pp . 33.35, Demonstration grants an dloans since the "Housing Act of 1961 0 " are also listed ,

32