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Show the confederacy, without any tax, impost, or duty therefor. Subsidization of transportation facilities, as a means of extending transportation facilities quickly into new territory and developing eco- nomic resources, has been a continuous national policy. The railroads were built generally over the country with the aid of local, State, and Fed- eral grants and loans. Highway and air transport have been, and are, aided by public funds. Our merchant marine is subsidized to equalize its costs with those of foreign competitors. The principal proponents of inland waterway tolls are trie railroads, which contend that the in- land water carriers, operating over free roadways, are thereby given an unfair competitive advantage over the railroads, which have to provide and maintain their own roadbeds and pay taxes on their value. Their position, as recently stated by the assistant general solicitor of the Association of American Railroads, testifying before the sub- committee of the Senate Committee on Interstate and Foreign Commerce, April 20, 1950, is quoted in part below: A substantial diversion of traffic from the rail- roads to the inland waterways has been in progress since the end of the war. * * * while the traffic handled on the rivers and canals represents but a small part (in 1949, only 4.6 percent of the total intercity traffic and 7.5 per- cent of the railroad traffic volume), it is nevertheless of vital importance in its effect on the railroads. The railroads would have no rightful basis for complaint if these inroads were the result of in- herent advantages of inland waterways, but they do have a rightful basis when, as here, they are due to artificial advantages resulting from subsidies to inland waterway transportation. He differentiates, however, between the rivers and the Gireat Lakes, stating: In the case of the Great Lakes, the combination of moderate expenditures and heavy traffic results in only a "very small subsidization per ton or per ton-mile to> the carriers operating thereon, a subsidy which has probably not been responsible for the diversion of any considerable amount of railroad traffic. The railroad argument does not recognize that: 1. Low-cost water transportation, through the stimulus tliat it gives to the general economic development of the area it serves, creates new traffic for the railroads, probably greater in vol- ume and profitability than traffic diverted from the railroads to the waterways. The railroads have had no net loss of tonnage; on the contrary, traffic on the railroads paralleling our improved inland waterways has increased along with the growth of traffic on the waterways. 2. There is no essential difference between water transportation on the inland rivers and canals and on the deeper waterways of the oceans and Great Lakes; the cost of shallow-water navi- gation may be higher, and therefore easier for the railroads to match, than deep-water naviga- tion; the railroads admit that the subsidy on the deeper waters "has probably not been responsible for the diversion of any considerable amount of railroad traffic." 3. The railroads themselves are the benefi- ciaries of substantial Government subsidization and protection. This is true not only of their original grants and loans, but of numerous later benefits, both general and special. Our regulatory laws sustain railroad rate levels and income; they are granted such specific benefits as RFC loans at less than commercial rates; they wrote off sev- eral billion dollars of new investment in railroad property during World War II by charging accel- erated depreciation to operating expense; they re- ceive extensive protection of their properties as a result of the Federal flood control program. The question of whether a water carrier operat- ing on a river should receive benefits from Govern- ment expenditures for a navigable channel is re- lated to the question of whether a railroad run- ning along the river bank should receive benefits from Government expenditures for flood protec- tion, with or without reimbursement. On the whole, it appears that the argument for inland waterway tolls as a measure of protection to the railroads cannot be altogether sustained. There are many legitimate reasons to support the financing of transportation facilities out of general tax funds. These have, in fact, been sufficiently persuasive to cause the Federal Gov- ernment to finance such facilities without requir- ing those who use them to pay the bill. But as 212 |