OCR Text |
Show long as general tax funds are applied to the pro- vision of transport facilities, and in varying amounts determined by legislative action, the difficulties of determining how much money should be spent, and for what purposes, are in- evitably increased. And this method of finance may lead to unfair competitive conditions and to an uneconomic division of traffic among the sev- eral transport agencies. However desirable it may be from an economic standpoint to finance transportation facilities through charges imposed on the user, such a goal is in practice beset by many difficulties. First, it does not follow that user payments designed to meet the total cost of transport facilities would necessarily achieve the kind of transport system we need. Certainly this would not have been the case had we insisted that motorists in the 1920's pay their fair share of the total highway bill. Similarly, in the 1930's, when airmail subsidies were creating a new transportation system by air, a policy of requiring full costs to be covered by transportation rates would have meant that the development of aviation in the United States would have lagged far behind the rest of the world. And the conduct of our merchant ma- rine policy on the basis of economic criteria might have meant national catastrophe. Transportation Policy Considerations There are, in fact, a number of considerations other than economics which must be recognized in determining financial policy. Among these are such objectives as the promotion of new in- dustries, the development of regions and re- sources, the provision of useful public works proj- ects to combat depression, the development of uniform standards, and provision for the national defense. The problem, therefore, is one of weighing the arguments for the use of general funds with those favoring user charges, and of determining, in the light of Federal objectives, the extent to which general fund support may be necessary. The current trend toward greatly increased Federal expenditures in this field calls for close examina- tion of this question in an effort to achieve as nearly as possible a considered program of trans- portation development. The argument that tolls should be charged on inland waterway commerce, as a means of im- posing on water transportation and each other type of transportation its full economic cost, has little practical significance at present, unless our freight rate and regulatory policies make it possi- ble to relate freight rates of the different modes of transportation to their costs. The dominating railroad rate structure is based not on cost but on furnishing sufficient revenues at rates which the traffic will bear. Rates on traffic which the railroads consider competitive with water car- riers are much lower than full-cost levels. It is recognized that regulation of intercarrier prac- tices is complicated by the rivalries of enterprise, often aggravated by efforts of shippers to obtain the lowest possible rates. However, rates should be based on costs and none should be allowed to gravitate to a nonprofit level because of competi- tion. The need in this connection for a revamp- ing of the regulatory and promotional policies is discussed later. As long as present conditions exist, there can be no economic distribution of traffic as between the railways and waterways on the basis of their costs, whether waterway tolls are charged or not. The exaction of tolls on waterway commerce under existing regulatory policies would simply raise the costs and rate levels of water carriers and would leave in the hands of the railroads the power to cut their rates to subnormal or below- cost levels, thus impairing or destroying waterway commerce, and to offset their losses on the water- competitive traffic by increasing the levels of other rail rates. There can be no sound distribution of traffic on the basis of economic cost of each type of carrier until our rate and regulatory policies are revised to insure the charging of rates by each type of carrier based on its costs. Until that time a sound economic basis is lacking for exacting tolls on water commerce. The national transportation policy, as defined in the Transportation Act of 1940, calls for regu- lation of all modes of transportation "to recognize and preserve the inherent advantages of each." 213 |