Switchover at the ICC

For all the five years that he was president of the hapless New Haven Railroad, Boston Attorney George Alpert moved up and down the land preaching that only Government subsidies could save the nation's railroad passenger operations from extinction. The Interstate Commerce Commission, historically opposed to rail subsidies, pretended not to hear. But last week, with the New Haven in bankruptcy and Alpert back at lawyering, the ICC did a roundhouse turn. After a year-long study of the New Haven and its pyramiding deficits, the commission decided that subsidies might indeed be the answer. Testifying before a Senate Commerce subcommittee last week, ICC Chairman Everett Hutchinson, with the support of nine of the commission's eleven mem bers, presented a plan which, he argued, would save commuter railroads from "a plunge into disaster." Under the ICC proposal the Government would give the railroads with the heaviest commuter traffic the equivalent of their direct investment in passenger operations and, in addition, would match dollar for dollar such aid as the railroads were able to squeeze out of state and local governments. Primarily designed to stimulate local aid to the passenger lines, the ICC proposal was not calculated to cover all U.S. railroad losses, which last year cannon-balled to $485 million and will go higher in 1961. Hutchinson proposed to limit the federal handouts to a total of $52 million a year, of which the New Haven alone might get as much as $7.2 million (up to $2.4 million in direct aid, $4.8 million in matched funds).

The Warning Whistle. The new ICC proposal is unlikely to get to Congress before next year, and when it does, the rails are apt to prove slippery. Already the warning whistle was blowing on Capitol Hill. Cried Ohio's Democratic Senator Frank Lausche: "Sweat on, you taxpayers. Let Congress take more money out of your pockets and pay it to those who imprudently run their businesses."

Even among railroadmen, the plan did not win unanimous applause. In the East, where passenger losses are heaviest, railroaders were cautiously delighted; a spokesman for the Pennsylvania allowed that his line would be happy to take any money it could get from anybody. But in the long-haul West, stronghold of profitable railroading, there were bitter cries that what the railroads needed was not more Government intervention but less.

Fumed Santa Fe President Ernest S.

Marsh: "This is the first step toward nationalization of all transportation."

Merely Temporary? Indignantly, ICC members denied that the gleam of nationalization was in their eye, pointed out that airlines and motor transport are both presently subsidized in one form or another--but are still far from nationalized.

Insisting that what it would really like to see would be reduced subsidies for the railroads' competitors, the ICC argued that this could not be accomplished in time to save the railroads. The rail subsidy, claimed the commission, would serve only as a stopgap measure until the day when subsidies could be trimmed all around to equalize competition for everybody in the business of moving people. This had a plausible ring, but even those who favored the ICC plan found it difficult to believe that railroad handouts, once begun, would ever be cut off.

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