Governmental Responsibilities in the Field of Local Burdens on Railroad Transportation Facilities

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The recent business recession has brought into sharp focus the precarious financial situation of many of the country's leading railroads. Congressional hearings instigated by Senator Smathers in 1957 gave wide publicity to the progressive inability of rail carriers to produce sufficient revenue to meet their continually mounting expenses. The report' which followed those hearings particularly emphasized that a principal cause of this deteriorating situation was the astronomical deficits incurred, particularly by eastern railroads, in operating services.2 Heavy losses from rendering commuter and other local service were specifically stated to have faced several large carriers in the East . . . with the imminent threat of bankruptcy.3 Hearings conducted at about the same time by the Interstate Commerce Commission on its own motion led to the submission of a proposed report which reached similar conclusions and ended with the prediction that the situation was so hopeless that most rail service would be discontinued by I97O.4 In the course of that report, the examiner referred to a study indicating that i8.5 per cent of the so-called deficit5 of Class I carriers throughout the country was attributable to commuter operations.6 In the case of individual railroads serving large urban centers, the percentage is obviously much higher. The threat which the situation poses to the continuance of commuter services has become a source of alarm in metropolitan centers, both to their patrons and to the communities in which they operate. The plight of the railroads providing such services in metropolitan areas is currently headline news, almost daily, in the public press. Recommendations for special city commissions, state commission, biand tristate commissions, all attest the concern of the public and its officials and emphasize * A.B. 1926, Williams College; LL.B. I929, Harvard University. Member of the New York bar; Chairman, Eastern Railroad Presidents Conference. 1 STAFF OF SENATE COMM. ON INTERSTATE AND FOREIGN COMMERCE, 85TH CONG., 2D SESS., PROBLEMS OF THE RAILROADS, REPORT OF THE SUBCOMMITTEE ON SURFACE TRANSPORTATION (Comm. Print x958). Id. at 3. 3 Id. at 4. See also the statements of Me.,srs. Alpert, Perlman, and Symes in Hearings Before the Subcommittee on Surface Transportation of the Scnate Committee on Interstate and Foreign Commerce on Problems of the Railroads, 85th Cong., 2d Sess., pt. I, at 4II, 227, 74, 144 (1958). 4Railroad Passenger Train Deficit, No. 31954, Examiner's Proposed Report, ICC, Sept. I8, I958. The term passenger deficit refers to the amount by which the revenues from passenger-service operations fall short of covering operating expenses, taxes, and net rents assigned or apportioned to this service. Id. at 2-3. Id. at I8.