began in 1947 and was continuing at a constant rate of 6 percent, it would be possible-I underline the word "possible"-to get thousands of people to change their habit patterns and get them out of the automobiles back into the commuter trains.

So we took these two lines as an experiment. Despite the fact that our market research indicated that we had to not only increase our frequency of service, reduce our fares, have better parking, relocate our stations, have additional services of one kind or another-despite all of that, we decided to just go ahead with the increased frequency of service and the reduced fares. Those two factors alone brought about this startling result.

Based on that, we think we have reason to believe that if we go through with a full-scale plan and really give people some good equipment where they can read their newspapers without going blind or being shaken up too badly, and add additional services, and one other thing we are serious about this-we think that the approach to the problem as we get underway and make the improvements will be one of modern merchandising. We think that if the entire community, as it will in the various metropolitan areas, gets behind this, and takes a forward-looking approach to this instead of a pessimistic or backward-looking approach, we believe that we will do a lot, not only to solve the city's problems, but also to cut down on these enormous deficits.

But over and above all, we say that no one approach and no one piece of legislation will solve this crisis. But there is one approach and one bill which surely advances the country along the path in its quest for a permanent solution. That approach is the one offered by Senator Williams, and that legislation is S. 3278. The city of Philadelphia strongly recommends that this subcommittee report favorably upon it. Thank you.

Senator WILLIAMS. Thank you. It is extremely helpful to us to hear the very intimate experience you have had with a very complex problem. It is easy to see the imagination and the effort of the Philadelphia people who have worked through this maze. And there is promise where there has only been pessimism.

I have just one further question. I do not know that you feel competent to testify in response to this, but we are concerned with the question of the interest rate. This is a rate which is well below the commercial rate. We, in proposing to set it on the same basis as the college housing rate, felt that we would stimulate the use of the proceeds and resources that would be made available that would not be used if the rate were substantially higher.

Do you have any feeling on the interest rate question?

Mr. BERGER. I do, and I want to say candidly that I am not prepared to say that I would oppose the legislation if you changed the interest rate. But let me point out how it works out, practically. If we plan a project which costs, say, $25 million, and if the interest should be roughly 3% percent, we are on a 30-year basis. It could be said that the annual payback would amount to roughly $1.5 million.

On the other hand, if it is increased to, say, 4 percent, we are going to have a payback of about $1.8 million. The $300,000 a year may very well mean the difference between what we call a self-sustaining project and one which cannot be shown, by projection, to be a selfsustaining project.

Senator WILLIAMS. Even at that, are you not conservative? Is there any 4-percent money?

Mr. BERGER. I am being extremely conservative. That is why I used those figures. If we are going to talk about 5-percent money, I think costs go way out of proportion. That is why I strongly endorse the low-interest rate.

Senator WILLIAMS. That interest difference, the amortization difference between the lower rate and the higher rate, might well make the difference between a program and no program.

Mr. BERGER. Absolutely. It might be critical. As I say, in all fairness and candor, I would not say I am against this program or bill if you change the interest rate. But I think Mr. Symes is correct that the equities being what they are and the tremendous present need being as critical as it is and as long as we do have this kind of deficit which we have already shown and experienced, I would say that you ought to keep the low-interest rate in there. This will assure selfliquidating projects. That is, saving there in the interest rate, the payback, will make possible economically feasible programs.

Senator WILLIAMS. Thank you, Mr. Berger. Thank you very much. Mr. BERGER. You are welcome.

Senator WILLIAMS. We have the honor to have Mr. Luther Gulick with us this morning.

We have been going without a break since 9 o'clock, Mr. Gulick. I wonder if we should take 5 minutes, if you would not object.

STATEMENT OF LUTHER GULICK, PRESIDENT, INSTITUTE OF PUBLIC ADMINISTRATION

Mr. GULICK. I would not object at all.

Senator WILLIAMS. I would not want to have our reporter here too tired for your testimony. I want to be a little fresher myself. (A short recess was taken.)

Senator WILLIAMS. All right, we will come to order.

Mr. Gulick, again, let me say how much we appreciate your bringing your talents here to our problem in the subcommittee.

Mr. GULICK. Senator, it has been a long, hard, and extremely instructive morning. My statement appears not to have arrived, so I have no temptation to read anything to you.

Senator WILLIAMS. My comment was as I came in, "I hope you do not read anything, but just give us the benefit of your wisdom in your own way."

Mr. GULICK. So I will touch on a few points.

First, my name is Luther Gulick. I live in New York City, directly in the center of Manhattan Island. I am the president of the Institute of Public Administration, which is a nonprofit research and educational organization. It is the lineal descendant of the first organized citizens' supported governmental research agency in America and was started in 1905 as the New York Bureau of Municipal Research.

I am also the vice president of the Regional Plan Association of New York. This is a voluntary group which, for 30 years, has been working on the broad problems of total regional planning in the New York-New Jersey-Connecticut area.

I am a member of the National Planning Association Steering Committee, so I am concerned also with the broader picture. I have spent my life working for governors, mayors, and during the war periods, and a number of other periods, for the Government of the United States. At the present time, my work with the Federal Government is with the Outdoor Recreation Resources Review Commission in which I am interested because of the significance of outdoor recreation in the Federal program and its impact on urban life.

During the last 2 years, the Institute of Public Administration has been directly concerned with problems of urban transportation. We were a membership group which made the Washington mass transportation survey and assisted in the development of its final program which has been submitted to the Congress by the President of the United States. We have undertaken the drafting of the two major pieces of legislation growing from that program. First, the creation of a Federal corporation to deal with the transportation problem in the District of Columbia; and, second, the draft of an interstate compact which would bring together the State of Maryland, the Commonwealth of Virginia, and the Federal Government, as represented by the District of Columbia, in an interstate compact agency. This work is being handled in cooperation with the governments of the three jurisdictions that I have referred to. So we have been concerned both with the factual side and with the administrative and governmental aspect of the problem.

May I say that there is no solution for the problem of metropolitan and urban mass transportation through fighting and through jurisdictional conflicts? We have just seen from the very eloquent experience of Mr. Berger and Philadelphia what we have found in all other metropolitan areas that there is no solution through fighting with the railroads. There is no solution for the railroads in fighting with the governments and their responsible political leaders. There is no solution in going at this problem with conflicting jurisdictions. The State cannot say, "This is our job and not your job." The locality cannot say, "This is our job and nobody else's." The Federal Government cannot stand aside and say that transportation in the large urban areas is a local responsibility and must be handled by the local area and by the local people.

The transportation problem is all one ball of wax. You cannot find a solution for the highway problem without getting into the problem of mass transportation as over against privately owned cars and buses. You cannot deal with this without dealing also with parking. You cannot deal with the highway problem without dealing also with rail transportation. You cannot deal with rail problems without dealing both with freight and with passengers. You cannot deal with these without considering the commuter as well as the through operation.

So what we must recognize is that we are now in the middle of our, shall I say or at the beginning of an extraordinary revolution in the pattern of urban life. This is not true only in the United States, although we lead the procession because we have the automobile development and greatest development of hard-surface roads anywhere in the world. It is true all over the world. During the last 2 months, I have been as far as India, Pakistan, Iran, Turkey, Egypt, Italy,

France, England, and Western Germany. I can tell you that what we are seeing here today in the urban areas is something that is happening all over the world.

The population is expanding, and they are crowding into the cities. So that the new pattern of urban life is a new pattern socially and economically and spacially, and the key of the whole business is transportation. Therefore, when I saw that your committee, Senator Williams, with such distinguished representatives, not only of my own State, but of other States, was tackling this problem, I said, "This is the beginning of a new day for the American urban communities." Just as in 1862, the Congress of the United States proceeded to do something constructive for the rural areas when the Moral Act was passed and the great system of land grant colleges and the programs which ultimately developed-not only education, but many types of rural help came forward, so we stand now at the period of American history where this Nation is predominantly a nation of big urban concentrations. It is a mistake to think of these as "cities," using the term that we have used in the past. It is a new type of settlement spread out with the old urban concentrations at the center, yes, but suburbs which are manufacturing suburbs as well as residential suburbs, so that it is a new structure of interrelations of human beings, not only in their daily life, but in their economic productivity.

The efficiency of America economically over the next two generations will depend upon the success of our development of these urban concentrations as efficient elements of the total economy. Just the other day, I was observing the steel that was going into a building on Park Avenue next to my office. I found that steel came by trucks from Indiana, not by rail. When I talked with them about it, they said, "Oh, yes, they left the night before." Inside of less time than the passenger trains run from Indiana to New York, they delivered the steel on a schedule in the city of New York so that truck No. 185 for the 10th story got in there just ahead of truck No. 186 and 187 and 188. They are able to schedule this construction over these long distances because of what-a structure of highways which has been built into the economy and around which the economy has redesigned itself.

This business now means that the streets of our cities, the highways of our country, are part of the assembly line of the American economy. To this extent, they have now been woven into a national system of life and the national system of economics. So that when we talk about the problem of mass transportation in the cities, we are dealing with a circulation problem for human beings within a new urban pattern, a pattern which must be made efficient from the standpoint of economics and must be made satisfactory from the standpoint of the good life.

There are three basic facts. The first is that this is a new pattern. Nothing can stop its development, but it can be a very unsatisfactory period of development if it is not approached broadly. Secondly, transportation is the key. Third, and this I think is your most important task, is to recognize that this problem is powerfully impressed with a national interest.

The National Government cannot say, "This is a problem in which we are not concerned." After all, from the very beginning, this Na

tional Government was set up with a recognition of a responsibility in the field of interstate commerce and circulation. It was set up from the beginning with a constitutional responsibility for post roads. When this Nation now begins to be primarily a nation of great urban concentrations and when the efficiency of our economy and the safety of our defense depends upon this new pattern and upon its effectiveness, the National Government cannot stand aside and say, "This is not a problem for the National Government."

Senator WILLIAMS. Would you pause there a moment, Mr. Gulick? The Treasury Department suggests that the transportation problems we are discussing are primarily the responsibility of municipalities and public and private transit authorities. I do not know with what authority the Treasury Department speaks to transportation problems, but is it your view that their conclusion really does not face the situation that presents itself?

Mr. GULICK. It does not face the situation as it exists today, but it will be obvious to all in another decade that it does not face the situation which is developing in this country. Most of our great metropolitan areas already straddle State lines, and it is the feeling of those who say that the problem is entirely local that these State lines are going to be obliterated by the creation of local governmental authorities that reach across State lines.

Furthermore, the problem of national defense should indicate that the security of this country rests, not alone on its military powers, but on its total economic capacity. And the efficiency of our economic structure is going to depend very heavily on the effectiveness of these great urban concentrations because these are the predominant new structures of America, both economically and socially. So that if the National Government is going to put to one side its responsibilities, let us say we heard this morning a good deal about railroads and about the failure and the inability of the railroads to deal with the commuter problem because of the lack of national leadership and help and the inappropriateness of regulation which has been established in a day of monopolies.

The Federal Government is building the intermunicipal and Interstate Highway System. Does the Federal Government with to forgo its participation in that national highway program which was undertaken, if I remember rightly, partly for purposes of defense, indicating the significance from the standpoint of the Congress, at least, of the connecting up of the urban areas as part of our total national economy.

Senator, the urban transportation problem could be solved very simply by vastly expanding the urban highway facilities and parking facilities.

But may I point out that this would destroy the urban center as a part of American life. You can pave a city over completely and thus have excellent space for automobiles to park and plenty of roadway for automobiles to travel on. In the end, you would end up by not having a central city and not enough has been said in the discussion today of the importance of congestion. Congestion of men who are at work on administrative, managerial, professional, and technical problems in high concentration is one of the essential factors of the effectiveness of the American economy and social system today. We must plan for effective congestion.