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Northwestern University in cooperation with a view to old broadcasting system presents the reviewing stand program in its twenty first year on the air today the reviewing stand asks Do we want toll highways are unrehearsed give and take discussion well consider the need for transcontinental roads and the best means of financing them in our moderator James H. McBurney dean of the School of Speech Northwestern University well introduced participants in today's transcribed discussion Mr McBirney our speakers today are George W. Barton consultants are they trying to instill that Northwestern University. Francis de ole executive director of the only I state total Haile commission in John H. Alan president of the Julian Collins and Company and former president of the Investment Bankers Association of America I don't know if you know we are here to discuss the question do we want toll highways let's open is limited by getting your attitudes toward these highways a bargain when you have say on line answer that by saying definitely we want highways we've gone through a period of twenty five years perhaps in which highway building has lagged behind the highway requirement at a terrific rate during the Depression there was no money to build roads. Then during the period of World War two strategic material wasn't available for road construction and as a result the highway plant has seriously deteriorated and since the war we've had an unprecedented increase in the number of automobiles trying to use our antiquated highways with congestion and accidents as a result so that we've reached the point where the highway deficiency is critical and we need highways quickly tolls are one method of accomplishing that purpose well I take it. You had knowledge you regard the toll highway as as well as one important way of meeting this deficiency I do and this started with the state of Pennsylvania doing the pricey as they were able to build the RAM toll road in the state of Pennsylvania and that has been a pattern more last far other states to follow and we are interested in doing this a toll by Toll methods in order to look team what citizens need as rapidly as possible Collins as an investment banker How do you regard these toll highways Well my field is in the underwriting and distribution of revenue obligation such as call roads bridges and tunnels which facilitate the lovelorn of heavy volume their killer traffic in congested areas budgets at this car and are either desirable or undesirable pending on whether the volume of traffic would produce adequate revenues to pay principal and interest on the obligations what your issued and to provide reserves for the maintenance operation and other purposes. Well now in the in the early days of this country I think I'm right in this we used to have a lot of these toll I always told bridges and the like and they seem to pass out of the picture pretty much in that more recently we started hearing about it all highways that's correct in my state there were just a Virginia there were quite a few of the is told projects small toll bridges and show roads which were. Toll finance but you'll find that all of those wrong to private industry none of them were state on state support but now we've been building a freeway is until recently free public highways until recently I take it they Pennsylvania Turnpike was one of the first Pennsylvania meantime bikes whether to fast when I why are we turning to these to this tall principle again what is necessary to do that dollar that all mused how it is and states have a debt limit and in order to have their own erode fast. It cost a lot of money and this money has to be spread over many many years this is shown by the he as it took to Bill evens expressway half the time it took and his taking of the Congress. On the tollroad program we are able to go on with the venture which is sound obtain money and immediately stock construction and give you hundreds of miles of roads and three or four Yaz where it would take many years to do that if this was financed through state are going to still funds any question about that analysis whatever it be that Burton Yes I think so in that case it doesn't make any difference how much a road cost if it cost five hundred million dollars to build it if there is traffic there to justified and they finance charges will underwrite it and you can acquire five hundred million immediately and start building and have the thing done in two or three years whereas to acquire five hundred million dollars from current revenues is a pretty slow process but it was a the essential difference with the toll highway and a free highway Well I would divide the highway a highway into three or four features highway is important in its location on matters of highway location generally are approached about the same way it will allow highways to be finance from gas tax or from tolls next there's an element of highway design the design doesn't differ greatly between a toll highway and a highway paid from gas tax there are some elements of difference which are largely the result of the total collection problem and the matter of operation policing and so on it's about the same way I have of a free highway or a tour highway the big difference is in finance. Well you if the let's talk about this matter then of financing highways. It is do you regard the method of financing highways as a as a cheaper method of building roads or is it a more expensive method of getting them done quickly but I would say that in all properly it's a little more expensive but not a great deal more when you figure that. You can right away to build a freeroll on that right away lies idle for a considerable time with no construction no traffic and interest being paid on the money that's in that right away I think you'll find that the overall cost of the toll highway is a by little bit more than the free highway cons but I have an example of that in one thousand nine hundred fifty four. Over two billion dollars was raised for the construction of toll road rage and tunnel project that is equivalent.. To The amount of money that was raised under general obligations which would you regard as I don't know whether this is an Answer Book question but would you regard a commons a toll roads as as good financial risks what a lot of it's been our experience with and I think the best answer I can give to that is that they have been widely accepted by insurance companies institutions banks and others who desire tax exemption and good security what the interest of these bonds usually bear. I believe the average would be about three and a quarter percent How would that compare with a general obligation let's say of the state on the general obligation of the state of Illinois I would that the Pentagon with already yield one eighty two percent it is costing us a little more that is that's that's correct but on the other hand once the roads in operation and they are successful that you can reap on your bonds and come up with the oyster story if you have a point you want to make aboard Yes. Any time we build to make up a deficiency we are talking about borrowing money through mines so that regardless of whether we're borrowing money from one of one Bond type or another we are incurring an interest cost in our highway program well the interest cost in the toll type of financing is higher than it is and other types of borrowings that I'm in normal use for highway work but there's another interesting creature about the toll highway that I think Admiral almight of mention and that's this business of generated traffic it is then a rather strange experience with these toll roads most of them that have been built that the use of the toll road is not as a result of traffic being attracted to the toll road from some other free road that already exists in America fact or for example in the case of the all Klahoma turnpike only about a third of the traffic now using the turnpike was diverted away from the existing highway system two thirds of that traffic is entirely new trial. Now that new travel wouldn't it have existed if the toll road and not been there the reason there is new TRAVEL NOW IS THAT IT people aren't able to level little farther from their places of employment they're a little more willing to drive out in the country to see relatives or go on a fishing trip or whatever it may be so that strictly a new source of highway revenue is produced when you're one of these toll roads is built in a favorable location so that to a degree the extra interest costs that are incurred in the toll road construction are offset by this generated traffic through the gas tax and license fees paid by all this new use we have an expiration example of that the upper temp of the a highway in Florida was opened in September and the last figures I saw showed induced traffic sixty five percent above engineers report. That's an interesting case in point and how the lasting fact is if you are you'll find that along the three roads of these toll roads power on the phone role to play Storm traffic drops off considerably but have very short time to free roads again carrying the same amount of traffic they did care I have before the toll roads are open I don't think we have to blame that exclusively on a troll toll road it's nearly always the case nowadays with AIDS and it proves a terrific demand there is for highway service a new road is built and almost immediately its capacity is used up and then they all roads are back again carrying what they used to carry before we can expect I think fairly Chicago area one coming years three years old and I have another point you have I'm might be interested in as far as toll roads from Sun I think that any toll road that is close to a heavily populated area. Will do more plus one plants and anything else you need to people will move out country people will have a means to get in and out of town and will move out of these so thickly populated slums. Let me ask one or two specific questions aren't you I'm thinking of the take Illinois as an example here where we're we're paying for three highways gas taxes. Tax and so on aren't you involving people in a kind of dual taxation when you put up these things toll No not at all the only the user pays no one is forced to go on a toll highway that might he not be in substance forced to go on if they are told road is built rather than a free road it is unlikely that every road will be built from the toll road to compliment your three year olds they are not in competition they have to how about the maintenance of your Free Will you should have more money available for the maintenance of the roads. You have an opinion on that Barton. I believe it's fair to say that they told us act as a dual tax a man who uses a toll road facility does a gasoline tax license plates. Plus a toll but he isn't hard to use that toll facility unless he is forced to do so by the failure to keep up the parallel Frerotte that's the critical point is they have the absolute admiral here is right in his point that your very roads are mundane actually there's more money to maintain them there will be more money and they will be maintained in this state I can assure you I think generally speaking that's true that they this induced travel on the toll road is a new source of revenue which in turn can help raise the level of the freeroll woods and it's just an obligation of everyone's interest in the highway development see that takes place but do people have a living along the uses the turnpike sees toll roads have sufficient access to them to make them useful for local transportation i asked me do doubt there's ample access on all of them and the ones we want to go in the state of Illinois shall likewise have ample access you'll find that every major population suffer they will be in a change for people from that Sun A to get on the toll road is that true of toll roads done last to a toll road generally isn't it to clarify that point a little bit isn't it strictly accurate to say that the interchanges are located at major centers of party alleged correct but for local travel say between Miss semi-rural community and people who have a mile or two outside they must continue to use the free road because a toll road will not matter if that is correct that is correct how can you. The builders and forgive me for directing this question Do It Again how can you build toll roads for that they say that all know I was out working in close cooperation with the neighboring state that would seem to me that the success of the project would depend in part on interstate cooperation we are who are we operating very very closely with all of our neighboring states to Toll Road offices open here all last February the first. During the month of February and March that we had conferences with the people was poncing Nebraska Our And then he got yesterday in a jam one of our commission George Howell myself were in Indiana where we had our all day conference with the people in it with a total thought of any on a Kentucky Ohio and Michigan and I'm glad we are working on the job up an agenda now to be presented at a governess conference on the twenty first there of February was to be held in Evansville Indiana among the same states what is what is the attitude Barton of the federal government started to all islands if there is any at that you can identify I don't believe there is any that I can identify. I believe that the matter up in the have heard. Much of President Eisenhower's proposed a road program I have personally I'm not familiar with that road program. But would it have any relationship at all to the subject we're discussing I think it does in that. Suppose there is a nationwide system of tall turnpikes built there will be certain parts of the country where the local travel is generated in that area will the new not be sufficient to support a toll road for example through mountainous area or the sparsely settled country of the Southwest and a case like that the federal government government would have a stake in connecting up say the California link with the Oklahoma length of a transcontinental turnpike that's one interest another interest of the federal government necessarily I believe as expressed in the current federal discussions of highway financing is that various methods of financing will be used including tools when they appear to be the most effective way of creating the highway facilities in major traffic areas so I'd say that the federal road program definitely contemplates a further into the toll program as far as I know that is. That is undecided at this point but I would confirm what you understand to be their plan and their pattern so I don't believe there is any conflict between the federal plans and the plans of the local state or you know if the federal government would come into any state. And lay our plan out I feel sure that that plan would be identical very close to the plan that any engineer. We lay out on. A tour highway under similar circumstances that when you get the summons you knowing people in the traffic revenue people together and they get in on traffic density they show exactly where these roads should come and they just fall out and the one. Now let me ask. Here for a rather specific question share that concern the people who live near these toll highways or highways that are already in there in prospect. How do you determine and really the routes that these highways will take well we are going to love and to the state archives and take the traffic density figures that they have compiled after many years and that traffic density picture just gives you a natural route for a highway in a great many cases you can't use that because the acquisition of real estate of people who do so you go as close to it as you possibly Yeah then we turned that route over to the traffic revenue engine as it may but upstream lines and study it and they come up with a figure eyes to the amount of traffic that will. Go and use a road that you have laid out is that proceeding any different when you're dealing with a toll highway Barkin that it is when you're dealing with a free highway. Not a great deal different I don't think in the case of the free highway general a what you attempt to do is build it in a place where it will get to great issues and that's what the total authorities are also seeking to accomplish but I think that there is one point I'd like to make because my peculiar interest in. Any highway whether it's a toll highway or financed by a different means as a considerable impact upon property through which it passes or near which it passes as a person creates a highway system he is creating a pattern on which that region is going to grow therefore the location of these highways is a very important matter for requiring coordination between land use planning as well as highway planning to assure that land values are preserved or generally speaking enhanced in the highway program. But you agree with I said you don't have quite a modicum life not long ago showing how real estate values have gone up along the right of way up the two highways the state of New York now another question if I may that record you add is the acquisition of the right away for these he said toll highways condemnation proceedings unlike any different in the case of a toll I weighed with me in the case of freedom none whatsoever. Does that procedure vary from state to state and it does yes that we have no quick take law in the state of Illinois where other states do what do you mean by a quick. Quick take longer to can just go in and take a man's property and them settle it after after you have taken in the state you cannot do that man must be you receive just compensation on his property before you can move in and if you're feeling I take it around the board here that the effect of a highway of this or generally will be to increase that is a perp deal on the on the highway Oh I'd like to think so but what has been what's experience generally on that bike it depends on the use of that land was in before the highway came there of course. Generally speaking if the highway is passing through a lightly populated area the highway raises the value of that land for almost any purpose industrial residential or whatever that is some distance each Sylar way. The Oklahoma experience demonstrates quite well the favorable effect of the turnpike construction there on the small communities just off the turnpike which used to be bisected by US sixty six they used to have all that through traffic going down their main streets and now with that through traffic over on the turnpike their local business is in much better shape than it used to be. Conceivably if a highway were located on the very top caliber through a top caliber residential area it could be pre-shared the use of the land for number one class residential purposes it generally changes the character of the land and whether the value of the school up or down depends on how the land initially was used I would think that would be a fair statement Collins I think that the internal last ten years there's been opposition to bypassing some small communities but I think that's completely reversed. And they would rather have the traffic away from their business center and. Then to have it run through on Hardy's that the property owners whose land is is hit by this. Compensated or whose land is Martin's term. Differentiate where it becomes a second or third class residential district rather than a first class residential district Well the jewel fine is the whole of the property owners get just compensation I think you'll find the state of Illinois got all the roads of until he out that they have been less than five percent of the one a state sponsor condemnation seedings not over ninety five percent I find has just been by negotiation with the On what do you mean by condemnation proceed are you not able to reach the agreement of that price for the on that is taken to take your court. Well now as we as we. Discuss this question it it seems that the central issue in the A and the construction of toll highways is whether or not the toll method is a sensible method of financing. Public Highways that in terms of your analysis earlier Barton is a significant difference between a toll highway and they and a free highway now let's come directly to that issue if we made we believe skirted it and you'll be helpful to us here Collins and what are the different ways of financing highlighting finance it on the toll basis for some other ways are you going to finance it out of current revenue such as gas tax or license fee you can finance it out of a bomb secured by gas tax and license fees. Which is all your jewel consensus straight up with issues state which would you describe is a page you go method Well that is spending no more money this year than we take in from gas tax license fee and other user revenues now there's a bar there is that in the historic method of building highways in this country. It's gone through cycles early in the period of highway development shortly after one nine hundred twenty when the automobiles first came into use a good many bonds were sold and already create hard roads quickly. Then at that time there were no gas taxes and very few small license fees after that first epidemic of bond issues and then the user revenues were assessed gas taxes and so on and a period of followed in which most of the construction was done on a page or go basis from your years current revenue but as I indicated some minutes ago we've reached the point now where the costs of highly construction of gone so high and the need for construction to become so extensive that it appears at a pace you go basis is not the answer to all of our highway needs as long as we keep to the. Fees and charges for highway use at their present low levels if we wish to operate on a pay as you go basis I think we have two weeks at a higher. Level of taxes and fees for highway use and you think I gather those of you who support all highway is that we're not prepared to accept higher gas tax and higher. License fees a sort of basis of comparison is the typical gas tax rate is five to six cents a gallon. These toll charges normally run something far in the comparable rate of twenty to twenty five cents a gallon so this you can see the difference in the charges that are involved so I think you'd be quite awhile before we did except. Sharp major increase in our annual tax rates would it be fair to say then that the the principle argument for a toll road is it's a method of financing badly needed highways quickly and the user pays the user pays that is very important the other of the other motorist has the option of using in order for staying on the free highways of course on a plane again to two to question that analysis Collins It may not be a realistic option of just say that that is is a fear that some people entertain that there is a construction of your toll highways addle here notwithstanding will mean that the freeways will not be constructed which might otherwise have been built which denied him a an option and there is a fear in the minds of some people that the free highways will lead to Terry that just one point I want to bring in here that that is a safety factor of a toll highways man's life is worth a lot of money the extra great on some other toll high res title highways run eight to one in favor of the free routes and other cases for one favor the toll highways. Let me get this straight there the accident rate on the on your toll road is lower than it is on the M some cases one to eight and other cases wonderful Why would that be more well on average highway that now exists nine say the average highway in this country in the rural area still has a two line undivided road with sharp corners or rather blind curves and I'm sorry gentlemen but our time is up you've been listening to a transcribed Northwestern University reviewing stand discussion do we want tall highways our guest today George W. Barton associate consultant to the traffic Institute Northwestern University your teenage Collins president Julian Collins and Company and Admiral Francis P. old executive director told Highway Commission state of Illinois our moderator was James H. McBurney dean of the School of Speech Northwestern University next week the reviewing stand will ask how do we make up our minds about politics our guests will be for not barrels I'm director of the Behavioral Science Division of the Ford Foundation and co-author of voting a study of opinion formation in a presidential campaign and Elihu Katz assistant professor of sociology University of Chicago we hope that you will join us next week for our discussion how do we make up our minds about politics the Northwestern University reviewing stand is broadcast coast to coast every week as a public service feature of near two of your announcer Dick Kaufman this is mutual radio network for all America.