transportation, general manager, vice president of operation, and finally I served as chairman, president, and director for 4 years before I was asked to be president of the Burlington.

As stated previously, I am now president and chief executive officer of the Northern Pacific.

I mention this experience simply to make one point clear: During my 31 years of work with the American railroads, I have yet to meet an operating man, railroad officer, or employee, who is not interested, affirmatively, and positively, and continuously, in railroad safety.

This is not something we just talk about; it is something we work at and work at all the time. We are not merely sensitive to our responsibility for safety; we react to that sensitivity by exerting every effort to promote and create safety. Later on I will mention some concrete results of this effort.

We are concerned with safety, first of all, because railroad managements are made up of people. Like other people, we are appalled by the waste of human lives that accidents can cause. Beyond that, safety is bread and butter to the railroads because an unsafe operation is an inefficient operation.

When we are inefficient, we lose business; and if we remain inefficient for long, we are not likely to be in business. Any unsafe operation on a railroad is almost certain to carry with it a direct economic penalty in addition to the economic erosion caused by inefficiency. That is because any employee or member of the public who is injured by an unsafe train operation almost always recovers substantial damages from the railroad.

Exactly the same holds true for freight that is damaged or destroyed. We pay for it.

For these reasons I must respectfully disagree with the continuing statement of Mr. Boyd in his letter of transmittal to the effect that:

The cost of greater safety will be borne reluctantly unless it is a burden which falls evenly on each member of the industry. Uniform Federal regulation is the only way industry can be assured of this.

There is no "cost of greater safety"; greater safety means increased profits to railroads as well as benefits to their employees and shippers. To think of safety as a "burden," as the Secretary evidently does, simply does not reflect the attitude of the industry.

I also do not understand the Secretary's solicitude for "uniformity" of this supposed burden throughout the industry. If my railroad is safer than a competing road, then to that extent I am a more effective and successful competitor and I am doing a better job of railroading. That is the aim of every railroad, and therefore, no railroad would dream of postponing an improvement in safety simply because it wasn't "uniform" in the industry.

The cooperation among railroads reflected in the AAR makes it easy for the existence of new safety devices or procedures to become known throughout the industry.

Before it can be determined whether this bill should pass, there are three vitally important subsidiary questions that in our opinion have to be answered:

First, what need exists that is not now being satisfied?

Second, can the need be met by means other than legislation?
Third, if it cannot, how can this legislation satisfy that need?

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I mention these three questions as the ones that the committee and the Congress should keep always before them because I believe them to be essential questions under the American system of government.

During my lifetime the Federal Government has become a much more important factor in the lives of all citizens and in the activities of all industries. This is not in itself a development to be deplored. Government exists to satisfy essential needs that cannot otherwise be met. For this reason, I believe, our Government has been right in enacting much legislation and in imposing certain regulations on industries where a given need is plain and where only governmental action can bring relief.

The other side of the coin is that our Government does not and should not regulate where the need is not clear, where it can be met by other means, or where legislation can do little or nothing to solve it. I think that is the situation here. It seems to me that the present bill amounts to regulation for its own sake and I think that kind of regulation is improper.

Section 3 of the bill authorizes and directs the Secretary "to promote safety in rail commerce" by prescribing rules, regulations, and standards that would govern all aspects of railroading. As I read this portion of the bill, in the light of the broad definitions contained in section 2, there is no limit to the areas of the railroad business to which the Secretary's rules could extend. There also is no standard to govern either the form or content of those rules other than the directive "to promote safety."

If this reading of the bill is correct, then the bill is necessarily premised on the assumption that every conceivable area of the railroad business is unsafe-and that Federal regulation in all these areas not only can make them safe, but is essential to that end.

If this premise is analyzed, it will be found to be wrong.

Let me address myself first to one area of railroad safety, that of bridges. The safety of railroad bridges is expressly mentioned by the Secretary in his letter of transmittal as an area of railroading over which he has no present authority but over which he believes he should exercise such authority.

There have been bridges for as long as there have been railroads and railroad men have therefore always been concerned with bridge safety, and the elements that go into the provision of rail transportation, to make them safe.

The American railroads have a nearly perfect record in recent years. with respect to bridges. American railroads today use and maintain about 192,000 bridges (including trestles and culverts). Their total is about 4.500 miles, a distance considerably greater than the mileage from New York to San Francisco.

A recent survey made by a special AAR committee at the request of President Johnson shows that all class I railroads inspect their bridges carefully at least once a year under the exacting standards promulgated for their use by the AAR's engineering division.

Many bridges are inspected more often than once a year. In addition, these bridges are rated under the engineering division's rules. This means that their carrying capacity is assessed and traffic routed over them is controlled accordingly. In this manner even a very old bridge is kept up to a safe standard through inspection and its stresses are limited, if need be, by the rating system.

In looking at Interstate Commerce Commission's official statistics, we find that there have been no train or train service accidents which caused casualties betwen 1961 and 1966, the last year for which these statistics were available.

This, then, is one area of railroad safety which the Secretary of Transportation expressly wishes be covered by pending legislation, but is an area where there is no need for regulation as is demonstrably indicated here.

No law enacted for the regulation of railroad bridges would have the slightest justification, but that is exactly what this bill would do. We consider that in this respect, the bill is a clear example of regulation for its own sake. It can't be justified.

It is sometimes argued that if existing safety in such an area is good, then regulation cannot be burdensome. In the first place, this is not so. The railroads had a superb record of power brake safety prior to adoption of the Power Brake Act of 1958. The act was adopted anyway. To this day, almost 10 years later, the railroads have been unable to obtain a single change in the rules adopted at that time despite the need for many changes dictated by experience and the advance of technology.

This is an extreme example of the inflexibility that always inheres in governmental regulation of safety.

Second, this argument is nothing more than support for regulation as an end in itself. Those who make it do not ask "why should this law be passed?" They ask only "Why not?"

Let me take another example of a part of railroading that the Secretary has said in so many words that he needs to regulate: the matter of car wheels and axles. We can show the frequency of derailments in train accidents ascribed to car wheels and axles by the Commission and it is perhaps appropriate that we do so, since the Secretary in his letter of transmittal has twice stressed the significance of wheel axle failures and their contribution to derailments.

The precise figures for the last 10 years will be presented by a later witness who will discuss the statistical aspects of our case. These figures show that in 1966 (the latest year for which complete statistics are available) the rate of derailments in train accidents attributed to defects in wheels and axles, as measured by either ton-miles or carmiles, was lower than in all but one of the 9 years, 1957 to 1965,

inclusive.

This is a measure of success on the part of railroads-not failure of the kind that demands legislation.

This success is no accident. It results in large part from the railroads own efforts, in collaboration with their employees and their suppliers, to improve the situation. A dramatic demonstration of the effectiveness of our own efforts can be found in the statistics on hotboxes in recent years.

"Hotbox" is a colloquial word for an overheated axle bearing which happens in transit because of insufficient lubrication, excessive friction, or both.

In 1957 statistics collected by the AAR's Mechanical Division from member roads showed that on the average during that year member roads ran only 182,000 miles between hotbox setoffs; that is to say, cars that had to be taken out of a train and put to one side for repairs. In every year since then, average mileage between setoffs has in

creased, until in 1967 it had attained 1,828,000 miles, a record 10 times: better than that of only 11 years ago. This marked improvement resulted directly from improvements in the design, lubrication, inspection, and care (including the use of detection devices) devoted to journal bearings. It was done cooperatively among the railroads themselves, with the assistance of railroad suppliers and car builders, not by any Government directive.

This program was not free: it has cost many millions of dollars for railroad research and its implementation in this area alone; and, when we found the solution, the AAR made it compulsory that it be put into effect over the Nation's railroads.

I speak of the changeover from waste to journal pads, and friction bearings. Railroad research to further improve the record is still continuing.

This is another area where railroads have proved their own ability to increase and promote safety by their own efforts.

Our attention within the industry has not been limited to bridges and hotboxes, two of the areas to which specific emphasis has been given by the Secretary in his letter.

During recent years additional millions of dollars have been expended in acquiring equipment which will permit safe and more efficient operation. Among such items (all of which will be found on the Northern Pacific) we must include wide load detectors, broken flange and loose wheel detectors, dragging equipment detectors, high water detectors, mud and rock detector fences, radios, and various types of track cleaning equipment.

We have rail detector cars in operation 12 months a year. From our analysis of accident causes, we have recognized the need for continuing education and testing of all employees on operating rules and procedures. Our safety department is rapidly expanding its program. We are fully aware of our responsibilities to our employees, our patrons, our passengers and the public; every effort is being expended to improve our mode of operation in order that we might provide more efficient and safer service.

I do not wish to be selective in discussing railroad safety so as to speak of only the better elements of our record.

Let me, therefore, speak of derailments that come about through failure of track, a subject which concerns our industry seriously at this time and all the time. This is because accidents of this kind have increased in recent years.

The AAR's Mechanical and Engineering Divisions have worked hard to determine causes and suggest cures for this increase. So have the managements and the responsible officers of every member road.

Although improvements have been and are being made, a complete solution has not been found. This suggests that both causes and cures in this instance are not easy to determine and are both multiple and complex.

We would welcome the assistance of the Department of Transportation in our effort at analysis; but we do not believe that rules which the Department might promulgate could in themselves provide any cure. We have had a good deal of criticism in recent months concerning these derailments both from railway labor and from the Government: but most critics have done no more than to urge that this legislation or legislation like it be enacted as a cure-all.

In short, the pressing need in this area now is analysis of the problem in order to determine what should be done. If only a small part of the funds that I suppose would be required to implement this bill could be devoted to research on track failures, I believe that real progress could be made. I feel confident that the industry will solve the problem in time, unaided.

Cooperation of the Government could shorten that time. Passage of this bill will, in my opinion, contribute nothing to that end. What we need from the Government is cooperation, not accusation or ill-founded legislation.

Much of the claimed justification for this bill seems to rest in the record of "train accidents" which have taken place since 1961. The Secretary mentions this matter in his letter of transmittal, and it was also the subject of a widely publicized letter dated April 3 from the Chairman of the National Transportation Safety Board, Mr. O'Connell, directed to the Federal Railroad Administrator, Mr. Lang.

The facts stated in Mr. O'Connell's letter are correct as far as they go, but both they and the summary statement made by the Secretary create a misleading picture of railroad safety. Both Mr. O'Connell and the Secretary discuss statistics relating to "train accidents," a highly specialized category. It is a very easy matter, however, for uniformed persons to translate the facts as to "train accidents" into broad statements concerning "railroad accidents." This, the press has already done.

Although casualties can be and are caused by "train accidents," a simple comparison of the number of "train accidents" or even their frequency does not necessarily tell anything about the casualty experi

ence.

More details will be set forth in the testimony of the statistical witness who will follow me. I may say at this point that the category of "train accidents" is both unique and not necessarily related to casualties. It was devised long ago by the Interstate Commerce Commission. A "train accident" has been defined since January 1, 1957, as any accident involving the operation of trains which results in damage to railroad property exceeding $750, excluding cost of clearing wreck. Under this definition, many train accidents can and do occur without death or injury to any person and without damage to freight. The sole criterion is the monetary damage to railroad property. And in these days, we can't even get a car off the track for less than $750. Another peculiarity of this classification in a time of rising prices is its adherence to a flat dollar amount of damage. The amount has not been increased since 1957. It is common knowledge that the cost of living, and the cost of railroad property along with it, has increased substantially in the last 11 years. The increase in "train accidents" during these years is therefore in part attributable to inflation-an accident "canse" that passage of this bill cannot affect in the slightest.

The facts as to the railroads' safety record will be set before you by a later witness. I may put the matter in perspective, however, if I point out that the preliminary data for 1967 shows deaths in U.S. railroad accidents down 8.4 percent in that year as compared with 1966, and injuries down 5.3 percent. What in this improvement requires this legislation that is premised on supposed failure in safety?