Back to  Taft Pages or Bromleyisms

Roads, Tolls, and Who Pays
by
Michael L. Bromley
copyright 2006

Private property was not established in order to gratify love of some material wealth or capital. It was established as an instrumentality in the progress of civilization and the uplifting of man...

- William Howard Taft (1912)

In the Depression of 1920, the fuller effects of the command economy of the Great War fell upon labor, consumer and factory alike. Railroads, which had enjoyed the monopoly conditions of general government supervision and public investment in infrastructure during the War, had to re-learn the ways of the market and pesky labor. Manufacturers, generally, fell over post-war enthusiasms as inventories piled, prices fell, and money yanked tight. While consumers took to suddenly lower prices, the general shock of strikes, shortages, economic decline, coupled with uncertainty over the end of war time price controls, set the larger measure of the national mind to alarm. In this national psychosis that joined the wartime transition, labor suffered the most, as the severe anticlimax of 1919 and the smoldering promise of wartime wages and overseas revolution faded to the realities of lower wages, job cuts, and a government that was gladly out of the business of labor-management harmony. The uniformity of the war economy created expectations peacetime could not match, and the unruly conditions of free enterprise and private contract prevailed over the government’s continued and relatively tight economic hold.

That the wartime industry was not nationalized would seem normal to Americans of today. In neither world war did the Government take over actual ownership of business. Indeed, having learned the ugly lessons of the first War, the government left management to the railroads during the second, and never considered nationalization. Even the inevitable price hikes, shortages, profiteering, and hoarding of the wartime consumer economy also had its comforts. Good citizenship required that private interest subject itself to national duty, so discomforts of the wartime economy had purpose and patriotic virtue. The exit from wartime distress often hurt more than the wartime discomforts themselves.

Perhaps the most distressing of human emotions is uncertainty. The comforts of central command, when lost, terrify. Coming out of the first World War, the normal insecurities of a market economy, especially for labor, were amplified by the sudden loss of wartime regularity. It was disturbing. Absent the military crisis, neither producers, retailers, labor, nor consumers were any more willing to sacrifice self-interest to the common good. Most discontented of all were those who benefitted from the wartime controls. We see a similar condition in the post-Soviet transition that is especially acute in pensioners, government workers, party members, and others dependant upon the orderliness of central rule. Far worse was the scarcity that marked the Soviet consumer economy, or America’s during war, but patriotism yields to self-sacrifice when the hurt comes from market corrections rather than national purpose. If prices flew skyward after war controls were lifted, such as for food after WWI, or used automobiles after WWII , the immediate suffering of high prices bled the national memory of lines, shortages, and outright bans on behavior and goods during war. Exiting both world wars, discontent soared well above prices. Now, let us see how this might work in reverse with a modern condition we all enjoy, or think we enjoy, in our roads.

"What, no bread lines today?"

Imagine that tomorrow morning, 6:00 a.m., like a radio station switching formats, Americans woke up to an eight dollar toll to work on privately-owned roads, and no traffic jams. You’ll have to think once or twice before rejecting that one. No traffic jams? While the Id and the Ego may collide, and the wallet is more than willing should the Id prevail: really, no traffic? Now imagine that same fare, only with traffic jams. The gut revolts before, even, the brain. You’d spend your day composing such a desperate letter as this, from 1907, to the President of the United States:

Sir: The transportation problem in this country has assumed such an acute phase that it must have a satisfactory solution. So long as there is divided control over the great public highways and the corporations that manage them, no such solution can be reached. As quasi-public corporations they are, by their very nature, subject to public control and regulation. Unity of control and regulation is essential to their welfare and efficiency, and essential to the welfare of the public to whose service they are dedicated.

Unlike our writer of 1907, Judge E. J. Farrer of New Orleans, we would entertain little constitutional scrupulousness in ridding the national curse of poorly managed and expensive roads. Judge Farrer only wanted that these road operators "willingly submit to the drastic regulation and supervision... in order to obtain the large measure of protection that would come," so to "put an end to the clamor raised in some quarters for the Government ownership..." Road owners and operators, he told the President, must choose between a polite bow or total submission: "It appears to me to be a just mean between the extremes of selfish private ownership and control and absolute Government ownership." Were today’s roads eight dollar a ride messes, we might be on the side clamoring for just that. But they are not. Roads today are mostly "free" -- and near fully taken to one of those "extremes" Judge Farrer warned against, outright "Government ownership." Judge Farrer was concerned with 1907’s clamor for public ownership of the railroads. It never happened. Why, then, is it that today’s "great public highways" are government owned?

When in 1912 Taft spoke his defense of private property it seemed to him ludicrous that he had to do it. The Socialist ticket that year took almost ten percent of the national vote, and a hugely popular third party candidate spoke freely of nationalizing railroads, legalizing monopoly, and setting prices. Within the decade, and under the agency of war, management of the railroads was nationalized (not ownership). So disastrous was the WWI rail program that during World War II the system largely kept its autonomy. Price controls were another matter. Following market liberalization after the Second World War from federal price controls, inflation spiked to the highest in American history. While national management of the economy had its place during war (arguably unnecessary), its immediate aftermath was disastrous, and other of its malign effects lasted decades. The question was answered: the command economy didn’t work. If there is any test of public policy, or of the structure of a social contract, experience provides it. Just the same did Taft wonder of 1912’s clamor for more democracy. The institution of democracy, he observed, is not an object. We choose it for its benefits and not for itself. Against the dominant mood of 1912 that brought as much a "people’s revolution" as this nation has seen in such things as the 17th amendment for the direct election of the Senate, the initiative, the referendum, and the recall, Taft puzzled that, while all those things were well and fine, they were useful only to the extent that they properly functioned. Just what are we getting at, was his question. America of 1907 had had enough of the pure rights of contract and property. Government control, it was argued by the likes of Judge Farrer, or Theodore Roosevelt, was necessary in order to salvage the institution of property from its own excess. It seemed not to be working. As Taft noted in 1912, "Private property was not established in order to gratify love of some material wealth or capital. It was established as an instrumentality in the progress of civilization and the uplifting of man..." So, too, democracy, or any government form or action. Justification comes in the product. It must perform. "Now popular government is not an end," Taft warned.

Would that we had private ownership of the roads, eight dollar tolls, and traffic jams, we might well question the institution of property in our paved roads, and not just, as was considered in Judge Farrer’s day and on into the age of Amtrak, in our iron-tracked highways. Why then, with horrific congestion, costs exceeding funding and expense, why then, do we so readily, rather innately accept public ownership of our national strips of concrete and asphalt while fretting over that sole, hurting example of a nationalized passenger railroad service that runs mostly on privately-owned rails? As one critic of the system wrote,

Amtrak should be dismantled for practical reasons, not ideological ones about the size and purpose of government.

To this view, it is not so much that Amtrak is nationalized that bothers, it’s that with Amtrak nationalization doesn’t work. With so little to like in the one national corporation in the service of passengers, we elsewhere and readily accept it with our streets and highways. Our critic of Amtrak, while demanding that its service be privatized, even at the expense of losing unprofitable rural service, somehow turns it around and questions that the ownership of the rails Amtrak rides upon are private. It is, as the author points out, the reverse of the nature of much of the nation’s transit systems, in which infrastructure is publicly owned, operated, and financed, and freight and passenger service is private. One wonders, though, why but for ideological reasons does he hold to this proposition. Is he calling for nationalization of the rails? (Ninety-five percent of the rails Amtrak uses are owned by the rail freight industry.) Are airports inherently public facilities and service? City bus systems? Taxis? Automobiles? Trucks? And what of the roads cars and trucks use?

There once was a vibrant political debate over the nation’s roads, how to pay, who to own. The ever vital question was performance. From the origins of the old British turnpike, revenue and expense of a road was held as close as possible to its use. In the American system of local, state and federal divisions, taxes over the 18th and 19th centuries were variously derived and applied to roads, land, and road use. Even the first Federal highway adventure was to be funded by sale of land at its destination in the Ohio Valley. Soon enough, and in accord to then dominant practice of private and public roads, and after almost seven million dollars invested from the general funds (to which land sales contributed), the toll system was adopted. The Federal government was out of the road building business. Operation of the National Road was turned over to the states -- but not out of constitutional purity as the story is often told. While to the presidential mind of 1838 the national government had no business with locally-operated tolls, the argument was expedient. The choice was rather more simple than constitutional purity. It was political. If the government wanted something, it got it, especially money, which well before Van Buren’s day came from all sorts of places, including a 1794 excise tax upon for-hire carriages. What fell upon Van Buren was neither constitutional propriety nor trouble with funding. A new technology forced the change.

We don’t often see in the time or person of George Washington modernity and technological advance. Here was a guy who understood mobility, be it in the strategic retreat, a desk he had built for use on horseback when roaming his plantation, or reaching westward for investment and national growth. Washington gave important presidential endorsement to the hot-air balloon. He personally invested in the steam engine (for boats, factories, and canals). The purpose of transportation, as George Washington so brilliantly conceived it, was nationhood in the shrinking of time and space. Franklin saw this purpose in the delivery of the mails. Washington’s idea was for rivers and canals. Jefferson, who ordered the testing of western rivers so as to reach the Pacific ocean, looked also for that national road to join east and west. Even that some-time localist, Andrew Jackson had to admit by 1833 that this new thing, steam travel by rail, deserved a look by the President on the national behalf. He didn’t like it, and he rather subscribed to his Vice President’s description of the thing:

...As you may well know, Mr. President, "railroad" carriages are pulled at the enormous speed of 15 miles per hour by things called "engines", which in addition to endangering life and limb of passengers, roar and snort their way through the countryside, setting fire to the crops, scaring the livestock and frightening women and children. The Almighty certainly never intended that people should travel at such breakneck speed.

His successor, William Henry Harrison, rode to his inaugural date in Washington by train. Like Taft taking to the automobile with the first official White House autos in 1909, or Harding affirming it in the first-ever automotive inaugural parade ride, presidential endorsement of such things is more than show, more than mere confirmation of existing fact. It represents full national acceptance of that something new. The Internet exists with or without Bill Clinton and his Vice President’s famous claim upon it; but imagine had the pair opposed the technology, especially in tax policy? The leverage of the White House is never more strong than in affirmation or denial of something new. Theodore Roosevelt’s opposition to the motor car delayed and severely impacted the acceptance and forms of the automobile and roads for them. When Woodrow Wilson’s national war machine turned to the automobile as a tax, he condemned it as a wasteful luxury suitable for government excision. Harding came along just in time to protect the automobile from an even worse tax scheme, a national horsepower tax, the use of which in Europe destroyed the middle market, mid-priced family car. At the same time, Harding’s Congress leveled the railroad with more and more Washington control.

The railroad would alternatively scare or enthuse presidents down the line from Van Buren, Lincoln, Theodore Roosevelt, to Harry Truman. So, too, the automobile. Thus it was that Dwight Eisenhower is the father of the Interstate Highway System. And thus it was that Eisenhower’s scheme to pay for it prevailed over the objections and alternative plan of the powerful Senate Committee on Public Works chairman, Edward Martin of Pennsylvania, who had little use for the gasoline tax or the huge federal role in roads that Eisenhower installed. The great 19th century movements in roads, the canals and the railroads, broke that original federal plan for the National Road, and set that road’s conclusion as policy for the winning technology of the train. The Federal Government indeed subsidized the railroads with rights of way and the famed ten-mile checkered square gift of land, but its role was otherwise constrained. Federal grants amounted to a fraction of railroad land purchases. The far more important Government intervention was in general endorsement and the hugely important contracts for delivery of the mail. Starting in the 1880s came regulation. Never at serious issue was ownership. The reason was that the system worked. And it worked great.

Meanwhile, federal construction of roads for bi- and quadrapeds was limited to rather insignificant monies spent on military and post roads. Even with the famed Rural Free Delivery (RFD) of the mail, the Feds left it to the states to build the roads for it. There is no sense talking about highways and road policy before the fuller dispersion of the automobile. Before then, roads were of rail. Not even the bicycle craze, as lauded by historians as the RFD for promoting the "Good Roads" movement, meant a thing before the automobile. The first major impact of the automobile on public road policy came in the $50,000,000 debt the people of New York voted upon themselves in November of 1912 for the building of roads for automobiles. The funding followed the expiration of an earlier $50,000,000 that had been carelessly spent in the pattern of the horse and rail era, and that led to a highways and roads system that was entirely ill-equipped for what in 1912 had become "The All-Conquering Automobile." The New York Times complained,

The good roads of this State are not continuous. Because the $50,000,000 appropriated [in 1907] for their building was proportioned ‘equitably’ among the several counties, it was squandered on short stretches of highway that begin nowhere, end nowhere, and serve chiefly to line the pockets of local contractors who built them and are employed to keep them up.

More stupid was that the surfaces laid were entirely inappropriate for automobiles, which summarily, and in full accordance with the Department of Agriculture’s studies of the effects of "pulled" or "pushed" wheels upon macadam, asphalt, dirt, and other surfaces, tore it all up. Fifty million dollars is no small thing. The sum was three times the annual appropriation out of the heralded Federal Aid Act of 1916, which, when divided by the 48 states came to nothing compared to New York’s huge public investment in its highways. Although long holding the automobile ransom as a taxable luxury, to help pay for these debts New York went to that now primary mover over roads, the automobile. Here now, there was no thought to tolls. That concept, we should note, was fully at work on the roads of rail, where passengers and freight paid their way by particular use.

A notable and hugely important exception to general funding of road building was William K. Vanderbilt’s privately-built toll road on Long Island, a project he started amidst the anti-automobile days of 1906-07, and in protest of mismanagement of the public highways. Vanderbilt built the nation’s first road designed for automobiles, with grades, bridges, entry and exit ramps, and high speeds. By 1911, when Vanderbilt’s highway was more fully opened, the old "Good Roads" movement was upon the national government, which, itself, was now upon the automobile thanks to Taft’s deliberate shift to the automobile. The two joined, and Congress laid out the first serious funding of roads for automobiles in a 1912 law that authorized $500,000 in federal grants to the States for "experimental" post roads -- the experiments being for surfaces that could accommodate cars. This law led directly to the 1916 and 1921 Federal Aid Acts that partially funded state road building and improvement out of the general revenue.

Outside of federal lands, both Acts strictly avoided any direct federal role in the building and management of the roads they would fund. From the outset, then, federal policy accepted devolution in roads. Also set from the beginning was that the need for any federal role at all was to support poorly run and inadequately built state roads. Reported The New York Times during the debate over the Bankhead "Good Roads" bill of 1916 that was to provide $75,000,000 in Federal aid to states for roads over five years -- from 1907 to 1912:

Senator Wadsworth of New York, in opposing today the principle of Federal aid involved in the Good Roads bill, said that New York had at great expense provided its own system of roads, and it would not be right to expect New York to contribute to a national system, the returns from which would work to the benefit of other States than New York.

While its high place in funds received from the federal road dole mollified Empire State indignation, with its advanced highway and road program, with its huge tax and consumer base, New York was destined, no matter what the form, to the losing end of any federal program. States all understood how it worked. During debates over the 16th amendment and its income tax, smaller, especially southern and western states marched the amendment through the legislatures often with the express intent to screw it to New Yorkers. Considering themselves inequitably burdened by consumption tax in the tariff, they looked to the income tax for redress. New York itself took two years and a dramatic political swing in the 1910 election to sign up. Supporters only did so with wilful delusion as to the difference between an apportioned tax by state population and a direct tax upon individual incomes "from whatever source derived." Reported The Times in 1911,

Claims of the Republicans that New York State would suffer at the hands of Western and Southern States, which the [Republican] Minority Leader Merritt declared "had put their heads together to indirectly do to manufacturing and business States what they couldn’t do directly," were med by Majority Leader Smith and other Democrats with arguments that the resolution only empowered Congress to levy such a tax, and did not fix the manner in which it was to be levied. "I don’t think Congress will ever unjustly tax us," said Mr. Smith.

In addition to its deliberate revision of the original Constitution’s limits on a direct tax as a leveling device upon larger states, other arguments understood that the flow of authority to Washington would follow a federal tax on incomes. Just so with roads. Certainly, the matching requirement of Federal Aid kept a balance towards states that could afford it, but once met, since allotments were guided in thirds by ratios of area, population, and rural delivery route mileage, a small-population, large space states such as Wyoming easily grabbed a hugely disproportionate share of federal monies over the large, large-population Eastern states of Pennsylvania and New York. With the added rationale of national defense following the Villa raids and subsequent Mexican intervention of 1916, Texas, Arizona, New Mexico, and California were the immediate winners in federal lottery. Along with the money flow came road policy according to federal standards. In centralization was uniformity, be that a blessing of mixed results between those states with existing highway infrastructure and management and those previously without it.

However small a start, and however inconstant its path before the Eisenhower plan, the 1916 Act most importantly asserted both the federal and local roles in road policy and that incoherence of matching grants, federal rules, state indebtedness, and the ultimate and rather disjointed mix of revenue sourcing. Firstly, National roads would not be built buy the users. The cost would be distributed across society. Even as federal funding was moved from general revenue to gasoline and vehicle excise taxes, in channeling the money from the consumer to Washington and back again to the states, the user’s initial relationship to the road by that penny a gallon tax was cut from it. In partly nationalizing roads, the user, too, was partially nationalized.

As Congress sorted out the close of WWII, and the ongoing legacy of the New Deal and the tremendous federal wartime intervention, what and how the general government did confused previous definitions, even those of the 1930s. State officials were especially keen on the trend. At a 1947 Governors’ conference, in response to proposals for "readjustment" of luxury, gasoline, inheritance, and other excise taxes from Washington to the states, Governor Caldwell of Florida replied that the federal government might not be so quick to let go. He countered with a proposal to remove federal alcohol and gasoline excise taxes to pre-war levels. History has proved correct the Governor’s reasoning, but there was far more to it than just Washington’s death grip on the revenue flow. Earl Warren of California was more honest. Regarding the federal gasoline tax, he flatly admitted his state’s advantage in the current scheme. As recorded by The New York Times:

Governor Warren expressed gave doubts of the wisdom of the suggested exchange of tax fields. He said it might undermine the stability of state revenues. Concerning the suggested Federal abandonment of gasoline taxes, he remarked that this would operate to the disadvantage of western states s in the division of Federal gasoline tax collections. These funds are now apportioned among the states on a formula which takes into account population, area, and road mileage. Western states, with large areas and large road mileage get back from the Federal Government more than they could collect from state-imposed gasoline taxes. The contrary is true in New York and other eastern states.

Count Florida in California’s side of the ledger. No mistake, here, that New York’s Dewey and New Jersey’s Driscoll were the forces behind the "readjustment" proposal. At another gathering of state officers a few years later, Virginia Senator J. Gordon Bennet decried the scheme. The states, he declared,

have been wooed and won by the blandishments of what is called ‘Federal aid. It has been pleasant for such states to shift to the Federal Congress the onus of levying and collecting the taxes to produce the revenue. For this and the return of the revenue to the states, the Federal ’handling charge’ has been a substantial percentage of the whole.

Pennsylvania’s Senator Martin added that "a sort of creeping dependence" had turned certain states to federal dependents. Four states, he said, derived a quarter of their revenue from Federal Aid, and fifteen others took in a nearby twenty percent. In all, he said,

it is amazing to realize, for example, that Federal aid constitutes more than 17 per cent of total state general revenue.

Resistance to the federal gasoline tax carried through to the Clay Committee hearings and a concurrent governor’s conference on the plan. In October of 1954, the Associated Press reported that, "Generally speaking, the program was received coolly by the Governors, many of whom said they want the Federal Government to get out of the field of gasoline taxation." Senator Martin may have protested too loudly. With the Federal government funding but seventeen percent of state roads its role, and its leverage was minimal. We can see the effects of the federal system just as largely in its absence. The 1912 New York bond, 1920 and 1930s state road building initiatives, or the massive 1940s and 1950s state highway projects were deliberate assertions over the incoherent federal policy and commitments of those periods. There being no question of the need for interstate highways, and little agreement on how to make them, who to pay for them, and so on, the old Federal Aid system had carried through to the Eisenhower presidency. Devolution was fully at work.

President Eisenhower’s bold demand for $101 billion for new highways brought little new to the debate. Proposals for national highways started long before, be it in Clay’s National Road, Lincoln’s Transcontinental railroad, or the various schemes for national highways for automobiles that began around 1911. Eisenhower’s original plan called for little more than an increase in the existing annual Federal Aid appropriations that were drawn from the federal gas tax. His larger program, he stated, would be funded by joint state and federal investments, and paid for by the increased gasoline consumption the new roads would spawn. The difference was in the coherence of his plan in lumping annual appropriations goals into a ten-year program – and a new, radical urgency upon the nation to build highways.

When Eisenhower declared that roads were necessary for the nation’s economic health, for the physical safety of the road citizenry, of the benefits for intercourse and commerce, these were the old arguments. So, too, was Eisenhower’s core justification for federal involvement in national defense. In early 1916, Henry Joy of Packard Motor promoted a plan for 10,000 miles of roads for military necessity. Joy, a principal in the Lincoln Highway coast-to-coast venture, was tapping a national mood much agitated over "preparedness," the raging European war, and, closer to home, the Mexican frontier. Much as war has been a primary catalyst in social change from the Revolution onward, war defined national road policy. The failure of the railways to meet WWI’s mobilization, the huge truck-building program, and the demonstration from France of motorized defense fueled the national road building program in America. The 1916 Federal Aid bill may not have passed but for Pancho Villa. Indeed, Hitler’s Autobahn marked no innovation so important as the urgency he created with it. What it was in 1955 was the hydrogen bomb. Eisenhower looked to the Constitution for more than just military roads. He was as serious about it as he was answering a current and immediate demand. His Interstate plan might not have exited Congress but for the just-ended war in Korea, the failed Geneva Summit of 1955, and the atomic bomb. To a recalcitrant 1954 Governor’s conference that found so many good reasons to ignore the President’s program, from Grange opposition to the then strong devolution movement, Eisenhower went nuclear. In asking for five billion dollars a year for ten years, he asked for highways "fit for the atomic age." Think 1950s. Think Red Scare. Think "Duck and Cover." Think H-Bomb. Integral to John Foster Dulles’ brinkmanship policy of 1954 was civilian self-defense. Highways were its core.

Just as the Clay Committee forwarded to the President its $101 billion plan, one that, according to The New York Times, "makes New Deal and Fair Deal public works projects diminutive by contrast," another prominent Eisenhower committee was finalizing its own report along presidential instructions. The "President’s Commission on Inter-governmental Relations," dedicated to decentralization of the New Deal, had its own ideas on road building. Give it, and the taxing, back to the states. The Committee’s mandate was none other than "reducing Federal commitments to the states as much as possible…. Federal economy and increased sovereignty for the states." Tops on the list was the two cent a gallon gas tax that came to some $900 million a year that was to be yielded to the states. The Clay Committee’s response was to keep the two cents a gallon, and raise additional needs through debt, managed by a distinct, new, and federal agency.

Eisenhower thus launched contradictory initiatives that nevertheless met in defining the course of the national highways. The new system, Eisenhower told Congress, must "stand on its own feet." Here, finally, was answered the 1911 warning of road advocate John A. Stewart, president of the International League for Highway Improvement, that,

for the Government to build even 10 per cent of the [needed] roads ...would cost over $2,500,000,000. To build an adequate system of roads... would cost at least $25,000,000,000. There can be no doubt whatever that a direct tax would be necessary in order to carry out any scheme of Government aid, nor is there doubt that such direct tax would have to be levied at a constantly increasing ratio.

At Eisenhower’s lead, the interstate system would be built. It would be organized and financed by the federal government. The states, however, would manage and build them, and, most importantly, the program would, as Eisenhower demanded, pay for itself. No matter the source, the funds would be off budget. So ended the decades long debates, so was answered Mr. Stewart, and so ended Federal Aid that sank money into roads from general revenues. This doctrine set, so, too, its natural conclusion that the user would pay. The President announced:

In the case of the Federal Government, moreover, expenditures on a highway program are a return to the highway user of the taxes which he pays in connection with his use of the highways.

The impact of Eisenhower’s statement did not escape notice. Reported The Times:

The President expressed his gratification with the highway bill, and said he was sure the public would welcome the fact that Federal gasoline tax revenue would be used entirely for highway improvement. In the past some state officials have complained that not all Federal gasoline taxes were used for road building. >>see "Chase Manhattan Suggests That Nation Use Alternate Routes to Finance Roads" which says that a likely Highway measure would include "ending the diversion of highway use taxes to other purposes…"

The Eisenhower scheme called for bond issues, with tolls yet an option, as an expanded gas tax, to back the debt. Either way, "the highway user" was the system’s co-signer. Devolution’s triumph came not in the user-fee system but in the stand-alone structure of the road building program. The formula seems rather obvious to today’s gas-tax mind set, however much modern politics siphons into the gas tax stream for other purposes. It was not so obvious to 1955. The devolution movement repudiated New Deal centralization, and stamped its very distinctive limits upon the new highway program. On top of the stand-alone financing and management, just the same it limited user taxes to roads.

Seldom are federal revenues so precisely earmarked. While it may be logical that park entrance fees finance those parks, there is no self-evident claim for roads on the gasoline and other vehicle and road excise taxes. Federal precedent was long set differently. Just as the earliest Federal Aid came of the general fund, when Uncle Sam went looking for extra cash for wartime revenue (both world wars), to balance the budget (Hoover), or for the New Deal employment projects and Keynesian pump-priming, taxing of cars, trucks, buses, tires, and gasoline presented no inherent limits on the destination. These were excise taxes, simply, no different in kind from taxes on alcohol, tobacco, and luxuries. When the federal government demanded that states limit spending their own gas tax revenue to roads at stake was not some ethical limit on applying the proceeds of a tax to its source but the federal matching funds which were tied to state gasoline taxes. Congress was watching out for itself, and not for the states. As Harry Hopkins, FDR’s Federal Emergency Relief Administrator said when defending the use of motor vehicle excise taxes for general "relief" programs:

There is nothing sacred about some of these State taxes – gasoline taxes, for instance…

From the earliest of the automobile, states looked to the machines to pay for the roads they demanded, tore up, and otherwise inspired. Here again it was a matter of expedience, and not doctrine. Motor vehicles were obvious and lucrative revenue targets. In 1936, ninety-nine percent of state highway revenue came from motorists. Yet, far short of all of the motor taxes went to roads. New York State that year diverted $70 million from roads. The practice carried well past the Depression. In 1952, the Times reported, of all motor-related taxes, "the gasoline tax collections alon[e] exceed, and by a wide margin, the total to be expended this year for highway and street purposes." It was news, then, to 1955 when General Clay’s Advisory Committee announced that "The majority agreed that Federal revenue from gasoline taxes should be earmarked for highway improvement purposes." Eisenhower and Clay repudiated the old temptations.

The fight in Congress turned around the immediate foundation of the program, whether it be built on indebtedness paid with existing user fees on gasoline, vehicles, and rubber (the stance of the Administration and its Senate allies) or by pay-as-you-go funding from increased user fees (the position of the Democrat House). The what was fixed. Only the how remained, and it was, but for some resistance, confined to Eisenhower’s insistence upon a stand alone, off-budget program. The final stab at general funding came from Senator Albert Gore, whose complaint was that the proposed program would ignore rural roads. Within the Democratic caucus, however, came severe dissent coming from other southerners who demanded retraction of language in the Gore bill that required that states pay "prevailing" wages in highway construction. (Convict labor was still in use.) With the offending words struck, the Senate passed the bill. The House refused it.

Just as the Gore bill ran interference against the bonding and tolls plans, devolution pressured back against Gore’s general funding. The Gore plan was more against debt and tolls and pay-as-you-go than for anything else. Certainly, the stand for rural roads was significant, however, that the federal government was at all involved meant a redistribution of revenue from higher to lower concentrations of funding. From its beginnings, Federal Aid, or any federal program, assumed the imbalance between revenue and need, between concentrated traffic and distance. The program itself meant spreading the burden across states lines. Herein came the Gore plan’s defeat. In limiting Federal Aid to the annual books, the state contributions would remain one-to-one federal to state dollars for the first $1.6 billion annual appropriation, with a two-to-one split for its remaining $500 million yearly federal contribution. Ironically, with its near equal federal-to-state spending ratio, the Gore plan would have ensured that lesser federal role that devolution advocates demanded, and it would have rendered more funds to the larger states with more taxing power.

In the House, various other pressures re-made the plan. "Everybody wants a road bill," Rep. McCormack of Massachusetts explained, "but nobody wants to pay for it." McCormack blamed the trucking industry for a House defeat of the pay-as-you-go proposal. The truckers denied it. Observed the Times:

...from the time House members began to talk about specific user-taxes, such as on gasoline, Diesel fuel and tires, instead of just the abstract virtue of spending $50,000,000,000 of Federal and state money in about a decade to build and improve highways, it has been obvious that the lobbyists were hard at work.

As went prospects for Eisenhower’s plan, so went to contrary fate state programs. Staring down a pending massive federal bounty, states got to rethinking their own highway projects, such as in New York where a $750 million highway bond issue set for voter approval moved in mirrored direction to the for and against votes on Eisenhower’s plan in Washington. As soon as the federal scheme passed Congress, the Michigan Highway Commissioner took advantage of his state’s late entry into the toll road game to proclaim the public’s right to "free super highways." A news report of the Commissioner’s decision ended with, "Financing of the free road is expected to come from Federal aid under the new highway program and from state highway funds built up by taxes on gasoline."

Tolling’s importance in the debate has been discounted by historians. The Clay Committee and the President treated tolling as a fall-back, and neither seriously stood for it. Tolls nevertheless dominated the discussion, if in rejection, or as an unmentionable solution. As loud as were the Clay Committee’s pronouncements for its interstates, the dirty business of paying for it was smuggled into the debate in platitudes and general assertions. While claiming that the proposed $32 billion direct federal investment and its $11 billion in interest would be filled by ever-increasing gasoline consumption feeding the system at two cents a gallon, tolling backed it up as the option play. If not A, then B. Of course, the merest scent of tolls set the dogs howling. Noted The Times:

The need for highways has not been questioned but the financing method and the $11 billion of interest payments have. The American Automobile Association has also objected to the program because it would encourage toll roads. The A.A.A. opposes tolls as a further charge against motorists.

Opposition was immediate and fierce. The Federal interstates, the AAA declared, shall be "undarkened anywhere by the shadow of a toll gate." The organization’s New York affiliate called tolls "ruthless exploitation" of motorists. Here was the AAA, the group most singly responsible for the 1916 Federal Aid Act, standing against the interstate system as proposed by the Clay Committee:

The American Automobile Association has also objected to the program because it would encourage toll roads. The A.A.A. opposes tolls as a further charge against motorists.

Along with the motorists lobby, Louisiana Governor Robert F. Kennon stood for the general revenue scheme. "Toll highways, he declared, were not the answer to raising the necessary funds," wrote The Times. Why the vehemence?

For the Governor of Louisiana it was an easy equation: why charge Louisianans for what New Yorkers could help pay? For the AAA, it was more complicated. The group’s mad rejection tolls was larger than its theory of tolls as double taxation. In 1955 the Association’s New York affiliate instructed its 485,000 members (!) to vote negative on that pending $750 million bond since the float was not secured to the purpose of road building. Lacking a legal earmark, this was a reasonable position, especially if a matter of negotiation. However, as an end game, it smacked of the proverbial cut of the nose: as The Times demanded of the motorists, "the question remains, do you build roads or not?":

The association doesn’t like toll highways, it doesn’t like the New York City auto use tax, it doesn’t like toll bridges. It has a perfect right to be against all these things. But unless it wants to delay indefinitely any substantial improvement of highways for New York State it should reconsider its position on the $750,000,000 amendment. Defeat of that fund would be a high price to pay for "victory" on the earmarking principle, which is wrong to begin with.

Beyond the AAA’s philosophical differences, any national highway system had to accommodate tolls one way or another. The Clay Committee recommended that states having built already sections of highways that would become part of the interstate system would be reimbursed only in part for that investment in future allotments to be spent on other projects. The language deliberately walked around its true subject, existing state toll roads. Henry E. Bailey, former manager of the Oklahoma Turnpike Authority, pointed out that had the federal government joined the various state turnpike expressway projects the interstate system would already have been largely built, and there’d be no need for arguing over who was going to pay and how. No matter what Congress ultimately decided, the existing and advanced toll systems in such places as New York, New Jersey, Pennsylvania, and Oklahoma presented as ugly a political dilemma as any. Since these toll roads were by nature, self-funded, and as of the mid-1950s, successes far beyond the expected, there was no pressure from bond holders for immediate payout far short of interest yields, there was no desire in the states in new roads to compete with what they had just built, and there was severe pressure from other states not to fund what was already funded, or being funded, by those other states and their road users. The presence of these toll roads complicated the pay-as-you-go schemes more than general funding plans such as the Gore Bill. In the latter, it was an easy assessment of how much a road was worth, and how much the builder of it was going to get. The Clay Committee’s gasoline tax with more difficulty avoided the problems of double-payment and fair allocation of new taxes. The Clay solution was to fund "new" projects and not existing ones by some calculation that accounted for those existing roads.

Oklahoma’s Bailey had it right. Had Congress opted to back these various state toll systems, there’d have been no need for the national, $101 billion plan. Had it been otherwise, however, another obstacle to tolling would have forced Congress to compromise over the inconsistency between miles and populations state to state, as well as in state highway programs. The latter problem was less severe. In the 1950s there yet existed wide discrepancy in the forms and conditions of state highways and rural roads. The 1916 Federal Aid law meant to create uniformity in these programs by conditioning federal grants to state-wide control of road building and maintenance. Enduring variances in need created uneven demands that in 1955 were yet difficult to reconcile -- if such reconciliation was perceived in the national interest. That, combined with the wide range of gasoline consuming populations, meant that Congress would have to choose sides. There would be winners and losers in the gas tax game, just as there were in any direct tax that was not precisely apportioned by state population (ever the political dilemma in American federalism). Here appeared the weakness of the gas tax as user fee. If, under the theory, the user should pay, how, then, to allocate the receipts consistent with the idea? Already, rubber, automobile, and motor carrier fees had far less attachment to actual use than gasoline. If an increase in the federal tax was to retain its relationship to the user, geographic dispersal of the taxes must match geographic use. The inherent disconnect between the requirements for rural roads and low usage of them rendered the user-fee system meaningless. In its greater specificity as user-fee, tolling would seem, and did seem, to exacerbate the problem of mediating variant state needs. We must note that it was more than a political problem, since the general benefit of the interstate system had for its primary impetus general economic uplift and national and civil defense. Tolling, precisely for its bond of consumer and provider, more honestly accounted for the natural discrepancies in the user fee. The more loosely defined gasoline tax hid the differences. It stood in principle as a user fee, and acted in practice as a general tax, hidden by the bottom line out of the pump, vastly more important, then, as a 1932 observer noted, for its "being unimportant."

For a national system, the subsidies could not be avoided. Nor could be avoided were the existing toll roads.

Modern Federal Highway Administration (FHWA) literature rather excuses these pay roads as unfortunate, yet ultimately useful inconveniences to the interstate system. The FHWA publication, "Why Does The Interstate System Include Toll Facilities?" explains:

In the 1939 report to Congress, Toll Roads and Free Roads, the U.S. Bureau of Public Roads (BPR) rejected the toll option for financing Interstate construction because most Interstate corridors would not generate enough toll revenue to retire the bonds that would be issued to finance them. In part, the report attributed this conclusion to "the traffic-repelling tendency of the proposed toll-road system." Although some corridors had enough traffic to support bond financing, the report predicted that motorists would stay on the parallel toll-free roads to a large extent.

Noting that,

That conclusion was called into question when the first segment of the Pennsylvania Turnpike, from Carlisle to Irwin, opened on October 1, 1940. It was an instant financial success. Following World War II, the turnpike's continued success prompted other States to use the same financing method. Each State established a toll authority to issue bonds. Revenue from the bonds provided the funds, up front, to pay for construction. Toll revenue allowed the toll authority to repay bond holders with interest and finance administration, maintenance, and operation of the highway.

Based on this model, turnpikes appeared or were planned in Connecticut, Florida, Illinois, Indiana, Kansas, Kentucky, Maine, New Hampshire, New Jersey, New York, Oklahoma, Virginia, and other States, often in corridors that had been designated as part of the Interstate System in 1947. These roads were built without any Federal-aid highway funds or other Federal tax dollars.

the article credits these toll roads for greater expansion of the "free" interstate system:

The inclusion of this [toll] mileage meant that Interstate construction funds that would have been used for construction of toll-free Interstate highways in these corridors could be used elsewhere to build Interstate highways sooner than would otherwise have been possible.

This remarkable observation might be spoken in reverse. Would that the "inclusion" of "toll-free Interstate highways" impeded growth of that vibrant toll-road network upon which the national highway system was built? Little Connecticut, whose angling, lengthy slice of I-95, but for intervention of anti-competition forces might have been the site of the nation’s greatest private highway, has instead woven itself around an ugly mix of tolls and toll-excluded interstate funds. Connecticut’s 1950s toll roads, the Merritt Parkway and the Greenwich-Killingly Expressway (designated I-95 by the Feds) were hugely successful. As with the New Jersey Turnpike, expectations landed stupidly short of actual demand, and the bonds were paid off years ahead of schedule. In the 1980s, and with the public outrage over a collapsed bridge and a horrible runway truck collision at a toll booth, Connecticut moved from tolling to federal funding for expansion of the roads. All this might have been altogether different had in 1929 the state given the New England Express Highway Company the right of eminent domain to build a modern, $85 million alternative to the old U.S. 1 post road that was as early as the 1920s incapable of meeting the demands of modern road transport. That’s how it worked with the railroads. Why not with the new toll road? That old form of road, rail, instead, got in the way. Correctly smelling competition, the New Haven Railroad pulled upon its tight, two-way hold of the regulatory state’s twisted marriage of the regulator and the regulated, and shut down the project.

Even without the New England Express Highway company, the 1920s was an era of vibrant road building, well ahead of the post-War federal and state projects. Spurred by the triumph of the automobile, the coming of the motor truck, and by Federal Aid and by the plain inadequacy of Federal Aid, state road building exploded. From private initiatives such as the Conners Highway, the $1.8 million private east-west highway built by W.J. Conners in central Florida to the extensive state and private efforts along the Lincoln Highway, there grew, cumulatively, a true national road building program. In absence of Eisenhower-type central programs the Federal Aid era has been defined as un- or dis-organized. It was neither; it was extensive, directed, and amazingly efficient.

With Federal Aid but a small part of the overall expenditures, the foremost effect of Washington’s role came in the required reorganization of road programs at the state level. Especially rural states had relied on towns and counties, burdening farmers with, as in Arkansas, 100 percent land tax for road building. The Federal Roads Bureau engineer, Herbert Fairbank, correctly saw the federal role in breaking down haphazard state and local conflicts that inhibited through and interstate roads. In 1925 he spoke of the benefits of the state-wide programs:

To the traveler there is the prospect of an early and uniform development of main interstate roads which would probably never take place under promiscuous county control.

Fairbank then launched into the inherent problem in Federal Aid, that same that later tripped up the Clay Committee:

To the taxpayer it means a relief from burdensome taxation and the assurance that the taxes collected will be more economically expended. When so large a proportion of the traffic on the main roads originates in and is designed for the cities, it is not fair that agricultural counties through which these roads pass should have to pay the entire cost of providing the roads. If they attempt to do so, they either will have to build a type of road which is more expensive than their local needs require or they will have to expend excessive sums for the maintenance of roads adequate for the local traffic, but inadequate for the intercity and through traffic, or they will have to stand by and see their roads destroyed.

Fairbank was the principal author of the 1939 Roads Bureau report to Congress, "Toll Roads and Free Roads," that explicitly rejected tolling for an interstate system. The "traffic-repelling tendency of the proposed toll-road system," the report declared, would render a toll network financially unsustainable, especially given the disparity between miles and traffic across the country. A decade before, one Lester Barlow, engineer, proposed a federal-managed national toll road. "Having proved that the road could be constructed while paying for itself," he declared, "and at that with a considerable sum to the good, the surplus could be used for the westward continuation of the highway." Both Barlow and Fairbank of 1925 were of the same mind on the necessity to subsidize rural highways. In his lecture on those "promiscuous" counties, Fairbank explained,

By spreading the cost over a larger base, such as the State, and putting an appropriate part of the burden on city people roads can be built and maintained without unduly burdening any one with taxes.

Despite Fairbank’s 1939 rejection of tolls, and despite Barlow’s admission that rural roads require urban subsidies, Conners, Fairbank, Barlow, and other engineers, bureaucrats, and would-be road visionaries all held to a core vision that one way or another the user of the road should pay. Even with federal assistance, or outright general funding, somehow or other, the debate ever turned around some degree or formula of a user fee -- of road pricing, that is -- however limited. In his 1925 talk, Fairbank explained how his state-wide example operated nationally:

The Federal Aid Highway System is a system of main interstate roads, which has been selected solely with a view to accommodating the largest percentage of all highway traffic with the least mileage of roads.

The definition right away conceded the relationship between service and demand. Nevertheless, the single largest setback to road pricing and the user-fee concept came in the "Toll Roads and Free Roads" report. The Bureau’s hostility towards tolling was earlier and vehemently spoken by the Bureau’s longtime Chief, Thomas MacDonald in 1929. Regarding the late 1920s explosion in private toll bridges, MacDonald plainly spoke the bureaucratic contempt for this private competition:

Since highway transportation has grown to such dimensions that to enumerate the figures does not enlighten but rather confuses our conception, the possibilities of rich fields to exploit have been greatly multiplied and extended. Coincident with the constantly new found uses or the more complete adaptation of this form of transport, come new proposals for fettering the freedom of the road to fill a private purse.

There is no responsibility which deserves to engage the attention of this group of highway officials more than these invasions. The real question is the very simple one of whether it is sound public policy to grant the right to collect a private profit from the user of the highway. The answer ought to be a vigorous and authoritative ‘No. [sic] There is no place on the public highway for the privately owned toll bridge.

In this 1929 speech, MacDonald didn’t venture into pure damnation of tolls, although he came close. Insisting that highways and bridges were "essentially public undertakings and should be so undertaken whether the cost is paid from tolls or not," he declared the "free highway" of greater public necessity than "super-roads," which he classified as "de luxe service roads." "They cannot be substituted for adequate free highways." If these luxuries were to be built, he insisted -- and while admitting to a legitimate purpose of the toll for it -- they should be built by the railroads, and "not in competition with them."

These extraordinary views were fully tasked in his Bureau’s late 1930s study of a potential national network. Unsurprisingly, the Bureau stuck with the terminology of extravagance and luxury in what were called "super highways." In addition to the view that highway traffic in western states was so severely minimal that the highways would go practically unused on top of unpaid if financed by tolls, the Bureau concluded that the interests of localities was the greater than unimpeded traffic. In 1941 the Bureau, renamed now the Public Works Administration, and as of 1939 transferred to the Federal Works Agency (in line with New Deal thinking of the role of road building for employment and pump priming), backed a limited 30,000-mile "Interregional Highway System." The system was to blend and "mend" existing roads, expanding them where traffic levels required, and otherwise avoiding the "super highway" idea. The new plan re-affirmed the Administration opposition to tolls.

In rejecting tolling, President Roosevelt substituted New Deal policy for New Deal goals. With the economy into the new decade yet in its 1930s funk, with war in Europe and Asia, and with a political and financial end to TVA-style public "works," a huge national highway project was out of the question. Roosevelt turned, instead, to the political stance, and stood for a national road system while doing nothing to advance. It. With his endorsement of the Bureau reports, Roosevelt unwittingly turned the issue back to politics, which freed the states to develop highways despite bureaucratic resistance in Washington.

Various states already defied MacDonald’s narrow view. In his Bureau’s antipathy for private enterprise in roads and bridges and in tolls, generally, MacDonald rejected the very solutions that were just then being applied by the states. Pennsylvania’s great turnpike began over the Bureau’s objections to such projects, not only over toll financing but against intercity routes that the Bureau felt would not be adequately trafficked. The Pennsylvania project started amidst 1938 discussions by New Jersey, Maryland, Delaware, New Jersey, and New York highway departments over a "super-highway" that would connect Washington to New York City. The plan called for a federal loan to be "amortized through toll revenues." New York state and its counties, meanwhile, turned to toll-financing for important new local roads.

In response to the motoring tourism and camping craze of the 1930s, road pricing and user-fees freely operated in various scenic toll roads in New England, North Carolina, Colorado, Texas, and throughout the far west. At five bucks a car and driver, plus a dollar per passenger, the toll road up New Hampshire’s Mt. Washington became the nation’s most expensive road. It was no different from the old turnpike. A 1908 Washington Star editorial described how it worked:

Last Spring a motoring party, after plowing through the mud of Maryland roads, and enjoying the comparative luxury of a Pennsylvania "pike," encountered a stretch of such awful "going" that the end of all things seemed near at hand. The car was jounced from rut to rut. Great stones gave the chauffeur the task of his life to prevent disaster. He wrestled with the wheel and brake and lever, and managed to make progress, a triumph of mind and machinery over matter. Somebody in the car remarked that it was a long way between toll gates, whereon the chauffeur, a product of the smoothly paved town, emitted an irrepressible sniff. Asked the cause of his derision, he said: "Toll gates! I’m getting wise to this toll stunt! When the roads is good they charges for ‘em, and when they’s like this they ain’t got the nerve to ask for money."

We could not ask for a clearer statement on the efficacy of road pricing. In the Thirties, up Mt. Washington and other scenic roads, it was at work in full.

The reason localities and states had in the 1920s and 1930s turned to tolling for bridge and road financing was because it worked. (Here arises a large inconsistency in New Deal thought, and in MacDonald’s damnation of "private profit" -- and, perhaps, a source of the period’s distaste for tolls: public bonds profited private investors.) Of FDR’s government, only the War Department stuck to the necessity for a national system.

Of all these toll roads, the most remarkable in its history and operation was the New Jersey turnpike. The mid-Atlantic cooperation never materialized, and Pennsylvania went forward on its own. Immediately following the close of warfare and the return of automobiles, numerous states launched new highway projects along the Pennsylvania example, with Maine first up in 1945. New Jersey was among those states.

The New Jersey Turnpike was an immediate success. Within a year of its inauguration, volumes exceeded levels predicted for the 1970s. Severely underestimated demand was especially faulty regarding the levels of interstate travelers. The Turnpike impacted national road policy immediately. Its success bred not only similar projects in other states, but an immediate attempt to join it through direct or indirect access. Indiana’s and Ohio’s turnpikes were to connect with Pennsylvania’s, which itself was to be connected to New Jersey. Interested groups lobbied Albany and Trenton for more connectivity between the Turnpike and the NY Thruway. Southern states were pressured to better traffic flows and build by-passes around cities along the major routes. New Jersey’s example pressured the national demand for more roads; its working sent traffic, especially trucks, upon them all. While many of these projects were long before conceived, such as Ohio’s, which began with a 1946 survey, it the New Jersey turnpike forced it upon the rest.

The project took on the worldwide fame of the Autobahn and the Autostrada. A London Times correspondent labeled it "this noble way," and called for similar roads for car-rich, road-poor Britain. The New York Times noted that old England, with its taxed-laden motorists might not accept another toll. Those extreme automotive taxes went little to road building, it was noted. More significantly, however, was the old, vile association in the British mind of the inseparable word "turnpike" -- the "pike" was that iron blade lined atop the rail that only "turned" once the fare was paid. The marvel lay not just in the road but in its financing. The German and Italian highways were products of socialist and fascist collective action. New Jersey’s was a capitalist’s affair, speckled with such titles as Drexel, Kuhn, Loeb, Hornblower, Lehman, Bearn, Stearns, Paine, Webber, Salomon, and so on. In that the Turnpike, and those of New York, Ohio, Pennsylvania, and others, well preceded the Interstate system, these toll roads influenced national road policy well beyond their milage, and well beyond their millions invested.

The New Jersey example proves the success of a state-run, user-fee financed toll system. It has not given us proper indications of an operative competitive system and its pricing mechanisms. Truckers spilling onto local roads or taking the toll-free North-South Pennsylvania routes to avoid Turnpike fees are pricing themselves away from the Turnpike, certainly; these efforts, though, are not full competitive pressures upon the Turnpike. Given the federal system’s bias against tolls, and the state tolls’ bias against competing "free" roads, the balance of federal expenditures and state gasoline and other vehicle taxes and toll roads is skewed towards the incentive to build new roads that the Feds largely finance in states without toll roads, and for more "free" roads in states without toll roads, or in areas of states that have no competitive toll road. That is, competitive pressures on road building are negated entirely by either the presence or absence of toll roads. Competition in roads, that is, market pricing, has not been allowed to operate. Late 19th century railroads were far more competitive than today’s highways. The so-called "natural monopoly" of the rail lines is nothing compared to that of the present highway system. Only congestion has betrayed these imbalances, which we would otherwise ignore for the geographic monopoly that highways have enjoyed.

That state gasoline taxes are not correlative to road pricing demonstrates the failure of the gasoline and motor tax as user fee with any viable relation between use and fee. The lower gas taxes of a New Jersey or of an Oklahoma are indicative of those states’ extensive toll road systems which are sustained outside of the federal gasoline tax. However, this correlation is not consistent in other states, such as New York or Pennsylvania, which employ high gas and vehicle taxes in addition to tolling routes. The direct relationship is corrupted by the federal tax, the federal Interstates, and the state matching funds.

Nevertheless, we can derive certain principles from the current system and its particular development. The first is devolution, which is inherent to all existing and previous forms of federal road building. The second is the "stand alone" principle, which the Eisenhower system affirmed over the alternative and historical example of general funding and pay-as-you-go road building. The third is the user fee.

In the current system, each principle is compromised. Devolution is devalued immediately by the ten percent Federal "cut" off vehicle taxes that remains in Washington to fund the bureaucracy and other-than-highway projects such as mass-transit systems. While the "stand alone" principle remains in the Highway Trust Fund, in the absence of an absolute earmark vehicle taxes serve as general revenue when applied to non-highway purposes. The user fee is likewise compromised by the federal cut, re-direction of its funds, and by the general distance in taxpayer mind and in allocation of funds from source to destination. All of these principles are further burdened by the intrusion of the various federal requirements that also bear upon the highway system such as traffic safety rules, environmental requirements, and the pork barrel.

If we admit to these principles, why should we so readily submit to their compromise? These principles are at work, but they are at work weakly. An immediate question, then, is how these principles -- already agreed upon, already acted on -- can be made stronger, how they can better work.

In 1932, Shorey Peterson published "Highway Policy on a Commercial Basis," a manifesto of tolling’s second coming. The first, Peterson explained, came from Adam Smith himself:

The greater part of such public works [toll roads] may easily be so managed as to afford a particular revenue sufficient for defraying their own expense, without bringing any burden upon the general revenue of the society.

Noting Motor Age bureaucratic attempts to rationalize road building by standards of usage, need, and design, Peterson wondered why, then, should not the building and management of roads more fully adopt the "commercial basis" upon which such standards were based. Fuel and vehicle taxes were intended to join user to provider through the "basis" of "road use." Studies of road use, wear, and so on, by highway planners were attempts at the "business view of roads," with "experimental determination" to supplant "political pressure" and the "exigencies of politics and the state of the public treasury." This was all well and good, Peterson declared:

But if this tendency from a collectivist to a commercial view of highways has been marked, its apparent goal is by no means fully realized either in prevailing theory or practice.

Peterson tracked the wildly exaggerated claims of the social benefits of highways from their promoters. "One may suspect, moreover," he wrote,

that the present employment of these methods of guiding road improvement derives in part from a conviction that they emphasize the need of still larger expenditure, and that any prospect that such criteria would show the outlay on roads to have become excessive, would quickly discredit them, and lead to renewed stress of the intangible general benefits of good roads.

The claimed benefits may strike as familiar today’s readers, starting with the "general" blessings good roads confer upon "education, recreation, health, fire prevention, police protection, the national defense, the postal service, living and distribution costs," then on to diverse advantages to industry and the economy, and the more specific benefits of roads to "property" and the "road user." Yet, as Peterson pointed of his contemporaries in the road building professions, today’s reader will subscribe to those concepts of the general utility of highways while at the same time holding that the system fund itself. These contrasting notions, Peterson wrote, created "a peculiar inconsistency... since the very persons who would spread road costs with reference to these numerous benefit have also endorsed the principle that traffic should govern road investment." Half the job, that is, is no job:

Thus the logic of this emphasis of a multiplicity of benefits threatens whatever standing the business view of road administration may now enjoy...

Peterson was no an ideologue. He was concerned with the practice of road policy, not theory. The futility of the "general welfare" theories of highways, as he observed it, was devastatingly simple:

When a public service is conceived and administered in terms of its contribution to general welfare, its worth, and the capital investment warranted thereby, are subject necessarily to a decidedly inconclusive process of estimate.

The statement renders logrolling, upon which federal highway budgeting of the Highway Trust Fund has so violently fallen, downright practical. At least pork handouts can be measured in campaign donations and incumbency. Why did Ike propose a $101 billion highway system? Why not one costing $99⁹ billion, or $199 ⁹⁹? All the road projects in the world could never add up anything but their cost. Leaving aside Peterson’s criticism, the "general welfare" aspect of the Eisenhower System is generally conceded, regardless of the cost. In the paper, "Fiscal Dilemma," which argues for a revision of highway financing along Peterson’s commercial principle, Orski, Lockwood, Pisarski and Poole wrote,

The gasoline tax has been an efficient, time-tested method of raising transportation revenue and has served us well during the many years when the federal transportation program had a unifying national purpose and a well-defined objective -- the construction of a national system of Interstate Highways. But once the Interstate System was completed, the rationale for relying solely on the federal gas tax and the Highway Trust Fund became less compelling. The post-interstate program no longer has a clear national purpose.

While we doubt that the Interstate ever held such coherency, it is done. It is built. So, conceding the necessity for the collective program in its origins, those same reasons cannot stand when Federal funds go today to maintenance and expansion of existing highways, and, when applied to new construction, are indisputably local in benefit. Peterson’s 1932 admonitions were ignored. He deserves now a new listen, if not for construction of a new network, but entry into a day of new challenges to the existing networks, competing transportation and communication technologies, and demands for funding. The fix is in the pricing mechanism, which the gasoline tax cannot, and will not fulfill.

But if the process of guiding road improvement should be in the nature of control as just described, does it matter who provides the funds? One answer is that reliance upon registration and fuel taxes, in lieu of tolls, gives striking support to the commercial concept, without which its character would be lost. It may be urged further that, as a matter of elementary fairness, there is little reason, in an economy still essentially individualistic, why the privilege of using motor roads should be conferred at general public expense. But a more compelling reason for depending upon special taxes for road use as closely as is practicable, is the desirability of promoting an economic organization of the transport industry, including rail, motor, and other facilities. An essential of such organization, where patrons are free to adopt the agency that they prefer, is the condition that each agency bear its own costs; and an appreciable tho minor part of motor-transport costs arises in connection with the highway. This consideration applies not only to commercial vehicles, but to all motor cars, since all are competitive with railroads, and since there exist alternative possibilities in the organization of motor transportation itself.

Peterson complained that the socialized motor road system placed railroads at an unfair advantage. For 1932, this was magnificently prescient. He argued that the railroads paid as much in taxes as the motorists paid in registration fees, $350 million annually. Motor transport itself, he said, went lightly taxed, especially since vehicle owners were not obliged to purchase the highways they run upon. Peterson had no problem with taxing vehicles, or gasoline, for general purposes. In fact, he argued that if road financing was through tolling more closely bound to use, the gasoline tax could be freed for other uses. If the rails were relied upon to carry a general burden, he wrote, there ought to be no special exception for automobiles and trucks.

On the much argued point whether the states may properly divert to non-highway purposes a part of the receipts from registration and fuel taxes, we now have two reasons why such action is proper. One is that such taxes stand partly in lieu of general taxes, such as are paid heavily by the railroads, and that motor transportation should contribute in similar manner to governmental functions other than highways. The other is that a substantial fraction of such part of the special tax receipts as is properly regarded as payment for road use is of the nature of interest on a public investment. The state is no more obligated to reinvest in one of its enterprises all of the income therefrom than is a private undertaking, and should decide the matter on similar grounds. Perhaps for a considerable time new road improvements will usually amount to more than the interest on old improvements; but the time should come when a portion of this income can be used to reduce the burden of government upon other revenue sources. Such reasoning rests, obviously, upon the conception of highways as a publicly-provided commercial instrument; if they are not to be so regarded, there can hardly be any theoretical objection to treating these special tax receipts as part of the general-tax fund.

Peterson wrapped up his discussion by asking whether the "conception and treatment of roads -- even of automobile roads -- in the traditional political manner can be wholly eradicated, or whether they should be."

In a period characterized by an ever-widening collectivism, it may be a backward step to reduce road administration to a narrowly conceived commercial basis. And still more serious questions arise as to whether highway matters are capable of effective administration according to private business criteria, in view of the nature of politics and the character of democratic government. But misgivings on this latter score, it seems, derive from a condition to which we should not easily submit. The very fact that the scope of government is expanding to include functions which have lain in the private business field, or which might properly lie there, renders more necessary than otherwise the formulation of standards which promote economy, and which spring from an appreciation that the requirements of social economy are not altered by the presence of public administration ... The logrolling approach to economic matters... is equally to be eschewed.

Not bad advice that, especially the last. Most importantly, he poses the challenge to his day which carries forward to us today, and which is especially important given that the national course ignored his argument that, even if capital investment in highways may accord the "specific situation," "financing of improvements cannot, in the absence of a toll system, be accomplished on that basis." Go we forward with the watered theory of the user fee, especially when the challenge faced is no longer of connectivity, right of way, or national defense, but of maintenance and congestion. The half-loaf of road pricing may have carried us through the building of the Interstate system. Peterson’s final question to 1932 ought be asked again: what is it we are after, and does it really work:

To this end it is possible that, with the beginning already made in the highway field, a still more extensive application of the commercial conception of road administration will furnish useful practice and experience.

Every day every driver chooses according to rationales that can be explained in analogous economic terms of costs and benefits. The scenic or the less-aesthetically-challenged road may take longer, but the benefits derived, be it relaxation, discomfort, or whatever, is larger than the time and fuel spent acquiring it, or larger than the discomfort thus avoided. The emotional benefits are paid by the disadvantages of the experience avoided. Everyday behavior is built around congestion. The traffic-stuck driver chooses it. No matter how awful the rush hour it exists because the working day begins and ends according to norms most people prefer, and that preference exceeds the penalty of bad traffic. But, as Peterson noted, just because something exists does not make it desirable.

We prefer the flat-out opposition to road solutions than the prevalent surrender to as is. No-growth opposition is at least honest in its antipathy to the automobile Opposing a new road because "it will just be filled up," seems shamefully less bold than opposing it because it holds that many more automobiles. Peterson wrote,

It appears obvious to a motor-minded age that road regulations should not thwart transportation progress.

If this is not so obvious anymore, at least we can debate the question with honesty rather than obfuscated debate of an end to "transportation progress" through state sanction of the traffic jam. If the American people demand upon themselves greater use of mass transit, so be it. We do not recommend the mistakes of the highway system upon other forms of transit. Socialization of airports may not speak the future of air transport. We have already decided, however, that socialized air traffic pricing is wrong. Local and interstate rail suffers from the absence of competition, and from unfair competition from the various and irrational market subsidies that work for and against it. It does not follow that these models define road and highway use.

Nor does application of principle require the purity some who argue market pricing demand of it. The Supreme Court has long recognized, even during the so-called laissez-faire period, that private property is subject to the public weal. Libertines who admonish any limitation upon private contract and property, including, even eminent domain, are not only binding themselves to an impossible purity, they are ignoring the limitations of their own theories, principally, as Peterson warned, the democratic system. Forget it. Theirs is pressure from without, added pull and not the full agenda. We admire the concept of road pricing taken to its logical extreme of competition operating across all roads, down to the four-way local stop that might present the driver with a decision to pay how much to use which road, a choice presented through the competing enticements and market conditions of each path. There will be no perfection in such a system, at least not any more than we find in every other aspect of national life that we leave to the market to define for us -- that is, just about everywhere else in everything else we do outside of our cars and trucks.

It can work, and with or without total privatization. We care less for ownership than for the operative mechanisms of private incentive and competition. If a state or a county proves an effective competitor, all the better. Amtrak is Amtrak not because it is public but because that public ownership has failed. The purity we demand is in practical function, including, of course, political viability.

That said, the "political conception," to use Peterson’s words, is more dangerous than that of the pure libertine, precisely because of the practical side of majoritarian politics. While the current half-a-loaf application of road pricing through the gasoline tax cannot be any worse, that same mistake must be avoided in any incomplete application of road pricing. Back to Peterson:

...it seems sometimes to be assumed that if roads are financed entirely by those who use them, and if funds thus derived are all applied to roads, the desired result will be achieved. But nothing could be further from the truth. The defect is elementary.

The defect is alive and well in the self-financed and otherwise entirely successful New Jersey Turnpike: competition. Continuing from Peterson:

"Any monopoly of a necessity may readily exact from its customers a gross return far greater than may reasonably be committed to conducting and expanding the enterprise.

As does private property, competition as principle exists not for the concept but for the benefit. It is a means, not an end. The "general welfare" is better served in highway management by the pricing mechanism of the user-fee system of tolling than through general financing, or through the gasoline tax and its insulated relation to actual road use.

We either accept the notion of the user fee, or we reject it. If it is at all operative, we must, then seek that which makes it best operate. Connecticut abolished its tolls because of the hassles of toll collection and the dangers of the start-stop toll booths as pronounced by a devastating runaway truck crash in >>19__. New Hampshire, Maryland, and other states have woken to the obvious solution to toll delays by tolling double one direction, under the theory that what comes around goes around, and north bound, or south bound, the fees paid will be the same. Electronic tolling removes the barriers altogether. Although an initial mess, New Jersey’s Easy Pass has proven itself effective, and the connectivity issues of varied systems have been resolved by the profit incentive which has drawn interstate cooperation. Taking it all further, Oregon has considered satellite-based mileage-fee systems to charge per mile used. While problematic, we do not discard this out of hand for any reason other than to question its effectiveness, its constitutionality, and whether it submits itself to political reality. An initial objection would be to any distancing of the mileage fees from the actual road used, which would thereby negate consumer choice of routes. If, on the other hand, the system were confined to particular routes, and priced accordingly, we would find it consistent with and, even, highly adaptable to congestion pricing.

For tolls, the technology is with us. There is no more reason to require continued use of the old turnpike system of gates for those unwilling or unqualified to use an electronic pass than there is to provide automobiles to those without one. The individual burden of the electronic/radio toll no where exceeds the collective burden of toll gates and associated congestion. The ideal system would allow the market to figure this out: if in a competitive system enough drivers resisted the electronic payment, operators would provide cash toll gates to accommodate the client base. Toll gates persists only in the absence of market forces.

The fundamental corollary to road pricing is competition. Without it, pricing is meaningless. The gas tax fails for the disconnect between its inherently weak relation between supply in roads and demand in gasoline. Tolling connects supply and demand. Monopoly interferes. Thus HOV-2 and HOV-3 manage incomplete facsimiles of market conditions and road pricing. Monopolies require that demand conform to supply. By limiting demand to multi-passenger cars, any empty space on HOV lanes reflect the monopolistic -- a.k.a., artificial -- scarcity. The HOV system works if the goal is to increase multiple passenger vehicle use. It fails if the goal is to reduce congestion, to increase road efficiency, or to better manage road financing. The persistence of HOV lanes must be acknowledged as political compromise and not road functionality. HOV is anti-growth. If that is the goal, then Okay; if not, then let’s drop it. We prefer California Governor Schwarzenegger’s explanation in demanding new methods: "Californians can't get from place to place on little fairy wings. We are a car-centered state. We need roads," said Gov. Arnold in announcing a plan in January that could allow private investors to build toll roads." HOV is capitulation to congestion. It defies consumer choice, and it has proved incapable of meeting it.

Regarding HOV, we must clarify why it manages congestion more weakly than road pricing. Firstly, it is rigid. HOV’s exhibits flexibility only in time, and even that is limited. Rather than HOV adapting to traffic patterns, traffic patterns grow around HOV rigidity. Secondly, justifications for HOV lanes based on measuring passenger volume as opposed to vehicle volume defies road consumer preferences. It is self-evident that a market-system that does not adapt to consumer preference cannot survive competitive pressures. HOV lanes exist and can only exist in monopolistic systems. While passenger-weighted systems fail market tests, there is no irony that road pricing provides an incentive for multiple-passenger vehicle use. We might call this competition from within.

In 1980, Louis J. Gambaccini, New Jersey state Commissioner of Transportation announced to readers of The New York Times, "HOV: An Idea Whose Time Is Now." Of designating as HOV-3 the new fourth lanes on a 12-mile "free" section of the Garden State Parkway, he lectured,

Use of the HOV lanes will provide a fighting chance of meeting environmental standards for the air, since there will be fewer vehicles on the road. And because there will be less traffic, those vehicles on the three other lanes will move more expeditiously. The alternative of simply opening the new lanes to all traffic all the time would, based on travel projections, result in seeing this stretch of roadway reach its capacity during rush hours again in 1984-85. And then where do we go? We, as taxpayers, can no longer afford to build unlimited numbers of new highway lanes any more than we can afford, as a society, to ignore the need to conserve energy and protect the environment. The Federal Government recognizes that and now requires that the feasibility of designating HOV lanes be considered in any new road construction using Federal funds.

There’s so much so wrong here, we can only be thankful that 1970s defeatism is done. Most startling is Mr. Gambaccini’s direly empty, static view of the future. Would that a sudden economic spurt in 1983, or, perhaps, a fantastic reversal of New York City’s 1980 bankruptcy lead to far, far more traffic in the region than 1980 ever imagined.