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ence of State Governors as his forum, the President asked the governors for their cooperation and help to work out the details of “ ‘. . . a grand plan for a properly articulated system that solves the problems of speedy, safe, transcontinental travel—intercity communication—access highways—and farm-to-market movement—metropolitan area congestion—bottlenecks—and parking.‘ ’[1] To overcome the accumulated deficiencies, he called for spending $5 billion per year for 10 years, in addition to normal expenditures.[2][N 1]

The President’s bold plan was well received. The conference appointed a Governors Highway Committee to advise the President, particularly in the matter of financing the program. The conference also refrained from further attempts to get the Federal Government to retire from gasoline taxation.

At this time, the President did not have a detailed blueprint for his Grand Plan, and he realized that a great deal of study would be needed before a definite plan could be presented to Congress for action. He appointed a Federal Interagency Committee to study highway policy within the Government and also asked General Lucius D. Clay, who had served as military governor of Germany, to head up an advisory committee of prominent citizens to determine the needs and recommend a financing plan. The Clay Committee, as it was thereafter known, held hearings and enlisted the help of AASHO and outstanding experts from public agencies, the highway industry and highway user groups.

The best estimate of needs came from AASHO which, with the help of the BPR, had updated its estimate of the needs of the Federal-aid systems in 1953. That estimate was $35 billion to make the 673,137-mile Federal-aid system adequate for 1953 traffic. Projecting the needs ahead to 1964 and adding an allowance for other roads not on any Federal-aid system, AASHO and the Committee arrived at a figure of $101 billion for the total capital needs that would have to be met by 1964.[N 2] The Committee estimated that the existing sources of revenue would produce only $47 billion to meet these needs, leaving a financial gap of about $54 billion.[5]

The Clay Committee Report

In December 1954 the Governors Conference Special Highway Committee[N 3] submitted a report recommending that the Government assume the entire financial responsibility for the Interstate System and that Congress continue its 50-50 support for the remaining Federal-aid systems so long as the Government continued to levy excise taxes on motor fuels, lubricants and motor vehicles. The States and local governments, the report continued, should pay for the remaining costs, amounting to about 70 percent of the total program.[7]

The Clay Committee agreed substantially with the governors in this division of the financial burden, but recommended that the States pay 5 percent of the cost of the Interstate System. To finance the Federal share, which they estimated at $31 billion,[N 4] the Committee recommended that Congress create a Federal Highway Corporation with authority to issue $20 billion in 32-year bonds, paying the interest and amortization charges out of the future income from the Federal taxes on fuel and lubricants. The Committee estimated that the cost of the Interstate System financed by this method plus the cost of the regular Federal-aid authorizations continued at the current rate would about equal the yield of the fuel and lubricating oil taxes, projected without increase in rates to 1987.[9]

President Eisenhower received the Clay Committee report, A 10-Year National Highway Program, in January 1955. A few months earlier he had asked for and received from Congress a $6 billion increase in the national debt limit to cover deficits incurred in the Administration’s antirecession program. The President, therefore, welcomed the Clay proposal to finance most of the road program outside the budget, and he included it as a major feature of the Administration’s highway bill which he sent to Congress in March 1955.

Meanwhile, Senator Albert Gore of Tennessee, Chairman of the Senate Subcommittee on Roads, was holding hearings on his own highway bill—an expanded version of the traditional biennial Federal-aid authorization providing $1.6 billion annually of Federal funds which the States would be required to match with $1.27 billion.

Both the President’s bill and the Gore bill came under strong attack in the committee hearings. Former Commissioner duPont testified that the old pay-as-you-go system was too little, too late to meet present needs: that it would take 32 years to complete the Interstate System at the rate proposed by Senator Gore.[10][N 5] The new Commissioner of Public Roads, Charles D. Curtiss, said that according to a poll of the State highway departments, only 19 States would be able to match the Federal funds proposed in the Gore bill, but 43 would be able to match the smaller amount in the Administration’s bill.[11] Senator Harry F. Byrd, Jr., of Virginia, chairman of the powerful Senate Finance Committee denounced the Administration’s plan as a scheme to evade the debt limit and remove the highway program from the control of

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  1. ↑ In calendar year 1953, these normal expenditures amounted to $3.5 billion for State-administered highways, $1.2 billion for local roads and $1.2 billion for urban highways and streets—a total of $5.9 billion.[3]
  2. ↑ The BPR’s study ordered by Congress in 1954 showed that the total of the needs to reach adequacy of all highways by 1964 was $126.1 billion ($100.8 billion for construction, $19.4 billion for maintenance and $5.9 billion for administration).[4]
  3. ↑ This Committee was composed of Governor Walter J. Kohler, Jr., of Wisconsin, Chairman, and Governors Frank J. Lausche (Ohio), Howard Pyle (Arizona), John Lodge (Connecticut), Lawrence W. Wetherby (Kentucky), Paul Patterson (Oregon), Allan Shivers (Texas), and Robert F. Kennon of Louisiana, Chairman of the 1954 Governors Conference, ex officio.[6]
  4. ↑ This total was divided as follows: $25 billion for the Interstate System, including essential urban arterial connections; $3.15 billion for the remainder of the Primary System ; $750 million for the Federal-aid Urban System, $2.10 billion for the Federal-Aid Secondary System and $225 million for forest highways.[8]
  5. ↑ Mr. duPont resigned as Commissioner of Public Roads in December 1954 in order to give his full attention to promoting the President’s highway program. Charles D. Curtiss, a long-time career engineer who had served 11 years as deputy commissioner, was appointed to the vacancy January 14, 1955.
  1. ↑ Bureau of Public Roads Annual Report, 1954, p. 3.
  2. ↑ President Starts Ball Rolling for Bigger Highway Program, Engineering News-Record, Vol. 153, No. 4, Jul. 22, 1954, pp. 21, 88.
  3. ↑ Bureau of Public Roads, Highway Statistics, 1953 (U.S. Dep’t of Commerce, Washington, D.C, 1954) pp. 61, 90, 94.
  4. ↑ Needs of The Highway Systems, 1955-84, H. Doc. 120, 84th Cong., 1st Sess., p. 19.
  5. ↑ Highway Problem is How to Raise $50 Billion, Engineering News-Record, Vol. 153, No. 16, Oct. 14, 1954, p. 21.
  6. ↑ AASHO, supra, note 20, p. 185.
  7. ↑ President Gets Governors’ Highway Report, Engineering News-Record, Vol. 153, No. 24, Dec. 9, 1954, p. 23.
  8. ↑ H. Doc, supra, note 67, p. 21.
  9. ↑ AASHO, supra, note 20, p. 186.
  10. ↑ Battle Joined Over Rival Highway Plans, Engineering News-Record, Vol. 154, No. 8, Feb. 24, 1955, p. 23.
  11. ↑ Highway Hopes Dim, Engineering News-Record, Vol. 154, No. 16, Apr. 21, 1955, p. 26.
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