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November 25,1977
Nation of Subway Riders?
Not very likely. And we may not turn
into a nation of bus riders either, despite an encouraging increase in transit
utilization in the past several years.
Government subsidies are now beginning to refurbish the transit industry in
a massive way, and the result could be
a 2 1/2-fold increase in patronage by
1990. But even with a gain of that
magnitude, transit's share of total
ridership would remain where it is today, at about 6 percent.
The trend in transit patronage has
been sharply downward for most of
the past generation. In 1950, there
were 13.8 billion total revenue passengers - about three-fifths bus riders,
and the rest street car and rapid-transit
(fixed rail) passengers. A quarter century later, there were only 5.6 billion
revenue passengers- about threefourths bus riders. Transit planners, at
their most optimistic, hope to do
nothing more by 1990 than to restore
transit patronage to what it was in the
much smaller economy of 1950.
A survey of commuting patterns, prepared in connection with the 1974
housing survey, emphasizes the modest level of transit patronage. In that
year, only a
over a million of the
33 million home owners relied on mass
transit to get to work - not many
more than those who walked to work.
(However, the proportion was larger
among the 17 million renters.) Not surprisingly, the private auto was by far
the chief means of getting to work, being used by 73 percent of the home
owners and 61 percent of the renters.
3
And in most cases, the commuter
drove alone, since only about one
commuter out of seven belonged to a
carpool.
Why drive?
The private auto is used for about 87
percent of all trips taken in U.s. cities.
This is not necessarily because of the
perversity of the consumer or his ignorance of economics. In the words of
the Brookings' Institution's Wilfred
Owen, "'Part of the reason can be ascribed to public policy that has favored the car, but the basic reason
why most urban trips are made by
automobile is that the family car, despite its shortcomings, is superior to
any other method of transportation*
(Transportation for Cities). On a service basis, the auto generally wins out
on time savings alone, since the average travel time for the work trip is 21
minutes for the motorist and 37 minutes for the transit rider.
The automobile offers comfort, privacy, limited walking, minimum waiting,
and freedom from schedules or
routing. It guarantees a seat, protects
the traveler from heat, cold' and rain;
provides space for baggage; carries extra passengers at no extra cost; and
for most trips, except those in the center city, gets there faster and cheaper
than any other way. The transit rider, in
contrast, must walk, wait, stand, and
be exposed to the elements. The ride is
apt to be costly, slow, and uncomfortable because of antiquated equipment,
poor ventilation, and service that is
congested in rush hours, infrequent
(continued on page 2)
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during any other time of day, inoperative at night, and practically
nonexistent in suburbia.
governments to shift road money to
bus and rail alternatives.
Owen thus concludes: "'{Vlosturban
areas of the United States are totally
dependent on highway-oriented transportation, and in particular on the private automobile. The idea that there
can be a return to rail transportation
or other public transit on a scale that
will make a decisive change in transport patterns is an illusion."
For a while, it seemed that most of the
Federal funds would go into the creation of advanced (fixed rail) rapidtransit systems, typified by San Francisco's BART and Washington's Metro.,
But the escalating costs and rather
modest benefits of the BART system
raise doubts about the future of other
systems now being built or planned in
cities such as Baltimore, Miami, Atlanta,
Honolulu and Detroit. According to
University of California Professor Melvin Webber, "'BARThas become the
ultra-modern version of the New Haven and Long Island commuter
railroads - not the first of a new breed
of urban transport, but perhaps the
last of a dying species."
Ridingthe rails
Why not drDve?
If all this is so, why has the Federal government undertaken its multi-billion
dollar effort to reverse the tide in favor
of mass urban transit? Briefly, this represents the nation's response to traffic congestion and pollution, to the
mounting social costs of an automobile-dominated environment, and
above all, to our dependence on foreign oil to keep the metropolis moving. Between 1972 and 1977, the bill
for oil imports has jumped from $5 billion to $45 billion a year, reflecting not
only soaring prices but also an 80percent increase in oil-import volume.
In 1964 Federal assistance to public
transit totalled a modest $30 million; by
1975 it had reached an annual level of
$1.4 billion, and was rising swiftly. Recent legislation has established the first
long-term commitment to transit, providing not only for capital investment
but for operating subsidies as well.
Moreover, the Federal highway program has been greatly expanded in urban areas and modified to allow local
2
Having spent $1.6 billion - double the
planned amount - to reverse the trend
of the auto-highway system, BARThas
attracted only half the passengers expected and is serving a mere 2
percent of the trips within its district.
Lessthan a third of its riders have been
diverted from private cars; about half
have come from car pools and buses.
High capital costs and spiraling operating costs, combined with low patronage, have made the average BARTride
cost about twice as much as the bus
and about 50 percent more than the
private car. According to Webber, the
system could buy a fleet of new buses
sufficient to carryall BART's passengers projected to 1980 for less than
$40 million, or about half what BART
Billions
15
$ Billions
4.0
Transit
patronage ,....
y
3.0
10
2.0
1.0
1950
1955
pays every year for mortgage payments alone.
BART's designers assumed that commuters choose private cars because
of their high speed, so they built into
BART the expensive capabilities of 80mile-per-hour service. But apparently
commuters were less interested in
speed than in the door-to-door, nowait, no-transfer features of the private auto. Would-be BART riders thus
prefer using either the buses that
come close to their homes or their private cars parked out front.
Back on the bus
The inflexibility and high costs of BART
and other fixed-rail systems tend to
rule them out of contention as the final answer to the urban-transportation
problem, despite the billions of Federal funds allocated to this purpose. (The
argument isn't completely one-sided,
since fixed-rail supporters claim that
these systems will pay back their investment over the long run, and in the
meantime will reduce the pressure on
highway traffic.) One of the leading
critics of fixed-rail systems has been
President Carter, who last spring sent a
handwritten note to Transportation
Secretary Adams: suspect that many
of the rapid-transit systems are grossly
over-designed. We should insist on: a)
off-street parking, b) one-way streets,
c) special bus lanes, d) surface rail/bus
as preferable alternatives to subways."
Wilfred Owen argues that transit planners should make better use of the al-
3
ready sizable transport investment in
urban areas, especially by utilizing relatively low-cost bus systems. This strategy would emphasize a variety of
policies (traffic management, and tax
and pricing measures) to discourage
the use of cars, as well as flexible work
schedules and other measures to improve traffic efficiency. Under this approach, he claims, capital costs for
transit and urban highways could be
held well below $3 billion a year, or
half the recent level.
Indeed, in Owen's eyes".the l1(baotransportation problem is only one
facet of a more basic problem.
reordering of national priorities calls for
avoiding excessive investments in
transportation and dedicating resources instead to the transformation
of blighted urban areas and to more
self-contained communities designed
to reduce transportation needs and
thus energy needs. Much urban traffic
arises from journeys that are either an .
escape from poor surroundings or a
necessity imposed by the disorderly
layout of cities. Efforts to remedy these
conditions through urban redevelopment and a more rational process of
suburbanization could reduce the
length of home-to-work trips and
eliminate some trips altogether. Trans!
forming the cities could substitute access for mobility. Meanwhile, the task
is to make effective use of the
multibillion-dollar highway network
that is already in place, including such
measures as the operating subsidies
that are now being used to stimulate
increased bus patronage.
William Burke
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BANKINGDATA-TWELFTH FEDERAL
RESERVE
DISTRICT
(Dollar amounts in millions)
Selected Assets and liabilities
Large Commercial Banks
Amount
Outstanding
Change from
year ago
Dollar
Percent
Change
from
11/9/77
11/2177
Loans (gross, adjusted) and investments*
Loans (gross, adjusted)-total
Security loans
Commercial and industrial
Real estate
Consumer instalment
U.s. Treasury securities
Other securities
Deposits (less cash items)-total*
Demand deposits (adjusted)
U.s. Government
Time deposits-total*
States and political subdivisions
Savings deposits
Other time deposits+
Large negotiable CD's
104,712
81,290
2,740
24,633
26,435
13,912
8,443
14,979
100,541
29,716
162
68,587
5,224
31,692
29,519
11,501
+ 1,390
+ 858
+ 783
+ 163
+ 147
+ 17
+ 192
+ 340
+ 1,541
+ 920
- 73
+ 512
- 57
+ 25
+ 437
+ 588
Weekly Averages
of Daily figures
Weekended
Member Bank Reserve Position
ExcessReserves(+)/Deficiency (-)
Borrowings
Net free( +)/Net borrowed (-)
federal funds-Seven Large Banl(s
Interbank Federal fund transactions
Net purchases (+)/Net sales(-)
Transactions with U.s. security dealers
Net loans (+)/Net borrowings (-)
+ 13,540
+ 11,561
+ 974
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
Weekended
+
+
2,096
5,361
2,013
229
2,208
10,316
3,551
180
6,309
399
2,878
3,049
1,207
-
+
+
+
+
+
+
+
+
14.85
16.58
55.15
9.30
25.44
16.92
2.64
17.29
11.43
13.57
52.63
10.13
8.27
9.99
11.52
11.73
.Comparable
year-ago period
11/9/77
11/2177
+
21
225
204
+
1
228
227
+
1,415
+
1,430
+
366
+
575
+
280
+
706
3
0
3
*Includes items not shown separately. tlndividuals, partnerships and corporations.
Editorial comments may be addressed to the editor ( William Burke) or to the author ••••
Information on this and other publications can be obtained by calling or writing the Public Information
Section, federal Reserve Bank of San francisco, P.O. Box 7702, San francisco 94120. Phone (415) 544-2184.
@FedFRASER