What was a major effect of the creation of the interstate highway system on the United States?

When Eisenhower pitched the interstate system to Congress, he justified the cost of the project as a national security measure, but he knew the real value of the investment was the effect it would have on the U.S. economy in the short and long run. Dissertational research by Daniel Leff Yaffe of the University of California, San Diego estimates that the output effects of building the interstate highway system has had a long-run relative multiplier of 1.8, meaning that every dollar spent on interstates has led to $1.80 of additional economic output. In 1991, one year before its completion, the FHWA issued the final cost estimate of the interstate system at $128.9 billion, over five times the original estimated cost in 1959 — $27 billion — adjusted for inflation. Assuming the long-run multiplier is 1.8, the interstate highway system has generated over $283 billion in additional economic output.

Since the interstate highway system was completed in 1992, the federal government has continued to provide funding for interstates to states through a series of grant programs collectively known as the Federal-Aid Highway Program. Research published in NBER Macroeconomics Annual by San Francisco Fed Economists Sylvain Leduc and Daniel Wilson examined current federal public infrastructure investment and found that federal highway grants given to states boost economic activity in the short and medium term. Overall, each dollar of current federal highway grants received by a state raises that state's annual economic output by at least $2.

Tapping the Brakes

Today, as in the 1950s, the interstate system has critics. For example, some people are calling for the "defederalization" of the transportation system to change the incentives created by its current top-down, federally driven decision-making. In a 2017 working paper, Santiago Pinto, a Richmond Fed economist, examined the economic implications of shifting from an institutional arrangement in which transportation decisions are made in a centralized way to one that gives a larger role to local or regional agencies. He found that in a decentralized arrangement, local transport authorities tend to overinvest in transportation that connects the city's residential areas to local employment centers — compared to a centralized system — but tend to underinvest in transportation that connects cities to one another.

A handful of defederalized transportation authorities, including the Chicago Transit Authority in Illinois, the Metropolitan Transportation Authority in New York, and the Jacksonville Transportation Authority in Florida, exemplify Pinto's model of a decentralized transportation authority. "An important contribution of these agencies is that transportation decisions would tend to be coordinated among participants, so they would internalize their impact on the local areas," he says.

Another consequence of the interstate was that many small towns, centered around old state roads and U.S. routes, were left in the dust after the construction of larger interstate roads. These small towns suffered financially after the construction of the interstate because people were able to bypass these towns in favor of the faster route of transportation. One example of a small town negatively affected by the interstate is Peach Springs, Ariz. In the 1880s, Peach Springs was built as a watering station for steam locomotives. The railroad necessitated the construction of train facilities, housing for railroad workers, a terminal, and a hotel. During the next few years, the town's several businesses catered to travelers and railroad workers. Additionally, Peach Springs advertised itself as the first gateway to the Grand Canyon to attract tourism dollars. When Route 66 was built, Peach Springs prospered and built motels, diners, and gas stations to attract travelers. But when I-40 was built in the 1960s and 1970s, it bypassed Peach Springs entirely. Of the 32 active businesses in Peach Springs before the bypass in 1978, only two businesses remain in the town today: a grocery store and a motel.

The development of the interstate highway system led to economic growth, but it has had mixed results for the quality of life for the people who use it. Some argue the time savings from reduced commuting times has translated into additional time for preferred activities. On the other hand, some argue that the time savings from using interstates are reduced or eliminated because of induced traffic from induced highway demand — that is, increasing the supply or quantity of roads makes people want to use them more. Research published in the American Economic Review by Gilles Duranton of the University of Pennsylvania and Matthew Turner of Brown University examined the effect of lane kilometers of roads on vehicle-kilometers traveled (VKT) in U.S. cities. They found that VKT increases proportionately to roadway lane kilometers for interstate highways, and that the sources for this extra VKT are increases in driving by current residents, increases in commercial traffic, and migration. "The provision of roads essentially does nothing for congestion," Duranton explains. "When new roads are built, they fill up very quickly, and travel conditions do not change."

In some respects, the construction of the interstate has played a positive role in U.S. urban areas, despite initially being excluded from early stages of interstate planning. The interstate highways increase mobility in urban areas by reducing travel times for cars, buses, and trucks, while lessening traffic congestion on non-interstate roads. The addition of the interstate also allowed cities to expand their physical size. "In a world where people can only walk or ride a horse, cities cannot be very big, but in a world with widely available transit and cars, cities can grow a lot bigger," says Duranton.

The interstate connected suburban and rural communities to city centers, but it divided and destroyed urban neighborhoods, particularly in minority communities. For example, within the Fifth District, neighborhoods in Southwest Washington, D.C., were sacrificed to construct I-395, forcing those residents to move to other areas. In an article published in 2007 in the Quarterly Journal of Economics, Nathaniel Baum-Snow of the University of Toronto's Rotman School of Management studied the effects of interstate highway construction on population in central cities. His results showed that between 1950 and 1990, the population of U.S. central cities in the United States declined by 17 percent, on average, despite the overall population growth of 72 percent in metropolitan areas. His model estimated an 18 percent population reduction for each addition of a new highway though a central city. His findings showed that if the interstate highway system had not been built, central city populations would have grown by about 8 percent, on average, implying highways played a substantial role in suburbanization in the United States.

Today, many cities are reconsidering highway policies that pushed elevated interstate highways through central cities and caused damage to housing, businesses, and neighborhoods. Since the 1970s, at least two dozen U.S. cities have contemplated removing central-city elevated expressways. So far, a few cities have successfully removed or modified such highways: Boston replaced its Central Artery with a network of tunnels, known as the Big Dig; New York's West Side Highway is now a street-level boulevard; and Harbor Drive in Portland, Ore., is now a waterfront park.

Conclusion

In the 65 years since the creation of the interstate highway system in the United States, the growth of the economy and the quality of life and mobility of Americans has substantially increased. Yet the future has turned out to be more complicated than the one presented by Futurama; the transportation arteries presented in miniature in 1939 have delivered challenges as well as benefits after being brought to life.

READINGS

Duranton, Gilles, Peter M. Morrow, and Matthew A. Turner. "Roads and Trade: Evidence from the U.S." Review of Economic Studies, April 2014, vol. 81, no. 2, pp. 681-724. (Article available with subscription.)

Herzog, Ian. "National Transportation Networks, Market Access, and Regional Economic Growth." Journal of Urban Economics, March 2021, vol. 122, pp. 1-17.  (Article available with subscription.)

Karas, David. "Highway to Inequity: The Disparate Impact of the Interstate Highway System on Poor and Minority Communities in American Cities." New Visions for Public Affairs, April 2015, vol. 7, pp. 9-21.

On June 29, 1956, President Dwight D. Eisenhower signed legislation funding the construction of the U.S. Interstate Highway System (IHS)--something Americans had dreamed of since Detroit starting building cars.

The Missouri Highway Commission awarded the first contract to begin building the interstate along the famous Route 66 in rural Laclede County, 160 miles southwest of St. Louis. However, construction on the first section of interstate actually began in St. Charles County, Missouri, on Aug. 13. Kansas and Pennsylvania have also made competing claims that their states were first to possess sections of interstate.

No matter who was first, the enthusiasm for a uniform system of roads, bridges, and tunnels was very high in 1956, nearly fifty years after the introduction of Henry Ford's Model T automobile. The building of the IHS, formally known as the Dwight D. Eisenhower National System of Interstate and Defense Highways, proceeded rapidly throughout the country, and by the early 1990s, nearly 45,000 miles of interstate highway were complete.

In order to understand the IHS's importance in U.S. society, let's examine its history. President Eisenhower is widely regarded as the catalyst for the IHS. His motivations for a highway network stemmed from three events: his assignment as a military observer to the First Transcontinental Motor Convoy, his experience in World War II where he observed the efficiencies of the German autobahn, and the Soviet Union's 1953 detonation of the hydrogen bomb, which instigated a fear that insufficient roads would keep Americans from being able to escape a nuclear disaster.

THE FIRST TRANSCONTINENTAL MOTOR CONVOY

In the summer of 1919, Lt. Col. Eisenhower was a dejected midcareer Army officer. He narrowly missed out on overseas service during World War I and anticipated a reduction in rank as the Army shrank and prepared for peacetime operations. Adding to his discontent, he was physically separated from his wife and infant child because of a shortage of military housing.

Eisenhower was assigned as an observer to an unprecedented military experiment--the First Transcontinental Motor Convoy. The operation was a road test for military vehicles and was used to identify the challenges in moving troops from coast to coast on the existing infrastructure. The excursion covered 3,200 miles from Washington D.C. to San Francisco. It included 79 vehicles of all sizes and 297 personnel.

During the expedition, Eisenhower gained some insight for the creation of a network of connected roads and bridges. Eisenhower's report to Army leaders focused mostly on mechanical difficulties and the condition of the patchwork of existing roads. He reported a mix of paved and unpaved roads, old bridges, and narrow passages.

Narrow roads caused oncoming traffic to run off the road and encounter added difficulty when reentering the roadway. Some bridges were too low for trucks to pass under. Eisenhower pointed out that the roads in the Midwest region of the United States were impracticable, but the roads in the east were sufficient for truck use.

Eisenhower singled out a western section of the Lincoln Highway, a transcontinental road with routes through Utah and Nevada, as being so poor that it warranted a thorough investigation before government money should be expended. He praised California for having excellent paved roads. Lastly, he observed that the different grades of road determined much of the convoy's success.

WORLD WAR II

During World War II, as the supreme Allied commander, Gen. Eisenhower was the architect of the defeat of Nazi Germany. As Allied armies raced across France and into Germany, he marveled at the vast highway system built by the Germans prior to the war. Eisenhower wrote in his presidential memoirs, "During World War II, I had seen the superlative system of German autobahn--[the] national highways crossing that country."

This advanced European highway system helped the Allies. The autobahn aided the Allied victory by enabling the Allies to efficiently resupply forces that pursued the German Wehrmacht across France and into Germany. The famous Red Ball Express was a magnificent achievement that kept swift-moving Allied field armies resupplied.

In August and September of 1944, an around-the-clock operation of 6,000 trucks delivered materiel to forces on the move. It involved a 300-mile divided road that eventually converted to a super highway. The road extended from the Normandy beachhead to terminals near Paris. Later, a second super highway extended from Paris into Germany.

THE CLAY COMMITTEE

Instrumental in the logistics success following the D-Day landings was Lt. Gen. Lucius Clay. He was a key aid to Eisenhower during the war and later when Eisenhower ascended to the presidency. Eisenhower knew Clay, a West Point-trained engineer, was a respected troubleshooter, an effective administrator, and politically adept.

In 1954, Eisenhower appointed Clay to head the President's Advisory Committee on the National Highway System. The so-called "Clay Committee" began work to develop a national highway plan, and its outcome was a report to Congress on the National Highway Program.

The resulting "Grand Plan" obligated $50 billion of federal funds over 10 years to build a "vast system of interconnected highways." The committee based its proposal on four points. The first point appealed to safety. It cited 36,000 traffic fatalities each year and the multibillion dollar effect on the economy.

Next, the report cited the physical conditions of existing roads and their effect on the cost of vehicle ownership. It was thought poorly maintained roads adversely affected the economy by increasing transportation costs, which were ultimately borne by the consumer.

The third point involved national security. The pervasive threat of nuclear attack in the United States called for the ability to execute the emergency evacuation of large cities and the quick movement of troops essential to national defense.

The last point appealed to the health of the U.S. economy. Improvements in transportation must keep up with the expected increase in U.S. population. Moreover, road improvement is essential to the economy and an efficient use of taxpayer money.

The Clay Committee concluded its report by stating that the positive economic attributes of the highway system were the potential for economic growth and the well-being of the economy through "speedy, safe, transcontinental travel" that could improve "farm-to-market movement."

THE COLD WAR

The IHS was the largest public works project undertaken in the Unites States and came at a time when the Cold War consumed not only a large part of the federal budget but also the attention of the U.S. public.

The Cold War played a pivotal role in the creation of the IHS. Shortly after Eisenhower took office in 1953, Soviet leader Josef Stalin died, setting off a power struggle in the Kremlin. It was not until September that Nikita Khrushchev emerged as the general secretary of the Communist Party of the Soviet Union.

On Aug. 12, 1953, the Soviets exploded their first hydrogen bomb, thus moving closer to the United States in nuclear parity. It was unsettling to have a superpower with an unstable government armed with the latest nuclear weapons technology. This event further jolted an already rattled U.S. public, which routinely engaged in civil defense drills. Citizens built bomb shelters, stockpiled food, and prepared for imminent nuclear war.

In a July 1954 speech to the Governors' Conference, Vice President Richard Nixon expressed concern over the "appalling inadequacies" of the existing U.S. road infrastructure and its inability to meet the needs for responding to a national emergency on the scale of atomic war. Nixon mentioned atomic or atomic war no less than 10 times in the speech.

This topic was on the minds of most Americans. Seventy-nine percent of the public thought a nuclear conflict between the United States and the Soviet Union was imminent. In the event of war, 70 million urban residents required evacuation by road.

The Clay Committee also warned of the need for large-scale evacuation of cities in the event of nuclear war. Furthermore, it cited federal civil defense authorities who were worried that a withdrawal from urban areas would be the largest ever attempted. The Committee soberly stated, "The rapid improvement of the complete 40,000-mile interstate system, including the necessary urban connections thereto, is therefore vital as a civil-defense measure."

NATIONAL DEFENSE AND THE TESTING PHASE

A large scale urban evacuation drill conducted in June 1955 drove home the importance of an evacuation plan. The ensuing confusion coupled with crowded evacuation routes seemed to make President Eisenhower's case for the IHS. Moreover, the administration was serious about the role of a uniform system of roads for national defense and directed Department of Defense (DOD) involvement.

When the IHS began in earnest, a testing facility was created in central Illinois to evaluate pavement, road standards, and construction techniques, among other things. The DOD contributed equipment and personnel for the tests. Military leaders knew from their experiences in the two previous world wars that roads were vital to national defense. During World War I, military truck traffic destroyed roads. In World War II, defense plants were often supplied by truck, but the lack of road standards sometimes impeded timely delivery.

Over a two-year period, Army trucks drove 17 million miles on the test roads. Some vehicles carried blocks of concrete in an effort to see how long a 24-ton truck would take to destroy roads and bridges. Highway building and maintenance standards were developed from the tests.

THE INTERSTATE WE KNOW

Congress passed the Federal-Aid Highway Act of 1956 creating federal funds for interstate highway construction. As the IHS developed so did its ability to support national defense. For example, throughout the system, mile-long stretches of concrete pavement double as emergency landing strips for military aircraft. Many Army posts, especially where division-level units are garrisoned, are near interstate highways.

For example, the 1st Infantry Division at Fort Riley, Kansas, is adjacent to I-70, and the 1st Armored Division at Fort Bliss, Texas, is close to I-10.

During Operations Desert Shield and Desert Storm, the IHS contributed to the success of mobilizing the military for war in the Middle East. Military planners were emboldened by the ability to move personnel and materiel with ease during national emergencies.

AN AGING SYSTEM

Despite the convenience and ease of movement, the IHS is showing its age. When funding was appropriated in 1956, planners knew that, at some point, roads, bridges, and various infrastructure would deteriorate. The IHS was expected to last only into the 1970s when improvements would be needed. The 1956 appropriation ran out in 1972 and current funding is sustained by the motor fuel tax, which is funneled into a trust fund.

The IHS's disrepair was highlighted in July 2007 with an unfortunate tragedy in Minnesota. On a summer day near Minneapolis, a section of a steel arch bridge on Interstate 35 collapsed into the Mississippi River. The accident killed 13 people and injured another 145.

The accident remains one of the worst bridge failures in the U.S. history, and it highlights the poor condition of the nation's infrastructure. At the time of the incident, approximately 150,000 of the nation's nearly 600,000 bridges "were considered either structurally deficient or functionally obsolete," according to a 2012 ABC News report. Since the I-35 incident, political leaders have called for a major investment in the nation's infrastructure.

Most Americans see the IHS for what it is: a quick, efficient, and convenient means of travel. The automobile culture, which hit its stride in the 1960s, thrived on networks of paved roads and inexpensive gasoline. Along the way, an entire segment of the economy was born. Businesses catered to travelers. Hotels, motels, restaurants, and service stations appeared at interstate exits to serve weary motorists.

The IHS is an icon and marvel of man's ingenuity. Great leaders such as Dwight Eisenhower and Lucius Clay had the foresight to conceive and build a network of interconnecting highways that helped to shape and define postwar America. Who from the current generation of leaders will repair, rebuild, and expand the IHS?

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Lee Lacy is a retired Army Reserve lieutenant colonel and an assistant professor at the Army Command and General Staff College at Fort Leavenworth, Kansas. He is a graduate of the University of Arkansas and holds a master's degree from Webster University.

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This article was published in the March-April 2018 issue of Army Sustainment magazine.

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