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The confusion that is inherent in applying H. R. 2531 and H. R. 4862, to air carriers, based, as I say, upon an innocent misunderstanding, is something which we hope that your committee will not permit

to occur.

Some 20 years ago, in 1919, a committee of the Congress produced a report based upon the lack of properly informed testimony, and America has suffered for the last 20 years because of that report. Your able chairman wrote a minority report against it. He was opposed to the majority report. But that majority report is still referred to today and still is one of the detriments to American aviation, and it has been a detriment all that time. I hope that this committee will not make the same mistake that that earlier committee made.

Some 20 years ago a mistake similar to that in the present bills was made in aviation when the War Department and our whole Federal Government, based upon the euphonious term "communications," said that military aviation was a mode of communication, nothing else, and therefore put it under the body that handled military communications.

As I have just said, we then placed aviation under the body that handled communications. We put all aviation pertaining to the present and future wars under the Signal Corps, and what was the result of then putting aviation under the Signal Corps?

When we went into Mexico for the sole and exclusive purpose of chasing Villa, within 2 months every military airplane we had in America was grounded. That the landing wires instead of flying wires broke while in flight is the only reason we did not fall out of the heavens.

American aviation, military and civil, was grounded in 60 days. Our troops suffered at Carrizal. Why? Because we did not then have a single airplane, military and civilian, in Mexico fit to fly, to do the scouting; and our ground forces were defeated, suffered a horrible defeat at Carrizal because we had blindly lumped aviation with all "communication."

That was a mistake then, just as big a mistake as it would be now to put aviation under the regulation here proposed a mistake made because of a euphonious slogan. Let this generation not repeat the mistake of a past generation.

A year later additional results of that mistake became evident when we went to war in 1917 with only 26 qualified fliers in all America to handle the whole Army program. And you know that, at the beginning, aviation in the World War was a fiasco. It took a year of intensive wartime activity to recover from that mistake made due to a euphonius slogan.

In 1934 it was my privilege to serve on a board created by direction of the President to study what we could do to improve the Army Air Corps. After we finished our labor the President spoke to our committee and said, "Gentlemen, I trust that you have not increased my labors as President of the United States."

We asked him what he meant, and we told him what our report was to be. He said, "I am grateful for that report." He said, "You have decided the matter. Now, let us agree to leave the Army Air Corps alone for at least 10 years and give it a chance to progress under the new theory which you have recommended."

Now we ask that same identical frame of mind for civil aviation. Give us a chance to show what we can do under the Civil Aeronautics Act.

AVIATION IS A SPECIAL PROBLEM

H. R. 2531 was introduced on January 13, 1939. Eleven days later, on the day that Dr. Splawn, of the Interstate Commerce Commission, appeared as your first witness, the President wrote a letter which we suggest be inserted in the record. With your permission we will quote three or four excerpts from the letter. I quote the following:

Civil aviation is clearly recognized as the backlog of national defense in the Civil Aeronautics Act which set up the effective machinery for a comprehensive national policy with respect to the air.

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Underlying the statute is the principle that the country's welfare in time of peace and its safety in time of war rests upon an economically and technically sound air transportation system,

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This new national policy set up by the Congress views American aviation as a special problem requiring special treatment. Aviation is the only form of transportation which operates in a medium which knows no frontier but touches alike all countries of the earth. One fact which stands out is that hardly another civil activity of our people bears such a direct and intimate relation to the national security as does civil aviation.

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With your your permission, we have quoted these excerpts from the President's letter. I ask that this brief four-paragraph letter be

made a part of the record.

Mr. CROSSER. Very well.

(The letter referred to is as follows:)

To the National Aviation Forum:

THE WHITE HOUSE,

Washington, D. C., January 24, 1939.

Civil aviation is clearly recognized as the backlog of national defense in the Civil Aeronautics Act, which set up the effective machinery for a comprehensive national policy with respect to the air.

Underlying the statute is the principle that the country's welfare in time of peace and its safety in time of war rests upon the existence of a stabilized aircraft production-an economically and technically sound air transportation system, both domestic and overseas-an adequate supply of well trained civilian pilots and ground personnel.

This new national policy set up by the Congress views American aviation as a special problem, requiring special treatment. Aviation is the only form of transportation which operates in a medium which knows no frontiers but touches alike all countries of the earth. One fact which stands out is that hardly another civil activity of our people bears such a direct and intimate relation to the national security as does civil aviation. It supplies a reservoir of inestimable value to our military and naval forces in the form of men and machines, while at the same time it keeps an industry so geared that it can be instantly diverted to the production of fighting planes in the event of national emergency.

I hope the forthcoming National Aviation Forum will give serious thought to the many phases which enter into aeronautics as a national problem. FRANKLIN D. ROOSEVELT.

PRESENT REGULATION SATISFACTORY; NO NEED FOR CHANGE

Mr. GORRELL. May we have the privilege of following up the quotation of the President by a quotation from Mr. Mapes, of your committee. It is in the Congressional Record of June 11, 1938, on page 11702, and was uttered during the debate on the Civil Aeronautics Act. Of that act he said:

It

It is well drafted and covers the subject in a very satisfactory manner. is a good bill and ought to be passed. It meets with very general approval of the industry and those who have made a study of the subject as well as of the Members of the House who have been the most instrumental in piloting it through Congress.

And then, may we quote an excerpt from the remarks of Mr. Wadsworth of your committee?

Mr. Wadsworth, in speaking in the same debate, said:

It is a bad policy to have two agencies of the Government trying to do the same thing.

That statement of Mr. Wadsworth on two agencies of the Government doing the same thing would apply both to H. R. 2531 and H. R. 4862, insofar as they include air carriers.

And may we have the privilege of quoting from your chairman. He said in reference to the Civil Aeronautics Act:

The important thing is to do the job right. The plan worked out by the subcommittee provides a more efficient method for covering these duties than any existing set-up of the Government.

That is from the Congressional Record of May 7, 1938, on page 8500.

Then one more quotation from your chairman. Again, in the debate on the Civil Aeronautics Act, he said, as recorded in the Congressional Record of May 9, 1938, page 8597:

The question of rate coordination is not now, and for some time to come will not become, an acute problem as between air and surface transportation.

What has happened since Chairman Lea then spoke that would change the situation? Nothing. Indeed, the financial condition of the railroads, we are told, has improved since the Civil Aeronautics Act was being considered last year by this committee. When Mr. Lea spoke, as just indicated, and later when that act was passed, the Congress had before it the President's message of April 11, 1938, on the subject of Immediate Relief for Railroads, together with the report to the President submitted in June 1938 by Chairman Splawn and two of his associates of the Interstate Commerce Commission, discussing the railroad problem. That is the report of the Committee of Three. All the facts which led Chairman Lea to make his statement of last May, quoted above, still apply, and with exactly as much force.

We trust that you may find it in accordance with your informed will to eliminate all forms of civil aeronautics from the pending legislation. As we advised you in 1937 and 1938, civil aviation is indivisible. This we shall again explain later. Foreign aviation cannot be separated from interstate aviation nor can overseas aviation be separated from either foreign or interstate. Civil aviation is indivisible.

SUMMARY AND CONCLUSIONS

The two bills before this committee, H. R. 2531 and H. R. 4862, vitally affect civil aviation and particularly air carriers.

EXISTING LAW AFFECTING AIR CARRIERS

The Civil Aeronautics Act of 1938 sets up the Civil Aeronautics Authority. No common carrier by air can operate in interstate overseas, or foreign commerce, and no common carrier or contract carrier by air can carry the mail without a certificate of convenience and necessity issued by the Authority, section 401. Rates of compensation for air-mail transporation are fixed by the Authority, section 406. Common carriers by air must file tariffs with the Authority and adhere to them and cannot engage in unreasonable or discriminatory practices, sections 403 and 404. The Authority regulates such carriers' books, accounts, and records, section 407. Consolidations and interlocking interests are subject to the Authority's approval, sections 408 and 409. And all rates of common carriers for transporting passengers and property in interstate air commerce can be fixed by the Authority; in overseas air commerce the maxima and minima of such rates can be fixed; and in foreign air commerce discriminations in such rates can be removed, section 1002. In addition, the Authority has extensive powers to regulate operations of all civil aeronautics in the interest of safety, title VI.

The care and consideration which were devoted to the formulation of the Civil Aeronautics Act are evidenced by the statement of Chairman Lea, in opening debates on the bill in the House, when he said:

The important thing is to do the job right. The plan worked out by the subcommittee provides a more efficient method for covering these duties than any existing set-up in the Government. Congressional Record (pamphlet copy) for May 7, 1938, at page 8500.

And after the bill had passed through the trials of debate and conference, Mr. Mapes rendered it this tribute:

It is well drafted and covers the subject in a very satisfactory manner. It is a good bill and ought to be passed. It meets with very general approval of the industry and those who have made a study of the subject as well as the Members of the House who have been the most instrumental in piloting it through Congress. Congressional Record (pamphlet copy) for June 11, 1938, at page 11702.

EFFECT OF PENDING BILLS ON EXISTING LAW

The two bills now under consideration would accomplish the following:

H. R. 2531 vests in a reorganized I. C. C. the ultimate and final power, superior to the power of the C. A. A., to fix minimum rates to be charged by common carriers by air in transporting passengers and property in interstate and in overseas commerce. In addition, it would give the same power to the I. C. C. respecting minimum rates in foreign commerce, although 9 months ago Congress deliberately refused to provide rate-fixing for such commerce.

H. R. 4862 takes away from the Civil Aeronautics Authority and transfers to the I. C. C. (1) all powers to fix rates to be charged and practices to be followed by common carriers by air in transporting passengers and property in interstate commerce (including commerce in and with the territories and possessions); (2) all powers respecting filing and adhering to tariffs; (3) all regulations respecting discriminations; (4) all regulations of books, accounts, and records; (5) powers to require reports; (6) all powers respecting consolida

tions and interlocking interests. In addition, it vests in the I. C. C., roughly, the same powers respecting contract carriers by air, a matter intentionally not covered by the last Congress in drafting the Civil Aeronautics Act.

Thus each bill would create sharply divided jurisdiction between two Government agencies. H. R. 2531 would give to the I. C. C. the final word with respect to a most important regulatory power, with the Civil Aeronautics Authority a subordinate agency. H. R. 4862 would leave to the Civil Aeronautics Authority the power of granting certificates of convenience and necessity and of fixing mail pay, and all other economic regulation of air carriers would be vested exclusively in the I. C. C.; whereas for contract carriers by air economic regulatory powers not now possessed by the Civil Aeronautics Authority would be given to the I. C. C., leaving safety and mail regulation in the Civil Aeronautics Authority.

CURSORY STUDY OF PENDING BILLS' EFFECT ON AVIATION CONTRASTED WITH STUDY GIVEN CIVIL AERONAUTICS ACT

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H. R. 4862 was, it appears, prepared by a committee representing the railroads and H. R. 2531 is also response to railroad problems. At no time, so far as we have been able to ascertain, was anyone in the field of aviation consulted in the preparation of either bill.

The air carriers now have 30 minutes to discuss the matter with your committee. Nor will we be able to present the case of the contract carriers by air who are vitally concerned. This committee, the railroads' Committee of Six, the whole Congress, indeed, know little or nothing about the contract carriers by air or the nature of their problems, although they are a very important segment of the industry, scattered throughout the country and its Territories. Furthermore, we cannot cover the questions raised by the application of these bills to our Territories and possessions; and in Alaska, aviation is of more importance than all other modes of transport combined.

This 30-minute presentation is in contrast to the 20 years of study and painful and illuminating experience which resulted in the adoption of the Civil Aeronautics Act last year, a result, moreover, which occurred after nearly 5 years of the most intensive investigation and deliberation in both Houses of the Congress, during which the President's Federal Aviation Commission presented its exhaustive report which was the basis of the Civil Aeronautics Act. Furthermore, all of the executive departments concerned with aviation unanimously advised the Congress last year that in their considered judgment the Civil Aeronautics Act was vital and wise. The Chief Executive himself approved, and after the adoption of the act he wrote, on January 24 of this year, 11 days after the introduction of H. R. 2531 and on the very day when Dr. Splawn, of the I. C. C., testified on that bill before this committee:

Civil aviation is clearly recognized as the backlog of national defense in the Civil Aeronautics Act which set up the effective machinery for a comprehensive national policy with respect to the air.

Underlying the statute is the principle that the country's welfare in time of peace and its safety in time of war rests upon the existence of a stabilized aircraft production-an economically and technically sound air-transportation system, both domestic and overseas; an adequate supply of well-trained civilian pilots and ground personnel.

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