higher fare," and they told our carriers, "You charge the higher fare," and our carriers were charging the old fare, the lower fare, so when they got to this one foreign country, they had somebody there to pick up the difference, and I presume turn it over to Pan American although I have never found out just what they did with the money. This was only on one planeload.

Mr. HULL. Thank you, sir.

Thank you.

The CHAIRMAN. Mr. Devine?

Mr. DEVINE. I have no questions, Mr. Chairman.

The CHAIRMAN. Mr. Jarman?

Mr. JARMAN. Mr. Boyd, my understanding is that under 6400 the Board would have the power to suspend tariffs of carriers and would also have the power to regulate the rates and practices of carriers.

Let's assume that a carrier had a rate that was either too high or too low, and the Board stepped in and exercised its authority.

What would be the time factor involved under that authority before a decision might be finally reached on a rate?

Mr. BOYD. I am not sure that I can answer your question, Mr. Jarman.

I think I would have to know whether it is a carrier-whether it is a U.S. carrier, whether it is operating under Bermuda, whether the fare is applied to a country operating under a Bermuda type of agreement or some other type agreement, and I am not trying to evade the question.

I think that all of these things have got to be stated in the premise in order to give you

Mr. JARMAN. Let's assume it is a U.S. carrier.

Mr. BOYD. Yes, sir.

Mr. JARMAN. Ánd it set a fare that the Board considers either too high or too low.

Mr. BOYD. Well, we would suspend, all right. That is the triggering point, I believe, we suspend.

The CHAIRMAN. You would do that in either the 6400 or 1716? Mr. BOYD. Yes, sir.

The CHAIRMAN. At that point?

Mr. BOYD. Yes, sir.

The CHAIRMAN. All right.

Mr. BOYD. Now, frankly, I don't recall whether the time is set forth in 6400. My recollection, though, is, Mr. Jarman, that it would be under the same procedural limitations, same provisions we now have in the domestic law which would be suspended for not more than 6 months. There is a 180-day clause which we use there is a 180-day clause in the law today for interstate air transportation, and the provision would be exactly the same procedure.

Mr. JARMAN. You would suspend but there would be hearings and the presentation of both sides of the question?

Mr. BOYD. Yes, sir.

Mr. JARMAN. What I am trying to get clear in my own mind is how much of a time delay factor is involved in the authority that the Board requests. What kind of delays are involved in the interstate cases that the Board now has before it?

Mr. BOYD. Right. Well, there can't be more than 180-day delay, so that is 6 months. But as a matter of fact and practice, Mr. Jarman,

what normally happens is that when the Board suspends a tariff today in interstate air transportation, the carrier either withdraws the tariff or, after consultation with the staff, it will put in another tariff, which the staff will indicate we think this might be all right. However, the staff can't commit the Board.

But normally, these things are worked out between the staff and the carrier, and in the vast majority of the cases, suspension cases, we don't go to hearing.

Mr. JARMAN. How much contest is there over rate questions in the domestic field? How many such cases arose under your interstate authority in 1963?

Mr. BOYD. I would say between 40 and 50.

Mr. JARMAN. Per year?

Mr. BOYD. Yes, sir.

Mr. JARMAN. Well, then, as to the expediting of a decision, I assume that there is no backlog of such cases now before the CAB? Mr. BOYD. Yes, we have got a backlog of cases, of tariff cases, but we have no backlog of cases where we utilized our suspension power. You see the Board can either suspend and investigate or it can permit the tariff to go into effect and investigate.

And we have several cases where we have permitted the tariff to go into effect. We did not suspend, but we ordered an investigation because the tariff, in our judgment was sort of on the fence as to whether or not the fares to be charged were compensatory, and we do have some backlogs in that area.

Mr. JARMAN. Would that approach be possible under 6400?
Mr. BOYD. Yes, sir.

Mr. JARMAN. Where you would permit the rate to go into effect and simply investigate rather than suspend.

Mr. BOYD. Yes, sir; we could do either. It would be the same as in the interstate.

Mr. JARMAN. Thank you, Mr. Chairman.

The CHAIRMAN. Mr. Sibal?

Mr. SIBAL. Thank you, Mr. Chairman.

Mr. Chairman, where is the main thrust coming from in pushing this legislation. Who is behind this, what agency of Government or what group of people are pushing this?

Mr. BOYD. It is the Civil Aeronautics Board, Mr. Sibal, and we have been pushing that since 1942. We had a spur last year but we have sought this except for the period I mentioned earlier, the 2d session of the 87th Congress, we asked the Congress not to take action pending the completion of our international air transport policy study.

Mr. SIBAL. This because, as you indicated in your statement, that you feel that you need this authority in order to protect the public interest?

Mr. BOYD. Yes, sir.

Mr. SIBAL. Has the Board given any consideration, had any discussion among its members as to the problem which I think might arise if this legislation passed wherein you would become subjected to perhaps pressures or influences from the State Department in your work in this area.

Perhaps the State Department might be interested in relation with a particular foreign government which had an interest in a particular foreign carrier.

Have those elements come to your consideration?

Mr. BOYD. No, sir; I can't say there has been any consideration of that in terms of discussion among the Board members. It is difficult for me to conceive of such a situation.

Now, obviously today and ever since the Board has been in existence the State Department has had the right to advise us of political considerations that are involved in international aviation matters. And in fact we seek the views of the State Department in connection with permit proceedings and all other matters involving international aviation.

But we are not concerned about pressures. That is the story of our life.

Mr. SIBAL. Do you think the question, do you think my question is farfetched?

Mr. BOYD. What?

Mr. SIBAL. Do you think my question is farfetched and please feel free to say so.

Mr. BOYD. I don't think your question is farfetched but I think we view our function as being stated in the law, and if the State Department or the White House or Defense or anybody else wants to make a representation to us we are glad to receive it, and if we think that their representation comports or their advice or suggestions comport with what we should be doing under the law then we do it.

If we don't agree with them then we say, "Thank you very much.” Mr. SIBAL. The reason I ask this question is you show in your statement the authority you have in regulating these carriers in the case of interstate commerce?

Mr. BOYD. Yes, sir.

Mr. SIBAL. And you show by comparison you lack similar authority in many instances in terms of international traffic. And yet it would seem to me it doesn't necessarily follow that what authority you should have on an interstate basis you should have on an international basis because there are other different elements involved, aren't there?

Mr. BOYD. Absolutely, and that is one of the reasons why H.R. 6400 is couched in terms of discretionary power. Whereas our domestic ratemaking power is not discretionary at all. It is absolute.

Mr. SIBAL. Would it be your feeling that your decisions, the CAB's decisions in these ratemaking problems, even though your power is discretionary under H.R. 6400 should be made on the determination of the economics of the airlines, and the economics of the public in terms of the public interest.

Do you feel that is what the primary consideration should be?

Mr. BOYD. Absolutely. That is what the Board is in business for, and we that is what we deal with.

Mr. SIBAL. And you wouldn't feel that part of your responsibility would be to work with those areas of our Government who have the responsibility perhaps of bolstering up the foreign economy or anything like that?

Mr. BOYD. Oh, sure. We don't feel we are separate and apart from the rest of the Government, but as far as the Board is concerned, our considerations are economic considerations.

If there are political considerations then it is up to the State Department to advise us of those political consideration and we certainly take that into consideration.

Mr. SIBAL. No matter how it affects the American carrier.

Mr. BOYD. Well, now that is a hard question to answer. I think I could say in a broad way, yes, no matter how it affects the American carrier, because in the time that I have been in Washington, the State Department has never made any recommendations or asked anything of us which would be detrimental to the American carriers, and just as we are the economic agency, and State is the political agency, I am perfectly confident that the State Department is concerned about the economic welfare of the carriers, as we are concerned about the political posture of the United States.

Mr. SIBAL. Thank you. Thank you, Mr. Chairman.

The CHAIRMAN. Mr. Moss.

Mr. Moss. Mr. Chairman, what you are actually seeking here is additional authority which was clearly contemplated at the time of the 1946 agreement?

Mr. BOYD. Yes, sir.

Mr. Moss. And the difficulty of last year with the Government of Great Britain occurred under that agreement and was completely in consonance with the agreement?

Mr. BOYD. Absolutely, yes, sir.

Mr. Moss. We had agreed in advance that where disapproval was voiced by our Government, that the other government, under section (f) could then take whatever steps, in its judgment might be required, and we didn't limit the steps it could take.

Mr. BOYD. That is exactly right, Mr. Moss. What steps they could take depended on what authority their domestic law gave them.

Mr. Moss. So, we are not going here into the basic rights of a soyereign nation but rather the rights which are clearly agreed upon in advance in the Bermuda agreement, and you want to have the additional powers which were contemplated in the section (e) of the agree ment so that this Government can deal more effectively without its hands tied as was the case last year, where there are disagreements? Mr. BOYD. That is right, sir. To put us on a par with the other parties to the agreement.

Mr. Moss. I think you made a very excellent statement. Those are all the questions I have, Mr. Chairman.

The CHAIRMAN. Mr. Brotzman?

Mr. BROTZMAN. Just to follow up on that point. Had this law been in effect, Mr. Chairman, last year, at the time of the crisis what could the Board have done to correct the situation?

Mr. BoYD. Well, first of all, Mr. Brotzman, there would have been no crisis. Had this legislation been in effect last year, when on March 18, we issued our order disapproving the IATA agreement which had the effect of raising the fares by reducing the roundtrip discount from 10 to 5 percent, our carriers would have operated legally, lawfully within the terms of the bilateral agreement at the old rate, and the United Kingdom and Italy and Spain and all these other countries would have, I am certain, said, "That is all right. We want to go to arbitration. But you have every right to operate at the old fare." So, there would have been no crisis.

As a matter of fact, this is exactly what happened, Mr. Brotzman, in the case of the Canadian carriers, because Canada does have legisla tion, while their bilateral is not in identical terms with ours, their bilateral form, it is practically the same, and the Canadian carriers con

tinued operating at the old rate, and they operated without any restrictions.

So, I don't think there is any question there would have been no crisis had we had that legislation.

Mr. BROTZMAN. Now to sum up two key statements, I think you made on pages 3 and 4, your present authority, as I understand it, is to remove discrimination after notice and hearing.

Mr. BOYD. Yes, sir.

Br. BROTZMAN. Now this: When you use the word "discrimination," is this discrimination between two competing airlines or what does this mean?

Mr. BOYD. No, sir; this is discrimination in terms of the traveling public.

Mr. BROTZMAN. I see. This has nothing to do with rates.

Mr. BOYD. Yes; it does. It does but it means discrimination or nondiscrimination; let me put it this way: Nondiscrimination means if you and I get on an airplane, take the same trip, we pay the same fare and the fact you wear glasses and I don't doesn't have anything to do with it.

But often-I shouldn't say often, but sometimes a situation will develop where carrier will say, "Everybody who wears horn-rimmed spectacles can fly at a 20-percent discount."

Well now, that is not a legitimate distinction, and that is discrimination. I am being discriminated against; you are getting the preference.

Mr. BROTZMAN. Thank you. That is all, Mr. Chairman.

The CHAIRMAN. Mr. Dingell?

Mr. DINGELL. No questions, Mr. Chairman. Thank you very much. The CHAIRMAN. Mr. Hull?

Mr. HULL. No questions.

The CHAIRMAN. Mr. Van Deerlin?

Mr. VAN DEERLIN. No questions.
The CHAIRMAN. Mr. Pickle?

Mr. PICKLE. No questions.

The CHAIRMAN. Mr. Boyd, you mentioned in your statement the authority of the Board on disapproval under section 412 of the present act, agreements relating to the rates and that the carriers must then act individually when filing rates as required by section 414. I believe that is page 4 of your statement.

Mr. BOYD. Yes, sir.

The CHAIRMAN. And you stated when they do so the Board is powerless to prevent carriers from filing any rate it chooses. It may be wholly unacceptable from the standpoint of conventional rate-fixing criteria.

Mr. BOYD. Yes, sir; it may be wholly unacceptable.

The CHAIRMAN. Yes. By that do you mean that when you do approve a rate agreement under section 412 you have approved the rate from the standpoint of conventional rate-fixing criteria?

Mr. BOYD. To the extent that it is possible, Mr. Chairman.

Now on international rates and fares the only information we have available to us is the information relative to the U.S.-flag carriers. So, we use them as a measuring stick, but the fact of the matter is that we do not know what the economic situation is of the foreign