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corporated. I stated that what we need is an estimated balance sheet and operating statement of the proposed corporation. We are advised by the Bureau of the Budget and the Department of Commerce that it is not practicable to give us that information.

However, we are not opposed to S. 3435 simply because of the lack of that information. We are opposed to it because we feel that neither from the viewpoint of the Government nor the airlines is there sufficient need for a corporation to operate Washington National Airport to justify the creation of another governmental corporation. We believe that it is obvious that the best way to limit the number of Government corporations, which already is very large, is not to create new ones unless there is an urgent need for such an instrumentality. We do not believe such a need exists at Washington National Airport.

As the principal tenants of the airport, we are in a position to advise the committee that the airport is well managed and well operated. The Civil Aeronautics Administration is doing an excellent job. Moreover, the airport is not operating at a deficit. It produces revenues each year of approximately $400,000 more than the expenditures authorized by Congress for its maintenance and operation. This amount is slightly larger than the annual interest charge which would result under S. 3435. Perhaps it is an added tribute to the excellent job being done by the Civil Aeronautics Administration, but it is our conviction that neither the airlines nor the traveling public have experienced any adverse effects from the inability of the airport management to contract for services or property without public bids, or from the lack of a revolving fund. Certainly we do not believe that these two problems are serious enough to justify the incorporation of the airport.

It is true that we have had a problem recently relating to the construction of a "finger" at the airport to provide additional gate positions for the loading and unloading of aircraft. A specific appropriation by Congress will be necessary to finance that construction. However, if we understand S. 3435 correctly, the proposed corporation would also have to finance that construction in the same way. It would also have to obtain the necessary funds by appropriation. Moreover, we do not believe that the creation of a corporation to operate the airport would relieve the executive departments or the Congress of much, if any, of their responsibility relative to expenditures made at the field. We note from the Budget Bureau's letter of June 15, 1954, that the corporation would be required to submit an annual business-type budget for review and approval by the President and the Congress. Also, to the extent that the corporation would be restricted in its operations to the amounts budgeted for the various functions which it undertakes, it would be in much the same position as the Civil Aeronautics Administration is now in as the operator of the airport.

Representatives of the Budget Bureau and the Department of Commerce have stressed the value of the business-type budgeting and accounting which would be installed if the airport were incorporated. However, as Mr. Owen A. Kane, legislative attorney, Office of the Comptroller General, testified before the committee, this can be done, without incorporation, under the Budget and Accounting Procedures Act of 1950. This act, moreover, modernized the audit authority of the General Accounting Office and authorized that agency to make the type of audit most appropriate for the Government operation involved.

Furthermore, incorporating the airport would not result in giving the corporation any greater authority than the Civil Aeronautics Administration now has to establish fees and rentals for the use of the field. The Civil Aeronautics Administration now has complete authority to establish the fees and rentals paid by those who use the field. Under this authority 3-year leases were recently negotiated with the airlines covering their use of hangars on the field. The leases between the CAA and the airlines, specifying the landing fees and rentals for the use of the terminal building, have approximately 61⁄2 years to run. Under S. 3435 the corporation would take over the field subject to these leases. Thus, the corporation would not be in any better position than the Civil Aeronautics Administration to negotiate with the airport tenants for fees and rentals covering their use of the field.

A similar observation applies to the suggestion that, under S. 3435, the corporation would be able to obtain additional revenues of approximately $450,000 a year by reason of charges made to various Government agencies occupying space on the airport or using the field. We think that it is sound policy that agencies of the Federal Government occupying space on the field or using the field (other than space occupied by the CAA or the Weather Bureau for air traffic control activities or weather-reporting activities relating to air-traffic

control) should pay a fair rental for the use of such space or for the use of the field. They are not now making such payments. However, this result can be obtained without incorporation of the airport and under existing Federal statutes.

To summarize we believe that the Civil Aeronautics Administration is doing a good job in running the airport. We do not believe that the problems which they are experiencing in that operation are sufficiently grave to warrant the incorporation of the airport. Furthermore, we do not believe that there are sufficient advantages either to the tenants at the airport or to the Federal Government to warrant adding one more to the already great number of governmental corporations. For these reasons, we urge the committee not to approve S. 3435.


S. G. TIPTON, General Counsel.

Washington, June 18, 1954.


Chairman, Committee on Interstate and Foreign Commerce,

United States Senate, Washington, D. C.

DEAR SENATOR BRICKER: Reference is made to your letter dated June 7, 1954, in which you asked me to advise you whether I believe that S. 3435, a bill to incorporate the Washington National Airport, should be amended to bring it in line with the policies enunciated in the Interstate Commerce Act and the proposed bill to establish a Commission on Area Problems of the Greater Washington metropolitan area, H. R. 2236.

In considering this matter, the first point that comes to my attention is the difference between the purposes to be accomplished by these legislative proposals and enactments.

The purpose of H. R. 2236 is to create a study commission or a coordinating commission to investigate and make recommendations pertaining to highway, bridge, and traffic problems of the metropolitan area and the problem of the integration of the public transportation system for the greater metropolitan area. The Interstate Commerce Act effectuates Federal control over and regulation of certain phases of interstate commerce.

The purpose of S. 3435, however, is vastly different from the purposes of the foregoing legislation in that it is for the purpose of creating a corporation to operate the Washington National Airport as a port of embarkation and disembarkation for the public traveling by air and to furnish all services necessary, desirable, and incidental thereto.

The furnishing of the service of ground transportation to and from the airport is one of the more important of these services. It has been the experience of the Government in the operation of Washington National Airport that satisfactory ground transportation service can best be furnished by a single operator who can be required by contract: (1) to have sufficient vehicles available to take care of the demands of the public; (2) to carry insurance deemed by the Government to be sufficient to protect the public using his vehicles; (3) to have able, efficient, and trained personnel to operate his business; (4) to fully coordinate his operations with air carrier and other operations on the airport so as to effectuate the control of traffic into and out of the terminal buildings and the congested traffic areas; (5) to make reasonable charges for his services; and (6) to pay the Government a fair proportion of his revenue to help defray the expense of operating the airport.

In return for the large investment necessary to guarantee the Government these requirements the concessionaire must be assured of a sufficient volume of business to make his operations economically feasible. This is done, not by barring all other taxicab or limousines from the airport, but by giving this concessionaire the business emanating from the airport. Taxicabs of other companies may bring in any business emanating from the District, Virginia, or other places without hindrance or without the payment of any fees to the Government. Also, the Alexandria, Barcroft, and Washington Transit Co. operates through the airport under an agreement with the airport in order to furnish low-cost transportation to those who do not desire to use the limousine or taxicab service. Without the control the Government exercises through its contract with the ground-transportation concessionaire a flush of business at other points in the

metropolitan area could drain all the taxicabs away from the airport leaving it without service for an indeterminate period of time. Also, there could be no assurance that other standards of operation desired by airport management would be met by independent taxicab operators. After many years of experience in operating Washington National Airport it has been found that independent cab operators cannot be depended upon at the airport to furnish continuous, dependable service as can a single operator, bound by contractual arrangements to supply the particular needs of the public using the airport.

The primary purpose of S. 3435 is to create an organization that can more efficiently operate a business-type function of the Government, such as the airport happens to be, than the ordinary Government agency that does not have the special latitude that will be granted the Corporation. This Corporation is not being created for the specific purpose of regulating any businesses except those offering special services to the public at the airport, and then only as they affect the operation of the airport.

For these reasons I am of the opinion that it would be unwise to tie the hands of the proposed Corporation by the insertion of provisions in S. 3435 that would effectively prevent it from deciding between different types and operators of ground transportation services to be offered to the public at the airport. I believe that the Corporation should be given the necessary latitude to choose the particular types of ground transportation and their operators that would, in the opinion of its board of directors, be best suited to answer the needs of the public using the airport at any particular time.

Sincerely yours,



To: Senate Committee on Interstate and Foreign Commerce. Attention: Mr. Edward C. Sweeney. Subject: S. 3435, a bill to amend the act relating to the administration of the Washington National Airport, to incorporate the Washington National Airport Corporation, and for other purposes. An analysis and comparison with certain other statutes chartering Federal or State government corporations. This memorandum is intended to indicate the material differences between the charter of the Corporation which would be created by this bill and the charters of other Government wholly owned corporations which operate business enterprises. In the time available, it has been possible to make the comparison with only some of the many wholly Federally-owned corporations, and to identify only one comparable State-owned corporation engaged in airport operation. However, consideration of the general subject leads one to conclude that the Federal corporations selected are likely to throw light on this bill. Also, it appears that airports are usually operated by municipalities or States without incorporation. Of course, theer are various State regulatory agencies, boards, and authorities; but it would seem safe to say (without a State-by-State review of the statutes) that most such organizations are not comparable to corporations. S. 3435 is here compared with:

I. Saint Lawrence Seaway Development Corporation, created by Public Law 358, 83d Congress, 2d session, approved May 13, 1954;

I. Inland Waterways Corporation, incorporated June 3, 1924, by 43 Statutes 360, several times amended (49 U. S. C. A. 151 et seq.);

III. Tennessee Valley Authority, formed May 18, 1933, by 48 Statutes 58, later amended (16 U. S. C. A. 831);

IV. Port of New York Authority, New York laws, 1921 (ch. 154, sec. 1 (pt. ), (65 pt. 2), McKinney's Consolidated Laws of New York annotated)) section 6404.

The charter of Saint Lawrence Seaway Development Corporation and of that contained in S. 3435 for the Washington National Airport Corporation appear to be modeled after general corporate provisions in a book entitled "The Government Corporation: Elements of a Model Charter" by Sidney D. Goldberg and Harold Seidman, published 1953 by Public Administration Service, Chicago, Washington, and San Francisco (herein called Model Charter). That book discusses (pp. 3-7) similarities and differences between agencies and corpora

tions and summarizes the "Criteria for Use of Corporations," by the Government, as follows (p. 9):

The use of a corporate form of organization is normally indicated only when a program:

1. Is predominantly of a business nature;

2. is revenue producing and potentially self-sustaining;

3. involves a large number of business-type transactions with the public; 4. requires greater flexibility than the customary type of appropriation budget ordinaryily permits.

2. Is revenue producing and potentially self-sustaining;

3. Involves a large number of business-type transactions with the public; 4. Requires greater flexibility than the customary type of appropriation budget ordinarily permits.

Some of the most important advantages which Government management officials see in corporations as compared with agencies are:

1. greater procurement flexibility with respect to property;

2. greater autonomy in the making of decisions;

3. budget and fiscal procedures for business functions more comparable to those used in private business.

Accounting officials, however, point to the increased authority agencies may now be given to use revolving capital and management funds, the increased flexibility possible since the Budget and Accounting Act of 1950, and to the many urgent circumstances under which negotiation of contracts without advertising is now permitted to the Federal executive agencies.

Incorporation of the Washington National Airport was recommended by the Hoover Commission on April 1, 1949, in its report on Federal Business Enterprises, and in the President's budget message this year.

The Corporation would become subject to the Government Corporation Control Act, enacted December 6, 1945, (59 Stat. 597) (31 U. S. C. A. 841 et seq.), to regularize divergent practices which had developed during the rapid growth of Government corporations. The Corporation's decisions with respect to its obligations and expenditures would be subject to provisions of law specifically applicable to Government corporations. (S. 3435, secs. 15 and 4 (g), respectively.) Section 1: Washington National Airport Corporation would operate the airport subject to the direction of the Secretary of Commerce, who also governs the Inland Waterways Corporation; whereas the recently incorporated St. Lawrence Seaway Development Corporation is subject to the direction and supervision of the President of the United States, or the head of such agency as he may indicate, and the Tennessee Valley Authority is directed by a board. (The St. Lawrence provision is more like the Model Charter, p. 11.)

However, the management of the Washington National Airport Corporation is vested in an Administrator and a Deputy, both to be appointed by the President, by and with the advice and consent of the Senate.

The purposes of the earlier three corporations are spelled out in considerable detail, as are those of the Port of New York Authority which was created by an interstate compact and State legislation as a body corporate and politic granted the others. (See also Model Charter, p. 13.)

Section 2: The Corporation is to have perpetual succession unless sooner dissolved by act of Congress. In this respect, it appears similar to the life granted the other. (See also Model Charter, p. 13.)

Section 3: The principal officers will be at Washington National Airport and at other places prescribed by the Secretary; and it will be a resident, for civil venue, of the jurisdictions where such offices are established. (See Model Charter, p. 13.) The other three Federal corporations are not given the authority to establish such other offices. (The Port of New York Authority is a resident of every county and Federal judicial district within the Port of New York district, for purposes of suit.)

Section 4: General powers granted are: (a) Seal; (b) bylaws; (c) acquire, use, and dispose of property to extent appropriate to the purposes of the corporation; (d) accept gifts in aid of its purposes; (e) make and perform necessary contracts and transactions with anyone; (f) appoint and bond civil service employees and employ experts and consultants under 5 U. S. C. 55 (a); (g) determine its obligations and expenditures “subject to provisions of law specifically applicable to Government corporations"; (h) be party to suit but exempt from costs as United States is; (i) have United States priority in collection of its debts from bankrupts, insolvents, or decedent's estates; (j) have United States

executive franking privileges; (k) execute instruments; (1) take appropriate action to carry out its powers; (m) settle claims. [Italics added.]

Most of the language of the foregoing general powers is taken, with modifications, from Model Charter, pp. 15-46, 61. At p. 44 of that book it is suggested that perhaps corporate property should be specifically exempt from attachment as an incident of the power to be sued.

The St. Lawrence charter does not include the airport corporation's power underlined above; but does include authority to issue revenue bonds to the Secretary of the Treasury and to make payments in lieu of taxes.

The Inland Waterways charter authorizes that corporation to make contracts and to borrow; but not specifically to pass bylaws, accept gifts, have United States Government priorities, have franking privileges, execute instruments, nor settle claims. It does not require employees to be under civil service.

The TVA is authorized to contract only "as herein authorized," to condemn property by a special procedure, to place the condemned property in the name of the United States and to assume control of it as agent of the United States. Although TVA may dispose of personal property, specific provision must be obtained to dispose of real property. Its board selects and removes all other officials, agents, and employees without regard to civil service laws, but on the basis of merit and efficiency without political test. It must pay laborers the prevailing wage. It was not authorized to accept gifts. It is required to keep accurate books as to specific segregation of costs.

The Port of New York Authority is authorized to purchase, construct, lease, and operate terminals, make charges for their use, to condemn by special procedure, and hold property, borrow money, issue bonds and mortgages (without impairing any State or municipal property unless consent is given), to elect a chairman and appoint employees.

Section 5: "Subject to the provisions of the Government Corporation Control Act, the Corporation shall have and may exercise such specific powers, in addition to those elsewhere conferred in this Act, as may be deemed necessary to protect, operate, improve, and maintain the Washington National Airport as a business enterprise and a public service facility." [Italics added.] (See Model Charter, p. 47.)

St. Lawrence may construct and operate deep-water navigation works as specified, negotiate with Canada on rules and rates, and establish rules and rates, subject to the approval of the President.

Until otherwise directed by Congress, Inland Waterways was to continue the operation of certain transportation and terminal facilities, extend them to a specified extent, and then sell them under certain circumstances to private business. Also, it might exercise the Secretary's functions under 49 U. S. C. A. 141 and 142 with respect to Government-owned boats on inland waterways and the development of water transportation.

'TVA was authorized, in considerable detail. to construct dams, control navigation, generate and sell power, make and sell fertilizer and explosives, make studies and experiments, help readjust the displaced populations; provided that none of the power revenues should be used for the construction of new power projects (other than replacements) until Congress approves.

The Port of New York authority is specifically authorized to effectuate, establish, acquire, construct, rehabilitate, improve, maintain and operate air terminals within the Port of New York District (in addition to powers with respect to transportation facilities generally within that district).

Section 6: "(a) The management of the Corporation shall be vested in the Secretary of Commerce.

"(b) A seven member Advisory Board appointed by the Secretary (without regard to civil service laws) shall meet at this call at least once each six months, review the Corporation's policies on design, construction, administration and general matters, and advise the Secretary. Members from private life shall receive $50 per diem; others nothing. All members shall be reimbursed necessary expenses." (See Model Charter, p. 48.)

The St. Lawrence management is vested in an Administrator and a Deputy, both appointed by the President of the United States, by and with the advice and consent of the Senate. The St. Lawrence Advisory Board is composed of five members appointed by the President, by and with the advice and consent of the Senate. Not more than three may belong to the same politcal party. The meetings must be at least once cach ninety days. Members receive the same per diem as the bill provides, but are not specifically authorized to be reimbursed (in addition to "their necessary traveling expenses while going to and coming

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