handicaps the Merchant Marine in performing the tasks set for it should be promptly removed. The entire nation has a stake in the Merchant Marine. To place American ships on a basis of competitive equality with foreign-flag ships, Congress has provided large subsidies to equalize the cost of construction and operation. These farsighted measures will be rendered largely ineffective if the Merchant Marine must not only suffer a diversion of traffic to air lines but also be placed in a position where it cannot compete on even terms with foreign steamship lines for the remainder of the traffic. Members of the Civil Aeronautics Board have made it rather clear at the hearings that they consider they have a mandate to develop air service to the exclusion of all other considerations. The view was expressed that the Board was not charged with the duty to consider the interests of the Merchant Marine. They take the view that air service should be developed to the maximum extent possible and that the greatest development will take place if it is left with companies engaged in air service exclusively,33 ignoring the fact that the objectives set by Congress in the Transportation Act of 1940 were to develop, coordinate and preserve "a national transportation system by water, highway and rail, as well as other means adequate to meet the needs of the commerce of the United States, of the Postal Service, and of the national defense." The sounder view, and that more in line with our national transportation policy, is set forth in the following quotation: "Ships and planes are not an end in themselves; they are a means to an end. They are arms or instruments of the Nation-its people and Government-to carry on an to insure the movement of its overseas commerce to meet the needs of commerce and national defense in time of war or peace. * The stated policies of Congress are practically identical in the respective objects sought for the merchant marine and the air transport system of the United States; a strong virile organization, untrammeled by restrictions expressed or implied, complementary and auxiliary to each other, helping, not hindering the growth of the other." 34 Some appropriate action by Congress is urgently called for. The number of air lines that can successfully operate on a given route will be limited for years to come. If the Board persists in its announced policy, all available routes will be parceled out among domestic operators and foreign competitors, and steamship lines will then be faced with the probable contention that additional air services are not required in the public convenience and necessity. The steamship operators have argued their cases fully with the Board but without apparent success. The Maritime Commission has intervened in the proceedings in the interest of the Merchant Marine, but there is no indication that the Board will change its announced policy. If, in pursuance of such policy, the Board denies certificates to the steamship carriers, the decisions cannot be reviewed by the courts. The steamship operators, believing that Congress will not want the Merchant Marine to be hampered by restrictions it, itself, has not imposed, urgently request Congress to intervene in this important matter to the end that the law may be administered as written and that our Merchant Marine may be free to equip itself adequately for the tasks assigned to it. Respectfully submitted. (Discussion off the record.) SEA-AIR COMMITTEE OF THE NATIONAL J. RAYMOND HOOVER, BON GEASLIN, Counsel. The CHAIRMAN. The committee will adjourn now and we will meet again at 2:30. (Whereupon, at 12:20 p. m., the committee recessed until 2:30 p. m., of the same day.) 83 Testimony of L. Welch Pogue, Chairman of CAB, Executive Hearings before the Committee on the Merchant, Marine and Fisheries, 78th Cong., 2nd sess., on H. R. 52, p. 127. See also statement of Board in American Expcrt case, supra. 34 Admiral Land, Executive Hearings, Note 29, supra, pp. 2 and 4. AFTERNOON SESSION Senator MCCLELLAN. Just a moment. The committee will come to order. Mr. Mittleman, you are representing Mr. Brown, are you not? Mr. MITTLEMAN. Yes. My name is E. B. Mittleman. I am representing Mr. H. W. Brown, president of the International Association of Machinists. [Reading:] STATEMENT OF H. W. BROWN, PRESIDENT, INTERNATIONAL ASSOCIATION OF MACHINISTS (AS PRESENTED BY E. B. MITTELMAN) I am H. W. Brown, president, International Association of Machinists, with offices at Ninth and Mount Vernon Place NW., Washington, D. C. The International Association of Machinists represents some 700,000 American citizens. Many of our members are engaged in domestic air transport, many in international air transport, and others in various branches of the airplane and airplane-engine manufacturing industries. We have a vital interest in the future welfare of the American aviation industry, and for this reason, we are deeply concerned in any arrangement, even such as bears so resounding a name as "freedom of the air," if the arrangement is likely to do more harm to the industry than good. Any step, such as Senator McCarran has taken in S. 1814, which is likely to make for a fuller consideration of the public policy involved in our relations with other nations in the matter of international aviation, we are fully in favor of. I have been away from Washington so much during the past few months that I have not been able to study Senator McCarran's bill well enough to be sure that it goes far enough in giving American aviation all the protection it needs. It is only necessary to recall what happened to the American merchant marine, between the War of 1812 and World War I, under the doctrine of the "freedom of the seas," to realize what may happen to American aviation under the twin doctrine of "freedom of the air." At the end of the War of 1812, 90 percent of American overseas trade was carried in American ships; just before the outbreak of World War I, 10 percent of such trade was carried in American ships. The chief reason for that decline, I am convinced, is that our ships could not hold up against the low cost of construction and the low cost of operation that the foreign ships enjoyed, because of the generally low standard of living prevailing in their countries, and with it low wages. My only concern at the present time is that we should not go through the same experience with overseas aviation as we went through with overseas shipping. The wages in our aircraft plants, on our landing fields, and of our operating crews are higher than they are abroad. Unless we watch our step it is almost certain that our shipping experience will come back to haunt us. As president of the International Association of Machinists, I have appeared before several congressional committees on the same subject before. The picture has slightly changed. We were in favor of one strong American-flag line to stand up against the powerful foreign monopolies; now several American-flag lines are operating abroad. The broader problem between us and other nations, one or several lines, is, however, still the same, and our position is still the same. At the Chicago International Conference four separate agreements were drawn up for submission to the 52 governments there represented: I. An interim agreement on international civil aviation. III. An international air-transit agreement. IV. An international air-transport agreement. The permanent convention (agreement II) sets up an international civil aviation organization consisting of an assembly, a council, and such other bodies as may be necessary to deal with technical subjects such as rules of the air, entry regulations, registrations of aircraft, customs and immigration procedure, sanitary measures, investigation of accidents, licenses for aircraft and flight personnel, and other similar matters. It also provides machinery to administer agreements III and IV as between any nations which ratify them. The interim agreement contains the same general provisions as does the permanent convention. It is limited, however, to a 3-year period after it has been accepted by 26 nations, if the permanent convention has not sooner come into effect. The international air-transit agreement (agreement III) provides for "freedom of transit"-that is, the right of foreign aircraft to fly across a nation's territory without landing, as well as the right to land for refueling and servicing. These rights are generally referred to as the first and second "freedoms of the air." The international air-transport agreement (agreement IV) provides for all five so-called "freedoms of the air"-the two, above referred to, and also the following: A. The right to put down passengers, mail, and cargo taken on in the aircraft's own country. B. The right to take on passengers, mail, and cargo destined to the aircraft's home country. C. The right to take on passengers, mail, and cargo destined for any other foreign country accepting the agreement and the right to discharge passengers, mail, and cargo taken on in any such foreign country. We favor our Government accepting agreements I and II, which provide machinery for our country and other countries to cooperate in the sound development of international air transportation. We strongly oppose our Government accepting agreements III and IV, which are contrary to the interests of American labor. The International Association of Machinists has opposed these so-called "freedoms of the air" ever since the suggestion was advanced in the public press nearly 3 years ago that it would be in the interests of all nations, including the United States, to change our long established air-transport policy in favor of adopting these "freedoms of the air," a fine-sounding slogan as yet not understood by the American public but a slogan which, if adopted, would cripple our international aviation. On August 19, 1943, we advised the President, as well as the congressional committees concerned, as follows: "Members of the International Association of Machinists are employed for building, repairing, and maintaining aircrafts and, therefore, we are very much interested in matters affecting our domestic air lines as well as manufacturing of aircrafts. "It is our information there is agitation for a policy referred to as 'freedom of the air.' Because of the inevitable happenings to wage earners if 'freedom of the air' becomes a reality; hence our following observations in the matter: "Our Government should not bargain away or impair its complete control of American airspace, including the right to license foreign-flag aircraft on American foreign-trade routes. The United States should not acquiesce in any new international policy of 'freedom of the air,' which would work only for the benefit of foreign nations with lower labor standards than ours. For the same reasons we should not accept 'freedom of the air.' Our national interests require continuance of the principle of 'sovereignty of the air' now in effect in all countries and specified in our domestic legislation. In this way foreign-flag air lines can continue either to be excluded or to be limited to a fair share of the traffic as our national interests require from time to time." A great portion of American organized labor shares our views that the acceptance by our Government of either the so-called "two freedoms agreement" or the "five freedoms agreement" drawn up at Chicago would be disastrous to the United States. The railroad brotherhoods have formally resolved: 1. That present international and domestic laws which provide complete control and full air sovereignty for American and foreign international air transport are satisfactory; but the Congress in connection with further development of national policy should give consideration to and explore the legal possibilities of providing that all licenses issued to foreign-flag air lines contain adequate provision for the protection of American wage standards. 2. That American international air lines should not engage in domestic air traffic in the United States and American domestic air lines should not engage in international air traffic. Foreign-flag air lines should be licensed by our Government to discharge and pick up traffic only at gateway airports in the United States. 3. That international domestic air transport should continue under strict Federal regulations. 4. That steamship lines, railroads, bus, and truck corporations and/or their subsidiaries and/or their holding companies, singly or collectively, should not be permitted to operate or control any air line. 5. That to protect America's position and to compete effectively in the postwar world against the great foreign air-line monopolies the United States should concentrate its national effort in a single strong American flag air line, organized according to a Government-approved plan, and in the private ownership of which all American transportation interests may be represented. The Railway Labor Executives Association represents over a million American citizens engaged in various branches of our transportation industry and the following individual labor unions: Brotherhood of Locomotive Firemen and Enginemen. Switchmen's Union of North America. Order of Railroad Telegraphers. American Train Dispatchers' Association. Railway Employees' Department, A. F. of L. International Association of Machinists. International Brotherhood of Boilermakers, Iron Ship Builders, and Helpers International Brotherhood of Blacksmiths, Drop Forgers, and Helpers. Brotherhood Railway Carmen of America. International Brotherhood of Firemen and Oilers. Brotherhood of Railway and Steamship Clerks, Freight Handlers, Express and Station Employees. Brotherhood of Maintenance of Way Employees. Brotherhood of Railroad Signalmen of America. National Organization Masters, Mates, and Pilots of America. National Marine Engineers' Beneficial Association. International Longshoremen's Association. Hotel and Restaurant Employees' International Alliance and Bartenders They have stated their position as follows: "1. The broad objective of the public interest in transportation is the development and preservation of a national system of transportation, as contemplated by the Transportation Act of 1940 and the Civil Aeronautics Act of 1938, capable of furnishing with the utmost reliability, dependability, and flexibility, at all seasons and during all weather conditions, in peacetime and in war, a general commoncarrier service for passengers and property. Each type of transportation should take its proper place in such a transportation system. "2. If each type of transportation should be required to bear the full cost involved in transportation by that group, as a result of the elimination of subsidies, a great forward step would be taken toward bringing about fair and just competitive conditions among the several types, establishing a proper and economic distribution of traffic, and developing a sound over-all transportation system in the public interest. It is, therefore, our view that under a competent system of private operation and management, without subsidies, a national transportation system can be developed that will be superior to any in the world. "3. It would appear that there has been much discussion in the public press about 'freedom of the air,' or other similar doctrine which would lessen control of the United States over its airspace. It is particularly important that wage and living standards of American labor should be protected against inroads of foreign competition whose wage standards are far below those existing in this country. We are opposed to any lessening of our Government control of our airspace, and think that every application of any foreign air line to fly into or over the United States whether or not authorized to carry traffic should be separately considered as at present. In this way the foreign air lines can be limited to a fair share of American international traffic." I am not an expert on the division of powers between the President and the Senate in conducting international affairs. Nor do I know precisely, where under the Civil Aeronautics Act of 1938, the powers of the President, the State Department, and the Civil Aeronautics Board begin or end in allowing foreign air lines to participated in our traffic. The only thing I do know is that under the stimulus of the war just ended, air transportation has broken out of its shell, and has become a full-fledged industry employing both on the manufacturing and transportation side hundreds of thousands of people, and destined, if its already known potentialities have any meaning, to vitally affect the destinies of the Nation, not only internally but externally. Bearing in mind the slow evolution domestic air transportation was going through before the war and the slow pace at which international aviation was developing, section 802 of the Civil Aeronautics Act of 1938 may have been good enough for those days. The section directs that "The Secretary of State shall advise * * * and consult with the Authority (Civil Aeronautics Board) . concerning, the negotiation of any agreements with foreign governments for the establishment or development of air navigation, including air routes and services." It was apparently under this authority that the State Department proceeded to open a new chapter in international aviation, new because of the scope of the commitment if nothing else, when a year ago it, not fully clear of its power, after a verbal understanding with the chairman of the Commerce Committee and the chairman of the Foreign Relations Committee, an understanding which turned out to be a misunderstanding, proceeded to commit the Nation to all the five "freedoms," including the one which gave foreign air lines the right to pick up and land passengers and traffic going to and coming from other nations than the one to which the air lines belonged. Senator McCarran's bill clarifies the powers of the State Department on these matters, as given in section 802, and restores to the Senate the right to consider questions of policy in international aviation, whenever this country's interests are at stake. As already indicated I should like to have the opportunity to study Senator McCarran's bill a little more fully, and the privilege to communicate to this committee such further comments as we may have. Senator MCCLELLAN. You read that as the statement of Mr. H. W. Brown? Mr. MITTLEMAN. That is right. Senator MCCLELLAN. Would you care to make any comments now? Mr. MITTLEMAN. Only to this extent, that I think the statement of Mr. Brown represents the precise viewpoint of the association on the matter, and I do not have anything further to say. Senator BREWSTER. Do you have any figures on the comparative costs and wages of machinists here and abroad? Mr. MITTLEMAN. The problem came to us overnight, and we have not done as much as we should like to do with this problem. For that reason, we ask for the opportunity, should we go into this a little more fully, to present further comments. That is one thing that we would like to do. Senator BREWSTER. I think if you could get any figures on that, it would be very helpful to the committee. That is, of course, one of the major problems, and bears directly on the question. The comparable costs constitute a substantial element. Mr. MITTLEMAN. That is right. Senator MCCLELLAN. If you care to submit anything further to the committee, you may present it to the chairman for his consider-ation. Mr. MITTLEMAN. Thank you. Senator MCCLELLAN. Very well. We will next hear from Mr. Hornbeck. STATEMENT OF DONALD W. HORNBECK, OF MILLER & HORNBECK, CLEVELAND, OHIO, COUNSEL FOR THE BROTHERHOOD OF LOCOMOTIVE ENGINEERS AND THE BROTHERHOOD OF RAILROAD TRAINMEN Mr. HORNBECK. Mr. Chairman and members of the committee, my name is Donald W. Hornbeck. I am a member of the law firm of Miller & Hornbeck, Cleveland, Ohio, which is counsel for the Brotherhood of Locomotive Engineers, and also the Brotherhood of Railroad Trainmen. Both of these organizations have asked me to |