NUMBER OF POSITIONS IN FISCAL YEAR 1950 Mr. STEFAN. You were provided funds for 661 positions in 1950, is that right? Mr. MULLIGAN. 662. Mr. STEFAN. Are they all filled at the present time? Mr. MULLIGAN. Let me explain it this way: We had at the beginning of the fiscal year 1950, 671 people on our pay roll. The funds available to us for this current fiscal year would support an average employment for the entire year of 650. Starting as we did with 671 we were required to reduce our staff below the figure of 650 which I mentioned, in order to make the average for the year. Mr. STEFAN. What is this figure of 661.9? PRESENT POSITIONS AND VACANCIES Mr. STEFAN. Then you have how many positions authorized now and how many vacancies do you have? Mr. MULLIGAN. That was for 1949, Mr. Stefan. Mr. STEFAN. For 1949 it is 667.5 man-years? Mr. MULLIGAN. You are correct, sir. The 661.9 is the average for the year 1950. Mr.. STEFAN. How many positions do you have authorized now and how many vacancies do you have as of today? Mr. MULLIGAN. We have 640 people on the pay roll as of today. Mr. STEFAN. How many vacancies? Mr. MULLIGAN. We have no vacancies. Mr. STEFAN. All the positions are filled? Mr. MULLIGAN. All the positions are filled to the extent that our money will provide, because we started the year with more people than we could carry for the year. Mr. STEFAN. I understand that. You said that before. But you have no vacancies? Mr. MULLIGAN. No, sir. STATEMENT OF WORK LOAD Mr. STEFAN. At this point in the record, Mr. Chairman, I would like to have the summary representing the Board's work load by activ ities, if you have not already put it in the record. Mr. ROONEY. We shall insert it at this point in the record. The item in this chart referring to tariffs refers to number of pages and not number of separate matters, does it not? Mr. O'CONNELL. That is correct. And additionally the figure is wrong as was indicated yesterday. Mr. ROONEY. We have already found that out. Mr. O'CONNELL. I know. (The matter referred to is as follows:) Mr. STEFAN. Again I call attention to the membership of the committee to the history of this program. Here is a request presented for over a million dollars increase in spite of the increases that we gave them when they said they needed to catch up with their backlog. The backlog did not reflect the necessity for such a tremendous increase, in my personal opinion. DUTIES OF THE BOARD I have some general questions, Mr. O'Connell, in connection with the duties of your Board. What are your duties? You make rates and give permission for the extension of air lines and the establishment of new air lines? Mr. O'CONNELL. That is right. We are responsible for the economic regulation of air transportation and responsible for the safety regulation of air transportation generally. APPROVAL OF AGREEMENTS ON COMMISSIONS Mr. STEFAN. Would you have anything to do with any agreements made by commercial air carriers with travel agencies in the matter of commissions, and so forth? Do you go that far? Mr. NUNNELEY. Agreements which are common among the air lines for arranging the amount of commissions, or any other such cooperative working arrangements by the air lines are filed with us and we have to approve or disapprove them. COMMISSIONS TO TRAVEL AGENCIES Mr. STEFAN. You approve the matter of commissions which air lines give to travel agencies? Mr. NUNNELEY. To the extent that that subject is covered by agreements among the air lines. In other words, if two or more air lines get together and say that we will give the agents only 5 or 10 percent, they must file that agreement with us and we must approve or disapprove it. Mr. STEFAN. How much do the air lines give these travel agencies in commissions for selling airplane tickets? Mr. McCLURKIN. Generally, domestic it is 5 percent and international 7.5 percent. If there is a general agency agreement of some kind which involves performing other services, there is an overriding commission usually of 2.5 percent on either the 5 percent or the 7.5 percent. PURCHASE OF TICKETS OUTSIDE THE U. S. A. Mr. STEFAN. Travel agencies have complained a great deal, Mr. O'Connell, that under the present tax of 15 percent on travel tickets, a lot of people have gone to Mexico or Canada and purchased their tickets with the result that American travel agencies have lost a lot of money. Mr. O'CONNELL. That is true, and the Government has lost a lot of money, too. Mr. STEFAN. Is that practice still going on? Mr. O'CONNELL. Well, to an extent. I believe the carriers generally, on a cooperative basis, have not facilitated that type of operation more recently. But there was, in fact, a wide open hole in the tax law so that if a person bought a ticket in Canada Mr. STEFAN. Suppose I sent up to a travel agency in Windsor, Ontario, for a ticket from here to Nebraska. I could do that, could I not? Mr. O'CONNELL, Yes. Mr. STEFAN. As a result, the Government would lose the 15-percent tax and the travel agency would lose their 5-percent commission, or whatever it amounts to? Mr. O'CONNELL. That is right. Mr. STEFAN. I am referring to the American travel agency. Mr. NUNNELEY. That is not something over which we have any jurisdiction at all. Mr. STEFAN. These rates that the carriers make with the travel agencies are a matter of agreement between the travel agencies and the air lines. But they bring those rates to you for your approval, is that right? Mr. NUNNELEY. They bring the agreement, as they must under section 412, to us for approval or disapproval. It gives us no control over the person who goes to Canada and buys a ticket, as you have described. Mr. STEFAN. That is just an extraneous matter? SCALE OF COMMISSIONS Mr. STEFAN. I want to get back to the matter of rate making between the carriers and the travel agencies, the matter of the commissions. Mr. NUNNELEY. Insofar as that is embodied in an agreement among the air lines, it must be submitted to us and we act on it. Mr. STEFÁN. All you do is to approve the agreement, is that the idea? Mr. NUNNELEY. Approve it as a group; yes, sir. Mr. STEFAN. You have nothing to do with whether the rate is too high or too low-that is, the commission to the travel agencies? Mr. NUNNELEY. A part of our responsibility, I presume, would be to determine if the rate was at an improper level, in which case we would disapprove that agreement. Mr. STEFAN. The air lines used to sell travel books and give a discount of 15 percent. Has that kind of business been liquidated? Is that out now? Mr. NUNNELEY. That is correct. That discount is no longer offered by the air lines. Mr. STEFAN. I understand, however, from the travel agencies that the air lines pay the travel agencies no commission on books that they sell; is that true? Mr. NUNNELEY. It used to be true when that plan was in effect. I do not understand that it is true any longer. The plan is no longer in effect. No discount is offered of that character. Mr. STEFAN. You have nothing to do with a travel agency that is set up in business in competition with other travel agencies. That is |