Miss EARHART. Charter operators are those individuals who have airplanes for hire to carry on miscellaneous flying. For instance, a rancher is wounded and the airplane is the quickest method of getting him from his isolated home to medical care. He is off the route of any regular air line and he calls a charter operator, who is ready at all times, day and night, to fly an airplane anywhere.

Again, sightseeing flights come under this type of service. Schools I believe come under this type of service, as well as flying done for motion pictures.

You, perhaps, are not familiar with the Motion Picture Pilots' Union, which carries on and does most of the flying for the motionpicture industry. I believe there would be no point in putting such flying and other charter services under the regulation of the Interstate Commerce Commission, at least at the present time. I am sure such regulation would tend to put a great proportion of these pioneers out of business, for their existence is more or less precarious at best.

Senator MCCARRAN. Miss Earhart, do you not think, if you will develop that last thought, that if the Interstate Commerce Commission or some proper commission had the power, that in keeping with what you know, and which naturally they would acquire by way of knowledge, there could be regulation that would be tempered and right and in keeping with the respective industries to which you have referred?

Miss EARHART. When you realize, Senator McCarran, that these groups are now regulated as to safety requirements, as to license requirements, as to the airplanes they may fly, as to when they may fly them, and all that sort of thing, the only point possible to be taken into consideration by the Interstate Commerce Commission in that connection would be regulation as to when those operators could fly in bad weather and interfere with scheduled transport. The Department of Commerce permits air lines to fly under certain conditions. But there is no regulation as to when these private pilots may fly, and that would be the only phase which I could see would readily come under the Interstate Commerce Commission. It is really too early for a legislative body to consider that matter at the present time. Senator MCCARRAN. Just one or two more questions: Do you consider the present measure, with the splendid suggestions you have made, to be a step in the right direction?

Miss EARHART. Yes, I do.

Senator MCCARRAN. Have you read the report made by Mr. Eastman?

Miss EARHART. I have read his report, and as usual it is a very clear and concise document, filled with valuable, common sense ideas. Senator MCCARRAN. And in the main you rather agree with him? Miss EARHART. Yes, I do; with the exception of the certificates of convenience and necessity. I believe that air lines should be allowed to develop, hit or miss, for a certain period of time, and thus gain a liberal experience upon which to base future regulation.

Senator MCCARRAN. That last expression of yours, "hit or miss," by which method they should be allowed to develop, might mean that in order to gain an experience they would have to suffer a great loss. Miss EARHART. Well, in any development there is a certain amount of sacrifice inevitable.

Senator MCCARRAN. That is true. You are entirely right on that. But there is the question of minimizing the amount of sacrifice.

Miss EARHART. That is true. But I see in it a certain amount of stalemating in the matter of progress. I do not know whether I make myself clear. For instance, one air line is run here, and another line is run over here. A far-sighted gentleman wishes to connect these two points and he cuts across the hypotenuse of the triangle. Of course with the two named air lines having certificates of convenience and necessity, the pioneer is going to be held up in attempting to cut across, whereas he might be serving two centers of population exceedingly well if permitted to go ahead.

Senator MCCARRAN. You do not understand, do you, that under this bill he would be held up?

Miss EARHART. I think so.

Senator MCCARRAN. He could apply for a certificate of convenience and necessity and establish a basis to cover the issuance of it.

Miss EARHART. Perhaps so, but you know that the mills of any legislative body grind exceedingly slow.

Senator MCCARRAN. Well, as to that matter, we do not expect it to be placed under any legislative body but in the hands of the Interstate Commerce Commission.

Miss EARHART. Well, I think I might apply that to the Commission as well, because of the study required where there is yet so little. material to study.

Senator MCCARRAN. Miss Earhart, I am very grateful indeed to you for your coming here and giving us the benefit of your suggestions. We are trying to work this matter out properly for the benefit of the industry and the public, and it is good to have suggestions from you, who have given so much time and thought and energy to flying.

Miss EARHART. If my suggestions are of any benefit to you I shall be glad.

pro

Senator DONAHEY. Miss Earhart, do you find uniformity in the matter of operation of airports? For instance, this legislation is posed to regulate airports and operators. What has been your experience in connection with uniformity and successful planning in connection with the air industry to protect the public welfare?

Miss EARHART. There is very great diversity in the types of airports and in the operation of airports. I feel that the regulation of the Interstate Commerce Commission, again, possibly should not be extended to airports except terminals serving several air lines. Most of them are impecunious and just hanging on and could bear no additional expense. They need every possible means of income. To illustrate, there are airports that sell alfalfa from the unused portion of the field, to supplement revenue from aviation activities. The transport operation of these airports is only a small part of their possible income. And, of course, with the Department of Commerce helping, as they have never helped before, the private pilot, we may look for a great increase in private flying. Again, airports supported by this phase of the industry hardly should be under the regulation of the Interstate Commerce Commission.

Senator DONAHEY. Speaking strictly of public welfare, could not there be a system of uniform lighting and uniform operation that would be helpful to everybody through regulation?

Miss EARHART. Yes; more uniform than it is now.

Senator DONAHEY. Do you find little fault with the airport situa tion?

Miss EARHART. There are certain regulations adopted by the Department of Commerce, and airports are increasing in uniformity as the practices become accepted. But we are still in a state of flux, and really no one knows what are the proper practices, what kind of lights there should be, whether concrete on runways is better than asphalt, or whether there should be any runways at all. There are many matters that are still to be determined by experience.

Senator DONAHEY. I know nothing about the subject and was asking for information from your experience.

Miss EARHART. You will please realize that I do not pose as an expert. Perhaps aviation is too young to have any experts.

Senator DONAHEY. I thank you very much for your suggestions. Senator MCCARRAN. Yes, Miss Earhart, I wish to thank you again. Miss EARHART. It has been a pleasure to come here and find people sincerely interested in aviation.

Senator MCCARRAN. That is what we are interested in, and we appreciate the suggestions from those who have had experience, such as you have had.

(Thereupon Miss Earhart left the committee table.)

Senator DONAHEY. Senator McCarran, I believe you wished Mr. Eastman to be heard.

Senator MCCARRAN. Yes, Mr. Chairman. Mr. Eastman, if you will just state your official position.

STATEMENT OF JOSEPH B. EASTMAN, MEMBER OF THE INTERSTATE COMMERCE COMMISSION AND DESIGNATED AS FEDERAL COORDINATOR OF TRANSPORTATION, WASHINGTON, D. C.

Senator MCCARRAN. Mr. Eastman, in keeping with your experience I will ask you whether or not you have considered the bill now before the subcommittee, and if so if you will give a frank statement of your views with reference to the bill and its general operation.

Mr. EASTMAN. Well, I should preface any statement by reciting these circumstances: Under the Emergency Railroad Transportation Act, it was one of my duties to consider transportation conditions generally, and to make such recommendations for future legislation, designed to improve transportation conditions, as I felt the public interest demanded.

That authority was broad enough to cover air transportation as well as any other form of transportation. However, last year the Congress provided for a special Aviation Commission to consider the subject of air transportation and to make recommendations thereon. That being the case I did not make the investigation of air transportation which I otherwise would have made. I have not made the special study of the subject which I have made, for example, of motor-carrier transportation or of water-carrier transportation. And I approach this particular bill without having made an investigation which covers all the details of the need for such consideration.

But, so far as that is concerned, we have the report of the Aviation Commission which gives the facts with respect to the industry, and their recommendations, as I recall, were for a rather elaborate scheme of regulation, calling for a special commission to consider that particular subject and deal with it. I have approached this bill on the assumption that the need for legislation had been shown by their

investigation; and have considered the bill more from the standpoint of form and method of administration than from the standpoint of the basic need.

Approaching the subject from that standpoint I have the view that it is desirable one commission should control all forms of transportation rather than that the subject should be divided up among a number of special commissions, because I think we have got to consider transportation more and more from the general standpoint, with the view of securing a transportation system made up of all those parts which will operate together in the most efficient way, with all transportation agencies interlocking and interrelated to a very considerable I think that is more true of the other forms of transportation perhaps than it is of air transportation. Nevertheless, I think there is an interrelation between air transportation and the other forms of transportation.

From that point of view I am in favor of legislation which will provide for supervision of this subject by the Interstate Commerce Commission, and I think the Commission can handle it.

Senator DONAHEY. With full coordination?

Mr. EASTMAN. Yes, sir.

Senator DONAHEY. All under one head?

Mr. EASTMAN. Yes, sir. Now, so far as the details of the bill are concerned, I endeavored to cover those in the report which I made to Chairman Wheeler of the committee.

Senator DONAHEY. That was made a part of the record?

Mr. EASTMAN. Yes, sir; I believe it was. That letter was dated July 31, 1935. I think that is all I have to say about the subject unless you have some questions to ask me.

Senator DONAHEY. You are in favor of this measure, I take it? Mr. EASTMAN. Yes; subject to the changes suggested in that communication.

Senator DONAHEY. You think with those changes the commission would be able to carry out the work all right?

Mr. EASTMAN. I think it will.

Senator DONAHEY (chairman of the subcommittee). Any questions?

Senator MCCARRAN. I wish to thank you, Mr. Eastman, for coming up here and giving us the benefit of your recommendation. (Thereupon Mr. Eastman left the committee table.)

Senator DONAHEY. I believe we are now to hear Mr. Crowley, Solicitor of the Post Office Department.

Mr. CROWLEY. Mr. Chairman, would it be all right for you to hear Mr. Branch first?

Senator DONAHEY. Certainly.

Senator MCCARRAN. Mr. Chairman, before Mr. Branch makes his statement and not in connection with what he will have to say, on yesterday I transmitted a letter to you as chairman of the subcommittee bearing on the subject of the special Commission on Aviation that investigated the subject, and especially asked that the summary of their report, as attached to my letter, might be entered on the record of the hearings of the subcommittee.

Senator DONAHEY. Yes; that has already been done.

Senator MCCARRAN. In that connection I wish to draw the attention of the members of the subcommittee to the fact that, generally speaking, in fact emphatically speaking, the special Commission on

Aviation appointed by the President rather leaned toward and adopted the terms and conditions of my bill introduced in the Seventy-third Congress. The bill introduced in each branch of the Congress provided for a special commission rather than to put the matter under the Interstate Commerce Commission. But, taking their recommendations as a whole, I wished to draw to the attention of the members of the subcommittee the fact that as a general regulatory measure they approved the terms and conditions of the pending bill.

Senator DONAHEY. Now, Mr. Branch, we will be glad to hear you.

STATEMENT OF HARLLEE BRANCH, SECOND ASSISTANT POSTMASTER GENERAL, WASHINGTON, D. C.

Mr. BRANCH. Mr. Chairman, the Post Office Department, which has been rather close to the question of air transportation for a long while, hourly, almost minutely close to it, cannot agree that the time has come to put civil air transportation under the Interstate Commerce Commission so far as it involves the granting of certificates of public convenience and necessity, and requiring the Post Office Department to put the mail on planes under such an arrange

ment.

From our own experience and from our constant study of this problem, we believe that the time will come when that should be done, but that until the Government subsidy to air transport has ceased it will not be proper to do so. We believe that it would not be in the public interest, and we are convinced that it would not be in the interest of our mail service for you to enact the McCarran bill.

I am going to give you just a brief general picture of the situation because I believe it has its bearing on every phase of it. Then I will ask, if you please, that you hear our Solicitor, along with our General Superintendent of Air and Railway Mail Service, who has been making a study and an analysis of the McCarran bill as it would affect our service.

Two or three years ago we found the air-mail system growing more costly all the time, with a great many features in the service which did not appear to be in the public interest, or in the interest of better mail service. I do not think I speak in extreme or unmeasured terms when I say that in those days the air-mail service, as it was set up, was nothing short of nor less than a racket. The operators were more concerned in those days with various ways and means of chiseling a little more mail pay out of the Government. The service. was costing approximately $20,000,000 a year. The reception room of the Second Assistant Postmaster General, who was in charge of mail transportation and therefore in charge of the air-mail service, was filled up, all day, with representatives of air lines, who were coming in to get something else. They were always wanting something else. They took up quite a large part of the time of that official.

When the contracts were annulled we began to build up a new system. Following the sentiment in Congress, and our own sentiment, we sought to put the air-mail business on a business basis, to make it unnecessary for the companies in order to protect their interests to have lobbyists sitting around in our reception room at all hours of every day, constantly striving not only to chisel something off the