On page 47, lines 13-15, the words "in foreign countries for transportation by their service" are duplicated and appropriate correction should be made. Sections 418 and 419 are the usual separability and effective date provisions. Subject to the above corrections it is believed that the amended bill will promote the orderly and safe development of air transportation with due regard for the interests of the Government, the public, and the operators. Respectfully submitted.

FRANK MCMANAMY, Chairman of Legislative Committee.

Table showing passenger traffic statistics for air-mail contractors

Table comparing sections of S. 3027 and amendment thereto Continued

Senator MCCARRAN. I draw the attention of the committee to a letter of June 26, 1935, from Mr. Roper, Secretary of the Department of Commerce, in which he states that he will make a study of the bill and submit a report on it later. I do not find that report before the committee. It has not come in yet.

Senator DONAHEY. We will call for it. It will be presented, will it? Senator MCCARRAN. Yes; I understand so.

Now, Mr. Chairman, to facilitate the work of the committee and not to keep the committee here too great a length of time, I respectfully suggest that at this time the committee recess until tomorrow, at which time we hope to have this committee print before the committee, and at which time I will have marshaled as best I can the facts which I hope to give to the committee in as short and brief and concise a manner as possible; and I have notified those whom I wish to come before the committee, and others who want to come on their own accord will be here. I am partially to blame for this situation, because I have just returned from a trip to the southern end of the country, and I would like to have that order followed if it is convenient and agreeable to the committee. That would mean that those who are here now would kindly return, and anyone else who wants to be heard will come here tomorrow. I want to say that I will go just as fast as I can in presenting this matter to the committee.

Senator DONAHEY. Is there anybody here who desires to be heard? Can we not hear somebody this morning?

Senator MCCARRAN. Except that I think the orderly way would be to hear first those who are in favor of the measure.

Senator DONAHEY. Is there anybody here who wishes to be heard in connection with this measure this morning?

Mr. HAMILTON. Tomorrow would be satisfactory to me.

Senator DONAHEY. Very well, then. We will adjourn to meet tomorrow morning at 10:30.

Senator MCCARRAN. Thank you very much, Senator.

(Whereupon, at 11 a. m., the subcommittee adjourned until tomorrow, Tuesday, July 30, 1935, at 10:30 a. m.)

REGULATION OF TRANSPORTATION OF PASSENGERS

AND PROPERTY BY AIRCRAFT

TUESDAY, JULY 30, 1935

UNITED STATES SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON INTERSTATE COMMERCE, Washington, D. C.

The subcommittee met, pursuant to adjournment, in the committee room of the Senate Committee on Interstate Commerce, Senate Office Building, Senator Vic Donahey (chairman of the subcommittee) presiding.

Present: Senators Donahey (chairman of the subcommittee) and Truman.

Also present: Senator Pat McCarran, of Nevada.

Senator DONAHEY. Senator McCarran, you may proceed.

STATEMENT OF HON. PAT MCCARRAN, SENATOR FROM NEVADA Senator MCCARRAN. Mr. Chairman, for the benefit of the committee, I ask to be inserted in the record at this time the message of the President of the United States, of date June 7, 1935, and especially draw the committee's attention to one paragraph in the message, which is a short message, dealing with the business of air transportation. The entire message has as its tone and tenor the coordination of the transportation facilities of the United States. I ask that the message be inserted in the record.

Senator DONAHEY. Without objection, it is so ordered.

(The message of the President of the United States dated June 7, 1935 is as follows:)

[H. Doc. No. 221, 74th Cong., 1st sess.]

MESSAGE FROM THE PRESIDENT OF THE UNITED STATES TRANSMITTING A RECOMMENDATION THAT THE EMERGENCY RAILROAD TRANSPORTATION ACT OF 1933 BE EXTENDED FOR AT LEAST ANOTHER YEAR

To the Congress of the United States:

It is high time to deal with the Nation's transportation as a single, unified problem. For many years in the past transportation meant mainly railroads. But the rise of new forms of transportation, great expenditures of Government funds for the development of waterways and for the building of great highways, and the development of invention within the railroad system itself, have enlarged the problem far beyond that conception which dominated most of our past legislation on the subject. In some instances the Government has helped a little. In others it retarded. In still others it has given special assistance from time to time in many instances without rhyme nor reason-in all instances without considering each aspect of the problem in the light of all the others. It is small wonder that in a transportation picture so confused, the public has been inadequately served.

I have from time to time, in this session, addressed the Congress as to the necessity of various forms of Government aid and regulation of transportation.

21

I now wish to draw together and supplement these various suggestions for the consideration of the Congress in this session.

In the railroad field there has been a growing recognition of the necessity for reorganization and coordination. To that end there was created the office of Federal Coordinator of Transportation. The Coordinator has considered various ways of effecting economies through the physical coordination of railway facilities and services, and, in addition, has studied and made suggestions for legislative measures covering both the railroads and other forms of transportation.

Another type of reorganization necessary for the sound and healthy recovery of our railroad system is financial. Many of our railroads are in a sound financial condition. Others are in need of reorganization. To enable necessary financial reorganizations to be effected inexpensively and promptly the Congrees passed, 2 years ago, certain amendments to the Federal Bankruptcy Act. Shortcomings in this legislation have appeared which have prevented an efficient and extensive use of it. In order to correct these shortcomings the Coordinator has recommended certain amendments which are now before the Congress for action. Various differences of opinion as to these amendments are rapidly being adjusted and it is my hope that this legislation may be promptly enacted.

I have already recommended to the Congress my views with regard to the relations that should exist between the Federal Government and air carriers. Legislation has been introduced for the purpose of carrying out these recommendations. I am in general accord with the substance of this legislation although I still maintain, as I indicated in my message on that subject, that a separate commission need not be established to effectuate the purposes of such legislation. Air transportation should be brought into a proper relation to other forms of transportation by subjecting it to regulation by the same agency.

A bill for the regulation of highway motor carriers has passed the Senate and is now before the House of Representatives. The practical unanimity with which the Senate passed this bill convinces me of the extent to which all of the difficult adjustments among the interests concerned were made and I recommend its early passage by the House.

Another bill for the regulation of intercoastal and coastwise trade and of some of the inland waterway carriers prepared by the Coordinator has been introduced and is before the Congress for action. I recommend that this bill be considered by the appropriate committees and pressed to early passage. I can see no reason why the responsibility for the regulation of intercoastal, coastwise, and inland waterways should not be vested in the Interstate Commerce Commission, with proper provision for the departmentalizing of the work of the Commission.

It is my hope that the Interstate Commerce Commission may, with the addition of the new duties that I have indicated, ultimately become a Federal Transportation Commission with comprehensive powers. It has been my intention to recommend this strongly to this session of the Congress, but the time remaining seems to preclude the discussions necessary for such changes. Such a reorganization should not be delayed, however, beyond the second session of the Seventy-fourth Congress.

The efforts toward the coordination of the railroads and the general improvement of transportation conditions which were begun by the Emergency Railroad Transportation Act of 1933, should proceed, and I recommend that the act and the office of Coordinator be extended for at least another year.

THE WHITE HOUSE, June 7, 1935.

FRANKLIN D. ROOSEVELT.

Senator MCCARRAN. Mr. Chairman, Senate bill 3027, as it now stands before the committee, is what might be termed a "third draft" of this bill that I have presented during this session of Congress. The committee will recall that during the Seventy-third Congress I introduced a bill based upon the same subject.

At that time I believed and I still believe that, which is my individual belief, it would have been better to have an independent commission to deal with air transportation. However, the President has taken the view that it should come under the Interstate Commerce Commission, and while we may not agree entirely, perhaps it would be best to try that out and give it the best opportunity for the devel

opment of the science and for the development of the industry that is possible.

I want to say to the committee that this entire bill is drafted with that in mind and with that only in mind, that is, the development and upbuilding of the industry, and to develop the air commerce of America so that it would be second to none in the world, having in mind that every commercial line is a potent factor toward national defense as well as toward the development of commerce by air.

With that preliminary statement, Mr. Chairman, I have, with the assistance of others, and have called to my assistance the best thought that I could find who were willing to assist, drafted this bill as an amendment to the Interstate Commerce Act, this act to be known as the "Air Transportation Act of 1935."

The bill starts out by setting out definitions, so that the terms may be used in a short form thereafter. It then, on page 5 and following, deals with general duties and powers of the Commission. The term "Commission" meaning the Interstate Commerce Commission.

Going down then to page 16, under the subject of "Valuation", giving the Interstate Commerce Commission certain powers of valuation, setting forth how accounts, records, and reports shall be available.

On page 19, it deals with the subject of rates, fares, charges, classifications, and practices. And the committee will see that we deal with that subject quite at length because it is all-important.

Then, on page 21, under the caption "Tariffs of Air Carriers and Air Port Operators", the committee will see that all through this bill we deal with air carriers and airport operators, dealing with them because they are related and interrelated and essential to the commercial transportation work.

On page 32, under the caption, "Consolidation, Merger, and Acquisition of Control", we deal with the subject of how consolidations or mergers or acquisitions may be accomplished. And the tenor of that is that such consolidations or mergers or acquisitions must be by and with the consent and after hearing before the Commission and can only be accomplished with the consent of the Commission. On page 39, we deal with the proposition of issuance of securities, and there again we place the entire matter in the control of the Interstate Commerce Commission. It will be noted that the antitrust laws are set aside as regard the operation of this bill because, as in the other transportation acts, it is found essential and they are made operative only by, with and through the control of the Commission. That is under the general theory or plan or scheme of coordination of all transportation facilities.

There are many phases of the bill that we will go into as the various parties appear here, and I will not take up the time of the committee further by way of explanation, excepting to say that the whole object and purpose of this bill is to assist in the coordination of transportation and bringing the transportation facilities of the country under one head, namely, the Interstate Commerce Commission, in carrying out the theory of the President.

With your permission, Mr. Chairman, I am going to call upon various parties here. I would like to call upon the representative of the pilots, Mr. Hamilton, if he is present. Mr. Hamilton, will you come forward somewhere here?