REGULATION OF TRANSPORTATION OF PASSENGERS

AND PROPERTY BY AIRCRAFT

MONDAY, JULY 29, 1935

UNITED STATES SENATE,

SUBCOMMITTEE OF THE COMMITTEE,

ON INTERSTATE COMMERCE,

Washington, D. C.

The subcommittee met, pursuant to call, in the committee room. of the Senate Committee on Interstate Commerce, 412 Senate Office Building, Senator Vic Donahey (chairman of the subcommittee) presiding.

Present: Senators Donahey (chairman of the subcommittee), Truman, Bone, Hastings, and Metcalf.

Also present: Senator Pat McCarran of Nevada.

Senator DONAHEY. The subcommittee has met to hold hearings on S. 3027, to amend the Interstate Commerce Act, as amended, by providing for the regulation of the transportation of passengers and property by aircraft in interstate and foreign commerce, and for other purposes. If there is no objection, we will order the amendment in the nature of a substitute for the original bill to be printed at this point in the record.

(The bill referred to, S. 3027, is here printed in full as follows:)

[S. 3027, 74th Cong., 1st sess.]

AMENDMENT Intended to be proposed by Mr. McCarran to the bill (S. 3027) to amend the Interstate Commerce Act, as amended, by providing for the regulation of the transportation of passengers and property by aircraft in interstate and foreign commerce, and for other purposes, viz: Strike out all after the enacting clause and insert the following:

PART IV

SECTION 401. This part may be cited as the "Air Transport Act of 1935."

DECLARATION OF POLICY AND DELEGATION OF JURISDICTION

SEC. 402. (a) It is hereby declared to be the policy of Congress to regulate transportation by air carriers in such manner as to recognize and preserve the inherent advantages of, and foster sound economic conditions in, such transportation and among such carriers in the public interest; promote adequate, economical, and efficient service by air carriers and airport operators, and reasonable charges therefor, without unjust discriminations, undue preferences or advantages, and unfair or destructive competitive practices; improve the relations between, and coordinate transportation by and regulation of, air carriers and other carriers; and develop and preserve a transportation system by air properly adapted to the needs of the commerce of the United States and of the national defense.

(b) The provisions of this part apply to the transportation of passengers or property by air in interstate or foreign commerce and to the procurement of and the provision of facilities for such transportation; and the regulation of such transportation, and of the procurement thereof, and of the provision of facilities therefor, is hereby vested in the Interstate Commerce Commission.

SEC. 403. As used in this part

DEFINITIONS

(a) The term "person "includes any individual, firm, copartnership, corporation, company, association, or joint stock association; and includes any trustee, receiver, assignee, or personal representative thereof.

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(b) The term "Commission" means the Interstate Commerce Commission. (c) "Aircraft" means any contrivance of whatever description which is used, or is capable of being, or is intended to be, used, as a means of transportation by air.

(d) The term "air carrier" means any person who or which undertakes, whether directly or by a lease or any other arrangement, to transport passengers or property in interstate or foreign commerce by aircraft for compensation or hire.

(e) The term "airport operator" means any person, not included in the term "air carrier", who or which owns, operates, manages, or controls any airport.

(f) The term "airport" means any locality, either of land or water, which is adapted for the landing, docking, mooring, taking off, servicing, and storage of aircraft, or a place used regularly for receiving or discharging passengers or property transported by air.

(g) The term "facility' or "facilities" includes any airport, light or other signal structure, radio directional finding facility, radio or other electrical communication facility, or any other structure or facility used as an aid to air navigation.

(h) The term "civil airway" means a route designated by the Secretary of Commerce, with the approval of the Commission, as a route in the navigable air space suitable for interstate or foreign commerce.

(i) "Navigable air space" means air space above the minimum altitudes of flight prescribed by regulations issued pursuant to law, and is subject to a public right of freedom of interstate or foreign air navigation in conformity with the requirements of this part.

(j) The term "transportation" includes the use of any and all facilities and instrumentalities of shipment or carriage, irrespective of any contract, express or implied, for the use thereof, and any and all services in or in connection with transportation.

(k) The term "interstate commerce" means commerce from one State or Territory or possession of the United States, or the District of Columbia, to any other State or Territory or possession of the United States, or the District of Columbia, or between places in the same State through another State, whether such commerce moves wholly by air or partly by air and partly by other forms of transportation.

(1) The term "possession of the United States" as used in this part shall include the Philippine Islands and the Canal Zone, and Puerto Rico, notwithstanding the provisions of the Act of March 2, 1917, to provide a civil government for Puerto Rico, and any other Act or Acts which are inconsistent with the provisions of this part, and any other possession of the United States.

(m) The term "foreign commerce" means commerce between any place in the United States and any place in a foreign country, or between places in the United States through any foreign country, whether such commerce moves wholly by air or partly by air and partly by other forms of transportation.

(n) The term "certificate" means a certificate of public convenience and necessity issued under this part to any air carrier or to any airport operator.

GENERAL DUTIES AND POWERS OF THE COMMISSION

SEC. 404. (a) It shall be the duty of the Commission

(1) To regulate air carriers and airport operators as provided in this part, and to that end the Commission shall have authority to make and amend such general or special rules and regulations and to issue such orders as may be necessary to carry out the provisions of this part.

(2) To avail itself of the assistance of any of the several existing research and technical agencies of the Government having special knowledge of matters relating to the safety of operation and equipment of aircraft, which are hereby authorized and directed to conduct such scientific and technical researches, investigations, and tests as may be necessary; and for that purpose the Commission may transfer to such agency or agencies such funds as may be necessary and available to make this provision effective.

(3) To promote the development of safe and efficient air transportation by prescribing, and revising at least annually, the minimum standards respecting the types of equipment to be used, and the quality of service to be rendered, in such transportation, and to make such standards effective on such dates as it may determine after due considerotion of the time required to procure and place such equipment in operation or to establish such service.

(4) To approve or disapprove, in whole or in part, any and all rules and regulations of any other department of the Government which affect the Commission's powers and duties under this part.

(5) To study the possibilities for, and direct the qualitative and quantitative development of, interstate or foreign air transportation and services, and to collect and disseminate information relative thereto.

(6) To inquire into the organization of air carriers and airport operators and the management of their business, to keep itself informed as to the manner and method in which the same is conducted and to transmit to Congress from time to time such recommendations as to additional legislation relating to such air carriers and airport operators as the Commission may deem necessary.

(7) To approve or disapprove, in whole or in part, any and all applications made by any air carrier or airport operator or other person subject to this part for, or in connection with, any loan from the Government, or any agency thereof, to such air carrier, airport operator, or other person.

(8) To study and report to Congress from time to time whether, in the public interest, the Government should share the cost of installation and maintenance of lighting equipment at airports subject to this part; and whether direct Government financial aid should be extended to air carriers or airport operators, including recommendations as to the service, equipment, and operation which should entitle air carriers or airport operators to such aid.

(9) In issuing certificates under this part, to provide for the application to civil aircraft of the laws and regulations relating to the entry and clearance of vessels to such extent and upon such conditions as it deems necessary, and to consider the necessity of securing for air carriers of the United States equality of opportunity in foreign countries

(10) To study and report to Congress as to the effect upon air transportation of existing laws and regulations for customs, immigration, and public-health clearances.

(11) To specify that an air carrier or airport operator must make proper provision for handling the mail, and also provide general transportation service which, in the opinion of the Commission, shall be adequate for the public convenience and necessity.

(12) To administer, execute, and enforce all other provisions of this part, to make necessary orders in connection therewith, and to prescribe rules, regulations, and procedure for such administration.

(b) The Commission may from time to time establish such just and reasonable classifications or groups of air carriers or airport operators subject to this part as the special nature of the services performed by such air carriers or airport operators shall require; and such just and reasonable rules and regulations and requirements, consistent with the provisions of this part, to be observed by the air carriers or airport operators so classified or grouped, as the Commission deems necessary or desirable in the public interest.

(c) Upon complaint in writing to the Commission by any person or body politic, or upon its own initiative without complaint, the Commission may investigate whether any air carrier or airport operator subject to this part has failed to comply with any provision of this part, or with any requirement established pursuant thereto. If the Commission after notice and hearing finds upon such investigation that such air carrier or airport operator has failed to comply with any such provision or requirement, the Commission shall issue an appropriate order to compel the air carrier or airport operator to comply therewith. Whenever the Commission is of opinion that any complaint does not state reasonable grounds for investigation and action on its part, it may dismiss such complaint.

(d) Whenever it shall appear from complaint made to the Commission or otherwise that the rates, fares, charges, rules, regulations, or practices of air carriers engaged in transportation to or from a port or ports of any foreign country in competition with interstate or foreign air carriers subject to this part cause undue disadvantage to the latter by reason of such competition, the Commission may relieve the latter from the provisions of this part to such extent, and for such time, and in such manner as in its judgment may be necessary to avoid or lessen such undue disadvantage, consistently with the public interest and the policy declared in this part.

CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY

SEC. 405. (a) No air carrier or airport operator shall engage in any interstate or foreign transportation, or any service connected therewith, subject to this

part unless there is in force with respect to such air carrier or airport operator a certificate of public convenience and necessity issued by the Commission, authorizing such transportation or service: Provided, That if any air carrier or airport operator or any predecessor in interest, has been operating during the year 1934, or any part thereof, such air carrier or airport operator may continue such operation from the date of the passage of this part until such time as the Commission shall pass upon the application for a certificate as provided for herein, which application must be filed within 120 days after this section takes effect: Provided further, That pending the determination of any such application the continuance of such operation shall be lawful: And provided further, That this paragraph shall not be so construed as to require any such air carrier or airport operator lawfully engaged in operation solely within any State to obtain such certificate from the Commission.

(b) Application for a certificate shall be made in writing to the Commission, be verified under oath, and shall be in such form and contain such information and be accompanied by proof of service upon such interested parties as the Commission shall by regulation require.

(c) Upon the filing of an application under this section the Commission shall immediately give due notice to the public of the filing of the same by posting a copy thereof in the office of the secretary of the Commission, and shall fix a date, not later than twenty days from the date of such filing, within which any person having an interest in the issuance of the certificate applied for may file with the Commission, under rules and regulations to be prescribed by the Commission, a protest or memorandum of opposition to the issuance of the certificate for which application has been made, and within thirty days from the date fixed for filing protest or memorandum of opposition the Commission shall set a date for public hearing thereon. The Commission shall give to the decision of applications under this section preference over all other questions pending before it under this part, and shall decide the same as speedily as possible.

(d) A certificate shall be issued to any qualified applicant therefor, authorizing the whole or any part of the operations covered by the application, if it is found that the applicant is fit, willing, and able properly to perform the service proposed and to conform to the provisions of this part and the requirements, rules, and regulations of the Commission thereunder, and that the proposed service, to the extent to be authorized by the certificate, is or will be required by the present or future public convenience and necessity; otherwise such application shall be denied.

(e) Any certificate issued under this section to an air carrier shall specify the route or routes over which (or, in case of operations not over specified routes or between fixed termini, the territory within which) the air carrier is authorized to operate and the service to be rendered over such route or within such territory. (f) Any certificate issued under this section to an airport operator shall specify the services and facilities which such operator is authorized to provide.

(g) At the time of issuance of a certificate under this section, and from time to time thereafter, there shall be attached to the exercise of the privileges granted by the certificate such reasonable terms, conditions, and limitations as the public convenience, necessity, and safety may from time to time require, including terms, conditions, and limitations as to the furnishing of additional service over the specified route or routes, or within the specified territory or at the specified airport, and the extension of the route or routes of the air carrier, and such terms and conditions as are necessary to carry out, with respect to operations of the air carrier or the airport operator, the requirements established by the Commission under this part.

(h) Any air carrier holding a certificate of public convenience and necessity issued under this part may transport in interstate or foreign air commerce to any place special and chartered parties, and may occasionally depart from the route over which it is authorized to operate under the certificate for the purpose of providing special service to a point not on such route, subject to police regulations of the several States, and in accordance with such regulations as the Commission may prescribe in the interest of public convenience and necessity.

(i) A certificate for the transportation of passengers may include authority to transport in the same aircraft, baggage, express, mail, newspapers, or such other classes of service as may be approved by the Commission.

(j) No certificate shall be issued under this part, and no air carrier or airport operator shall hold or operate under any such certificate, except upon condition— (1) That the air carrier or airport operator shall undertake to provide necessary and adequate facilities and service for the transportation of and to transport United States mail in accordance with this part whenever required to do so by the Postmaster General under such regulations as he may prescribe consistent with