for $3 million is also contrary and in opposition to the basic position you have taken under the law. Mr. BOYD. I think it is fair to say that the Bureau of the Budget disagrees with our view. POSSIBLE CLAIM AGAINST UNITED STATES Senator ALLOTT. All right; now, then, if that is the case, are you taking the position that under the general law people can come in and make a claim against the United States in the Court of Claims or otherwise if Congress does not appropriate the money that you commit yourself to? Mr. BOYD. Yes, sir. Senator ALLOTT. I think this is a good clear answer. exactly where we are now. Senator MAGNUSON. If they continue the same service. We know Senator MAGNUSON. Who determines how much service? You people do, don't you? Mr. BOYD. We do, yes, sir. REDUCTION OF HELICOPTER SERVICE Senator MAGNUSON. So if you want to cut the cloth to fit the suit, you just tell them to cut the service down to $3 million worth. Then they could not come into the Court of Claims, could they? Mr. BOYD. No, they could not, but I would like to say in this regard and make it just as clear as my prior Senator MAGNUSON. You do not think they should cut the service. Mr. BOYD. If the service is cut to $3 million, I would say to this committee and Congress cut it out completely because you are wasting your money at $3 million. Senator MAGNUSON. That is the kind of answer we want. So we have to make this determination now again, and, of course, I needn't tell you people on the Board what a problem this one item is with us up here, both in the committee, on the floor, and worst of all, in conference. FEDERAL AVIATION ACT VERSUS COMMITTEE INSTRUCTIONS Senator YOUNG. Mr. Chairman, could I ask a question? Does the Board intend to follow instructions that this committee may give you or the law? You say the law requires certain things. If this committee instructs you to report or otherwise to cut the service, which are you going to follow? Mr. BOYD. Well, Senator, we are going to follow the law. Senator YOUNG. You pay no attention to this committee, then. Mr. BOYD. If this committee makes the law-I would say this. We feel that we have an obligation to carry out the intent of the Federal Aviation Act which the Congress enacted and provided for the Board to carry out the responsibilities, and until section 406 of that act is amended, the only thing I see we can do, based on our oath of office, Senator, is to carry out the provisions of section 406. Senator YoUNG. This committee would often be in contradiction to the law, then, because we often put the limitations on the amount of funds. If we know what the law Mr. BOYD. The only thing I can say is that we consider ourselves to be creatures of Congress and responsible to the Congress. Now it certainly is true, Senator, that in a number of cases, we, and I presume other agencies, are faced with contradictory situations, and my own personal view is that when we are faced with a contradictory situation, I think we go to the basic law which in this case is the Federal Aviation Act. Senator YOUNG. If this committee put language in the bill itself, it would have the effect of law, would it not? FLEXIBILITY OF THE LAW Senator MAGNUSON. Well, if we would the law gives flexibility to these people to determine the amount of service. It says service shall be given, but if we cut it to $3 million or follow the $3 million, they would have to tell them-they would have to cut the service to fit the $3 million. But he says that he thinks that is in contravention of the basic law. If we are going to have helicopter service, we should provide the adequate service, and if we are going to cut it to $3 million, we had better not have it at all, then it is out from the law, not in. Is that a fair statement? Mr. BOYD. I think it is, but I do not think we understand the appropriations acts to constitute amendments of the substantive law. Senator YOUNG. Could you eliminate the service from one of the cities, for example? Could you do this and hold appropriations down that way? Mr. BOYD. Yes, sir; when a certificate expires-we cannot do it. while the certificate is valid. All these carriers are on temporary certificates. Senator YOUNG. Under the basic law, can you extend the service to other cities? Mr. BOYD. Yes, we could. SECTION 406 OF THE FAA ACT Senator SALTONSTALL. Mr. Chairman, I have 406 in front of me. As I understand it, Mr. Boyd, this section relates to the payment for mail, does it not? Mr. BOYD. Yes, sir. Senator SALTONSTALL. And under 406: The Board is empowered and directed, upon its own initiative or upon the petition of the Postmaster General or an air carrier, (1) to fix and determine from time to time et cetera the fair and reasonable rates of compensation for the transportation of mail by aircraft, the facilities used et cetera. Mr. BOYD. Yes, sir. Senator SALTONSTALL. And then "to prescribe the method or methods, by aircraft-mile"-and then under (b): In fixing and determining fair and reasonable rates of compensation under this section, the Board, considering the conditions peculiar to transportation by aircraft and to the particular air carrier or class of air carriers, may fix different rates for different air carriers or classes of air carriers, and different classes of service. FIXING MAIL RATES In other words, what you are doing is fixing the rates by which mail shall be carried, and when you come down to the helicopters, you fix what is a fair rate and then say if that is not enough, so that they are running at a loss, then the Government has got to come in and subsidize them, isn't that about it? Mr. BOYD. Yes, sir. That is a pretty shortcut way to get at it. Senator SALTONSTALL. So that if you fix a rate, you could in the helicopters fix a higher rate which would eliminate some of the subsidy or it would cost more to carry the mail. That is what it amounts to. Am I right in that? Mr. BOYD. Well, as a legal matter, yes, we could do that. But in that case, if we fixed the rate so that it was not economical for the Post Office to use the helicopters, then they would quit using the helicopters. Senator SALTONSTALL. All our argument last year concerned New York, Los Angeles, and Chicago. Mr. BOYD. Yes, sir. Senator SALTONSTALL. And what it meant for the helicopters, that you were fixing the rate by which those helicopters would carry the mail from the O'Hare Airport, for instance, into the Chicago post office. Mr. BOYD. Yes, sir. Senator SALTONSTALL. Is that right? Mr. BOYD. Yes, sir. Senator SALTONSTALL. And so you fixed what you think is a fair rate for a passenger and to carry the mail, and we pay that subsidy for carrying the mail, and the passenger gets his fare at the rate that you prescribe. BOARD OPERATION UNDER SECTION 406 (b) Mr. BOYD. Well, the way it works actually is that if you read on in 406(b), you will find that subsection 3 says the need of the carrier, and we do not as a technical matter fix the fares that are charged for passengers. The carriers, whether the helicopter or otherwise, file a tariff, and the Board approves the tariff, and essentially what we do is make up the difference between what the passenger pays and what it costs to maintain the operation. Now, we do this in three places, New York, Chicago, and Los Angeles. We do it in three places only because there was a judgment on the part of the Board at the time this was started that this was an experimental service, and this is what is being paid for. I think we can say the experiment has been a resounding success, and we are now in a situation where I would hope that the Congress would not look back on the amount of subsidy that has been paid in the past and say, as we have heard other critics say, my gosh, you have been paying this subsidy since 1954, and where are we? Isn't that long enough to run an operation? Well, the fact of the matter is that we have gone through three generations of equipment, and you cannot relate what happened in 1954 or 1955 or 1956 or 1957 or 1958 with other types of helicopters 31-706-64-pt. 1-9 with the situation we have today where for the first time the carriers have a piece of equipment which holds out the promise of being able to operate subsidy free. I think the manufacturers and the operators have just come a thousand miles on this thing, and we seem to be in a position where we are almost at the top of the hill, where we are paying what I must say, gentlemen, is a piddling amount of money in the national budget, and people who have not been able to inform themselves on this matter say, my gosh, 10 years, that is too long. Throw it out. JUSTIFYING SERVICES OF HELICOPTER Senator SALTONSTALL. Mr. Chairman. Mr. Boyd, what you testified is-may I read the last three sentences? "To maintain and continue the development of air transportation to the extent and of the character and quality required for the commerce of the United States, the postal service, and the national defense." Now, under that you justify these three helicopter services and an increased use of them. Mr. BOYD. Yes, sir. Senator SALTONSTALL. And what you say to us is that we have got to give you the money that you think is necessary to do that. Mr. BOYD. That is right, sir. Senator SALTONSTALL. That is the whole story. Mr. BOYD. Yes, sir. Senator MAGNUSON. Or cut them out. COMMITTEE CHOICE OF ACTION Senator MONRONEY. Is our only choice-amplifying what the Chairman says-our only choice is to say no money or give you the level that Congress is willing to do and say you get the best service you can out of this. Mr. BOYD. No, sir. I do not think so. I think that your choice is unlimited. You could say $3 million or $2 million or $1 million. Senator MONRONEY. That is what we did say. LESSER AMOUNTS WASTE OF MONEY Mr. BOYD. Yes, sir. But I am telling you now as a judgment of the Board, if it is $3 million, it is a complete waste of money and consequently, if it is less than $3 million, it is a complete waste of money because the carriers will not be able to maintain the type of operation which will permit them to get their bootstrap efforts going and lift themselves up out of this morass. Senator MONRONEY. You do not question the right of Congress to fix the level. Mr. BOYD. No, sir. Senator MONRONEY. You just say we ought to cut it all out if it is not enough to supply an adequate service to give them their way to work out. Mr. BOYD. Yes, sir. We are just telling you in our judgment, the ones who we think are expert in this field of economics, aviation economics, that whatever you do is quite all right, and we do not question it, but we tell you that our judgment is that you can waste a certain sum of money. REDUCTION IN NUMBER OF SUBSIDIZED HELICOPTERS Senator MAGNUSON. Well, the Chairman has been very frank about this. I wanted to ask one question that was not answered. Senator Saltonstall I believe suggested supposing you got the $3 million, the budget amount, and cut out one of the carriers. Mr. BOYD. We cannot do that before next year. DURATION OF TEMPORARY CERTIFICATES Senator MAGNUSON. Oh. I was going to ask why. They have temporary certificates. Mr. BOYD. Yes, sir. Senator MAGNUSON. A year, 3 years? What are they, 3-year temporaries? Mr. BOYD. Well, I think they vary. Chicago has 3-year, I believe. Los Angeles has-6 year, I believe, which expires sometime within the next 12 months, but until that expires, certainly Senator MAGNUSON. But it is possible, is it not, to cut out one service at the expiration of the temporary certificate? Mr. BOYD. Yes, sir. Senator MAGNUSON. And there has been some testimony last year that the Chicago operation, if there was to be any curtailment, that that would be the likely one to be curtailed. ANALYSIS OF HELICOPTER OPERATIONS Now, maybe you could put in the record a little later on your analysis of the three services, the Board's analysis. Mr. BOYD. I would be very happy to do that, Mr. Chairman. Mr. BOYD. In point of fact, we sent a team out into the field a month or so ago which spent nearly 3 weeks visiting the three helicopter operators, and we will submit a full report to this committee of the findings and the analysis. Senator MAGNUSON. I think that would be helpful. Senator HRUSKA. Would the chairman yield? Senator MAGNUSON. I am rushing along because of our time. Senator HRUSKA. In fixing the amount of $5 million, you arrived at that figure because of a certain level and degree of service that will be extended by these three operations. Mr. BOYD. Yes, sir. BUREAU OF THE BUDGET CUTBACK Senator HRUSKA. In cutting that back to $3 million, was there any dispute by the Bureau of the Budget with you as to the accuracy or the efficiency of those computations or did they just allow $3 million arbitrarily from other considerations? Mr. BOYD. There was no dispute on the computat My understanding is that the Bureau of t President has responsibility for alloc ୯ ator. e |