Central Airlines, or whether it was simply a routine report and handled in a routine manner.

The Solicitor of the Post Office Department advises us that there was an open hearing in which the matter was gone into thoroughly and in which it was determined that the transfer of the contracts was in the public interest.

Sincerely yours,

J. W. COLE,

Acting Second Assistant Postmaster General.

(Applications for consolidation denied.)

Mr. TABER. Have you told us about all the consolidations of lines holding these air-mail contracts, so far as you know, up to date? Mr. GRADDICK. Yes, sir; I have mentioned all of them.

Mr. TABER. Has any application for consolidation been made but not approved?

Mr. GRADDICK. Yes, sir; there was an application by T. W. A. and Braniff Airlines, but it was withdrawn. I believe I am correct in that, am I not, Mr. Howes?

Mr. Howes. The application was made and denied. A new application was made but it had been withdrawn.

Mr. TABER. T. W. A. and Braniff Airlines routes are in competition between Chicago and Kansas City, are they not?

Mr. CISLER. To Wichita.

Mr. TABER. Those two companies have competing lines between Chicago and Wichita; is that it?

Mr. CISLER. Yes.

Mr. TABER. Route 2 and route 9 go over the same territory between Kansas City and Wichita?

Mr. CISLER. The air-mail routes are together between Wichita and Kansas City. The T. W. A. does not have an air-mail route between Kansas City and Chicago but the Braniff Airlines has. The T. W. A. operates passenger service, however, between those points. Now I should like to call Colonel Gorrell. Senator TRUMAN. Very well.

STATEMENT OF EDGAR S. GORRELL, PRESIDENT, AIR TRANSPORT ASSOCIATION OF AMERICA, CHICAGO, ILL.-Resumed

Senator TRUMAN. Colonel Gorrell, will you first state your full name and the reason why you are here, and then proceed?

Mr. GORRELL. Sir, my name is Edgar S. Gorrell. I am president of the Air Transport Association of America.

The Air Transport Association of America is an organization of the scheduled air lines of the United States. Most of the members are air-mail contractors.

The office of the Air Transport Association of America is room 1217, 135 South La Salle Street, Chicago, Ill. The telephone number is Randolph 1148.

The names of the officers and directors are as follows:

Edgar S. Gorrell, president; Croil Hunter, vice president; Fowler W. Barker, secretary and treasurer.

Board of directors: T. E. Braniff, Paul Collins, Jack Frye. Croil Hunter, W. A. Patterson, E. V. Rickenbacker, and C. R. Smith.

The members of the Air Transport Association of America are as follows: American Airlines, Inc. Braniff Airways, Inc. Chicago and Southern Air Lines; Delta Air Lines Eastern Air Lines Hanford Airlines, Inc. Inter-Island Airways, Ltd. National Airlines System; National Airways, Inc.; National Parks Airways, Inc.; Northwest Airlines, Inc.: Pennsylvania-Central Airlines Corporation: Transcontinental & Western Air, Inc.; United Air Lines: Varney Air Transport, Inc. Western Air Express Corporation, and Wilmington-Catalina Airline, Ltd.

Pan American Airways System is an overseas or associate member. The objects and purposes of this association are:

First, to promote and develop the business of transporting persons, goods, and mail by aircraft between fixed termini, or regular schedules, and through special service, to the end that the best interests of the public and the members of this association be served.

Second, to advocate the enactment of just and proper laws governing the air-line business.

Third, to promote closer relations with and cordial cooperation among the members.

Fourth, to promote friendly relations with, and to secure the cooperation and good will of the public.

Fifth, to improve the transportation service rendered by its members.

Sixth, to promote the construction of proper airports and airway aids over such routes as will best insure benefit to the public and the air-line business, and to promote the maintenance, repair, and improvement of all airports used by air-line operators.

Seventh, to promote the establishment of necessary terminals and connecting schedules.

Eighth, to cooperate with all public officials in securing the proper enforcement of all laws affecting air transportation.

Ninth, to promote aviation safety in general.

Tenth, to do all things tending to promote the betterment of airline business, and in general to do everything in its power to best serve the interest and welfare of the members of this association and the public at large.

To speak concisely, the object and purpose of the association is by common action to advance the air-line industry for better service to the public and for the national defense.

Senator MCCARRAN. Colonel Gorrell, have you had occasion to examine S. 2 and the substitute to S. 2?

Mr. GORRELL. I have.

Senator MCCARRAN. When and how did this proposed legislation come to your attention? Will you kindly state in detail to the chairman?

Mr. GORRELL. In January 1936, when the Air Transport Association of America was first formed, I was elected its president. There was pending before Congress at that time a bill called S. 3420. That was my first sight of this legislation.

Last fall Senator McCarran notified me that he proposed to reintroduce S. 3420 and asked if I would submit such constructive suggestions as our industry might have.

Senator MCCARRAN. Since that time what, if any, study, have you made? Will you tell me the history of it and how you came into it, generally speaking?

Mr. GORRELL. I have made quite an extensive study of S. 3420. Upon receiving your suggestion and request that we offer you constructive suggestions, I went to my file and pulled out my copy of S. 3420 and also a copy of the committee print of S. 3420.

I worked diligently on the committee print, I considered every line, every sentence, and every word of your proposed bill. In short, I studied the bill to the very best of my ability. If you will notice, my copy of the committee print is in many places, marked with your

initials, indicating the points to which I gave consideration in preparing recommendations concerning your bill.

I now lay that marked copy before you in order that you may visualize the immense amount of consideration which I gave to your S. 3420.

I felt it would be wise that such constructive suggestions as I might have should be made to you in detail and in legislative language and not just simply as a general statement. In attempting to work up that type of constructive recommendation, I tried to draw a bill. As soon as I started to draw a bill I discovered I knew little or nothing about legislative draftmanship.

I got in touch with a firm of attorneys in Washington, the name of the firm being Covington, Burling, Rublee, Acheson, and Shorb. Judge Covington assigned Mr. Westwood, of that office, to help me, not alone because of his knowledge of legal draftmanship and his excellent ability as an attorney, but also because he was for some time law clerk to Mr. Justice Stone.

I gave my ideas to Mr. Westwood as best I could formulate them after studying your S. 3420. Mr. Westwood attempted to put my ideas on paper.

Our association was formed in January 1936. At its annual meeting in January 1937-the date was January 9-after the usual routine of the annual meeting was over, I "took up" with our members the subjects of pending legislation. I laid before the members the printed copy of your S. 2 and also the notes which Mr. Westwood and I had drafted as a basis for later recommendations to you.

Senator MCCARRAN. Had you ever seen S. 2 before that time? Mr. GORRELL. S. 2 had never been seen by me until I received it from you at that time. To my surprise, I found the views of the different air lines to be quite in harmony, which meant that you and we were thinking along the same lines, if such legislation were to be enacted.

We were confronted with the fact that S. 3420 had been reported favorably by a committee of the previous Congress. Then, S. 3420 had been reintroduced on January 6, of this year, in somewhat amended form. Also, we were confronted with the twice-spoken desires of the President that the commercial scheduled air lines should be placed under the I. C. C.

Faced with those facts, our industry believed that legislation of some kind by the present Congress was probably inevitable. I found that not only did the industry so think, but that they believed that S. 2 was, in principle, an excellent bill. We thought that, with a few amendments, it would be a workable bill.

As a result of the member meeting, in order to aid in further shaping up the thoughts presented to and expressed in that member meeting, I appointed a small committee of member persons. That small committee and myself put into shape the ideas of the member meeting, which were to a great extent, modifications of S. 2.

The shape of our modifications at that time took the following form: We thought that perhaps S. 2 gave a little too much power to the I. C. C. in regulating rates. We thought that, if rates were to be regulated by the I. C. C., the regulation should be only upon complaint of a competitor and should merely eliminate cut-throat com

petition. We also thought that perhaps intrastate air lines should be regulated to the extent necessary to eliminate adverse effects upon interstate commerce. To a great extent, the suggestions of our members were matters of draftmanship and rearrangement of the Interstate Commerce Act itself. We worked out proposals that would have restricted this proposed part 3 within much narrower limits than the first two parts of that act.

When I got my ideas in form, I came to Washington and spoke to Congressman Lea. The reason I spoke to Congressman Lea was this: In the last session of Congress there was considered not only S. 3420 but also H. R. 5174, the latter having been introduced by Mr. Lea. It sought, to a great extent, the regulation of commercial aeronautics, but under a separate commission. Before going to Senator McCarran, who had gone into this matter so thoroughly, I decided to explore the question completely. I particularly desired to know whether there was any further consideration of a separate commission.

I wanted to know from Mr. Lea whether or not he planned to reintroduce his bill. Also, I have known Mr. Lea for some 20 years. I have admired greatly his ability to learn facts about aviation.

Mr. Lea is the author of part 2 of House Report 637 of the Sixtysixth Congress, second session, February 16, 1920. It happens to be the only truthful congressional document I know of about aviation of that date. I would suggest that, if you gentlemen have not read it, you will find it an interesting document to read. It gives the truth about what America did in aviation during the World War. Mr. Lea was able to ferret out the truth when rumor was the prevailing vogue in Washington. His report accompanied House Resolution No. 78, on war-time expenditures, and is a credit to the Nation.

Since that date, Mr. Lea has kept up his interest in aviation, as was evidenced by his introduction of H. R. 5174, which sought to put into legislation the report of the Federal Aviation Commission.

I spoke to Mr. Lea about possible legislation during the coming year; I told Mr. Lea that Senator McCarran had asked me for constructive advice on S. 3420. I said that S. 3420 had now been replaced by S. 2. I talked to Mr. Lea about the general subject of legislation pertaining to scheduled air lines. As a result of that discussion, Mr. Lea apparently sent to Mr. Eastman my thoughts, which I had worked out with the help of some of the members of the association, and, in addition, he also sent H. R. 5174, of the Seventy-fourth Congress. Apparently, Mr. Lea asked Mr. Éastman for his criticism.

A few days later Mr. Lea invited me to his office, saying that he had heard from Mr. Eastman. Instead of giving me criticism on my suggestions, Mr. Lea showed me a document in the form of a proposed bill.

I looked at it and said, "Mr. Lea, this is the McCarran bill. This is S. 2, with some very modest changes. I wish it were possible for me to talk to somebody who knows Interstate Commerce Commission procedure, for I should like to ask some questions to get my mind straightened out before I speak to Senator McCarran."

Mr. Lea said he thought that that could possibly be arranged. Later, he said that Mr. Eastman said he would talk to me; that Mr. Eastman was a busy man and that, in the meantime, Mr. Eastman

would like me to talk to two of his subordinates, Mr. Haley and Mr. Stough.

I proceeded to talk to those gentlemen. I also am a busy person, and I asked Mr. Haley and Mr. Stough if they would discuss the matter with me at night, because I was occupied by day. That fitted in with their own engagements, and they agreed to do so. I invited them to my hotel for the purpose of talking with me.

Mr. Haley came to the hotel. The first thing he told me was that he had been designated by Mr. Eastman to talk with me only within the limits of the bill which Mr. Eastman had drawn and sent to Mr. Lea. He said he had no power to agree upon anything and that such talk as he did have with me must be confined to what Mr. Eastman had in his mind.

Mr. Haley had with him a modification of the document which Mr. Eastman had sent to Mr. Lea, the modification being the inclusion of provisions about foreign flying regulations.

My room in the Carlton Hotel is on the second floor, right near the elevator. Much of the time, while Mr. Haley and Mr. Stough were there, the door was open. The key is always on the outside of the door from 7 a. m. to midnight or 1 or 2 o'clock in the morning. The transom is always open. There was no secrecy of any kind about the talk.

The main results of the talk were an education to me and my associates concerning the administration by the I. C. C. of the I. C. C. Act. I realized, for the first time, that I had failed, and perhaps my lawyers had failed, to realize that S. 2 was going to be part 3 of the Interstate Commerce Commission Act and, as such, should bear extensive, definite, and formal relationship to part 1 and part 2. That was a thought which had totally escaped me.

I realized, after talking with Mr. Haley and getting an education, that, unless part 3 did bear a relation to part 1 and part 2, perhaps part 3 might in some way interfere even with the administration of part 1 and part 2.

Most of the talk with Mr. Haley and Mr. Stough was about the Interstate Commerce Act, the wording of the act, and, in general, discussions of the railroad part, part 1, and the motor-carrier part, part 2, the reasons for the provisions, and the language in them.

As a matter of fact, the talk was so lengthy on that particular subject that we started calling part 1 the "Old testament" and part 2 the "New testament."

We even spent time pasting part 1 in a scrap book and pasting part 2 in parallel columns alongside it.

Senator MCCARRAN. You did not by any chance call S. 2 the "Revelations", did you?

Mr. GORRELL. Senator, to be perfectly honest with you, I did call your S. 2 "Revelations."

With your permission, I offer to you for your record the pasted columns that we so laboriously compiled after such a lengthy amount of time spent in doing so.

Senator TRUMAN. Will that be of any value to the committee to have in this record?

Mr. GORRELL. I think it would be a great labor-saving device to your committee, because we could not find anything like it anywhere in Washington, sir.