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

Present: Senators Truman (chairman of the subcommittee), Schwartz, Austin, Davis, and Andrews.

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Also present: Senator Pat McCarran of Nevada and Senator Edwin C. Johnson of Colorado.

Senator TUMAN. The subcommittee will come to order. The purpose of ti. hearing is to hear testimony on S. 2 and the amendments presented by Senator McCarran also S. 1760. The bills and amendments thereto will be printed in the hearings.

(S. 2 and amendments are here printed in full as follows:)

[S. 2, 75th Cong., 1st sess.]

A BILL To amend the Interstate Commerce Act, as amended, by providing for the regulation of the transportation of passengers and property by aircraft in interstate commerce, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Interstate Commerce Act, as amended, herein referred to as part I, is hereby further amended by adding the following part III:

PART III
CHAPTER 1

SEC. 301. This part may be cited as the Air Transport Act of 1937.

DECLARATION OF POLICY AND DELEGATION OF JURISDICTION

SEC. 302. (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 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 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 faciltities therefor, is hereby vested in the Interstate Commerce Commission.

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DEFINITIONS

SEC. 303. As used in this part

(a) The term "Commission" means the Interstate Commerce Commission. (b) The term "aeronautics" means the science and art pertaining to all phases of flight in the air.

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

(d) The term "air pilot" shall include copilot.

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

(f) The term "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.

(g) The term "navigable air space" means air space above the minimum altitudes of flight prescribed by regulations issued pursuant to law.

(h) The term "air space reservation" means a zone, identified by an area on the surface of the ground, in which the flight of aircraft is prohibited.

(i) The term "interstate air 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 from one place in such Territory or possession or District of Columbia to another place in the same Territory or possession, or the District of Columbia, or between places in the same State through the air space over any place outside thereof, whether such commerce moves wholly by air or partly by air and partly by other forms of transportation.

(j) The term “air 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 by air.

(k) The terin "certificate" means a certificate of public convenience and necessity issued under this part to any air carrier.

(1) The term "securities" includes shares of capital stock, bonds, or other evidences of interest or indebtedness issued by an air line or other person.

(m) The term "service of notice" shall include the giving of notice by delivery in person or by registed mail or by telegraph.

(n) The term "United States", when used in a geographical sense, means the region, both land and water, known as the United States of America, comprising the several States and Territories, the insular possessions of the United States and the District of Columbia, but for the purposes of this Act, unless specifically so provided, shall not include the Canal Zone.

(o) The term "possession of the United States" as used in this part shall include Puerto Rico, notwithstanding the provisions of the Acts of March 2, 1917, and August 29, 1916, 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, except the Canal Zone.

GENERAL DUTIES AND POWERS OF THE COMMISSION

SEC. 304. (a) It shall be the duty of the Commission

(1) To regulate air carriers 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 from time to time, 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 consideration of the time required to procure and place such equipment in operation or to establish such service.

(4) To study interstate air transportation and services, and to collect and disseminate information relative thereto.

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

(6) To approve or disapprove, in whole or in part, any and all applications made by any air carrier or other person subject to this part for, or in connection with, any loan from the United States, or any agency thereof, to such air carrier, or other person subject to this part, and no such loan shall be made without such approval.

(7) To study and report to Congress from time to time whether, in the public interest, the Government should extend direct or indirect financial aid to air carriers or others assisting in air transportation, including recommendations as to the form of such aid and method of distribution.

(8) To specify that an air carrier 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.

(9) 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 subject to this part as the special nature of the services performed by such air carriers 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 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 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 has failed to comply with any such provision or requirement, the Commission shall issue an appropriate order to compel the air carrier to comply therewith. Whenever the Commission is of the opinion that any complaint does not state reasonable grounds for investigation and action on its part, it may dismiss such complaint.

(d) The Commission is authorized to make all necessary expenditures, at the seat of the Government and elsewhere, for the carrying out of the purpose of this part; to cooperate with and to attend meetings and conventions, when in public interest, of such organizations as are related to or a part of the commercial aviation industry or the art of aeronautics in the United States or any foreign country; to make investigations and conduct research in all matters pertaining to interstate and foreign air commerce when in the public interest; to acquire and operate such aircraft, navigational facilities, or motor vehicles as are necessary for executing the functions of the Commission under this part. The Commission, or any of its employees or agents, are hereby authorized to travel as the Commission may direct, by any means of air, land, or water transportation, including the use of private or public carriers, and for travel to and from airports and centers of population and other points necessary in order to carry out the provisions of this part, and such expenditures as are incurred thereby on official business shall be allowed and paid as travel, and not included in per diem, on itemized vouchers therefor approved by the Chairman of the Commission.

(e) Notwithstanding any of the provisions of this part, the Commission may from time to time by its rules and regulations and subject to such terms and conditions as may be prescribed therein exempt from the requirements of this part any air carrier or class of air carriers if it finds that the enforcement of this part with respect to such air carrier or class of air carriers is not necessary in the public interest by reason of the limited operations carried on by such air carrier or class of air carriers.

CERTIFICATES

OF PUBLIC CONVENIENCE AND NECESSITY

SEC. 305. (a) No air carrier shall engage in any interstate transportation, or any service connected therewith, subject to this part, unless there is in force with respect to such air carrier a certificate of public convenience and necessity issued by the Commission, authorizing such transportation or service: Provided, That if any air carrier or any predecessor in interest was operating on the date of the pass

age of this part, such air carrier 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 one hundred and twenty days after this section takes effect: Provided further, That pending the determination of any such application the continuance of such operation shall be lawful: Provided further, That the Commission shall issue a certificate to any air carrier who was in bona-fide operation during the calendar year 1936 or any part thereof and has continued such operation up to the date of the passage of this part: And provided further, That this paragraph shall not be so construed as to require any air carrier to obtain such certificate from the Commission to engage in transportation, or any service connected therewith, which is not subject to the provisions of this part.

(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) The Commission shall have power to issue a certificate 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: Provided, That the Commission shall issue a certificate of convenience and necessity without proof other than that required by section 305 (a) to applicants qualifying under that section.

(e) Any certificate issued under this section to an air carrier shall specify the route or routes over which the air carrier is authorized to operate and the service to be rendered over such route.

(f) 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, 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 the requirements established by the Commission under this part: Provided however, That no terms, conditions, or limitations shall restrict the right of the air carrier to add to his or its equipment and facilities over the routes, between the termini, as the development of the business and the demands of the public shall require.

(g) 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.

(h) No certificate shall be issued under this part, and no air carrier shall hold or operate under any such certificate, except upon condition

(1) That the air carrier 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 this part for which such air carrier shall be entitled to receive fair and reasonable compensation; and it shall be unlawful for any air carrier to handle or transport United States mail unless such air carrier holds a certificate of public convenience and necessity under this part and complies with the terms and conditions thereof: Provided, That any air carrier authorized to continue operations by paragraph (a) of this section may continue to handle or transport mail pending determination of its application under said paragraph (a).