country share the Air Mail Service, and the system has been laid out with that
in mind. The development of the Service is further ample proof that a sound
system has been built. A route that is a good mail route is likewise a good
passenger route, considering the potential traffic. In organizing the routes, the
Post Office Department has followed certain natural trade courses, providing
for a fast flow of mail between the larger centers of population, with a few
feeder routes to give service to those States which are justly entitled to some
share of the Air Mail Service. Certain technical problems present themselves
in establishing a route. The agency which is charged with the duty of pre-
scribing air-mail routes must have some knowledge of postal problems which
will be encountered. For instance, it must kept in mind that in the event of
cancelation mails must be trained, and it is necessary that an air-mail route
be established along certain points which will allow the most advantageous
training of the mail. It is obvious, however, that what would be advantageous
in expediting the mail would also be advantageous in expediting a passenger.
No other agency of the Government understands the problems of mail handling
as does the Post Office Department.

I am attaching hereto tables which show that mail is constantly increasing
under the present system. October 1934 broke the existing records; December
broke that record; March again broke the record, when, for the first time in
history, the poundage dispatched over the various routes was over a million
pounds; and successively since March, April, May, and June dispatches have
been over one million pounds. As mail has increased, express is also in-
creasing. The same is true of passenger travel. In March of this year the
revenues were three times the revenues of any previous March. Passenger
miles in March, April, May, and June have successively broken all previous
records by a substantial margin. Practically every major route in the country
within the past year has placed into service improved passenger equipment.
Within the last year the Bureau of Air Commerce has cooperated with the
Post Office Department in every way by providing airways with the most
modern facilities. With such a state of improvement in mail, passengers, and
express business and improvements in airways, airports, airplanes, and safety
instruments, it would appear that the present plan of organization should be
continued; that is, that the Post Office Department will prescribe the routes
and schedules; the Bureau of Air Commerce supervise the airways, planes,
and safety features; and the Interstate Commerce Commission prescribe the
rates.

(The tabulations referred to are as follows:)

Total passenger revenue, air-mail contractors, by months and fiscal years, as reported by contractors to the Post Office Department

Total passenger-miles, by months and fiscal years, as reported by contractors to the Post Office Department

Revenue passenger-miles, by months and fiscal years, as reported by contractors to the Post Office Department

Mr. CROWLEY. I should like to add that there is no provision made definitely establishing a rule by which the Government shall pay for carrying the mail. If these lines are so strong that they must be controlled by the Interstate Commerce Commission in detail, as

stated here in this bill, then we think that the proper rates for carrying the mail would be the same rates for which they carry express or passengers.

Senator DONAHEY. That will conclude our hearing today, if that is all, Senator McCarran.

Senator MCCARRAN. Mr. Chairman, I should like for this statement of mail revenues and total revenues (and percentage relationships) received by air-mail contractors from dates upon which they began operations under present contracts to September 30, 1934, as shown by report of Interstate Commerce Commission in Air Mail Compensation, to be made a part of the record.

Senator DONAHEY. That will be done.

(The statement referred to follows:)

Statement of mail revenues and total revenues (and percentage relationships) received by air-mail contractors from dates upon which they began operations under present contracts to Sept. 30, 1934, as shown by report of Interstate Commerce Commission in Air Mail Compensation, 206 I. C. Č. 675 1

1 Does not include revenues received by contractors from services off the mail routes. Those revenues if included, would increase the portion of the revenues received from sources other than the transportation of mail.

Senator DONAHEY. That concludes the hearing today, and the subcommittee will adjourn subject to the call of the chairman.

Hon. BURTON K. WHEELER,

DEPARTMENT OF COMMERCE,

OFFICE OF THE SECRETARY,
Washington, August 6, 1935.

Chairman, Committee on Interstate Commerce,

United States Senate, Washington, D. C.

MY DEAR SENATOR: The Department of Commerce, in response to request made upon it, is pleased to express its views on bill (S. 3027) bearing calendar date July 10, 1935, which was submitted by Senator Reynolds for Senator McCarran.

The declared purpose of S. 3027 is 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. It is apparently intended to be made part 4 of the Interstate Commerce Act, and, as section 401 states, may be cited as the "Air Transport Act of 1935." In commenting upon this proposed legislation, it is desired at the outset to affirm the zealous interest of this Department in the progress of interstate and foreign air commerce in the United States because the same has been our particular concern for nearly a decade, under the Air Commerce Act of 1926. Any rule or policy, falling within the administration's plan for coordination of the country's transportation facilities, that will be conducive to the development of air commerce and to its proper control will receive our earnest support.

However, it is our desire to point out certain aspects of the air transportation situation which we regard as highly pertinent. Aviation is a relatively new industry. It really still is in a state of infancy. It is carrying today less than 500,000 paid passengers domestically annually. Its express business is only about 2,000,000 pounds annually. Most lines are existing solely by reason

of having Government subsidies. Without them, there would be no aviation industry worthy of the name.

Because of the newness of the industry, the rules of successful operation of it are not well defined. Experience is teaching us rapidly how to handle many situations, but most of them are too new to permit us to say definitely that this method of handling them is right, while the other is wrong, and vice versa. Distinctly, in most aviation matters we are in a stage of experimentation. This is true in building and in operation, and, we firmly believe, it is true in regulation and control.

Hence, based on these facts and our experience, we are inclined in all matters of air transport legislation to suggest the advisability of proceeding cautiously. Especially would we commend the most careful study of all legislation which might tend to retard development of the industry.

Might we suggest, therefore, that your committee consider very carefully all of the elements involved in effecting an immediate transfer of aviation control to the Interstate Commerce Commission, or any other body without extensive aviation background, which is not completely set up at this time to administer the affairs of the air transportation industry. While we see no objection to transferring to the Interstate Commerce Commission matters of a judicial or a quasi-judicial nature, pertaining to air transport, we believe that a further study by your committee will reveal certain aspects of administrative problems not now evident and will serve to more clearly define those administrative features which have already presented themselves. We, therefore, suggest a most careful and thorough study of these factors before proceeding with such comprehensive legislation as is proposed in S. 3027. In other words, greater latitude, with fewer restrictions, is preferable at this time.

Specifically, we are mindful of the President's aviation message, delivered to the Congress on January 31 of this year. In the closing paragraph of that message, the President propounded a doctrine with which we are in complete accord. He said:

"In the granting of powers and duties by the Congress, orderly government calls for the administration of executive functions by those administrative departments or agencies which have functioned satisfactorily in the past, and, on the other hand, calls for the vesting of judicial functions in agencies already accustomed to such powers. It is this principle that should be followed in all of the various aspects of transportation legislation."

That passage, we believe, should be taken as a starting point for the setting up of a system that will best promote the objective sought, the present and future well-being of American air commerce.

After a careful study of S. 3027, the Department is of the opinion that it is, in large measure, a commendable piece of draftsmanship. In designing a measure of this nature, in which it is sought to lay the groundwork for future regulation of a medium of transportation, that, as a common carrier, has had such brief career, is admittedly difficult.

That certain phases of American aviation have reached a state of development requiring effective regulation in respect to their entrance into the transportation industry cannot be disputed. In that connection it might be remarked that our extensive experience in aeronautics has impressed us with the idea that the whole field can be generally divided into two major classifications; on the one hand the scheduled air-transport carriers, virtually all of whom hold air-mail contracts, and on the other, what we call miscellaneous flying, which embraces the remaining categories. That the scheduled air carriers could and should be regulated, not only for their own but for the general good, is agreed. Whether at this time the Government should go further in regulation of miscellaneous flying is a broad question. That part of our aeronautics is still in the guild stage, where the units have been found to be made up from four to five men participating in a variety of activities, such as flying training, charter flights, minor construction, emergency repair, and aerial photography.

In these reflections upon extension of present authority, we wish also to call your attention to existing law and our attitude in the matter of airports and airport operators. A preponderance of the airports made use of by interstate air carriers are owned, operated, and maintained by municipalities. The reason for this is found in the law, more precisely in section 5 of the Air Commerce Act of 1926. A review of the legislative history of that act will indicate that at the time of its passage it was agreed that for the Government to own, operate, or maintain airports would be unwise. It was contended that the airports, like the docking spaces for vessels, should be left to private ownership. As you know,