in a nonmonopolistic and competitive market, but the American Airlines at Hartford apparently would not have the right to do that. Mr. MILLER. No, but the city has built the airport and installed its equipment and has its interest requirements to meet, and it is a business proposition.

Mr. BERMINGHAM. That is exactly the way I think it should be handled, as a business proposition.

Mr. MILLER. As a business proposition, it certainly would not be unusual for the city of Hartford to determine that at its airport they are going to award the contract for gasoline for a certain period to company A.

Mr. BERMINGHAM. The only point of disagreement apparently between you and me is, I do not disagree with that if that is the way the city of Hartford decides, I cannot disagree but what the city of Hartford might decide that is the way it wants to operate its field; but after it has decided that, why should it say to my company, if I am not the one with whom you want to do business, that I cannot supply my customers at your airport?

You make your arrangements to get gasoline any way you want to, and you distribute those through whatever facilities you have at the field, and that is fine. You do it under a business arrangement, but why should I be prevented from serving my customers at that field? Mr. MILLER. Because I, as the manager of the airport, have installed this expensive equipment and underground pipes and I have trained men to handle it, and I am trying to protect the general public from fire hazards, and I do not want six trucks running on the field and servicing planes; and I control that situation, and I can offer better protection to the public that way.

Mr. BERMINGHAM. I think that to the extent that you offer better services to the public and do a better job than I can do, you are going to get the business, but I would prefer to have you get in a competitive market rather than by barring me from using your field.

Mr. MILLER. The competition comes when I call for bids for supplying that airport for a given period.

Mr. BERMINGHAM. In your operation of the airport, you are setting up a funnel, so to speak, through which the products of these suppliers must go, and on the other end of the funnel are the air lines. It is the air lines that want the advantage of buying their products in a competitive market. You, as the operator of the field, may be buying them competitively, but you are going to turn around and resell them on a monopolistic basis to the air lines, and it is that to which they object.

Mr. MILLER. That is all.

Mr. HESELTON. I have listened to your answers to Mr. Miller's questions, and I wonder, are you not laying considerable stress on the right of the oil company to sell to what it calls customers as against the necessity of an airport operated by a State or a municipality or even the Federal Government to try to put that on a business basis, and to do in this instance what it has to do in terms of buying supplies? The very fact that it asks for bids for fuel, and the low bidder may be your company, in the operation of a municipality, does not necessarily, it seems to me, lend itself to a charge of monopolistic and un

American practices. It seems to me that you are straining the argument when you say that because the municipality has by our action or the State has by our action gone into the development of a facility which incidentally gives another additional outlet for your products, that it is monopolistic when the management sees fit to adopt the very American practice of asking for competitive bids and letting a contract on a lowest bid. You do not agree with me?

Mr. BERMINGHAM. I do not agree with you because it seems to me that by doing that you are depriving the air lines of the right that I think they are reasonably entitled to, of buying their products in a competitive market. It is the air line that is going to use the gasoline and it is not the city of Boston or any other municipality.

Mr. HESELTON. Unfortunately, or fortunately, and I think fortunately, we have gotten in a position where our governmental units are operating these airports, and there is no one else who is able to. We have to face the fact, and try to devise means by which they can be operated soundly. It seems to me that is rather straining an argument to say that because we are doing that or because the cities and States are attempting to do that, they are engaging in monopolistic practices which are necessarily un-American.

That is just an observation. There is one other question, and I do not know that it is quite an analogy. Yet it seems to me that it is basic to our thinking as we work this out. Now, your company, in common with a good many others, or practically all of the other companies, has to pay toll charges on bridges that are built by the public, and I have in mind going through New York on some of those highways and parkways and some of the bridges where tolls are charged.

If I understand it correctly, the Pennsylvania Turnpike is open to truck traffic. Now, in terms of the delivery charges to which you object, that is a charge imposed on a new and better facility for which the general public, including your own company and individuals in your company, are paying. They are doing that because they want speedier transportation and safer transportation and more modern transportation.

Now, it seems to me that you can hardly accept that as fair and come up with an argument that a delivery charge to an airport which, as I suggested, is an outlet for more business for yourself, and is a better transportation system for the people of this country, is subject to the objections you have raised this morning.

Mr. BERMINGHAM. The distinction, Mr. Heselton, I draw between the type of charge you have just discussed, crossing a bridge or a high way or something of that sort, is that in those cases the charge that we are paying bears a reasonable relationship to the service that is being performed for us, and we are paying for a service. To take an example, let us say we drive our truck over the George Washington Bridge. I do not know what the toll is, but let us say it is $1. Čertainly it is no more than that. To measure that charge against a 3cent gallonage charge at La Guardia Field, let us say, where the trucks might go after crossing the George Washington Bridge, would result in a payment of some $180 or $200 depending on how much the truck carried. It may be purely a matter of degree. I think the few

dollars we pay to cross the George Washington Bridge bears a reasonable relationship to the services that the authority performs or performed when it built that bridge for our convenience. But I do not believe that $200 charge to run that same truck on La Guardia Airport is reasonable. It bears no relationship to any service that is being performed by the airport.

Mr. HESELTON. Assume a case where there is no facility open to oil companies as such, but the oil companies do enjoy the concentrated patronage in a valuable part of that airport. Would you object if we try to work this out to some kind of a fair charge for the use or the privilege of selling your product on that airport?

Mr. BERMINGHAM. I do not believe that there should be a charge simply for the privilege of selling on the airfield. That is why I made the statement originally that I thought the charge should be based or should be geared in some way to the space occupied. It seems to me that that is the main criterion for assessing a charge against people who use the airport.

Mr. HESELTON. It is the space occupied in relation to an over-all formula that would permit the airport to stay in business.

Mr. BERMINGHAM. It does not seem to me reasonable that you would charge the baker who drives his truck on the airfield to deliver bread to the local restaurant nor would you charge the laundry company for delivering clean linens to planes or restaurants, nor would you charge the public utilities for making telephone and water connections. Why should gasoline be singled out?

Mr. HESELTON. It might be extremely difficult to work out a formula under which everyone that was on that airport for the purpose of making a profit-and in almost every instance, so far as I know, making a profit-should be expected to pay a fair share of the cost of operation of that airport. I cannot see any argument against that. I do not care particularly how you do it, but I think that that is fundamental if we are going to get out of the business of having the general public and that includes everybody whether they use the air lines or not-paying this subsidy.

Mr. BERMINGHAM. I do not believe that we are in any real disagreement. I agree with you that those who do business on the airport should be required to pay their share of whatever is necessary to make that airport pay.

Mr. HESELTON. I have just one final question, and it may not be properly directed to you, but I want to get it in somewhere. Have you any records to show the gas tax rates in the country?

no,

Mr. BERMINGHAM. I do not have them available at this moment; sir.

Mr. HESELTON. Is there any way you can explain them to us for the record?

Mr. BERMINGHAM. I could get them for you; yes, sir.

Mr. HESELTON. Would it be too much of a job?

Mr. BERMINGHAM. No.

Mr. HESELTON. Personally, Mr. Chairman, I think it might be helpful to have that as a part of the record.

Mr. DOLLIVER. We will be very glad to have it.

(The information is as follows:)

1 In addition to the State gasoline tax the Federal Government imposes 11⁄2 cent per gallon gasoline tax on which there is no refund or exemption.

2 See notes accompanying name of State.

3 Aviation fuel is taxed by separate act instead of under gasoline tax law.

X in refund columns or in exemption column means full tax is refunded or exempted.

NOTES

Alabama: By regulation, tax exemption is granted to civil schools of aeronautics under contract with Federal Government on gasoline used solely in planes owned by the United States operated for training air corps flying cadets. Regulation issued Nov. 17, 1939.

Arizona: Under sales tax law regulations based upon attorney general's opinion of Mar. 13, 1937, respecting imposition of sales (gross income) tax, the 2 percent retail sales tax may properly be imposed upon income received from the sale of gasoline upon which the 5-cent State highway tax has been paid, but which has been refunded.

California: Sec. 6357, Revenue and Taxation Code, provides that where refund on nonhighway use of gasoline is granted the controller is to deduct the sales tax of 212 percent before making refund.

Colorado: Refund gasoline is subject to the 2 percent sales tax since it does not fall within the requirement for sales tax exemption as specified in sec. 15, ch. 144, 1935 Colorado Statutes Annotated. Connecticut: The 3 percent retail sales tax does not apply where the gasoline tax is paid (Laws 1947 (H. B. 1129), ch. 228, sec. 70).

District of Columbia: Under Virginia law sales of aviation gasoline to aircraft at Washington National Airport is tax-exempt.

Florida: Aviation fuel testing 78 octane number or higher is tax exempt (Stats. 1941, sec. 208.05). Georgia: Distributor sales of gasoline to U. S. Government are exempt. However, on cash sales to United States at service stations or dealer outlets, Form 1094 will be required. Resolutions confirming Executive order suspending tax on motor fuel used in training air pilots were adopted (Laws 1941, Res. 54,

p. 1863; Laws 1943, Res. 58, p. 1679; and Laws 1945, Res. 24, p. 1216). The Georgia Supreme Court on Jan. 9, 1946, affirmed decision of Fulton Superior Court rendered June 20, 1945, holding in effect that withdrawals of aviation gasoline purchased outside but shipped into the State and stored is not subject to the State gasoline tax (Thompson, State Rev. Comm'r. v. Eastern Air Lines, Inc.).

Idaho: "In order to encourage the development of aviation," a privilege tax of 21⁄2 cents per gallon was levied on "aircraft engine fuel" by a separate act (Laws 1933, ch. 196).

Indiana: Airport operator or anyone selling motor fuel exclusively for use in aircraft may, upon application to the gasoline tax administrator, be permitted to purchase aviation gasoline tax-free upon delivery to such distributor of a duly executed exemption certificate as prescribed by the administrator (Laws 1947 (H. B. 311), ch. 334).

Iowa: Sec. 422.52 (4) of the 1946 Code provides that where gasoline tax refund is granted, the 2 percent retail sales tax is deducted from amount refunded.

Kansas: Fuel resold by exemption permit holder for delivery into tanks of airplanes is exempt from the 3 cents per gallon tax (Laws 1939, ch. 331; Code sec. 79-3429). Also 40 or more gallons used for purposes other than operating motor vehicles on public highways are exempt from the 3 cents per gallon tax (Code, sec. 79-3418). The 1 cent per gallon temporary gasoline tax increase law which became effective Mar. 1, 1946, does not specify any exemption (Laws 1945, S. B. 306).

Kentucky: If liquid fuel is used exclusively to operate aircraft, the purchaser may obtain refund of 95 percent of the tax paid upon making application therefor (Laws 1948, H. B. 354, effective July 1, 1948). Louisiana: Operators of aircraft in interstate and foreign commerce under certificate or permit issued by the U.S. Civil Aeronautics Board and bonded with the Department of Revenue of Louisiana may purchase gasoline tax-free from distributors. (Letter from our Louisiana secretary dated June 17, 1946, in reply to our inquiry to determine the practice by the State under Act No. 330, Laws 1944.) Deliveries to United States for aviation purposes are exempt.

Maine: The 1947 law increasing the motor fuel tax from 4 to 6 cents per gallon grants a 2 cents per gallon refund to purchasers of aviation gasoline, thereby holding the tax on aviation fuel at 4 cents per gallon. Maryland: Owners or operators of airports, landing fields, air schools, and flying clubs licensed by the State aviation commission may sell tax-free to aircraft users and apply for the refund (Code, art. 56, sec. 255). Sec. 261, art. 81, of the 1939 Annotated Code as added by ch. 281, Laws 1947 provides that the sales tax shall not apply to sales of motor vehicle fuel and liquid fuel upon the receipt, use, distribution, or sale of which a tax is imposed by the law of this State.

Michigan: Aviation fuel is taxed under the Aeronautics Code. On fuels used in aircraft 11⁄2 cents of the 3 cents per gallon tax is refunded to air-line operators operating interstate on scheduled flights (Laws 1945, act 327, secs. 19 and 23).

Minnesota: Distributors or other persons who pay the 4 cents per gallon tax on aviation gasoline shall receive, as to all aviation gasoline over and above 50,000 gallons received, stored, or withdrawn from storage in any calendar year, the following graduated reduction in the tax, obtainable by refund on or before Mar. 1 of each year: On each gallon above 50,000 and not more than 100,000, 1 cent; on each gallon above 100,000 and not more than 150,000, 2 cents; on each gallon above 150,000 and not more than 200,000, 3 cents; and on each gallon over 200,000, 3% cents (Laws 1945, ch. 412; Code, sec. 296.18 subdiv. 4).

Mississippi: Any person selling aviation gasoline from an airport approved by the Civil Aeronautics Administration, who has filed a $1,000 bond and has obtained an aviation gasoline dealer's permit may exempt the purchaser from paying 5 cents of the 6 cents per gallon tax. Such seller to be reimbursed by applying for refund of tax not collected from purchaser. Claim to be signed by both distributor and dealer and filed within 60 days. Dealer to execute certificate of purchases as prescribed which shall contain a statement that such gasoline was purchased for aviation purposes exclusively (Laws 1946, ch. 264, sec. 39 part).

Nebraska: Aviation fuel is taxed at 5 cents per gallon subject to a refund of one-half of the amount of the tax paid if the fuel is used exclusively for the purpose of operating and propelling aircraft in the State (Laws 1947. L. B. 241). Full refund is provided for aircraft fuel consumed in aircraft used strictly for United States approved air-school purposes (Laws 1945, ch. 5).

Nevada: The State imposes to July 1, 1949, an additional 12 cents per gallon gasoline tax for counties, which tax is subject to the same nonhighway use refund as the 4 cents per gallon tax. However, any county may decline annually the impositon by July 1 of each year. 12 counties of the State's 17 have declined to July 1, 1948: Clark, Elko, Esmeralda, Eureka, Humboldt, Lander, Lyon, Nye, Ormsby, Persing, Storey, and White Pine (Laws 1947, H. B. 248).

New Hampshire: Laws 1947 (H. B. 345), ch. 281, sec. 8 imposes "an airways toll of 4 cents per gallon upon the sale of each gallon of motor fuel or fuel as defined in ch. 65, Laws of 1943, sold to and used in the propulsion of aircraft." No tax on aviation fuel sold to United States or its agencies.

New Mexico: Refunds are granted on 50 or more gallons purchased at one time providing a permit is obtained and refund application is filed within 4 months. However, no refund application for less than 100 gallons shall be considered (1941 Stats. Ann., secs. 68-1226 through 68-1228). The exemption from the sales tax on gasoline does not apply to the sale of gasoline on which a refund is claimed (sec. 76-1415 (i), Stats. 1941). North Carolina: Commissioner of revenue is authorized to relieve any distributor from payment of the motor fuel tax on gasoline designed for and sold and used exclusively in aircraft motors. Commissioner also authorized to refund the tax "which constitutes an unlawful burden on interstate commerce" if claim is filed within 60 days (Laws 1931, ch. 145, sec. 24; G. S. 1943, secs. 105-439.)

North Dakota: Under ruling of State auditor, aviation gasoline is sold tax-exempt, if purchased through a registered dealer (letter our files Nov. 21, 1941). If tax has been paid on fuel used in aircraft, refund may be obtained under refund provision respecting "industrial purposes" (Op. Atty. Gen. Jan. 3, 1947). Ohio: Motor fuel sold exclusively for use in the propulsion of aircraft is exempt from the 4 cents per gallon tax where such sale is evidenced by prescribed exemption certificate (Code sec. 5527(f) as added by Laws 1917, S. B. 227). Refund granted on motor fuel used exclusively in aircraft on which the tax has been paid (Code sec. 5534, as amended by Laws 1943, S. B. 162, and Laws 1947, S. B. 227). We have been advised that the 3 percent sales tax does not apply to the sale of gasoline even though the gasoline is exempted from the tax at time of sale or is subsequently refunded where the tax has been paid.

Oregon: Vendor of tax paid fuel may sell tax-free when delivering fuel into tank on consumer's aircraft except for 1 cent which vendor may hold in lieu of 1 cent which will be deducted when vendor applies for the 4 cents per gallon refund (Laws 1945, ch. 413, sec. 33; Code sec. 110-1701.33).

South Carolina: Tax is refunded on gasoline sold to any Army or Navy primary aviation schools to be used in planes owned by United States and used in training cadets, students, or trainees, actually enlisted in the United States Air Corps (Laws 1941, Act No. 128; Code 1942, sec. 2530-2).

South Dakota: A tax of 4 cents per gallon is imposed on motor fuel used in aircraft subject to a refund of 1 cent on each gallon above 50,000 up to 100,000 and 2 cents on each gallon over 100,000 gallons. Refund application filed with Aeronautics Commission for approval before State Treasurer makes reimbursement (Laws 1947, S. B. 190).