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the constant harassment of dealing with complaints from the air lines, which of course are strong backers of this legislation.
Municipalities are not generally engaged in gouging the air lines. They provide terminals for the use of a great transportation business, and this transportation business must eventually stand on its own feet and meet the cost of its terminals.
If Federal legislation continues to increase supervision of and restrictions upon the means of raising funds for the operation of municipal airports, as a condition to participation in the benefits accorded to municipalities under the Federal Airport Act, municipalities will be forced to consider whether it is profitable to accept the Federal benefits under the act; and should they elect not to accept such benefits, the national program of airports envisioned under this act will fail.
It is our hope that you will do everything within your power to defeat this legislation. Very truly yours,
LOUIS E. GRASHOT, Commissioner, Finances and Institutions.
Mr. DOLLIVER. The committee is in recess. (Whereupon, at 12:20 p. m. the committee recessed until 3 p. m.)
(The hearing resumed at 3 p. m.)
By congressional courtesy, we first call upon Congressman Eberharter, of Pennsylvania.
STATEMENT OF HON. HERMAN P. EBERHARTER, A REPRESENTA
TIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA
Mr. EBERHARTER. I am Representative Herman Eberharter, of Pennsylvania. I appear here, Mr. Chairman, at the request and perhaps to some extent on behalf of the county of Allegheny, whose board of county commissioners have operated in western Pennsylvania, there in the county, an airport which was when it was built perhaps one of the topnotch airports of the country. It cost a total of about $5,500,000.
They are now constructing a most modern airport in another section of the county, which will cost approximately $25,000,000 of the county's money, so that they have quite a stake in whatever decision this committee and the Congress makes with respect to the subject before you for consideration today.
They say, Mr. Chairman, this proposed legislation, if enacted into law, will seriously and adversely affect the orderly and efficient operation of Allegheny County airports in that it will impose unfair restrictions upon the county in the control of essential airport activities and facilities. It is our considered opinion that the effect of such legislation would discriminate against the public interest, for the benefit of a few air-line operators.
While the county is most anxious, they say, that the air lines prosper, nevertheless this proposed legislation is an unwarranted attempt by the air lines to interfere with those airport activities which are properly within the control and jurisdiction of the public authorities operating the airports.
This proposed legislation will, if enacted into law, deprive the public authorities of their control over the delivery, storage, and dispensing facilities for petroleum products used by the air lines on airport property and interfere with control of the dispensing of food and beverages at the airports.
Mr. Chairman, I feel that this is a very serious subject. It seems to have been proposed in some haze, and I think it is a matter which requires a great deal of study and consideration, and perhaps a real survey, before anything is done or any definite decision made.
I hope that the committee will, as I am sure it will, give every consideration to postponing this to a later date.
Thank you very much, Mr. Chairman.
We will now call on another of our colleagues, the Honorable J. Caleb Boggs, of Delaware.
STATEMENT OF HON. J. CALEB BOGGS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF DELAWARE
Mr. Boggs. Mr. Chairman and members of the committee, it is my desire to appear briefly in opposition to H. R. 6180, a bill to amend the Federal Airport Act.
This bill, if enacted, would work a great hardship on and be a deterrent to the full development of an airport program.
As far as I am concerned, I want to do anything possible to be of help in the development of a well balanced, over-all air program; but, in the development of such a program, we must be fully conscious of the components of such a program and not do anything that would tend to retard by limiting one phase in order to help another phase of such a program.
Airports I am familiar with are in a struggling stage, and this bill would certainly be crippling to the efforts and progress thus far made toward the development of efficient and adequate airports.
I should like to quote from a letter which I have received from Mr. Don W. Martin, airport manager of the New Castle County Airport, Wilmington, Del. Mr. Martin is also vice president of the American Association of Airport Executives. He states that he personally believes this bill to be vicious and unfair because airports must receive taxes and charges in order to survive and be maintained for civilian and military use.
I shall not go further into the details concerning the facts and various provisions of the bill because I know that the committee will develop them fairly. I am of the opinion, however, that this proposal, in view of all the facts and circumstances, does not justify favorable consideration at this time.
Mr. DOLLIVER. Are there any questions?
Mr. DOLLIVER. The next witness is Col. Raymond J. Kelly, corporation counsel of Detroit, Mich., and chairman of the committee on airports of the National Institute of Municipal Law Officers, 730 Jackson Place, Washington, D. C.
STATEMENT OF COL. RAYMOND J. KELLY, CORPORATION COUN
SEL OF DETROIT, MICH., AND CHAIRMAN OF THE COMMITTEE ON AIRPORTS OF THE NATIONAL INSTITUTE OF MUNICIPAL LAW OFFICERS, WASHINGTON, D. C.
Colonel Kelly. The National Institute of Municipal Law Officers is an organization of more than 500 cities acting through their chief legal officer. It is supported entirely by tax funds of cities to compile information of a legal character for its city members and to express the joint ideas of cities on matters which affect them all. I appear here in opposition to H. R. 6180.
In H. R. 6180 the scheduled air lines, already heavily subsidized and aided by cities and the Federal Government, seek to bankrupt forever the city-owned airports of the Nation. This is worse than biting the hand that has fed them-here the air lines seek to cut the jugular vein and keep airports that receive Federal aid forever impotent financially.
Why such a brazen attempt to guarantee perpetually that air lines will receive bounties from city taxpayers? Why seek by legislative edict from the Congress of the United States the forced expansion and continuance of city largésse in this field? I think I know.
This committee is well aware that from the beginning of civil aviation cities have been in the forefront sponsoring, aiding, and encouraging the scheduled air lines of the United States. The records of this committee are full of statements by city officials down through the years, in which statements benefit after benefit has been urged for the scheduled air lines. These air lines were repeatedly called an infant industry, and cities wanted and still want the benefits of scheduled air transportation. So our representatives came here to urge legislation, appropriations, and other action to help the scheduled air lines.
This is the first time, to my knowledge, when cities have appeared before this committee to oppose legislation obviously fostered by and designed to benefit scheduled air lines—but this is the first time in the history of civil aviation that the scheduled air lines have come before this committee to request a special and entirely unjustified subsidy from those who pay taxes in the cities and counties of the Nation. Why? I think I know.
City taxpayers have contributed millions upon millions to scheduled air lines in a manner just as effective as if these amounts were paid directly into air-line coffers. Without a single exception, every city in the Nation which receives scheduled air-line service has spent untold amounts on the construction, development, improvement, maintenance, and operation of an airport in order that this scheduled air line could operate. Without such airports, scheduled air lines could not exist. Cities which have expended these large sums have never received, nor do they ever expect to receive, reimbursement from the scheduled air lines. Since cities receive most of their income from real estate taxes, it is city real estate taxpayers who have paid this money into air-line treasuries. While it is true that Federal funds have been used in the construction of many of these airports, and this is quite proper because of the essential nature of airports in our national defense scheme, such payments have never relieved cities from bearing full operational and maintenance costs or from providing valuable space "free" at the airport to the Federal Government without compensation, for the weather bureau, the post office department, the Air Corps, and the Civil Aeronautics Administration, which to some degree has offset the Federal funds received.
With such a record of sponsorship and aid to scheduled air lines, why is it that these air lines now seek through this special legislation a guaranty that city taxpayers will continue to support them in the manner in which they have "become accustomed," and effectively expand this support? I think I know.
City expenses have greatly increased along with the upward trend of costs throughout the Nation. Every city is greatly pressed to make ends meet. Every one of the hundreds of services and functions of cities has been and is being examined most carefully by city officials and city taxpayers in order
that every unnecessary or nonbeneficial function or service may be eliminated or made to operate in a more efficient or economical manner. City officials and city taxpayers have begun to look at operation deficits at airports with a most critical eye. They are wondering how scheduled air lines can spend millions of dollars for advertising, the most expensive ticketing procedure in the world, and other luxuries, yet spend less than 1 percent of their total revenues on their most essential facility—the airport. Regardless of the merits of the current financial problems of scheduled air lines, problems which to city officials seem to stem chiefly from management and planning, city officials feel that something can be done, and something must be done, about the way the scheduled air lines have treated the cities of the Nation on landing fee payments for use of city airports.
When city airport operating deficits were exposed to the spotlight of local taxpayer reaction, there arose a general demand that something be done about the rotten situation which was revealed. Since city attorneys have had much to do with the leases which exist for the use of city airports, this problem has generally resolved itself into a question to the city attorney something like this: "Why can't you do something about the air-line lease for the use of our city airport?” There were so many city attorneys who had this question presented to them that at our national meetings this subject came up time and time again, and our committee on airports decided that a national survey and study was essential.
As our study progressed, it became quite clear to all of us that our chief difficulty with scheduled air lines grew out of the so-called model lease which the air lines had written up and which they “pressurized” onto city after city. When I say “pressurized,” I mean exactly that. Let me explain. The scheduled air lines have experts who do nothing else but go from city to city to negotiate agreements for the use of city airports. These experts always go in a body. That is, every scheduled air line using a particular airport sees to it that its representative goes at one and the same time to a particular city to negotiate an agreement for the use of the airport. There they meet with the airport manager, the city attorney, and other city officials designated for that purpose, and begin a discussion of the airport lease.
The air line representatives always take a united position. If any question comes up during the discussion, they insist upon retiring to
a separate room and forming a united opinion before one is expressed. In the past, they have invariably advised cities that their so-called model lease must be taken, “or else.” As evidence of this concerted action, the Air Transport Association has inserted a provision in their model-lease agreement to the effect that if a city grants more favorable terms to any other air carrier, then such terms shall be immediately made available to all air carriers, thereby insuring identical lease agreement terms.
This model lease, as I have said, is a one-way street, giving air lines everything they want and casting all the burdens of airport operation upon the city, with absolutely no benefits of any character. Also, the city attorney and most of the airport managers are not experts in the negotiation of such leases, and the subject is so extremely technical that it was easy for the air-line representatives to take advantage of their superior knowledge and experience in the field.
Is it any wonder that our study revealed in city after city a rather militant feeling against the tough bargaining practices of the air lines? When I use the word “tough," the committee will of course realize that that is not the adjective usually used by city officials in describing their reaction to such practices.
City attorneys soon realized that we were all to varying degrees "" in the same boat.” We resolved that we must do something about the situation. We first requested all of our cities to send copies of existing leases, agreements, and full data on existing financial arrangements for the use of their airport to our national headquarters. This was a long and tedious process, because usually these agreements were extremely long and technical, and it was difficult to obtain copies. Little by little we accumulated the necessary information upon which to base a considered and a reasonable judgment. We then began, more than a year ago, to draft tentative model agreements to cover all users of city airports. The scheduled air-line agreement was one of four. After we had drafted this tentative agreement, in order to be as fair as possible, we met with the representatives of the Air Transport Association--all of them experts in air-line leases for the various air lines-and discussed every provision, in fact, every phrase, of our own proposed model airport-air line agreement. On many points we changed our views because of information and arguments advanced by the air lines. We could not, of course, satisfy the air lines on every point, because it was obvious to them that for the first time in the history of this country the cities were going to have their own information on what cities have been paid for the use of airports by scheduled air lines, and cities were for the first time going to have their own model agreement which would fully protect the interest of cities. I really believe that the airlines themselves have been shocked by the facts revealed at our joint conferences to discuss this extremely important matter.
Naturally the air lines want to continue the existing situation if they can, and even to improve upon it if possible. I think this is a short-sighted view, but it is certainly one revealed by H. R. 6180, and I do not for one moment mean to impinge the motives or good intentions of the individual Congressman, who I believe was misled into introducing this bill.
This point in my narrative brings me to say that I have today delivered to the clerk of this committee a sufficient number of copies