They are charges against the services which use them, just as the landing area charges should be recovered through flight fees.

I might say that as a result of that analysis, we have established a tariff at New York International Airport which will open on July 1 on the basis not of traffic that we actually expect to handle there which will be initially 5 or 10 flights a day, but on the basis of 175 plane departures a day, on the theory that the airport operators should base their charges on reasonable utilization of the landing area.

In other words, he should just behave like a man starting a grocery store he has to absorb the loss, as it were, until his business builds up to reasonable volume.

So that the charges are related solely to landing areas so far as flight fees are concerned, and these other charges are separate and apart. I would like to interpolate at this point, because I do not believe the discussion this morning made clear that in connection with the arrangements for the handling of gasoline at New York International Airport, to which an earlier speaker made reference in his prepared statement, we have included three elements. One is the ground rent of the facilities which will be required for the storage tanks which will be exclusive use, and two, our debt-service costs on the investment in the storage tanks, which must be recovered; and third, a gallonage fee not to make us a profit as was suggested, but to recover to us the general cost of these common facilities used in common, to the extent that they are used in gasoline distribution.

We have just advised the scheduled air carriers that that charge would be initially 1 cent per gallon. Now, that is not a charge which has anything to do with flight fees. It is not a charge that is inequitable to any airplane whether it takes on 2,000 gallons per flight or 200 gallons per flight, because that charge reflects the cost to the airport of handling 2,000 gallons or 200 gallons or 2,000,000 gallons at the airport. I think it is important that the distinction be recognized. It is not a charge in lieu of flight fees at this particular airport.

Mr. BUSBEY. That is something like a charge, for instance, the cold-storage companies use when they unload a carload of Maine potatoes from Mr. Hale's State, and they charge 25 cents a bag for the first month, but after the first month it goes down to 15 cents a month, and that differential is more or less a handling charge there. Mr. BUCKLEY. That is right. I think the best comparison, and the members of this committee recognize it, is that these charges that are prohibited by this bill are what you might compare to top wharfage. If you are unloading a ship, you pay a side wharfage or dockage for the privilege of tying up your ship. On top of that you pay top wharfage for the privilege of moving cargo and supplies across the wharf. That is to reimburse the public-wharf operator for the cost of providing and maintaining that wharf. The question was raised this morning, and I do not believe it was answered, but I have before me, for example, the tariff of the port of San Francisco, issued by the board of State harbor commissioners, and at San Francisco, for example, they include vessels, stores, and supplies, and one of the items of merchandise against which wharfage charges will be collectedbunker fuel, for example, going into vessels in San Francisco Harbor at public piers, operated by the commission-there is a charge of 5 cents a ton on bunker oil loaded over the side from barges, and there

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is a charge of 7.5 cents a ton for bunker fuel that is loaded from a railroad car into vessels on the side of wharf. I think that is a reasonable analogy.

What you are being asked to do by passage of this bill is to require the airport operators to absorb a portion of the airport costs properly allocable to scheduled carriers in connection with their procurement of personal property. I submit, gentlemen, that that is a higher price to pay for Federal aid than the large air-line airports of the country can afford. If this bill were to be passed, it could aptly be renamed "A bill to wreck the Federal Airport Act."

I should add that the bill is not confined to aeronautical supplies for use by the carrier itself. It would also apply to goods purchased by it for resale to others.

Two: Passage of this bill will deprive airport operators who accept Federal aid of the opportunity of exercising their own independent business judgment in managing their airports.

Airports are rapidly becoming big business, a far bigger business in fact than the scheduled air transportation system of the United States. At a recent meeting of the Airport Operators Council, we sat around the table and found to our amazement that within 5 to 10 years this small group of 20 large air-line airport operators would have over a half billion dollars invested in air-line airports, almost twice the capital invested in the domestic scheduled air-carrier industry. The large airport operators have more at stake in the future of air transportation in this country than the air carriers, themselves. Mr. HESELTON. May I interrupt to ask if that means the local investment, exclusive of the Federal contribution?

Mr. BUCKLEY. It is exclusive of Federal contributions.

Now, our municipalities are increasingly finding that these huge airport investments cannot be carried as part of the general tax burden, except by neglecting essential municipal services, such as schools, streets, sewers, libraries, and hospitals. It was this situation which resulted in the leasing of the Newark and New York City airports to the Port of New York Authority for development on a self-sustaining basis. Similar pressures in other air traffic centers are resulting either in the transfer of airport operations to self-sustaining governmental units, or in the complete abandonment of plans for development which must be carried out if we are to have a healthy air transportation system.

Our projections of national air traffic suggest that within perhaps five years there will be 15 to 20 air traffic centers in the United States which will require for scheduled air carrier use alone more than the capacity of one three-runway airport. In no more than five of these air traffic centers today is there any tangible progress toward this necessary expansion of air-terminal facilities.

The proper development of the Nation's air-line projects, which are as essential in time of war as they are in time of peace, will come about only by permitting them to work toward a self-sustaining basis-and this will require the increasing development of nonflight revenues and the management of these facilities on a businesslike basis. Yet, the bill before you would deny the airport operator the Federal aid so essential to the achievement of this program, unless he gives up the right to use any independent business judgment in setting charges for the use of his facilities. Note that this bill is not limited in its cover

age to aeronautical items or even personal property essential to the operation of the aircraft of the scheduled air carriers. It covers every kind of personal property from mittens to bubble gum, and permits no charges by the airport operator to recover his many expenses which are entirely separate from the services which he might render directly in connection with the procurement of such items by scheduled air carriers.

To put these airports on a self-sustaining basis, as Mr. Elton has pointed out, you have to develop every conceivable item of nonflight revenue and you also have to be able to realize from every reasonable source of revenue within the airport.

We found, for example, that we now can generate between $1,200 and $1,500 a week income at LaGuardia Airport from vending machines. We have between 65 and 70 of them at the airport. It is a new source of revenue which we have developed within the past 7 or 8 months. But the secret of the whole thing, if we are going to have the huge airports that the air transportation industry must have if we are going to develop, is that jointly we and they have to be able to put these facilities on a self-sustaining basis. If we put in barriers, we simply cannot go forward with that type of program.

This attempt to restrict the discretionary power of the local airport operator through Federal legislation is quite at odds with the advice given to airport operators in Boston on April 2, 1948, by Mr. Ralph Damon, the president of American Airlines. In an address before the first annual meeting of the Airport Operators Council, Mr. Damon said,

It is necessary that legislative bodies give you sufficient discretion. Such discretionary power is essential in the public interest. Overly detailed legislative rules simply hamstring you and necessitate constant and uncertain revision.

We are all in complete agreement with that statement of Mr. Damon. He was making it at the time, I believe, because some of the States, in order to protect their airports, have recently passed legislation prohibiting the execution of leases with a long-term agreement. They have limited the terms of the leases to 5 years, or some such thing. Mr. Damon was arguing against that type of legislation. It seems to us that if the airport operator should have discretion in order to be able to negotiate agreements which are reasonably responsive to the needs of the scheduled air carriers, he certainly is entitled to the same discretion in order to negotiate in the public interest in order to keep his airport on a reasonably self-sustaining basis.

Three. Passage of this bill will remove from the Federal Airport Act the flexibility necessary to meet the changing needs of the developing airport industry. After months of conference with scheduled air carriers, oil companies, airport operators, and other interested groups and individuals, the Civil Aeronautics Administration published, on March 18, 1948, revised regulations for the administration of the Federal Airport Act. Prior to the adoption of these revised regulations, most large airport operators had found that they could not afford to accept Federal airport aid under the conditions established in the original regulations.

For most of us concerned with airport operation, the revised regulations are far from ideal. In fact, there are several large airport operators today who feel that they still cannot accept Federal airport

air because of the rigorous conditions set forth in the revised regulations.

The Port of New York Authority had followed these discussions closely and had made its suggestions for consideration by the Civil Aeronautics Administration. Some of our suggestions were accepted; many were not. We recognized, however, that the administration of this act must necessarily reflect the interests of both airport operators and airport users and we recommended to our commissioners that we apply for Federal aid on the basis of these new regulations. Our first application was filed on April 15, 1948.

As we went over these revised regulations with our board, we were not happy about them but we felt they recognized a reasonably satisfactory middle ground.

Within 3 weeks after these revised regulations were published, the subject bill was introduced. The content of this bill reflects substantially the point of view which the Air Transport Association urged on the Civil Aeronautics Administration in the course of its consideration of revised regulations. In effect, you are being asked to overrule the administrative action of an executive agency to serve the interests of one small group of airport users. It might interest you to know that, in the same speech by Mr. Ralph Damon, of American Airlines, from which I quoted previously, he stated that:

In 1947, commercial air carriers accounted for only 16 percent of all landings and take-offs.

The bill violates the general principle that legislation should be implemented through flexible regulatory procedures developed by the agency skilled and experienced in the field-in this case, the Civil Aeronautics Administration. I cannot help but quote in this connection a paragraph from a speech made by the Honorable Robert Ramspeck, executive vice president of the Air Transport Association, before the Airport Operators Council in Boston early last month. In his address Mr. Ramspeck said:

Airport agreements are entirely local in nature and their negotiation does not require intervention on the part of any outside group or organization, whether governmental or private. They should be subject only to negotiation between the provider and the user or users, as the case may be, without discrimination.

Four. Passage of this bill will threaten the safety of operations at airports accepting Federal aid. The committee will note that this bill would forbid the airport operator from requiring the scheduled air carrier or any person making deliveries to it from being required to use any storage, dispensing or delivery system, equipment or facilities operated by or pursuant to a contract with the airport operator.

What this means, in effect, is that the Congress would be forbidding the airport operator to determine how and where gasoline and other hazardous materials and supplies should be stored and handled on his airport.

On this point, the proponents of the bill are going far beyond the limits of business expediency and are asking for legislation which may jeopardize the lives and safety of thousands of passengers and visitors at our major air terminals. The volume of gasoline handled at the airport today is not something which can be treated lightly and left to the discretion of individual tenants. Aircraft engaged in North Atlantic or Trans-Continental operations take on 2,000 gallons

or more of gasoline each when they leave LaGuardia Airport. In 10 to 12 years we expect that one million gallons of gasoline per day will be used at the New York International Airport at Idlewild. To provide even a 2-weeks' reserve supply as a margin of safety against strikes and weather difficulties, we shall have to have storage capacity at the airport for 15 to 16 million gallons of gasoline.

If this bill is passed, it means that as the price of Federal airport aid the airport operator must relinquish any right to require the use of a common safe storage area, or the use of a safe underground gasoline distribution system, or the use of a consolidated fleet of tenders of standard design, so as to keep the number of such vehicles on the airport to a minimum.

At LaGuardia Airport today we have between 50 and 60 gasoline trucks running all over the airport when as a practical matter if that fleet were consolidated the volume of business could be handled by between 15 and 20 trucks.

Instead, he must agree to forget about the lives and safety of his patrons and permit gasoline to be handled in any manner the individual scheduled carrier desires at any place on the airport which that carrier may have under lease or permit.

By our lights, gentlemen, and I believe I express the opinion of most of the large airport operators throughout the country, that is too high a price to pay for Federal aid. We certainly cannot afford it. We have just finished, in cooperation with the Fire Department of the city of New York, a survey of the gasoline storage facilities operated by the scheduled air carriers at LaGuardia Airport. We found serious violations of the fire code, many of which had been called to the attention of the carriers more than 2 years ago, and which were still unremedied. I may say that we advised the carriers that unless these violations were remedied within 30 days, we would not permit further deliveries of gasoline. We cannot accept Federal aid if to do so we lose the right to protect the people who use our airports. Five: Passage of this bill will deprive the States and municipalities and even the Federal Government of their right to tax any articles of personal property procured by scheduled air carriers at airports accepting Federal aid.

I have said little about the so-called tax features of this bill because it is not in any sense of the word an objective or honest attempt to resolve the admittedly vexing problems of taxation which confront scheduled air carriers. Under the guise of characterizing this as a tax bill, it has been brought before you more rapidly than it might otherwise have been scheduled, originally for a joint hearing with a bill which resulted from long and detailed studies by the Civil Aeronautics Board and which was suggested for your careful consideration by both the President's Air Policy Commission and the Congressional Air Policy Board. I am speaking here of House Resolution 1241 which was originally to be before you today. On that bill I have no

comment.

The tax features of House Resolution 6180, however, are something else again.

Note at the outset that it forbids the collection of any taxes on any personal property procured by a scheduled air carrier unless the tax is one imposed by the airport owners or operators. This would cause several extremely curious results. I am not a lawyer, but I do see