Mr. MARTIN. Would it give the Commission power to establish new routes and increase or decrease service, or bring about consolidations, and things of that character?

Commissioner EASTMAN. In connection with the carriage of the

mails?

Mr. MARTIN. Yes.

Commissioner EASTMAN. I do not so understand. The Commission would have the right to grant a certificate of convenience and necessity covering new operations; would have the right to determine, in the last analysis, whether those new operators should or should not carry the mail; but when it comes to fixing the schedules for carrying the mail and how much mail shall be given to each operator, my understanding is that would continue to remain with the Postmaster General.

Mr. MARTIN. For instance, now, under present legislation, the Post Office Department establishes new routes and makes extensions and increases in the service and things of that character.

Commissioner EASTMAN. Yes.

Mr. MARTIN. Would those powers be transferred to the Commission?

Commissioner EASTMAN. So far as the present air carriers are concerned, they would have the right and duty under this bill to carry the mail. My understanding is that the determination of how much mail they should carry and how they shall carry it would rest with the Post Office Department, the Commission fixing the compensation.

Mr. MARTIN. The way I found all of this out, I have been trying to get an extension or a new route for the last 4 years. I have not gotten it, but I have learned something.

Commissioner EASTMAN. May I proceed?

The CHAIRMAN. Yes, Mr. Eastman.

Commissioner EASTMAN. I have been endeavoring to show that the events which have transpired since the report of the Federal Aviation Commission all tend to support the conclusions which that Commission reached as to the desirability of regulation such as is now proposed. At this point may I say a very brief word in regard to the conclusions that I reached when I was Federal Coordinator of Transportation in regard to the general regulation of transportation?

I think it is clear that transportation is an industry that must be publicly regulated. That fact seems to be conceded all over the world. It is an industry which is so affected with a public interest that such regulation is necessary in order to protect that interest, and that regulation should cover, in my judgment, all important forms of transportation.

I also reached the conclusion that the transportation problem is, after all, a single problem and not a series of problems, because all of these forms of transportation are interrelated in at least two ways: They are either interrelated by competition or they are interrelated by the opportunities for cooperation and coordination between them or by both. Therefore it seems highly desirable to concentrate regulation in a single body instead of spreading it over a number of separate bodies. That is necessary, not only in the interest of proper coordination between these various forms of transportation, but to insure fair and impartial treatment of them all by a body which has

no greater or different responsibility with respect to any one of them than to any of the others.

Now, before taking up the details of this bill, there are three matters of rather general importance raised by the bill which I shall discuss.

This bill covers operations, not only in interstate commerce, but in what is called overseas commerce, and in foreign commerce.

Overseas commerce is defined as commerce between the United States and its Territories and possessions which are separated by the ocean from the continental United States.

So far as the regulation of foreign commerce is concerned, there are, of course, many difficulties which are not present in the regulation of interstate commerce or in overseas commerce.

The Commission has had no experience with the regulation of foreign commerce in the sense in which it would have supervision under this bill. We do regulate the operation of the railroads in foreign commerce, but those operations are wholly confined to this country, of course. In other words, they are simply the operations of the railroads in carrying export and import traffic to and from the ports.

But when it comes to regulation of foreign commerce which embraces the entire field-in other words, the transportation from this country to other countries, or in the reverse direction-of course, the foreign country has the same right to regulate that this country may have, and that introduces complications which are not present when we are confining ourselves to domestic operations.

The Commission has felt doubtful about the wisdom of including the regulation of foreign commerce, initially, feeling that it might be wiser to try out the regulation of interstate and overseas commerce until the Commission became more fully informed in regard to the air carrier industry and had had an opportunity to investigate and consider these difficulties presented by the regulation of foreign commerce.

However, it is a fact that the operations of air carriers in foreign commerce are expanding with great rapidity and apparently many of the air carriers themselves are desirous that there should be some regulation over that phase of their transportation.

The Commission has no objection to trying its hand at that regulation, if that is desired by the Congress. In principle, there is no objection to it. The only question that arises is as to the practical difficulties in the way of such regulation.

The second point that I shall speak of is with respect to the jurisdiction over the safety of operation. In one of the bills, the jurisdiction which the Department of Commerce now has over safety of operation of air carriers is proposed to be transferred to the Interstate Commerce Commission. That is not true of H. R. 5234, however, which would leave that jurisdiction over safety of operation with the Department of Commerce, as it is now.

Mr. MARTIN. Mr. Chairman.

The CHAIRMAN. Mr. Martin.

Mr. MARTIN. Why should it not go to the Interstate Commerce Commission if the rest of it goes there?

Commissioner EASTMAN. Well, I shall give you the comments on that particular matter, which I made before the Senate committee. I was then speaking of the so-called McCarran bill. S. 2, and said

that that bill contained a separate chapter 2, to be known as the Air Safety Act of 1937, which would in effect transfer to the Interstate Commerce Commission in strengthened form, and insofar as air carriers engaged in regularly scheduled air service are concerned, the jurisdiction with respect to standards of safety for air transportation now exercised by the Department of Commerce. The Commission now has comprehensive jurisdiction over highway motor carriers with respect to matters affecting safety of operation, and for many years it has had jurisdiction over various important matters affecting safety of operation of carriers by railroad. On the other hand, the jurisdiction now exercised by the Department of Commerce over safety in air transportation is quite like that which for many years it has exercised over safety in water transportation.

This Commission has repeatedly urged that Federal regulation of transportation be concentrated in one administrative body. This is because the various forms of transportation are so interrelated, competitively and otherwise, and because of the clear need for impartial regulation of them all by a body which has no greater responsibility for or interest in one than another. In other words, transportation should be dealt with as an entity and not as a series of separate problems.

The need for concentration of administration, however, is not so clear in the case of safety as in the case of various other matters. Moreover, the need for safety regulation, in the case of air transportation, extends beyond the common carriers of persons or property to the many privately operated airplanes. As S. 2 is drawn, the jurisdiction of the Commission with respect to safety would be confined to the air carriers engaged in regularly scheduled service, and the Department of Commerce would continue to exercise similar jurisdiction over all other aircraft. Such a division of authority might lead to unnecessary duplication of staffs and equipment. On the other hand, it might be deemed inadvisable to extend the jurisdiction of the Commission over safety matters beyond the field of public carriage for hire into the field of private operation.

The question is one of policy on which it is hardly appropriate for us to express an opinion. We believe that the Commission can administer, economically and efficiently, any functions and duties with respect to safety in air transportation which the Congress may see fit to entrust to the Commission. Beyond that expression of belief we do not undertake to go.

Mr. MARTIN. Is this your own statement?

Commissioner EASTMAN. Yes, sir; this is a statement on behalf of the legislative committee.

Mr. MARTIN. Do I understand that the pending bill only involves carriers in public service, not private service?

Commissioner EASTMAN. That is right.

Mr. MARTIN. Section 320 of H. R. 5234, under the heading of "Safety Regulation", is very short.

SEC. 320. Nothing herein contained shall be construed in any way to impair or affect the jurisdiction exercised by the Secretary of Commerce relative to the safety of operation of aircraft.

Now, as I understand it, the whole question of the reorganization of the executive departments of the Government revolves around matters of duplication, overlapping, and all that sort of thing; but it looks like whenever we get up against an instant case where that sort of thing might be remedied, we go right ahead and do some more of it. I am not a stickler for what department or commission shall have jurisdiction over any particular field, except that it shall have jurisdiction of all of that field, and it looks to me as if the Interstate Commerce Commission is going to be given what is tantamount to regulation of the whole air field, with the single exception of safety, that feature ought to go there, too, and the Interstate Commerce Commis

sion is peculiarly qualified to exercise that sort of jurisdiction, because that is one of its principal activities in the regulation of other forms of transportation.

Of course, I would not expect the head or representative of some agency to come before the committee and put up an argument to transfer to their jurisdiction powers now exercised elsewhere, but I think it is a matter that the committee ought to give very serious thought to.

Commissioner EASTMAN. We endeavored to point out in the statement I have read that there would be involved a question of duplication of authority if the control of safety, so far as these domestic scheduled air carriers were concerned, were transferred to the Commission and jurisdiction over private operations left in the hands of the Department of Commerce, and in view of the duties of the Department of Commerce with respect to all aircraft, including the laying out of routes, the provision of aids to navigation, and all that sort of thing, it might well be desirable to keep that control concentrated where it is now, instead of giving a part of it to the Interstate Commerce Commission.

Mr. KENNEY. In the Motor Carrier Act jurisdiction was given to the Interstate Commerce Commission over private operations in respect to these things?

Commissioner EASTMAN. Over private operators who carry property; not private operators who carry persons.

Mr. KENNEY. Of course; the Department of Commerce has no jurisdiction over water transportation; water carriers are not regulated

Commissioner EASTMAN. They are regulated to a certain extent. Mr. KENNEY. Yes.

Commissioner EASTMAN. But not completely.

Mr. KENNEY. Not in the sense that the railroads are regulated. Commissioner EASTMAN. Not to the same degree; no.

Mr. COLE. May I ask a question?

The CHAIRMAN. Mr. Colê.

Mr. COLE. Commissioner Eastman, if the present safety of operations law with the responsibility left to the Secretary of Commerce were not in effect and this bill were passed, the power given to the Interstate Commerce Commission under the provisions of this bill would be broad enough to permit the I. C. C. to do what the Commerce Department now does with reference to safety, would it not? Commissioner EASTMAN. Not under H. R. 5234.

Mr. COLE. Why not? It gives you control over not only all the actual interstate flying, but also facilities and instrumentalities of shipment or carriage. I interpret that language to mean airport facilities as well as anything else that pertains to safety. I imagine the public is more interested in regulation of safety than it is of

rates.

Commissioner EASTMAN. Well, they are interested in both problems, but I think it is true they are more interested in safety.

Mr. COLE. But your idea is that under this bill the Interstate Commerce Commission is not going to have anything to do with safety problems?

Commissioner EASTMAN. That is my understanding. Section 320

reads:

Nothing herein contained shall be construed in any way to impair or affect the jurisdiction exercised by the Secretary of Commerce relative to the safety of operation of aircraft.

Mr. COLE. Yes; that is peculiar wording because it still leaves the Interstate Commerce Commission to decide whether any decision it makes, or any action it takes looking toward the safety of operation, does impair or affect the jurisdiction of the Secretary of Com

merce.

Commissioner EASTMAN. You have in mind, I think, the definitions in section 303 and what is there said with respect to "facilities”— but the sections which outline the powers and duties of the Commission do not contain any provision with respect to fixing standards of safety of operation. On page 6 the Commission is given authority to prescribe general standards respecting the character and quality of service to be rendered, but I take it that that does not extend to the designing of the airship from the safety standpoint, or the regulation of any other matters of safety in connection with operation.

Mr. COLE. What does character and quality of service mean, then? Commissioner EASTMAN. Why, it would mean the number of ships to be operated; the number of schedules; possibly might even mean the size of the ships, but would not, I take it, go to the question of safety standards.

Mr. COLE. It seems to me that the average person looking to the character and quality of service rendered by airplanes would say that goes far beyond your version.

Commissioner EASTMAN. There is another provision on page 15 which indicates the intention on the part of Congress and which provides, in line 22—

that any such certificate shall be suspended in whole or in part by the Commission without notice or hearing, to the extent required by any order of the Secretary of Commerce relative to safety of operation of aircraft, issued pursuant to the Air Commerce Act of 1926, as amended, and any such suspension shall remain in effect until the Secretary of Commerce certifies to the Commission that such suspension is no longer necessary in the interest of public safety. That indicates that the initiative with respect to safety of operation is in the hands of the Secretary of Commerce and mentions particularly the Air Commerce Act of 1926, which is not repealed by this bill, so far as safety provisions are concerned.

Mr. WADSWORTH. May I ask a question?

The CHAIRMAN. Mr. Wadsworth.

Mr. WADSWORTH. There are one or two things, Commissioner Eastman, that are not clear; I confess a good deal of doubt in my mind as to the practicability of this thing, just as I would a proposal that the boiler inspection of the railroads should be taken away from the jurisdiction of the Interstate Commerce Commission and given to the Department of Commerce. I anticipate a conflict.

Commissioner EASTMAN. Well, as this bill is drawn I see no need for conflict with respect to the matter of safety; as I understand the proposed legislation, that phase of it is left with the Department of Commerce.

Now, the third matter of general importance I wanted to mention was this