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DENVER, Colo., May 14, 1948. JAMES C. BUCKLEY,
Executive Secretary, Airport Operators Council: Concur wholeheartedly with your decision on H. R. 6180. Have already contacted Chairman Wolverton in this respect and appreciate your following through.
C. J. LOWEN.
DETROIT, Mich., May 14, 1948. JAMES C. BUCKLEY,
Port of New York Authority: We concur your testimony H. R. 6180. Request you place us on record opposing this bill.
EUGENE V. FRYHOFF, Director, Detroit Metropolitan Aviation Authority.
JACKSONVILLE, FLA., May 14, 1948. JAMES C. BUCKLEY,
Secretary-Treasurer Airport Operators Council: We heartily concur with your statement. E. P. Owen, Jr., will represent Jacksonville at the hearing.
E. E. BENTLEY, General Manager of Airports.
Kansas City, Mo., May 15, 1948. JAMES C. BUCKLEY,
Executive Secretary, Airport Operators Council: Fully approve your statement. Desirable you speak for all large airports. If possible add airport bill not proper vehicle for economic regulations of industry. Would be just as sensible to have mail rate determined through Federal Airport Act.
Louis R. INWOOD,
Director of Aviation.
St. Paul, MINN., May 14, 1948. JAMES C. BUCKLEY, Executive Secretary, Airport Operators Council,
Care Port of New York Authority. Receipt is acknowledged your statement re H. R. 6180 prepared for Port of New York Authority and also receipt acknowledged Airport Operators Council special bulletin May 12. I concur fully with position taken in your statement as contained in the draft of May 12 on H. R. 6180 and I authorize you to make this statement on behalf of the Airport Operators Council or on behalf of this Minneapolis-Saint Paul Metropolitan Airports Commission whichever may be desirable in your judgment as I am unable to testify personally before the Interstate and Foreign Commerce Committee of the House of Representatives, Monday, May 17, on behalf of this Commission.
ROBERT ALDRICH, Executive Director, Metropolitan Airports Commission.
St. Louis, Mo., May 14, 1948. JAMES C. BUCKLEY: St. Louis heartily concurs in your statement on H. R. 6180.
H. C. BROCKHOFF.
AIRPORT South San FRANCISCO, CALIF.,
May 14, 1948.
Port of New York Authority. We fully concur with the statements made by the Ponya in their protest against the amendments to the Federal Airport Act as proposed in H. R. 6180. This proposed legislation, if enacted into law, would seriously threaten the whole air transport industry. By making the development and maintenance of airports by city and county governments an ever greater burden on local taxpayers than they now are. Such legislation can conceivably halt the further development of the San Francisco Airport, the major international air terminal on the west coast by the refusal of our local taxpayers to approve further expenditures on this airport, if it is prevented from meeting its operating costs.
B. M. DOOLIN,
San Francisco Airport. Mr. HALE. Thank you, Mr. Buckley. Are there any questions?
Mr. HESELTON. I notice that you have replies only from San Francisco and the west coast and from Jacksonville in the South, and the question I have in mind is whether there are a large number of other airports in those locations that would be affected.
Do you anticipate further reaction to this legislation from other airports that have not yet reached you?
Mr. BUCKLEY. If I may, I have wires here attached to my statement for the record from Mr. Berry in Cleveland.
Mr. HESELTON. I have run over them and I find only one on the west coast and one in the South. Do all other airport authorities expect to send wires; or do you anticipate further wires from them?
Mr. BUCKLEY. May I supplement that a bit? Of the 20 members of the Airport Operators Council, Boston, Jacksonville, Pittsburgh, Philadelphia and New York, Newark, five were represented here today.
In addition, I have wires for the record from Chicago, Cleveland, Denver, Detroit, Kansas City, Minneapolis-St. Paul, St. Louis, San Francisco and the Washington National Airport. That is nine.
In addition I am authorized by telephone from Clarence Young in Los Angeles to advise the committee that Los Angeles objects completely to the reporting and passage of this bill. I am to tell the committee-both by letter and telephone, by Memphis, objecting, so that I believe the committee has or will be shortly advised directly by Baltimore of its opposition to this bill. So I have heard from all of the members of the Airport Operators Council but three, and all are in opposition to the reporting or passage of the bill.
Mr. HESELTON. With reference to those three, do you anticipate hearing from them?
Mr. BUCKLEY. I hope that I will hear from them within a day.
Mr. HESELTON. I would ask permission that the gentleman be permitted to send those for incorporation in the record.
Mr. HALE. That will be done. (The witness was unable to furnish the material mentioned above.)
Mr. HESELTON. You have not asked for advice from the rest of the airports not members of the council?
Mr. BUCKLEY. No, I think that I should say for the record, Mr. Congressman, if I may, that this is a newly formed organization, and I am serving without compensation as its acting executive secretary pending the employment of a full-time person for that position, and while I don't speak for the organization, it was for that reason that I distributed my proposed statement in advance, so that any who wanted me to indicate their agreement could so advise me. We did not distribute the statement or contact other airport opera
I understand, however, that a representative of the American Association of Airport Executives is on your schedule for this after
Mr. HESELTON. Has your experience been substantially the same in terms of trying to negotiate additional landing fees as has been described here today?
Mr. BUCKLEY. I think the answer, in a word, is “Yes.”
Mr. HESELTON. Mr. Chairman, I neglected to ask that some material from this work of Mr. Charles S. Rhyne, the Airport Lease and Concession Agreements, which is sections IV "V,” entitled “Federal Airport Act of 1946 and CAA Fluctuating Policy, which begins on page 26 and concludes in the middle of page 30, might be made a part of the record.
Mr. HALE. It will be so included. (The excerpt is as follows:)
(B) THE FEDERAL AIRPORT ACT OF 1946 AND CAA FLUCTUATING POLICY The General Counsel of the Civil Aeronautics Administration has advised that the model forms, appearing in sections VI, IX, XI, and XIII, infra, are "consistent with the requirements of the Civil Aeronautics Act of 1938, as amended, and the Federal Airport Act and regulations promulgated pursuant thereto.”.
In considering, however, the Federal Airport Act and city airport lease and use agreements, it is necessary to explore in some detail the attitude of the Civil Aeronautics Administration with respect to the use of exclusive aviation gasoline concession agreements. It is particularly important to do so, because of the fact that many cities derive their greatest airport revenues from the gasoline concession maintained at their field. In what manner this lucrative source of revenue is and has been threatened by the CAA is outlined in the following paragraphs. It should be borne in mind that while every city may not use the exclusive concession device, there are an equal number which do use it and which desire to protect their very right to use it.
When the Congress of the United States enacted the Federal Airport Act of 1946, it was thought that a real contribution toward the advancement of civil aviation had been made. It was believed that the impetus for the construction of many essential airfields throughout the country would be speedily provided. Liberal app priations from the Federal Treasury seemed to insure that sponsors of airport projects would not be placed in trying financial straits in attempting to carry out their portion of the national airport plan. In short, the program was viewed with great optimism by many cities.
Charged with the administration of that act was the Civil Aeronautics Administration. From the very outset, it was apparent that that agency was going to misinterpret, twist, and torture the real sense of the Federal Airport Act into something which suited the CAA's own internal pleasure and which would only have the result of impeding and hampering the accomplishment of the real purposes of the act.
This has been all too evident in the vacillation and indecision of the CAA in promulgating and adopting the rules and regulations under which the act would be administered. Particularly with reference to the matter of aviation gasoline concessions at airports upon which Federal funds are to be expended has this been true. The following chronology of events provides an ample demonstration.
First of all, it should be noted that the Federal Airport Act itself contains only the following provision in section 11 (1), with respect to the manner of use of the airport. This section requires that as a condition precedent to the approval by the Civil Aeronautics Administrator of a project under the act, he shall receive assurances in writing that: “the airport to which the project relates will be available for public use on fair and reasonable terms and without unjust discrimination.'
Obviously, no prohibitions against exclusive aviation gasoline concessions could conceivably be inferred from such language, but presumably on the basis of such language the CAA proposed to insert the following provision in the first draft of the tentative sponsor's assurance agreement:
“(f) The sponsor covenants and agrees that it will not grant to any one airport service operator an exclusive right to sell aviation gasoline and oil; and further covenants and agrees that it will not grant an exclusive right to any gasoline company which would limit gasoline and oil sold at the airport solely to its products unless such exclusive right is granted on a competitive basis, it is for a term of not more than 3 years, the contract granting the exclusive right requires the gasoline company to make available its products to all users of the airport on reasonable terms and without unjust discrimination, and the granting of such exclusive right has been approved, in writing, by the regional administrator.'
Following public hearings (at which NIMLO vigorously objected to the above) in November 1946 on the proposed rules and regulations and the sponsor's assurance agreement, of which the above quotation was a part, the above paragraph was changed by the Administrator to the following simple, but still completely unjustified, language:
"(f) The sponsor will not hereafter grant to anyone an exclusive right to sell aviation gasoline or oil."
It is doubtful if the proposed language was any more or any less acceptable than the language finally decided upon.
The next development with regard to the CAA's attitude on exclusive aviation gasoline concessions was the announcement, during the summer of 1947, that the Administrator would receive suggestions as to the revision of the rules and regulations and the sponsor's assurance agreement. Again the national institute renewed its original objections and there was some indication that the prohibition against exclusive aviation gasoline concessions would be removed. However, on August 28, 1947, the Administrator issued “letter” to all project sponsors to the effect that no revision would presently be made in the agreement but rather that a statement as to "its,” the CAA's, construction of the sponsor's assurance agreement would be issued. Its “construction” of the above provision was as follows:
“Section 1 (f) —This section permits a sponsor to exercise in its own right an exclusive right to sell aviation gasoline and/or oil. It also permits the sponsor to exact a gallonage charge on gasoline and oil dispensed or used by others at the airport. The prohibition is that the sponsor will not, after the date of the agreement, grant to someone else the exclusive right to sell aviation gasoline or oil.'
This interpretation is as completely unsatisfactory as the provisions in the sponsor's assurance agreement itself, for upon what theory can the CAA that it is permissible for the city to retain the exclusive right but it is not permissible to give it to another? If the city can do it why can't the city let another do it as a city can only operate through agents, employees and those with whom it must contract? The sale of gasoline is not something which can only be done in a governmental capacity.
Next in the chain of developments was a letter dated February 10, 1948, from General Counsel R. E. Elwell of the Civil Aeronautics Administration to General Counsel Charles S. Rhyne of the National Institute, in which it was stated that revised regulations would shortly be forthcoming which "would permit the grant of an exclusive right to sell aviation gas and oil for terms not in excess of 3 years.” This was indeed a surprising revelation, but the prediction failed to materialize because on March 18, 1948, the Acting Administrator adopted a new sponsor's assurance agreement, to be effective May 1, 1948, which, with reference to the provisions pertaining to exclusive aviation gasoline concessions, is the very epitome of administrative shortsightedness and unreasonable interference with purely local matters. Moreover, the provisions of the new agreement pertaining to aviation gasoline not only typify the failure of the CAA to grasp the vital importance of permitting the municipal airports of the country to achieve that stage of financial independence which is so necessary to the cause of civil aviation but they demonstrate a clear-cut and highly improper desire to shackle cities with burdensome and illogical limitations. This provision reads as follows:
“That it (the sponsor) will not exercise or grant any right or privilege which would operate to prevent any person, firm or corporation operating aircraft on the airport from:
“(2) Purchasing off the airport and having delivered on the airport without entrance fee, delivery fee or other surchage for delivery any parts, materials or supplies necessary for the servicing, repair or operation of its aircraft; Provided,
that the sponsor may make reasonable charges for the cost of any service (including charges for maintenance, operation and depreciation of facilities and rights-ofway) furnished by the sponsor in connection with the delivery of any parts, materials or supplies, And Provided Further, That in the case of aviation gasoline and oil purchased off the Airport and delivered to the airport, the sponsor may require the aviation gasoline and oil to be stored in specified places, limiting the amount delivered to the amount of storage space available, and if necessary for the safe and efficient operation of the airport, require persons furnishing their own aviation gasoline and oil to utilize such storage, dispensing and delivery system as the sponsor may designate.'
How the Civil Aeronautics Administration, an agency of the Federal Government, can presume to dictate upon matters which are purely local in charcter and which properly can only be considered as matters of contract between the city and the users of airport facilities is beyond all comprehension.
The above quotations from the sponsor's assurance agreements that have been in effect at various times in the past manifest a complete unwillingness of the CAA to foster sound economic structures at municipal airports. The most lucrative source of revenue to city airports, and this is borne out by the discussion in section 5E, infra p. 81, is thus effectively surrounded by CAA obstacles which can only be overcome by refraining from participation in the Federal airport program. Is it any wonder that such participation is being shunned by some cities?
The provision presently in effect can neither be justified on legal, equitable, economic or logical principles. There is nothing in the Federal Airport Act authorizing such a provision; it is highly improper to interfere in such local matters; and it curtails a lucrative source of city revenue.
Mr. Hale. The next witness is Mr. Harry V. Blair, assistant county solicitor of the county of Allegheny, Pittsburgh, Pa.
STATEMENT OF HARRY V. BLAIR, ASSISTANT COUNTY SOLICITOR,
OF THE COUNTY OF ALLEGHENY, PITTSBURGH, PA.
Mr. BLAIR. The county of Allegheny is a political subdivision of the Commonwealth of Pennsylvania with the county seat at Pittsburgh. It is a recognized fact that the county of Allegheny and the territory immediately adjacent to the county is the principal world center of heavy industry. The county of Allegheny has authority under the laws of Pennsylvania to establish, maintain, and operate airports, and in accordance with such authority the county of Allegheny owns and operates two major airports known as the Allegheny County Municipal Airport and the Greater Pittsburgh Airport.
The Allegheny County Municipal Airport is at the present time used by three scheduled commercial air lines: Transcontinental and Western Air, Inc., Capital Airlines, and Northwest Airlines. Greater Pittsburgh Airport is now in the process of construction for the purposes of civilian aviation and will be open for use by the scheduled commercial air lines within the next few years.
The investment of the county of Allegheny in its airports is a very great one. Over a period of years the county has spent in the establishment and development of the Allegheny County Municipal Airport approximately $5,500,000. Up to the present time the cost to the county in actual sums paid or contracted for in the development of the Greater Pittsburgh Airport amounts to $6,500,000, and present plans call for the expenditure of an additional $15,000,000 before the airport is finally made available for commercial operation.
The executive heads of the county of Allegheny at the present time are John J. Kane, chairman of the board of county commissioners, and Commissioners George Rankin, Jr., and Ernest Hillman. In their