enabled to hasten the day when subsidy payments by the United States Government no longer would be required. These are the contentions with which your committee has been fully apprised, and this office is not in a position to forecast with any degree of certainty the merits of either view. "It should be pointed out, however, that notwithstanding the carriers' repeated assertions that their financial structure is constantly being improved, there nevertheless remains the statistical fact that subsidies to this class of carriers have constantly been on the upgrade, despite the fact that there has been a stupendous increase in their route mileage and revenue plane mileage since 1947. Therefore, since these figures boldly spell out that there is no indication of an immediate end to their subsidy demands, there definitely emerges what would appear to be a need for the Congress to determine, as a matter of policy, whether it desires a continuation of such service which, as now being performed, must of necessity continue to be underwritten by the Government." Manifestly, the foregoing obesrvations were motivated to a large extent by our interest in the cost to the taxpayers through the need or subsidy mail rates which were being paid to those carriers. In the instant case, however, the bill expressly excludes this feature of the ratemaking elements by providing "That authority to engage in the transportation of mail pursuant to a certificate of unlimited duration granted hereunder shall be limited to the carriage of mail on a nonsubsidy basis with compensation restricted to a service rate." In view thereof, we have no recommendation to make with respect to the enactment of the bill. DEAR MR. CHAIRMAN: Reference is made to your request for report on S. 1474, a bill to amend section 401 (e) of the Civil Aeronautics Act, as amended. The measure would amend section 401 (e) of the Civil Aeronautics Act of 1938, as amended (sec. 481 (e) of title 49, U. S. C.), so as to make eligible for permanent certificates air carriers now operating under temporary certificates authorizing the holders to engage in air transportation of property and mail (but not passengers) within the United States: Provided, That the transportation of mail under such permanent certificates shall be on a nonsubsidy basis with compensation restricted to a service mail rate. The four air carriers covered by the bill, hereinafter referred to as cargo carriers, now hold temporary certificates for the transportation of property and nail. In proceedings before the Civil Aeronautics Board, the Department supported the grant of mail certificates to the cargo carriers on a nonsubsidy basis, urging that the services of any air carrier certificated by the Board to engage in scheduled cargo service should also be made available for the transportation of mail by aircraft. The Department utilizes the service of all of the cargo carriers for the transportation of priority air mail. The services of three are used in the transportaion of first-class mail as part of the Postmaster General's experimental 3-cent airlift program; the fourth carrier is not used because its route does not serve he areas embraced in this program. While the scheduled services of the conentional passenger air carriers generally provide adequate service for most of he daily volume of airmail, advantageous use is being made of the additional apacity and schedules of the cargo carriers, both as connecting services for onward transportation or as service from origin to destination. If certificates of unlimited duration are to be issued to the cargo carriers for he transportation of property, it is the Department's view that likewise mail ertificates should be made permanent on a nonsubsidy basis, as proposed in the ill. Accordingly, the Department has no objection to the enactment of this bill. The Bureau of the Budget has advised that there would be no objection to he submission of this report to the committee. Sincerely yours, MAURICE H. STANS, Deputy Postmaster General. TRANSPORT WORKERS UNION OF AMERICA, Senator A. S. MIKE MONRONEY, AIR TRANSPORT DIVISION, Washington, D. C., April 4, 1957. Chairman, Senate Commerce Aviation Subcommittee, Senate Office Building, Washington, D. C. MY DEAR SENATOR MONRONEY: The Air Transport Division, Transport Workers Union, AFL-CIO, has not requested time to appear before your committee currently holding public hearings on S. 1474, for the purpose of amending section 401 (e) of the Civil Aeronautics Act, as amended. It does, however, desire to bring to the attention of your committee its views on this particular Senate bill. The Air Transport Division supports the testimony given by Clarence N. Sayen, president, Air Line Pilots Association, and actively endorses the statement of George D. Riley, AFL-CIO legislative representative presented on behalf of the AFL-CIO Aviation Legislative Committee supporting the enactment of S. 1474. The air transport division went on record at the ATD Presidents' Council Conference in Los Angeles early in February of this year by unanimously adopting a resolution favoring this exact type of stability for the carriers involved herein. The ATD was concerned with the evergrowing number of furloughs and recalls of employees with these lines and with the "pat" answer during contract negotiations that, because of the nature of the operating certificates the employees involved would have to be satisfied with lower wages and reduced fringe items, with the result that the employees, members of our organization, are actually subsidizing the carriers. In prior public hearings before congressional committees, various airline company representatives have testified that the cost involved in processing an extension before the CAB, upon the expiration of a temporary certificate, is in the neighborhood of a quarter of a million dollars. While this expense is chargeable to the carriers' operation as a business expense, there are any number of places it could be spent for the betterment of the carrier and its employees. To name a few, newer and more modern aircraft, aircraft maintenance tools, freight and cargo handling machinery, employee contractual and fringe benefit items. For these reasons, and those already enumerated before your committee, we support the enactment of S. 1474. We are, however, extremely disappointed in the fact that S. 1474 as written, applies only to United States domestic carriers, excluding those all-cargo carriers operating under temporary certificates of public convenience and necessity issued by the Civil Aeronautics Board in international or foreign air transportation. The air transport division cannot find any logic or reasoning for the exclusion of the all-cargo international carriers from this legislation, especially in view of the fact that the reasons given to this committee in support of S. 1474 apply-even more so-to the international carries. For instance, any United States domestic all-cargo carrier is competing with not more than 3 or 4 certificated combination passengers, freight, and mail carriers on any one of its routes or route segments, while in the case of 1 temporary certificated all-cargo carrier between the United States and Europe, it is competing with not only 2 United States certificated carriers, but with 14 or more foreign-flag carriers. The air transport division does not hold a brief for any one carrier by virtue of the fact that it represents employees on nearly every United States airline, domestic and/or international, certificated or not. However, we firmly believe that the international all-cargo air carriers are being slighted by this proposed legislation and respectfully submit that S. 1474 be amended to include this most important segment of the all-cargo air transport industry. Very respectfully yours, JAMES F. HORST, International Vice President, Director, Air Transport Division. (Thereupon, at 11: 40 a. m., the committee proceeded to the consideration of other business.) PROPOSED LEGISLATION BY THE CIVIL AERONAUTICS BOARD APRIL 4 AND 5, 1957 Printed for the use of the Committee on Interstate and Foreign Commerce Cox, Ralph, Jr., president, Aircoach Transport Association, accom- Lear, Coates, Washington representative, Overseas National Airways, Newmann, Ross I., Chief of the International Rules Division, Civil Aeronautics Board, Washington, D. C., accompanied by John Dregge, Bureau of Air Operations... Seamon, Theodore I., Washington representative, Independent Mili- Solomon, Samuel J., president, California Eastern Aviation, Inc., Oakland International Airport, Oakland 14, Calif. Tipton, Stuart G., president, Air Transport Association of America, Beitel, Albert F. to Hon. Andrew F. Schoeppel, dated April 15, 1957. Cox, Ralph, Jr., president, Aircoach Transport Association, to Hon. Andrew F. Schoeppel, dated April 1957. Rickenbacker, E. V., chairman of the board, Eastern Air Lines, to Page 34 7 11 53 56 |