REGULATION OF TRANSPORTATION OF PROPERTY AND PASSENGERS BY AIR CARRIERS

MAY 28, 1937.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed

Mr. BULWINKLE, from the Committee on Interstate and Foreign Commerce, submitted the following

REPORT

[To accompany H. R. 7273]

The Committee on Interstate and Foreign Commerce, to whom was referred the bill (H. R. 7273) to amend the Interstate Commerce Act, as amended, by providing for the regulation of the transportation of passengers and property by air carriers in interstate, overseas, and foreign commerce, and for other purposes, having considered the same, report thereon with a recommendation that it pass.

This proposed legislation was originally introduced as H. R. 5234, which was amended and reintroduced in its present form, as H. R. 7273.

[H. R. 7273, 75th Cong., 1st sess.]

A BILL To amend the Interstate Commerce Act, as amended, by providing for the regulation of the trans portation of passengers and property by air carriers in interstate, overseas, and foreign commerce, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Interstate Commerce Act, as amended, is hereby further amended by adding the following part III:

"PART III

"SEC. 301. This part may be cited as the 'Air Transport Act of 1937'.

"DECLARATION OF POLICY AND DELEGATION OF JURISDICTION

"SEC. 302. (a) It is hereby declared to be the policy of Congress (1) to regulate transportation by air carriers in such manner as to recognize and preserve the inherent advantages of, and foster sound economic conditions in, such transportation and among such carriers in the public interest; to promote adequate, economical, and efficient service by air carriers, and reasonable charges therefor, without unjust discriminations, undue preferences or advantages, and unfair or destructive competitive practices; to improve the relations between, and coordinate transportation by and regulation of, air carriers and other carriers; and, (2) by such

regulation and by providing for the transportation of mail by aircraft, to preserve and further develop a system of transportation by aircraft in interstate, overseas, and foreign commerce properly adapted to the needs of the commerce of the United States, of the Postal Service, and of the national defense.

"(b) The provisions of this part apply to the transportation by air carriers of passengers or property in interstate, overseas, and foreign commerce and to the procurement of and the provision of facilities for such transportation; and to the transportation of mail by aircraft; and the regulation of such transportation to the extent hereinafter provided is hereby vested in the Interstate Commerce Commission: Provided, That nothing contained in this part shall be construed to relieve any person from any requirement of law, not inconsistent with this part. "DEFINITIONS

"SEC. 303. As used in this part

"(a) 'Air carrier' means any person who or which undertakes, whether directly or indirectly or by a lease or any other arrangement, to engage in transportation by aircraft of United States registry (1) as a common carrier of passengers or property in interstate, overseas, or foreign commerce for compensation or hire, or (2) of mail.

"(b) 'Aircraft' means any contrivance of whatever description which is used, or is capable of being or intended to be used, as a means of transportation by air. "(c) Certificate' means a certificate of public convenience and necessity issued under this part.

"(d) 'Commission' means the Interstate Commerce Commission.

(e)

'Foreign commerce' means commerce between any place in the United States, and any place in a foreign country, except between the Philippine Islands and a foreign country whether such commerce moves wholly by air or partly by air and partly by other forms of transportation.

"(f) Interstate air transportation', 'overseas air transportation', and 'foreign air transportation' mean transportation by aircraft in interstate commerce, overseas commerce, and foreign commerce, respectively, including the use of any and all facilities and instrumentalities of shipment or carriage, irrespective of any contract, express or implied, for the use thereof, and any and all services in or in connection with such shipment or carriage.

"(g) 'Interstate commerce' means commerce between a State of the United States, or the District of Columbia, and any other State of the United States, or the District of Columbia; or between places in the same State of the United States through the air space over any place outside thereof; or between places in the same Territory or possession of the United States, or the District of Columbia, whether such commerce moves wholly by air or partly by air and partly by other forms of transportation; but shall not include commerce between places in the Philippine Islands.

"(h) 'Overseas commerce' means commerce entirely between a State of the United States, or the District of Columbia, and a Territory or possession of the United States; or between Territories or possessions of the United States, whether such commerce moves wholly by air or partly by air and partly by other forms of transportation.

"(i) 'Person' means any individual, firm, copartnership, corporation, company, association, joint-stock association, or body politic; and includes any trustee, receiver, assignee, or other similar representative thereof.

"(j) 'Possessions of the United States' shall include Puerto Rico, notwithstanding the provisions of the Act of March 2, 1917, to provide a civil government for Puerto Rico, and any other Act or Acts which are inconsistent with the provisions of this part; and any other possession of the United States; including, for the purposes of this part, the Canal Zone: Provided, however, That nothing herein contained shall be construed in any way to impair or affect the jurisdiction which has heretofore been, or may hereafter be, granted to the President to regulate air navigation in the Canal Zone.

"(k) United States' means the several States, the District of Columbia, and the several Territories and possessions of the United States, including the Territorial waters and the overlying air space thereof.

"GENERAL DUTIES AND POWERS OF THE COMMISSION

"SEC. 304. (a) It shall be the duty of the Commission

"(1) To regulate air carriers as provided in this part, and administer, execute, and enforce all of its provisions, and to that end the Commission shall have

authority to issue and amend necessary orders in connection therewith, and to make and amend general or special rules, regulations, and procedure for such administration: Provided, That in exercising its duties under this part in respect of foreign air transportation, the Commission shall do so consistently with any obligation assumed by the United States in any treaty, convention, or agreement that may be in force between the United States and foreign countries and shall take into consideration any applicable laws and requirements of foreign countries. "(2) To avail itself of the assistance of any of the several existing research and technical agencies of the Government having special knowledge of matters relating to the operation and equipment of aircraft, which are hereby authorized to conduct such scientific and technical researches, investigations, and tests as may be necessary.

"(3) To promote the development of efficient interstate, overseas, and foreign air transportation by prescribing, and revising from time to time, general standards respecting the types of equipment to be used and the character and quality of service to be rendered in such transportation, and to make such standards effective on such dates as it may determine after due consideration of the time required to conform to such standards.

"(4) To study air transportation and services, and to collect and disseminate information relative thereto.

"(5) To inquire into the organization of air carriers and into the management of their business; to keep itself informed as to the manner and method in which such organization and management are conducted; and to transmit to Congress from time to time such recommendations as to additional legislation relating to such air carriers as the Commission may deem necessary.

"(6) To approve or disapprove, in whole or in part, any and all applications made after the date of the passage of this part for or in connection with any loan from the United States or any agency thereof to or for the benefit of any air carrier; and no such loan shall be made without such approval.

"(7) To make, at least annually, such audits of the books, records, and accounts of each air carrier and such other investigations and studies as may be necessary to determine whether there is being derived by or accruing to any air carrier any unreasonable profit from rates of compensation for all classes of traffic fixed by the Commission. From information regularly obtained and from such other special investigations and studies as are necessary the Commission shall report to the Congress as soon as practicable the effect of establishing a uniform rate for the transportation of mail by aircraft, either for carriers as a whole or for classes of carriers, and whether, in the public interest, the Government should extend direct or indirect financial aid to air carriers or others assisting in air transportation; and shall advise the Congress concerning any additional legislation which, in its opinion, may be necessary or desirable, including recommendations as to the form of, and the method of distributing, any financial aid.

"(8) To require that an air carrier make proper provision for handling the mail and also provide general transportation service which, in the opinion of the Commission shall be adequate for the public convenience and necessity.

"(b) The Commission may from time to time establish such just and reasonable classifications or groups of air carriers as the nature of the services performed by such air carriers shall require; and such just and reasonable rules, regulations, and requirements, pursuant to and consistent with the provisions of this part, to be observed by the air carriers so classified or grouped, as the Commission deems necessary or desirable in the public interest.

"(c) Any person complaining of anything done or omitted to be done by any air carrier in contravention of the provisions hereof, or any requirement established pursuant hereto, may file with the Commission a complaint in writing, which shall briefly state the facts. Upon such complaint, or upon its own initiative, the Commission may investigate whether any such air carrier has failed to comply with any such provision or with any such requirement established pursuant thereto. If the Commission, after notice and hearing, finds upon such investigation that such air carrier has failed to comply with any such provision or requirement, the Commission shall issue an appropriate order to compel such air carrier to comply therewith. Whenever the Commission is of the opinion that any complaint does not state facts, which warrant an investigation and action on its part, it may dismiss such complaint without hearing.

"(d) The Commission is authorized to make all necessary expenditures, at the seat of the Government and elsewhere, for the carrying out of the purpose of this part; to cooperate with and to attend meetings and conventions, when in public interest, of such organizations as are related to or a part of the commercial aviation industry or the art of aeronautics in the United States or any foreign country;

to make investigations and conduct research in all matters pertaining to interstate, overseas, and foreign air commerce when in the public interest; to acquire and operate such aircraft, navigational facilities, or motor vehicles as are necessary for executing the functions of the Commission under this part. The Commission, or any of its employees or agents, are hereby authorized to travel as the Commission may direct, by any means of air, land, or water transportation, including the use of private or public carriers, and for travel to and from airports and centers of population and other points, and such expenditures as are incurred thereby on official business shall be allowed and paid as travel, and not included in per diem, on itemized vouchers therefor approved by the Chairman of the Commission.

"(e) In any proceeding under section 310 or section 311 of this part, there shall not be taken into consideration in determining, or allowed as evidence of, or elements of, the value of the property of any air carrier, either goodwill, earning power, or the certificate of the air carrier, and in applying for and receiving a certificate any such air carrier shall be deemed to have agreed to the provisions of this paragraph on its own behalf and on behalf of the transferees of such certificate. "(f) Notwithstanding any of the other provisions of this part, the Commission, from time to time and to the extent necessary, may exempt, from the requirements of this part or any section thereof, or any rule, regulation, term, or condition promulgated thereunder, any air carrier or class of air carriers other than mail carriers, if it finds that the enforcement of this part or any section thereof, or any rule, regulation, term, or condition promulgated thereunder, is an undue burden and would work an unnecessary hardship on such air carrier or class of air carriers by reason of the limited operation of such air carrier or class of air carriers and is not necessary in the public interest.

"(g) The Commission is authorized to confer with or to hold joint hearings with any authorities of any State in connection with any matter arising in any proceedings under this part. The Commission is also authorized to avail itself of the cooperation, services, records, and facilities of such State authorities as fully as may be practicable in the enforcement or administration of any provision of this part.

"CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY

"SEC. 305. (a) No air carrier shall engage in interstate, overseas, or foreign air transportation or in any transportation of mail by aircraft unless there is in force a certificate issued by the Commission authorizing such air carrier so to engage: Provided, That if an air carrier was so engaged in such transportation on the date of the passage of this part, such air carrier may continue so to engage between the same points for one hundred and twenty days after said date, and thereafter, if said air carrier files an application for a certificate as provided for herein within said one hundred and twenty days, until such time as the Commission shall pass upon such application: Provided further, That pending the determination of any such application the continuance of such operation shall be lawful: And provided further, That the Commission may by order relieve from the provisions of this section air carriers who are not directly engaged in the operation of aircraft in interstate, overseas, or foreign commerce to the extent and for such periods as the Commission may deem necessary.

"(b) Applications for certificates shall be made in writing to the Commission, be verified under oath, and shall be in such form and contain such information and be accompanied by proof of service upon such interested parties as the Commission shall by regulation require.

"(c) Upon the filing of an application under this section the Commission shall give due notice thereof to the Postmaster General, and to the public by posting a notice of such application in the office of the Secretary of the Commission; and if the application is for a certificate authorizing foreign air transportation, the Commission also shall give due notice thereof to the Secretary of State, the Secretary of the Treasury, the Postmaster General, and the Secretary of Commerce, and shall consult the Secretary of State in respect of the international policy involved, and the Secretary of State shall conduct such negotiations with foreign governments as may be necessary to enable the Commission to pass upon applications for certificates authorizing foreign air transportation. Any interested person may file with the Commission a protest or memorandum of opposition to the issuance of the certificate. Such applications shall be set for public hearing and the Commission shall, insofar as practicable, give to the disposition thereof preference over all other proceedings pending before it under this part, and shall dispose of such applications as speedily as possible.

"(d) The Commission shall have the power to issue a certificate authorizing the whole or any part of the transportation covered by the application, if it finds that the applicant is fit, willing, and able properly to perform such transportation and to conform to the provisions of this part and the requirements, rules, and regulations of the Commission hereunder, and that such transportation is or will be required by the present or future public convenience and necessity; otherwise such application shall be denied: Provided, That if any applicant shall show that from December 31, 1936, until the date of the passage of this part, it, or its predecessor in interest, was an air carrier, continuously operating as such (except as to interruptions of service over which the applicant or its predecessor in interest had no control) the Commission, upon proof of such facts only, shall issue a certificate or certificates, authorizing such applicant to engage in interstate, overseas, or foreign air transportation of all classes of traffic except mail, between the terminal and intermediate points between which it, or its predecessor, so continuously operated during such period, and also authorizing such applicant to transport mail between the terminal and intermediate points between which such applicant, or its predecessor, was engaged in the transportation of mail at any time during the period from December 31, 1936, to the date of the passage of this part: Provided further, That if any applicant qualifying under the foregoing proviso, or any other applicant, shall show that, on the date of the passage of this part, it had been authorized by the Commission, to engage in any interstate, overseas, or foreign air transportation, or by the Postmaster General to engage in any transportation of mail by aircraft, the Commission, upon proof of such fact only, shall likewise issue a certificate or certificates authorizing such applicant to engage in the transportation of the same classes of traffic, to the same extent, and between the same terminal and intermediate points, as it had been so authorized: And provided further, That any certificate issued under either of the foregoing provisos of this paragraph may be amended to permit the transportation of mail or in other respects, in accordance with the further provisions of this section.

"(e) Each certificate issued under this section shall specify the terminals and intermediate points between which the carrier is authorized to engage in transportation and the service to be rendered; and there shall, at the time of issuance and from time to time thereafter, be attached to the exercise of the privileges granted by the certificate, or amendment thereto, such reasonable terms, conditions, and limitations as the public convenience, necessity, and safety may, from time to time, require, and such terms and conditions as are necessary to carry out, with respect to operations of air carriers, the requirements established by the Commission under this part: Provided, That a certificate issued under this section to engage in foreign air transportation shall designate such points only insofar as the operation is to take place within territories or territorial waters subject to the jurisdiction of the United States, and otherwise shall designate only a general trade route or the foreign markets to be served: Provided further, That no term, condition, or limitation of a certificate shall restrict (1) the right of an air carrier to add to or change equipment, accommodations, and facilities for performing the authorized transportation and service as the development of the business and the demands of the public shall require; or (2) compliance by an air carrier engaged in foreign air transportation with any treaty, agreement, or convention between the United States and a foreign country, or with any franchise, obligation, right, privilege, duty, or liability granted or imposed by any foreign country, in respect of transportation outside of the United States: And provided further, That no air carrier shall be deemed to have violated its certificate by landing or taking off during an emergency at a point not named in its certificate, or by making charter trips, or furnishing any other special service, under regulations which may be prescribed by the Commission.

"(f) A certificate may include authority to transport such classes of traffic, except mail, as may be approved by the Commission, and may include authority to transport mail; and it shall be unlawful for any air carrier to transport any class or classes of traffic not authorized in its certificate. Any air carrier holding a certificate for foreign air transportation shall be authorized to handle and transport mail of countries other than the United States.

"(g) No certificate shall be issued, and no air carrier shall hold, or operate under, any certificate, except upon condition that the air carrier shall undertake to provide, under such rules and regulations and schedules, not inconsistent with the provisions of this part as the Postmaster General may prescribe, necessary and adequate facilities and service for the transportation of, and to transport mail, whenever so authorized by such certificate and so required by the Postmaster General; and such air carrier shall be entitled to receive compensation therefor as hereinafter provided.

H. Repts., 75-1, vol. 2- -40