sary development of the system for the country as a whole. The act was a real charter, I do not think that there is any country in the world where commercial transportation showed anything like the development before the war that it showed in the United States.

Mr. REECE. There is now some agitation for the establishment of a separate legislative committee to deal with this problem of aviation. There are some who feel that it is part of our whole transportation system and that the legislative aspects of the problem should be centered, legislative aspects, of our whole transportation problem, should be centered in one legislative committee, and I think this committee and the Congress, anticipating the importance of civil aviation, undertook to meet in a way the questions which have been raised as a basis for establishing a separate legislative committee in the Civil Aeronautics Act, and setting up an independent commission which would concern itself altogether with this problem.

And, in that legislation was an undertaking to meet the views which are now being expressed in regard to a legislative committee, by setting up an independent agency that would be concerned only with this problem, and it was with some disappointment to some of us—I probably should say to some of us, I know it was to me, that in the reorganization that the independence of this board may have been somewhat jeopardized by making it an agency of one of the executive departments of the Government. My feeling was that it should have been continued as an independent agency and that in the board and in the administration is the point where the independence and singleness of purpose should be set up to deal with this problem, even more than in connection with the Congress or a legislative committee of the Congress, because after all, the responsibility of this committee so far, and of the Congress, is to coordinate in a legislative way our entire legislative program dealing with this question involved.

My observations are somewhat beside the point in the consideration of this bill but I did feel like saying that, as I understand this committee in the enactment of the Civil Aeronautics Act, undertook to recognize the importance of the problem and set up the Civil Aeronautics Board charged solely with the responsibility, as an independent agency, to deal with it, and to develop the problem and in due time. make appropriate recommendations to this committee and to the Congress for any additional legislation that might be needed to enable it to better do so.

That is all, Mr. Chairman.

The CHAIRMAN. I think perhaps I may say a word in connection with the Safety Board. Of course, I was opposed to the change that was made in the reorganization. The House voted against that change, but the Senate approved it, with the result that the reorganization stood.

I had the idea that the chief merit of that Safety Board was that we did everything we could to make it independent of your Board or anybody else. For instance, when it came to the question of reporting on the responsibility for accidents, we wanted to leave that Safety Board so that it could be free to criticize even your Board, if your Board might be thought to be responsible, or the regulations that you had made, for instance; but the Congress in the action that it

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took approved the reorganization order. So, in view of that situation I did not feel that I should bring it into this bill. I left it out of the bill just because I thought perhaps Congress having in that method prescribed for and acted upon the matter that maybe it would be an appropriate thing for me to leave it out of the bill.

So the question now, as I look at it is in the first place, whether we should immediately, by law, carry out the policy now involved in the reorganization order or whether we should change and go back to a different system from what the reorganization order provides.

It would seem to me quite clear that one or the other thing should be done.

If the reorganization order should probably be put into legislative form, if we intend to follow that, it would be, I think, a convenient way to have the law established as an act of Congress, if we want to do that. Of course that still leaves that question as to whether we should go back to the original policy. It would be a comparatively simple matter, of course, from a legislative standpoint, if we determine what the policy is.

That is just incidental here.

Mr. HINSHAW. It may interest you and the chairman for me to` say that the original theory held in the passage of the legislation establishing the Air Safety Board as an independent agency was entirely upheld by the findings of the Select Committee to Investigate Air Accidents.

The CHAIRMAN. Of course we now have the question of the established policy and that in itself, and the maintenance of stability, is an element to be considered, of course.

Mr. O'HARA. Mr. Chairman.

The CHAIRMAN. Mr. O'Hara.

Mr. O'HARA. I would like to ask about some things here which possibly will have to be developed later on. But, historically, I would like to ask the witness under what law you are now operating, whether under the 1938 aeronautics law or under the amendment of 1940.

Mr. POGUE. Well, it is under the 1938 Civil Aeronautics Act, as amended by the reorganization plans No. 3 and No. 4, which gained their validity from the Reorganization Act.

Mr. O'HARA. Executive orders were they?

Mr. POGUE. Yes; Executive orders under the Reorganization Statue.

The Congress had passed a reorganization statute, under which such Executive orders were permitted and these two Executive orders amended the act.

Mr. O'HARA. Well, in the operation of your Board as such you deal with the problems of rates and tariffs, as well as all of the ramifications of aeronautics; that is, civil aeronautics.

Mr. POGUE. Yes; that is true, Congressman, with the exception of the Administrator's functions.

Mr. O'HARA. As I understood it from your statement of yesterday you are further subject to the control of the Secretary of Commerce. Mr. POGUE. Not the Board. The reorganization order specifically provided that the Board should exercise its economic regulatory functions; its safety regulatory powers, and its accident investigation functions independently of the Secretary of Commerce.

Mr. O'HARA. Then you are also subject to some supervision on the part of the Postmaster General in regard to the mail that is carried?

Mr. POGUE. Well, I would not say that we are subject to any such regulation, Congressman. He has certain jurisdiction in connection with the mails. He can call for a new route to be establish and he can require the carrier to carry mail, but we have the power to fix the maximum loads if that becomes acute.

Mr. O'HARA. In what way does the Secretary of Commerce exercise any jurisdiction over your Board?

Mr. POGUE. Under the reorganization plan, the Secretary provides for us what are called "housekeeping" functions.

Mr. O'HARA. What about the Bureau of the Budget? Do you not have to submit to the Budget some of your items for examination by the Bureau of the Budget?

Mr. POGUE. No. The detail of the Budget, principally paper work, and the furnishing of supplies and that sort of thing, are supposed to be done by the Secretary of Commerce; but discretionary matters with respect to the Budget and actual presentation of the Budget is in the Board. That is, the Board determines how much money it needs and the Secretary has no control over its decision.

Mr. O'HARA. So far as your functions are concerned, as to the operations of air lines, and the fixing of tariffs, is that a matter solely within your jurisdiction?

Mr. POGUE. Yes.

Mr. O'HARA. No one exercises any control over you in that connection?

Mr. POGUE. No.

Mr. O'HARA. And the fixing of tariffs and rates and schedules; regulations; the Interstate Commerce Commission exercises no control?

Mr. POGUE. No.

Mr. O'HARA. Over your Board?

Mr. POGUE. Not at all.

Mr. O'HARA. Then, so far as your Board is concerned, it is an independent body insofar as the Department of Commerce is concerned, except as you have outlined, or so far as the Post Office Department is concerned, and in no way does the Interstate Commerce Commission interfere with your rate-fixing or regulatory powers? Mr. POGUE. That is correct.

Mr. O'HARA. Is that consistent with the Transportation Act of 1940 dealing with other modes of transportation?

Mr. POGUE. Well, I wish I could answer that, but I do not believe at the moment I am sufficiently refreshed on that act to answer that. Mr. BOREN. Mr. Chairman, will the gentleman yield?

Mr. O'HARA. Yes.

The CHAIRMAN. Mr. Boren.

Mr. BOREN. The Transportation Act of 1940 laid down the broad general principles that a national coordinated system of transportation was in the public interest and the national interest. Beyond that point there was no attempt to unify or consolidate the administration of the various agencies of transportation. That act simply declared that as a national policy transportation should be looked at as to its complete application to our Nation.

Mr. O'HARA. Well, in the matter of your commission, in the matter of fixing tariffs and rates and schedules, what, if any, consideration is given to competing carriers such as water, railroads, trucks, busses, and so forth?

Mr. POGUE. Well, up to now, Congressman, it has not been very much of a problem with us, because both the passenger rates on air lines and the express rates have been higher than the competing carriers. Also, up to recent months, all of the carriers needed some governmental mail compensation to permit them to break even and make a reasonable profit. So that our major problem was how much mail compensation they should receive.

Mr. O'HARA. As a matter of fact, it is true, is it not, that generally speaking it has been necessary to subsidize aerial navigation by a subsidy through the Post Office Department or otherwise? Is that not true?

Mr. POGUE. Yes; up until recently, but beginning about 3 months ago, or 4, the Board has issued a very substantial number of ratecase opinions and show-cause orders which recognize that the carriers involved have passed out of that need class.

Mr. O'HARA. They are self-sustaining, so far as their income and revenue is concerned; is that true?

Mr. POGUE. Yes; that is the fact.

Mr. O'HARA. What consideration has been given to the proposition in the development of aerial navigation as to discriminatory rates as compared to other competing lines of transportation, whether it be express, freight, or passenger?

Mr. POGUE. The air line rates have been so much higher, particularly in the express field, that there has never been any problem of discrimination against the air lines by any other form of transportation up to now.

Mr. O'HARA. That is up to this present time, I understand that is the situation.

Mr. POGUE. But I should say that the time is rapidly approaching when there may be some action with respect to the passenger rate levels, and if there is some, then the question you asked may become active.

Mr. O'HARA. I should like to call your attention to the bill H. R. 1012. There are in the bill, on page 6, section 2, functions under the heading of "Findings and declaration of policy"; and then, on page 2, there is a section on post-war planning, and I think in several places throughout the bill there are perhaps more matters of declaration of policy than are contained merely in the section under that heading, "Findings and declaration of policy."

Now, also on page 15, section 3101, "Administrator's powers," it would of course follow that under the declaration of policy contained in this bill, H. R. 1012, the Administrator would be the court that would determine what those directions of policy are. Is that not true?

Mr. POGUE. So far as his functions are concerned, I should suppose he would be bound by those policies, and expected to carry them out. Mr. O'HARA. And as to the functions-are you familiar with the functions and declarations of policy; have you studied them to any extent? I do not want to embarrass you if you have not had a chance to do so. I know that I have not had much chance to study them.

Mr. POGUE. We have not taken a position on them, Congressman, and have not studied them in detail.

Mr. O'HARA. Is it your position that with reference to various sections of the bill, for example, judicial reviews of orders made by the Administrator or by the Board, would be subject to review? There is a provision in section 3106, page 19, that provides for a review by the Federal courts. Would you feel that any order made by the Board or by the Administrator should be subject to review by the courts?

Mr. POGUE. Yes; the Civil Aeronautics Act of 1938 provides for judicial review and the section you refer to appears to provide judicial review. We think that is proper.

Mr. O'HARA. There is also a provision, I think, in section 3107, subsection (b), for a judicial review with reference to the title of compensation. I presume that was intended to apply to compensation of employees of the air lines. It is not plain to me just what is intended by that.

Mr. POGUE. I am sorry, but I am not prepared to testify on that, Congressman. I would certainly be delighted to answer your question after I have had a chance to consider it.

Mr. O'HARA. Have you any further expression with reference to subsection (a) of section 417, which deals with declaratory orders? I presume, Mr. Chairman, that that is declaratory orders issued by the Administrator himself and not referring to declaratory orders of the courts.

The CHAIRMAN. Yes. We will have those provisions discussed in detail later in the hearings.

Mr. O'HARA. Now, I was interested in the comments you made yesterday in which you stated that you felt that the Civil Aeronautics Authority should have complete control over all traffic by air. I do not know whether those were your exact words, but that, as I understood, is your view, that the Civil Aeronautics Authority should control all air transportation aside from the military, of course, whether it was interstate or intrastate, and I think you cited a Federal court opinion wherein one of the circuit courts of appeals had held that, or sustained your views in that regard in a case where a flyer or an airplane operator operated solely within one State.

That, of course, might be in the opinion of some people a rather serious invasion of State rights. I would like to have you amplify your statement if you care to do so, because I am still recognized as one of these old-fashioned people who feel that the States do have some rights left, which I thing should be maintained.

Now, for what reason, or reasons, assuming you have a carrier that operates solely within the State of Minnesota, for example, and perhaps has separate fields that are not used by other air companies, why should that carrier be subject to Federal supervision in the operation of his plane or planes.

I would like to hear from you on that.

Mr. POGUE. I am glad you asked me to say something about that. In the safety field, as I indicated yesterday, it is rare that you find any substantial volume of activity in the air that does not cross the State line. The airplanes are so fast that it is just the rule that trips are of substantial length, so that you have interstate traffic as the predominant feature of flying.