transportation during wartime led to an agreement of the Governors of the 48 States approving minimum maximum sizes and weights for the duration of war, higher than some of these otherwise obtaining. Despite this, cases have been reported where an enforcement of State provisions has occasioned loss in transport efficiency.

(6) One further diversity in State administration of motor carrier regulation should be noted, namely, not only among the several States, but even within them, the diverse jurisdictional agencies that are involved. Thus the operator must secure his vehicle licenses from some financial officer, his certificates from some public utility commissioner, and conform to operating rules prescribed by a vehicle commission or State highway department. At the State boundary he may be confronted by the police representatives of any or all three such diverse agencies, in many cases different from those with whom he is accustomed to deal in the State of his principal operations.

2. Such State diversities are, of course, not peculiar to transportation, for they pertain to many other industries as well. But highway transport is still a young industry, hardly more than 25 years old-and within that time there has developed by State action all this mass of State regulation with diversities resulting from diverse conditions in part, but also from divergent views of the authorities, and from diverse concepts of public policy. It should be the manifest aim of Congress in establishing the regulatory framework within which the newest mode of transport, namely commercial aviation, is to expand, attain its maturity, and build up its proper place in the economy of this Nation, to avoid these ills which in the past have accompanied the expansion of the older forms of transport; to prevent past practices that clearly are uneconomic and not beneficial to the public interest, from acquiring a foothold here at the very beginning of this industry. For once established, they, too, will expand and flourish; and hope of subsequent elimination will virtually vanish. Better prevent them from coming into existence now than allow them to grow up and then seek to eliminate them.

And yet the beginning of a similar condition already exists even in the airtransport industry, new as it is. True, the consequences of such regulation have not yet become very apparent, for contrary to what happened in the other forms of transportation, in aviation the Federal Government has early assumed the role of guide and regulator; and the States have legislated more slowly, and have not yet intervened to a marked degree in the safety and economic aspects of regulation. Yet legislation already does exist on the statute books of the several States that manifest similar diversities in regulatory policy; and if this condition is permitted to continue as aviation expands a condition similar to that now prevalent in highway transportation must be envisioned not only as a possibility but as a probability.

For example, while most of the States have some legislation on the statute books relating to commercial aviation, the same confusion that prevailed in highway transport concerning the proper regulatory agency obtains here; indeed, it is probably the result of that diversity in the highway field. Thus 24 States commit regulation to some specialized aviation commission, aeronautics board, or director; 5 vest the authority in a State railroad or public-utility commission; 6 have reposed it in State highway department or an aeronautical division thereof; and 2 identify it with some fiscal agency of the State. In 10 States there is no authority designated to administer the regulation provided for.

State regulation of aviation has largely concerned itself hitherto with ownership of the air subject to right of flight, with ordinary police powers regarding conduct of citizens in the use of airplanes, and have to a large extent modeled their safety provisions upon those of the Federal Government. But diversities do exist. While 35 States prescribe that aircraft and airmen must have Federal licenses, Virginia requires both; New Hampshire and Connecticut speak only of State licenses; Iowa calls for Federal unless released in writing by the State commission; Utah, Oregon, North Dakota, Minnesota, Michigan, Maryland, and Louisiana say that aircraft and airmen must have Federal or State license or registration.

It should also be observed that 7 States require certificates of public convenience and necessity for operation, issued usually by a public-utility commission; and some certificates have actually been issued. Massachusetts has provided for State regulation of rates charged by air line common carriers, including filing of tariffis, and the full complement of maximum, minimum, and actual rate prescription. And several other States, notably West Virginia, Illinois, Penn

sylvania, and California, have also requested the filing of air-line tariffs. Eleven States specifically declare that railroads may own and operate aircraft; and 1 includes steamship companies as well. California forbids operation at less than 1,000 feet over congested places, Delaware at less than 1,000 feet over congested places and 500 feet elsewhere, Vermont at less than 600 feet, and New York has both such limitations.

3. That such diversity of regulation regarding safety matters has been costly to highway transport, and even to railroads, is pretty clear. A repetition of that experience in air transport at the present juncture would certainly be even more burdensome to that form of transport, and might greatly retard that development of air transport which is deemed essential for both the commerce and the national defense of the United States. For aviation is a young industry that' has hitherto been largely unprofitable. While all proper measures of regulation essential to maintain safety should be accepted-and on one has a greater practical interest therein than have the air lines themselves—yet the industry should not be burdened with the costs of superfluous and conflicting regulation that not only does not enhance safety but tends actually to diminish it.

If there is State regulation of air transport experience in other fields warns that we may expect great diversity of State action with regard to such important matters as the following:

(1) Standards for inspection of planes, and their maintenance.

(2) Standards relating to the qualifications of pilots, mechanics, and others directly involved in the provision of air-line services.

(3) Maximum hours of service.

(4) Safety appliances to be installed on planes.

(5) Abatement of nuisance factors.

(6) Minimum heights and maximum landing speeds.

(7) Width of air lanes.

(8) Plane dimensional limitations.

(9) Gross and load restrictions.

(10) Full-crew requirements.

(11) And should the train principle obtain in air transport, then train-length limitation in the air.

Remember that all of these, and more, have been the subject of State nonuniform regulation, and may confidently be expected to prevail in air transport as that form of carrying expands in the future.

Such extensive State participation in regulation is likely to prove more burdensome to air lines because air-line operating companies of comparatively small revenue potential operate through more jurisdictions than do interstate bus or rail companies. While the Greyhound Management Corporation pretty well covers the United States, the operating subsidiaries are much more restricted, and the largest operators cover but a few States. The railroads operating into or within the largest number of States have but 14 States, there are but 2 of them. The Pennsylvania and Santa Fe respectively operate in 12 States only. Such transport companies are of huge size. By contrast note that air lines, which are very modest in size when compared with small railroad companies, already have much wider extension of service. Thus American Airlines already operates in 22 States, Eastern Airlines in 18. United Air Lines in 18, Pennsylvania-Central in 13, and Transcontinental & Western in 15 States. The average number of States served by the 17 domestic companies is 9. which is much larger than that obtaining for the class I railroads of the United States. Thus, with much smaller revenues and operations, the air lines enter more State jurisdictions than do other forms of transportation with much larger operations. This alone would enhance the burden upon air lines of complying with diverse regulations of the many State jurisdictions they must enter.

The most impelling need for exclusive Federal control of safety matters rests upon the attributes of air transport, namely, its speed, and by necessity fragility of the craft that must be employed in order to attain that speed. With such speeds as now obtain, and will be employed, and with the multiplication of aircraft in the air in the near future, safety undoubtedly is promoted by the greatest practicable degree of uniformity in safety requirements. Hazards due to operations that must conform to State determinations for craft operating along and across the lanes of interstate and foreign operations, should not be allowed to develop. The very speed of this vehicle allows little time for judgment to take into account conduct based upon regulatory variations; and uncertainty must often obtain concerning the political jurisdiction occupied at any

given time.

The probability that foreign operations, without the necessity of port clearances and station stops available to land and water types of carrying, means, that safety will be promoted by the minimum number of political jurisdictions participating in the regulation. Neither interstate nor foreign air-line operators should be forced to operate in a safety regulatory melange resulting from the direct participation of each of the 48 States as well as the Federal Government in that activity.

Thus far the States have generally shown a disposition to accept or conform to the Federal safety regulations, but not all have done so; and it must be anticipated that what has taken place with regard to other forms of transport in this respect, will tend to be duplicated in air transport. Even under the war emergency difficulty has been experienced with the abatement of State diversity in highway trucking, designed in the interest of vitally needful economy in highway transportation; and reversion to the status quo will take place after the war. Therefore, all previous experience warrants the conclusion that safety of air transport requires the maximum degree of uniformity in regulation, and that this will be obtained most readily and competently, if the subject is remanded at once to the exclusive jurisdiction of the Federal Government, as proposed in H. R. 1012.

4. It should be further noted that the case is stronger for exclusive Federal regulation of air-transport safety than for other forms of transportation, by reason of the financial position of State and Federal Governments with reference to air transport. In the case of highway transportation, the case for State intervention in safety regulation was strongly buttressed by the heavy financial outlays by each of the States for the provision, maintenance, and policing of the highways. Though aided by the Federal Government, the States assumed the major responsibility; and that primary fact has been recognized as warranting State action in safety matters, not only to preserve the safety of operations, but also to preserve the highways themselves. This condition of course does not obtain in air transport. Except for air navigation facilities including airport development, the air routes require no investment; and State responsibility in this regard is virtually nil. On the other hand, the Federal Government has made heavy expenditures both for the airways and to assist in airport development; and will doubtless incur heavier ones in the future to promote the growth of aeronautics, civil and military. In this respect the role of the State in providing facilities will be negligible as compared with highway transport; and the case will more nearly resemble that of water transport, where the navigable waterways have been chiefly the responsibility of the Federal Government. State responsibility for providing navigable waterways and attendant facilities has been small; and their regulation of waterway transport has been of small proportions compared with their intervention in rail and highway transport. 5. Turn now to that phase of transport regulation that has customarily been termed "economic," as contrasted with safety regulation.

(1) Referring again to other forms of transport, it is clear that the term "economic" regulation usually embraces such matters as the following; controlling the right of entry into that field of transportation by certificates of public convenience and necessity, and/or permits, and also the right of withdrawal and abandonment; regulating the amount and quality of service performed by carriers subject to the law; requiring the filing of tariffs and publication of rates; preventing unreasonable rates by the prescription of maximum, minimum, and actual rates; forbidding undue discrimination between persons, places, commodities, localities, etc.; prescribing accounting methods, and depreciation ratios; determining the valuation of the property upon which a fair return is to be earned, and determining what the fair rate of return should be; regulating financial practices and capital structures; formulating policies to govern the relationships between the same and different forms of transportation as regards consolidations and mergers, ownerships and interlocking directorates, leaseholds, joint through services, and rates. All these matters have pervaded the regulation of other forms of transportation for some three-quarters of a century; representing a long course of evolution, expansion, and extension to the newer forms of transport as they came into being. They exist in the Civil Aeronautics Act of 1938 for commercial air transport, interstate and international. (2) Furthermore, during the long course of this evolution, the dual sovereignty of the States and the Nation has also fastened itself upon the regulation of transportation. In fact, rail regulation began with the States, and only subsequently was projected into the Federal Government, when the lack of uni

formity of State laws regarding interstate transportation became intolerable, and when the Supreme Court of the United States in 1885 held that the absence of congressional action did not accord to the States the right to regulate interstate transportation. Likewise, in highway transportation State regulation preceded national; some States having assumed regulatory roles as early as 1916, and most of them before 1929; whereas the Federal Motor Carrier Act was not passed until 1935. In both of these cases the local interest initiated the regulatory process; the national action followed some years thereafter. It may be noted, however, that the same did not prevail in water transport; national regulation began in 1916, and local regulation in this field never has been of much significance.

(3) It should be pointed out too that customary distinctions between safety and economic types of regulation, cannot be pushed too far. For example, unquestionably substantial economic regulation has been effectuated in the guise of safety regulation. One case was cited previously; a limitation of truck weights to 7,000 pounds unless moving to the nearest rail station. Such is safety in form only; in reality it is economic regulation.

(4) Now it has already been shown that a most important contributing cause to the supersession of Federal authority for State authority in the regulation of railroads and highway forms of transportation, was the necessity of securing greater uniformity of regulation pertaining to interstate transportation. This had some application even to safety matters as far back as 1890; but it pertained even more to economic regulation, especially rates. For sometime, two decades or more, State and Federal Governments continued their concurrent jurisdiction, the one with reference to rates on intrastate traffic and the other in interstate traffic. So long as rate regulation was confined mainly to limited groups of rates, a clash between the two was not likely, unless and until the State regulation should seek to prefer State interests to those of the Nation. Such did take place, of course; and in the Shreveport and Minnesota rates cases, the supremacy of the Federal regulatory power was asserted over State regulation of intrastate rates, where necessary to correct cases of undue discrimination. The Transportation Act of 1920 further enhanced the authority of the Interstate Commerce Commission, which was first tested in the Wisconsin passenger cases growing out of increased rates and fares in 1920. Here the Federal authority had ordered an increase in interstate passenger fares, and the State authority refused to follow suit. In subsequent litigation the State was forced to raise its passenger fares to the levels fixed by the Interstate Commerce Commission, although no direct discrimination could be shown. The economic argument was that the failure of the State to raise its intrastate fares unduly burdened interstate commerce because the intrastate traffic was not bearing its proper share of the costs of a joint service.

And within the last month the Interstate Commerce Commission handed down another decision requiring an advance in the intrastate rates of a certain State, in order to bring such intrastate rates into conformity with the interstate rate levels established nearly a year ago. Whether these rate levels are proper or improper, is not the issue here. It is simply this, the Federal authority held that national policy required the increase; the State authority refused to cooperate; and it has taken almost a year under the 1920 act procedure to effect a decision to bring State action into conformity with national policy.

(5) Thus it is apparent from the past history of railroad regulation by States and the Federal Government, that State action may not only produce nonuniformity upon important matters of national policy but may result in burdening interstate traffic. This matter assumes much graver importance, when the national policy is that of promoting the development of a new form of transportation; and when the possibility of State policies in conflict therewith may actually thwart that policy.

In what ways could, or may, this happen? The answer is by divergent State action respecting certificates of public convenience and necessity for intrastate services, by prescribing different levels of rates within the State; by fixation of different valuations of property entitled to fair return, and by prescribing different standards of fair return than those adopted by the National Government; by imposing different rates of depreciation upon the planes used in intrastate as compared with interstate services; by adopting other and conflicting policies regarding mergers and competition with other air lines or other forms of transportation than those favored by the national authority. It is no answer to say that these things have not happened yet in air transport. They have happened

to other forms of transport. It is only the part of wisdom to act now to prevent their happening in the future; to forestall the growth of a large body of State precedent and vested interests in State regulations and policies, that can only be corrected later with great difficulty, if at all; and which once allowed to come into existence, are likely to persist for all time.

(6) Air transport is essentially far more of a national than a State instrumentality of transportation. This is already impliedly recognized in the early emergence of Federal regulation thereof, and the comparative absence of State action upon economic matters pertaining thereto. By reason of the speed of the airplane, and the wide range of its operation, both certain to be greatly increased, this form of transport is national and international to a degree that is true of no other form of transportation. Its contribution to the technology of modern warfare is well nigh supreme; it is more closely allied to the military (defense) function of the National Government than is any other form; and this statement does not ignore the magnificent contribution of the maritime, railroad, and trucking interests to the prosecution of this wear. It will undoubtedly be an important instrument of the international competition that is likely to prevail at the close of the war. The potential effect of the airplane upon national and international organization of nations must not be ignored. To a large degree the growth of highway transport rendered partly obsolete concepts of government functioning based upon towns and counties. The growth of rail rendered partly obsolete some of the concepts of government organization and functioning based upon State dominance. The airplane seems destined to continue this process nationally, and to challenge organizations of nations as hitherto existent. Commercial air transport as the organized segment of air transport is thus national and international in its present activities, and its future import; and its development should be controlled, guided, and promoted by a national viewpoint, by national determinations of policy, rather than by a mixture of State and national sovereignties of the air. Numerous grand questions of economic policy exist, whose answers cannot yet be returned with confidence. Whether commercial air lines should be encouraged to merge with each other, or should be continued along lines of growth hitherto attained; what rate of growth of this form of transportation should be sought, how it should be promoted, what returns to the investor are necessary to effectuate that, what routes and lines should be established and where; these are but a few of the major issues of policy to be faced. And they require a national, not a State, viewpoint for their determination.

For the first time in the history of this Nation, there is presented the opportunity of guiding the development of a growing and important form of enterprise along lines of national economy, rather than allowing it to grow up under the conflicting policies and views of competing and contending State and National Governments. And the appropriate method of accomplishing that end is to confer the exclusive power to effectuate economic as well as safety regulation upon the Federal Government.

Mr. NEWSOME. Mr. Chairman, may I ask a question?

The CHAIRMAN. Mr. Newsome.

Mr. NEWSOME. Colonel, what you are telling us here is that you are fearful that the intent of the law as to policy and Federal control is not clear in this bill and in the original bill?

Colonel GORRELL. I am afraid that as to the original bill some court somewhere might upset the decisions which the administrative agency has already made, and that is why I am suggesting that you spell it out a little more clearly.

Mr. NEWSOME. You think it should be further elaborated upon to make the policy clear?

Colonel GORRELL. That is right, sir.

Mr. O'HARA. Colonel, you do not mean to say that the courts should not have the right of reviewing it?

Colonel GORRELL. No; I mean that the courts should do what Congress expects them to do.

Mr. O'HARA. Otherwise you and I would differ on that point.