regulation of air contractors. The most significant part of the definition is found in subsection (a) which states in effect that the Liability Act and the regulatory provisions for air contractors will cover not only operators which conduct their business interstate but also those which operate wholly in one State.

INTERSTATE, OVERSEAS, AND FOREIGN AIR TRANSPORTATION

Section 7 of the bill amends the present definition of interstate, overseas, and foreign air transportation. These terms are employed in the present act to define the operations which are covered by the Board's economic regulations. The significant change made by this amendment is that the Board's economic regulation will clearly apply not only to air carrier operations between States but also to air carrier operations which are wholly within a single State. This change can be well illustrated by referring to an instance in which an attempt was made to begin airline operations between points wholly within a single State without securing a certificate of convenience and necessity from the Board or submitting in any respect to the other economic regulations specified in the Civil Aeronautics Act. An operation was begun between Niagara Falls, N. Y., and New York City in the latter part of 1940. The Board immediately started proceedings in the Federal court in New York to enjoin the operation.

The Board took the position that while the operation was being conducted between two points within a single State, the carrier was actually engaged in interstate air transportation because he was carrying passengers who were on interstate journeys. The case was finally closed by the carrier stopping the operation and consenting to a decree by the court enjoining it from conducting such an operation in the future. In connection with that case one difficulty in the present act became evident. The act does not in plain terms provide for economic regulation by the Board of an air carrier who, although not engaged in actual interstate air transportation, might affect or burden the operations of air carriers who are engaged in such air transportation. It has been settled for a great number of years from a constitutional standpoint that such regulation by the Federal Government is proper. The amendment which is in the bill would eliminate this difficulty and permit the Board to exercise this jurisdiction which is clearly conferred upon the Federal Government by the Constitution.

DECLARATION OF POLICY

Section 8 of the bill strikes out the present section 2 of the Civil Aeronautics Act and inserts in place of it a new declaration of policy. The present section 2 which is also a declaration of policy has been transferred from its present position in the act to title IV so that it constitutes a declaration of policy covering economic regulation. The new declaration of policy to go into section 2 is a broader declaration covering Congress' policy with respect to the regulation and promotion of civil aeronautics generally. A significant aspect of this declaration of policy is that it specifically recognizes that the promotion and protection of interstate and foreign commerce and the promotion and development of civil aeronautics as a vital national asset requires national regulation. The section includes a specific finding that because of the special characteristics of aviation the operation of any aircraft in any air space over the several States may adversely affect, endanger, burden, or interfere with other aircraft engaged in military or postal operations, or in commerce between the several States. The section also contains the finding that it is essential that there be uniform regulation covering all phases of aeronautics in order to promote safety, and that national planning and control of all aeronautics is essential in order that civil aeronautics may achieve its proper place in the economy of the country and in order that this country can assume its proper role in world aeronautics. In any litigation involving this act, these findings, if adopted, will make it plain to the court that after consideration of the facts, Congress had concluded that uniform and exclusive Federal regulation of aeronautics is essential to the national public interest.

PURCHASE OF AIRPORTS

Section 9 of the bill amends section 302 (a) of the Civil Aeronautics Act. That section now gives the Administrator power to construct airports but it contains a proviso which prohibits him from acquiring any existing airport by purchase or condemnation. Section 9 of the bill eliminates this proviso so that

not only may the Administrator construct new airports but he can also acquire existing ones.

AIRPORT SURVEY

Section 302 (c) of the Civil Aeronautics Act required a survey be made of the existing system of airports and that a report be made to Congress on this subject by February 1, 1939. This report was made and therefore the section, having

served its purpose, can be stricken.

AIRPORT CERTIFICATION BY THE ADMINISTRATOR

Section 11 of the bill contains amendments to section 303 of the Civil Aeronautics Act of 1938. The section now provides that no Federal funds can be expended for airports or air-navigation facilities except upon recommendation and certification by the Administrator, made after consultation with the Board that the air-navigation facilities are reasonably necessary for use in air commerce or in the interest of national defense. Section 11 of the bill amends this by eliminating the requirement that the Administrator's certification can be made only after consultation with the Board. Section 11 also adds a new subsection to section 303 which requires the Administrator in connection with the expenditure of Federal funds for landing areas to impose conditions which will result in the proper protection of the approaches to such landing areas. He is authorized specifically to enter into contracts with public bodies such as municipalities to assure compliance with these conditions.

DEVELOPMENTAL WORK AND SERVICE TESTING

Section 12 of the bill makes a minor amendment to section 305 of the Civil Aeronautics Act. That section authorizes the Administrator to perform developmental work and service testing on aircraft, aircraft equipment, and air-navigagation facilities. In this connection he is given the power to make purchases without competitive bidding and by negotiation of experimental equipment if such purchases are approved by the Board. Section 12 amends this provision by eliminating the necessity for getting the approval of the Board before the Administrator can make a purchase of experimental equipment.

DEVELOPMENT PROGRAM FOR AIR NAVIGATION FACILITIES

Section 13 of the bill requires the Administrator to prepare and maintain a development program for airports and air-navigation facilities. In making up this program, he is required to take into consideration the needs of the national defense and the national and international system of air commerce, and is directed to so design the program that it will at all times keep ahead of the needs of the national defense and of air commerce. The Administrator is directed to act in accordance with this program in building airports and air-navigation facilities himself and in approving expenditures of Federal money for this purpose by any other agency. He is required to report to Congress from time to time and at least once a year concerning the program and the progress made toward its accomplishment.

AERONAUTICAL TRAINING AND EDUCATION

Section 14 of the bill provides for the insertion in the Civil Aeronautics Act of the present provisions of the Civilian Pilot Training Act and makes them permanent provisions of law. The present Civilian Pilot Training Act will expire on July 1, 1944. In addition, section 14 directs the Administrator to promote research and aeronautical education, to prepare and disseminate aeronautical education material, and to confer and cooperate with governmental and other agencies in regard to aeronautical education. He is directed to carry out this program with a view toward familiarizing the youth of the Nation with various aeronautical skills and techniques.

SECTION 308

Section 15 of the bill merely provides for renumbering section 308.

ZONING

Section 16 of the bill provides for the insertion of a new title in the Civil Aeronautics Act which will provide for the regulation and elimination of hazards to aerial navigation.

Subsection 3100 (a) of the new title contains findings of fact by Congress and prescribes the policy that the Administrator of Civil Aeronautics is required to follow in carrying out the duties imposed upon him by the new title. Congress finds that a unified program for regulating the height and location of structures and objects of natural growth in the vicinity of landing areas and in other places where the safety and freedom of aerial navigation may be impaired is necessary if aeronautics is to be properly developed or if the investment of funds by the United States in landing areas and other air navigation facilities is to be protected. This section also states that the program should be carried out with consideration for the desirability of achieving maximum usefulness of landing areas, the desirability of maintaining standards for the height and location of structures and objects of natural growth as uniform as possible, and the necessity for freedom in the mobilization and employment of military aircraft. In working out the zoning program, the Administrator is also directed to weigh the economic effect of zoning in the vicinity of landing areas with the economic effect of relocating the landing areas.

In subsection (b) of section 3100 of the new title, Congress finds that it is necessary that this unified program be developed by an agency of the United States in cooperation with the States and their subdivisions and that it is necessary if the program is to be carried out that power be vested in an agency of the United States to secure the cooperation of the States and their subdivisions and to take necessary action to secure safe and uniform conditions.

Section 3102 requires the Administrator to formulate and maintain the unified zoning program in accordance with the actual and anticipated technological development of civil and military aeronautical equipment and operating procedures.

Section 3103 of the new title requires the Administrator to try to secure the cooperation of the proper local agency in formulating, maintaining, and carrying out the zoning program and to encourage the administration of the program by local agencies in order to decentralize the work of carrying it out.

Thus the theory of the bill appears to be that since unified zoning standards are required, a Federal agency should set those standards and work out the zoning program but that if possible the local agencies should exercise the jurisdiction to zone the airports in accordance with that program. If for any reason it appears that the program cannot be carried out in that way in particular instances, the Administrator is then authorized and required to go ahead and zone the area himself. Section 3104 of the new title specifies the manner in which he is to do this. By that section he is directed to establish what are referred to in the statute as air safety areas. He is required to define these air safety areas around airports by specifying the outer boundary of the area and filing the description of the area with the office which keeps the local land records. After this air safety area has been prescribed by the Administrator, he may then prescribe reasonable regulations governing the height of structures and objects of natural growth within that area. In doing this, he is required to take into consideration, among other things, the value of the property to be affected, the nature of the neighborhood, both before the landing area was established and thereafter, the probable military importance of the landing area, the nature of the air traffic using it, and the feasability and adequacy of other means for minimizing risks to aerial navigation in the vicinity of the landing area.

Section 3105 of the new title prescribes the ways in which these regulations may be enforced. Subsection (a) forbids the owner of a structure or an object of natural growth to permit or cause it to be in any way changed or grown so that its height will violate any of these regulations. Subsection (b) authorizes the Administrator, after notice and hearing, to require any person who permits or causes any structure to be changed or grown in violation of the regulations to take whatever action is necessary to correct the violation. Subsection (c) of this section is designed to cover the case where, at the time the zoning regulations are issued, a structure or object of natural growth within the safety area is higher than permitted by the regulations. In that event the Administrator is authorized by order, entered after notice and hearing, to require that the owner of the structure or object alter it so as to conform to the regulations. Compensation is provided for the owner in the manner I will describe in a moment.

The powers of the Administrator over structures, which I have discussed up to this time, have related to structures which are within the air safety area surrounding an airport or landing area. Subsection (d) relates to certain types of structures which are either within or without such an area. The Administrator

is authorized, after notice and opportunity for hearing, to require the owner of a smokestack, high tension wire, radio tower, chimney or water tower, or any similar structure which exceeds 150 feet in height, to reduce the structure to that height. In the case of any other structure which exceeds 350 feet, the owner can be required to reduce it to that height. Before the Administrator can take action of this kind he is required to find that the alteration is necessary to carry out the zoning program and the congressional findings and declaration of policy. Subsection (e) authorizes the Administrator to take necessary action in an emergency without notice and hearing.

These zoning orders of the Administrator are all subject to court review in the United States district court for the district in which the structure or object is located or in which the owner resides.

Section 3107 makes provision for the determination of compensation to owners of structures who have been required to alter them. The owner of a structure or object of natural growth which was too high at the time the zoning regulations were put into effect and who is required to reduce the height of the structure or object is entitled to just compensation. Also, the owner of a radio tower, smokestack, or other structure referred to in subsection (d) of section 3105 is entitled to just compensation. The compensation is determined by the Administrator after notice and opportunity for hearing. These compensation orders of the Administrator are also subject to review in the United States district court.

Section 3108 of the new title authorizes the Administrator to require persons to give public notice of the proposed construction or alteration of a structure where the notice will promote safety in aerial navigation. This is not a new section. It already appears in the Civil Aeronautics Act as section 1101.

Section 3109 of the new title provides the Administrator with incidental powers necessary to the conduct of proceedings in connection with zoning such as the designation of examiners, the issuance of subpenas, and the entry of orders.

DECLARATION OF POLICY FOR ECONOMIC REGULATION

Section 17 of the bill inserts at the beginning of the present title IV of the Civil Aeronautics Act a declaration of policy. This declaration of policy, with certain changes which I will mention in a moment, is now contained in the act as section 2. As I have already stated, the new declaration of policy in section 2 is designed to cover all phases of aviation, while the declaration of policy which will now be inserted at the beginnng of title IV deals entirely with economic regulation. A significant change in this section appears in subparagraph (a), where it states that the Board is to consider as being in the public interest and in accordance with the public convenience and necessity the encouragement and development of an air transportation system so located, equipped, and staffed that it may serve as an adequate auxiliary to the armed forces in time of national emergency both within and without the continental limits of the United States. This provision makes it plain that the Board, in granting certificates of convenience and necessity and in establishing subsidy payments in the air-mail rates, is to attempt to provide not merely a commercial service but is to provide also a system which will be adequate to serve as an auxiliary to the Army and Navy in time of national emergency. This new provision indicates that this action should be taken whether or not there is involved any commercial justification for the operation.

This provision would also appear to impose upon the Board the responsibility for anticipating and determining from time to time what the needs of the armed forces will be in time of national emergency for a transport auxiliary with respect to the places to which the transport operations are to be conducted, the number of trained personnel necessary, and the amount of equipment required.

Another significant change in the declaration of policy appears in subsection (e) which declares that the Board shall consider as being in the public interest and in accordance with the public convenience and necessity the furnishing of regular air transportation as far as possible between the continental United States and each of the Territories and possessions and any other place in which the United States has an interest. The present authorizations issued by the Board provide service between the United States and all of our Territories and possessions except Samoa, and therefore the significant part of the new provision is that which refers to any other place where the United States has an interest. The effect of this provision is to require the Board, in passing upon applications for certificates of public convenience and necessity, to authorize the inauguration of service

to any place in which the United States has an interest without regard to the commercial importance of the operation unless the Board should find that the inauguration of such service is impossible. In addition, after the service is inaugurated, the Board would be required to support the operation financially by providing an adequate subsidy through mail payments.

TEMPORARY CERTIFICATES

Section 18 of the bill amends section 401 (d) of the Civil Aeronautics Act so as to authorize the Board to issue a temporary certificate of public convenience and necessity even though a permanent certificate has been applied for. It provides that the applicant may reject the temporary certificate if he so desires. Under the present act, if an applicant asks for a permanent certificate, the Board has to give him a permanent certificate or none, even though it may appear to the Board that, under the circumstances, they would be justified in finding necessity for only a temporary certificate.

CITIZENSHIP

Section 19 of the bill amends subsection (h) of section 401 so as to provide the Board with a means of handling a situation where one of our air carriers ceases to be a citizen of the United States within the definition of that term as used in the Civil Aeronautics Act. Under the present act, in order to be an air carrier and secure a certificate of convenience and necessity, the company must be a citizen of the United States, that is, it must be incorporated in the United States, 75 percent of its stock must be owned by citizens and the president and twothirds or more of the board of directors and other managing officers must be citizens. However, once a certificate is issued, the statute is not clear as to what the Board can do if the carrier holding the certificate ceases to be a citizen because of large purchases of its stock by foreign interests or for some other reason. This provision would authorize the Board to suspend or revoke a certificate of convenience and necessity if it found that a carrier had ceased to be a citizen. It is also provided that if the Board considers such action to be in the public interest, it may postpone the effective date of suspension or revocation orders in order to permit the carrier to prepare and submit to the Board a reorganization plan designed to restore its citizenship.

ISSUANCE OF FOREIGN AIR CARRIER PERMITS

Section 20 of the bill amends section 402 of the Civil Aeronautics Act which provides for the issuance to foreign air carriers of permits authorizing them to engage in air transportation to and from the United States. The section now provides that these permits may be issued if, after notice and hearing, the Board finds that the foreign carrier is fit, willing, and able to perform the transportation and that the operation proposed is in the public interest. The Board's actions with respect to foreign air carrier permits are subject to approval by the President. The amendment to this section would authorize the Board to order the issuance of a foreign air carrier permit without finding that the transportation will be in the public interest or that the air carrier concerned is fit, willing, and able if the issuance is in accordance with an agreement which has been entered into between the United States and a foreign country providing for the establishment of the service. Under these circumstances, the certificate can also be issued without the public hearing now required.

FREE OR REDUCED-RATE TRANSPORTATION

Section 21 of the bill deals with the granting by air carriers of free or reducedrate transportation. Under the present statute a carrier can grant free or reduced-rate transportation to certain classes of persons specified in the last sentence of section 403 (b) of the act and to any other persons or class of persons so long as in doing so it does not unduly discriminate. The effect of the amend ment contained in section 21 of the bill is to provide that an air carrier can give free or reduced-rate transportation only to those persons specifically mentioned in the section plus such additional persons as may be specified in the Board's regulations.

What I have just said about the present provisions of the act applies to our carriers engaged in interstate air transportation. The situation is a little differ