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ent with respect to our air carriers who are engaged in overseas or foreign transportation. They can provide free or reduced-rate transportation to the classes of persons specified in the last sentence of section 403 (b) plus such other persons as the Board may prescribe by regulation, plus any additional classes of persons so long as a discrimination is not involved.

The effect of the amendment is to treat free and reduced-rate transportation provided by our carriers in interstate, overseas, and foreign transportation in the same way.


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I am passing over for the time being section 22 of the bill since it deals with the regulation of the rates of our international air carriers and foreign air carriers. That section will be considered later with others which deal with this same subject. I have already covered section 23 of the bill in discussing section 17. Section 24 of the bill amends section 412 of the Civil Aeronautics Act which section deals with the approval of contracts entered into between air carriers and between air carriers and foreign air carriers. Under the present section all such contracts are required to be filed with the Board and the Board is required to approve or disapprove them. The Board is required to disapprove any contract or agreement that it finds to be adverse to the public interest or in violation of the Act, and is required to approve any contract or agreement which it does not find to be adverse to the public interest or in violation of the act. The effect of approving such a contract under the present section is to exempt the parties to the contract from antitrust laws or other legal restraints which would prohibit them from carrying out the contract. The effect of a disapproval of a contract under the present section is not entirely clear but it does seem clear that this effect would not go beyond making the contract unenforceable between the parties. It would not render action under the contract unlawful. The amendment to section 412 which is proposed in this bill would specify that in the case of an agreement between an air carrier directly engaged in air transportation, that is, actually operating aircraft, and an air carrier indirectly engaged in such transportation, a forwarder for example, a disapproval would result in making the carrying out of a contract unlawful.


Section 25 of the bill inserts a new section in the Civil Aeronautics Act authorizing and directing the Board to enter declaratory orders interpreting any provision of the act or any order, rule, regulation, or requirement adopted under the act even though it does not actually have a case involving the question before it. An example of the procedure authorized by this section might arise upon the filing of a petition by an air carrier to determine whether a proposed plan for serving a particular point was considered as adequate service within the provision of the act which requires air carriers to provide adequate service. After consideration the Board would enter an order making a determination on this point, which order would be subject to judicial review according to the new section.


Section 25 of the bill also provides for the insertion in the Civil Aeronautics Act of a provision which would require the Board to provide and administer machinery for voluntary arbitration of claims, controversies, and other disputes arising between or among air carriers, foreign air carriers, or air contractors, or any of them, or between any of such person or persons and any other person or persons. It will be noted that this section contemplates voluntary arbitration. There is no requirement that disputes be submitted to the Board for arbitration.


Section 26 of the bill provides for the insertion in the Civil Aeronautics Act of a new title IV-A, which would cover the economic regulation of air contractors. The present act provides only for the economic regulation of air carriers who are by definition common carriers. The term includes those who transport persons and property by air for compensation either as actual operators of airplanes or forwarders or express companies. The term "air contractor" under the new title covers the same classes of persons but it covers the transportation of persons and

cargo otherwise than as a common carrier. Thus by providing for the regulation of air contractors in the new title, the Board is given the power to exercise economic regulatory powers over all of those who transport persons and property for hire, whether as common carriers, contract carriers, or othewise. The economic regulation provided for in this title is substantially the same as that provided under the existing law for the regulation of air carriers. Air contractors are required to have licenses before they can engage in the air contracting business. These licenses can only be issued by the Board if it finds that the applicant is fit, willing, and able to conduct the operation properly and that the operation is required by the public interest. Air contractors are required to file schedules containing their rates and, if the Board so requires by regulation, all of their classifications, rules and regulations, practices, and services. They are also required to adhere to these schedules and rebating is prohibited. Air contractors are required to establish and observe reasonable minimum rates and they are forbidden to give undue or unreasonable preferences.

It should be noted at this point that in the provisions dealing with rate regulation lies the greatest difference in the regulatory powers over air contractors and those over air carriers. Air carriers are required to establish reasonable rates while air contractors are only required to establish reasonable minimum rates. Also the Board is authorized to fix the exact rate to be charged by air carriers but it is only authorized to fix minimum rates for air contractors.

Another provision of the new title I-A should be noted. Subsection (b) of section 4100 authorizes the Board to make classifications of air contractors and to make any of the regulatory provisions inapplicable to them for such periods as the Board may deem to be in the public interest. The section requires that such action be taken with the objective, among others, of so adjusting the regulatory provisions to the changing needs 'and conditions of the air contracting business' as to avoid undue administrative burdens and unnecessary impediments to the development of such business. In making any of the regulatory provisions inapplicable to air contractors, the Board may impose such requirements as it may deem to be in the public interest.

Thus the general effect of these provisions is to impose complete economic regulatory requirements upon air contractors but to authorize the Board to make such provisions inapplicable if the public interest so requires.


Section 27 of the bill authorizes the Board to prescribe reasonable rules and regulations governing in the interest of safety the maximum hours or periods of service of airmen and other employees of air contractors. The Board now has this power with respect to air carriers.

Sections 29 and 32 of the bill provide for the safety regulation of air contractors. Air contractors are required to secure operating certificates which can only be granted if the applicant is properly and adequately equipped, and able to conduct a safe operation. Commercial operators are subject to safety regulation under the present'act but at the present time they are only subject to the general safety requirements which are imposed upon all operators of aircraft. This provision would require that each air contractor get an operating certificate after consideration of his individual operation.

AMENDMENT, SUSPENSION, AND REVOCATION OF CERTIFICATES Section 30 of the bill amends section 609 of the Civil Aeronautics Act which covers amendment, suspension, and revocation of certificates. The amendment accomplishes two purposes: First, it inserts among the other safety certificates referred to in that section the newly prescribed air contractor operating certificate, and second, it alters the present provision for notice and hearing. As it is now written, section 609 provides that amendment, suspension and revocation of certificates can only be effected after notice and hearing. The Board's practice up to this time has been that if the holder of the certificate did not want a hearing and waived it, no hearing would be held. However, it is not entirely clear that this procedure is valid. It may be that under the statute as now written the Board should hold a hearing in every case of amendment, suspension, and revocation even though the holder of the certificate does not want one. The amendment contained in section 30 would make it clear that the holder of the certificate is only entitled to an opportunity for hearing and if he does not want a hearing the Board would not have to hold one.


Sections 28 and 31 of the bill deal with the review of denials of safety certificates. Under the present law, if the Administrator denies an application for an airman certificate that is, pilot, mechanic, air traffic controller, etc.—the person who applied for it has the right to appeal to the Board and get a hearing and a review of the Administrator's action. This does not apply, however, with respect to any safety certificate except airman certificates. If the Administrator denies the application of a manufacturer for a type certificate for a new model, the manufacturer cannot secure a hearing or review before the Board. The effect of sections 28 and 31 of this bill is to provide that any person whose application for the issuance or renewal of any safety certificate is denied by the Administrator may secure a hearing and review of that action by the Board.


Section 33 of the bill amends section 801 of the Civil Aeronautics Act. The latter section now provides that actions of the Board with respect to certificates authorizing overseas or foreign air transportation, or air transportation between places in the same Territory or possession, and foreign air-carrier permits, are subject to the approval of the President. Under the amendment, the provisions now applying with respect to certificates of public convenience and necessity and permits will likewise be applicable to licenses issued to air contractors.


Section 34 of the bill inserts in the Civil Aeronautics Act a new section 802. In subsection (a) of that section the regulation of air commerce is declared to be a matter of special national interest. The subsection also provides that no State, Territory, or possession of the United States or a subdivision of any of them shall regulate air commerce or impose or enforce any regulation in a manner which hinders, burdens, or interferes with the free flow of such commerce or substantially impairs uniformity in the conditions pursuant to which such commerce is conducted throughout the United States.

It should be noted that this section covers the direct regulation of air commerce as such and the regulation of any subject matter which has the prohibited effects upon air commerce.


Subsection (b) of the new section 802 also prohibits multiple taxation in that States, Territories, possessions, or local subdivisions are forbidden to impose a tax on an air carrier or air contractor which results, or is likely to result, in imposing upon them more than an amount fairly allocable to the State, Territory, possession, or local subdivision imposing the tax. A recent case decided by the Supreme Court of the State of Minnesota provides the best example of the situation of which this particular section is designed to cover. In that case the State imposed a personal-property tax upon all of Northwest Airlines' flying equipment notwithstanding the fact that Northwest operates in six other States, which might also impose a personal-property tax on part of the same equipment. This section is designed to avoid possibilities of multiple taxation such as this, but at the same time to give each State its share of the taxes upon a fair basis of allocation.


Section 35 of the bill amends section 803 of the Civil Aeronautics Act so as to require the Chief of the Weather Bureau to detail annually 50 members of the Weather Bureau personnel for training at Government expense in advanced methods of meteorological science. The Chief of the Weather Bureau is now required to send 10 members.


Section 36 of the bill requires the Board and the Administrator to make recommendations to the National Advisory Committee for Aeronautics from time to time concerning research projects. Such recommendations can be made by the Board and the Administrator at the present time but there is no congressional direction requiring them to do so.


Section 37 of the bill amends section 901 (a) of the Civil Aeronautics Act. That section now provides that any person who violates any provision of titles V, VI, or VII is subject to a penalty of not to exceed $1,000. Since this penalty is limited to a violation of a provision of the act, it has been impossible in some cases to impose a civil penalty for a violation of a regulation issued under the act. This amendment so changes the section that this technical defect is eliminated.


Sections 38, 39, 40, 41, and 42 of the bill contain amendments to certain of the penalty provisions of the Civil Aeronautics Act so that they are made applicable to air contractors and air contractors' certificates and licenses in the same way that they are applicable to air carriers and the certificates which are issued to air carriers.


Sections 43, 44, and 46 of the bill contain amendments to section 1002 of the Civil Aeronautics Act so as to provide for rate regulation air contractors. As I have indicated previously, the rate regulation provided for is similar to that provided with respect to air carriers except that the Board is only authorized to fix minimum rates for air contractors.



Sections 43, 44, and 46 amend section 1002 (d) of the Civil Aeronautics Act so as to provide for the regulation of the passenger and property rates and practices of foreign air carriers and of our international carriers engaged in overseas and foreign air transportation. Under the present act the Board has no power over the rates charged by American flag carriers for foreign air transportationthat-is--between the United States and a point outside the United States-except the power to remove discriminations. Also the only power the Board has over rates for overseas transportation is to fix maximum and minimum rates. The Board has no power to fix the rates charged by foreign air carriers for foreign air transportation. These amendments to section 1002 would give the Board the same power over rates for overseas and foreign air transportation as it now has with respect to interstate air transportation by our domestic carriers. What I have said with respect to the rates charged also applies to rules, regulations, and practices.


Section 48 of the bill adds to section 1005 of the Civil Aeronautics Act a new subsection dealing with the reconsideration of the Board's orders. At the present time there is no specific provision in the act with respect to the power of the Board to reconsider an order already, issued or prescribing the procedure by which this is to be done. The new subsection inserted here provides that the Board may, in its discretion, grant reconsideration of an order upon application of any party. If the reconsideration is granted and it appears to the Board that the original order was unjust or unwarranted, the Board is authorized to reserve, change, or modify the order.


Section 49 of the bill amends subsection (a) of section 1006 of the Civil Aeronautics Act. The purpose of this amendment is to eliminate certain ambiguities with respect to the period within which a person may appeal from one of the Board's orders. The present provision states that a petition for review of one of the Board's orders may be filed within 60 days after the entry of the order. The present section does not provide, however, what happens if an application is made for reconsideration of the Board's order. This amendment makes it clear that the time for appeal does not begin to run until the time has elapsed within which an application for reconsideration may be filed and, if an application is made for the reconsideration of the Board's order, the time for appeal does not begin to run until the Board disposes of the application.


Section 51 imposes' upon air contractors the same requirement now imposed upon air carriers and foreign air carriers that they designate an agent upon whom service of notices and process and orders, decisions, and requirements may be made.


Section 52 of the bill amends section 1007 of the Civil Aeronautics Act. Among other things, that provision authorizes any party in interest to apply to a district court of the United States for the enforcement of section 401 (a) of the act, which is the section which requires an air carrier to have a certificate of convenience and necessity. This amendment wolud extend this privilege to violations of section 402 (a) requiring a foreign air carrier to have a permit and section 401 (a) requiring an air contractor to have a license.

Section 53 amends section 1007 (b) so as to provide for the enforcement of the terms and conditions of a license issued to an air contractor. The section now covers certificates of convenience and necessity and foreign air carrier permits.

Section 54 makes applicable to air contractors' licenses other procedural provisions which are now applicable to permits and certificates of convenience and necessity.


Section 55 of the bill amends section 1103 of the Civil Aeronautics Act. Section 1103 provides that among other things, copies of tariffs shall be preserved as public records and provides the legal effect which shall be given to such tariffs. Section 55 makes these provisions equally applicable to the rate schedules of air contractors.


Section 56 of the bill inserts in the Civil Aeronautics Act a new section which authorizes the Board to promulgate regulations to govern the choice of law covering the liability of air carriers and air contractors for injury or death to employees rising out of or in the course of their employment. This provision is designed to provide a solution to the problem of determining which State workmen's compensation law shall govern in the event of the injury or death of an employee. This problem is, of course, particularly prone to arise in connection with an air carrier's operations since they are usually conducted in many States.


Section 57 of the bill inserts a new provision in the act which gives the pilot or copilot power to impose certain restraints and requirements upon passengers or members of the crew if considerations of safety and the reasonable comfort of other passengers or crew members require. It also authorizes the pilot or copilot to make such disposition of property on board the aircraft as may be necessary in the interests of safety, including the jettisoning of such cargo. Under the provisions of this new section, neither the pilot nor the copilot, nor his employer, incur any liability on account of any action taken under the section.


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Section 58 provides for the adoption of a new act entitled "Air Carriers Liability Act of 1943.” This new act would govern the liability of commercial operators of aircraft for injury or death to passengers, damage or loss to property, baggage and personal effects, and loss resulting from the unreasonable delay in the delivery of baggage or property. The act would cover such loss or damage occurring in interstate, overseas, or foreign air commerce.

The proposed act is divided into three titles. Title I prescribes certain necessary definitions and other general provisions. Title II deals with liability for injury to or death of passengers. Title III covers liability for loss or damage to property, baggage, and personal effects, and loss resulting from unreasonable delay in the delivery of baggage or property. Title IV deals with the survival of liability against an express agency or operator of an aircraft.

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