tion of such personnel as may be deemed necessary to assist the Council and the Administrator in carrying out their respective functions under this Act: Provided, That to the extent possible, consistent with other duties and assignments, the personnel and facilities already under the direction of the members of the Council shall be used to carry out the duties of the Council. SEC. 3. The Advisory Committee is authorized and directed— (a) to survey the national requirements for aircraft designed for industrial or personal use and adaptable for military service; (b) to prepare and recommend to the Council from time to time, the operating and utility characteristics and specifications of such aircraft; SEC. 4. The Council is authorized and directed to allocate to the Civil Aeronautics Administration, from funds appropriated to carry out the purposes of this Act, sums to be used for the purpose of sponsoring design or development contests, entering into contracts or modifications thereof with an indivudual or organization for the design, development, construction, modification, and testing of prototypes of aircraft and aircraft components or the improvement of existing types of aircraft, in accordance with standards established by the Council on the basis of recommendations submitted by the Advisory Committee. SEC. 5. The Administrator is authorized to arrange proposed contracts when directed by the Council, and after submission for review to the advisory committee in accordance with section 6 (b) of this Act, to contract, using funds appropriated to carry out the purposes of this Act, for the design, development, construction, modification, and testing of prototypes of aircraft and aircraft components or the improvement of existing types of aircraft: Provided, That no such contract shall be entered into with an agency of the United States Government. SEC. 6. (a) The Administrator, in carrying out the provisions of section 4 of this Act, may enter into contracts or modifications thereof, with or without legal consideration, with or without performance or other bonds, and in carrying out such contracts, or modifications thereof, may make advance, progress, and other payments. (b) Each such proposed contract shall be submitted for review to the advisory committee and shall not be entered into by the Administrator until either (1) the contract has been approved by a majority of such committee; or (2) sixty days have elapsed subsequent to its submission to such com-. mittee. (c) Each such contract, or modification thereof, executed pursuant to this Act, shall contain (1) such provisions, consistent with the laws affecting the issuance or use of patents, governing the disposition and use of inventions made thereunder as are appropriate to protect the public interest and the equities of the indivisual or organization with which the contract, or modification thereof, is executed; and (2) a condition that one-half of the net revenues before taxes, derived by the contractor, his licensee or assignee, from the manufacture or sale of developments or improvements contracted for under the provisions of this Act shall be paid to the United States until all payments made by the United States under the terms of the contract have been repaid. SEC. 7. The Council through the Administrator shall submit to the Congress, on the 1st day of January in each year, a report on (a) the progress made in the accomplishment of the purposes of the Act and (b) the amounts of the expenditures made or obligated pursuant thereto. SEC. 8. There is hereby authorized to be appropriated such sums, not in excess of $5,000,000 over a period of three years, as may be necessary to carry out the purposes of this Act. SEC. 9. For the purpose of this Act, the term "contract" shall be construed as including an offer or agreement to award a prize or prizes to the winner or winners of a design or development contest or competition. Mr. SNOW. The only other thing is-I do not know what I should do with this I have a statement here for the committee from Mr. David Biermann, who is general manager of Hartzell Propeller Co., one of the largest manufacturers of small propellers. He asked me to submit it. The CHAIRMAN. We will insert that for the record, if that is agreeable. (The letter and the statement referred to follow:) Mr. CROCKER SNOW, HARTZELL PROPELLER CO., Chairman of Research and Development Committee, Logan Airport, East Boston, Mass. DEAR MR. SNOw: As requested in your letter of March 20, I am enclosing two copies of a paper entitled "Reasons for the Enactment Into Law of Bill S. 2984." Yours truly, HARTZELL PROPELLER Co., REASONS FOR THE ENACTMENT INTO LAW OF BILL S. 2984 The object of bill S. 2984 is to revive or stimulate the personal aircraft industry, which is on the verge of collapse. It is hoped that through expert supervision and with the aid of a small grant of money the disease which afflicts the industry can be diagnosed and a suitable remedy administered. That the industry is suffering from an economic ill can easily be proven by glancing at the production and financial reports. Personal plane production is now down to one-tenth the volume of 3 years ago, and many millions of dollars have been lost by various private enterprises in the past few years. The question comes up as to whether the industry is worth saving. The answer is "yes", providing it can be put on a self-sustaining basis. Obviously, any industry which is self-sustaining is a national asset, because it provides employment, pays taxes, and produces goods or services which contribute to our ever higher standard of living. Also, there is the matter of national defense. The next question is, How can the personal aircraft industry be made selfsustaining? The answer is that it must develop a product that the public wants, or can be made to want, with some further education. Obviously, the public does not want the present products in sufficient quantities to maintain a healthy industry. There must be serious deficiencies with the present personal airplane as compared to other widely accepted products, such as the automobile, for example. The deficiencies are not hard to find. The usefulness or utility is extremely small in proportion to the cost. The present airplane is limited in so many ways that only a few sporting individuals or companies can see fit to justify the expense. The present airplane is generally housed in large expensive hangars. It can operate only from one flying field to another, which is generally located at a considerable distance from the ultimate destination. It can operate only during the daytime and in good weather, with reasonable safety. Now consider the cost: The initial cost of the cheapest airplane starts out at about what a Cadillac costs and runs up to as much as a modern six-room house. But this is only the beginning. Hull insurance runs about 25 percent of the initial cost per year, while normal maintenance will be as much again. The per mile fuel cost is comparable to that of an automobile, however. With the symptoms of the disease fairly well outlined, one can consider possible remedies. This is where the services of experts are required. The solution is uot easy, but the writer feels that a solution definitely is possible. In fact, a solution will probably evolve in the normal course of events. Men with ideas will come forth and develop them as they always have in the past; however, it may take a considerably longer time by this natural process than if an organized attack were made. The question arises as to why the aircraft industry-which, taken as a whole is quite large if the military contractors are included-has not been able to come up with the solution to the problem. The writer believes the answer lies in the fact that the basic thinking has been toward military ends. Even the personal aircraft designers have been influenced by the military concepts of design, performance, and even utility. It is true that a number of different approaches have been suggested and tried, such as safety features, slow landing speeds, airplanes which can double for the automobile, and the like; but the final solution has not been approached. The basic limitations outlined above must be largely removed, after which the cost will find a much lower level. It is believed that the enactment of bill S. 2984 will be a positive step forward. It will bring together men of experience and wisdom to direct a study of the problem. It will provide financial means to encourage engineers and inventors to concentrate on the specific problem, without which they could do little. It provides risk capital for development in a field where such is not available. The bill does not insure that the patient will be cured any more than if it were directed toward the cure of cancer in the medical field. Everyone will agree, however, that cancer research is very important, without which there can be little hope for the final cure. Although the writer is a firm believer in private enterprise and individual initiative, it appears that some Government help must be forthcoming if headway is to be made within a reasonable period of time. The personal aircraft industry is sinking fast and needs assistance. DAVID BIERMANN, General Manager, Hartzell Propeller Co., Piqua, Ohio. Mr. SNOW. Well, thank you very much, sir, for your time and consideration. The CHAIRMAN. I have two or three questions which have been handed to me. They are not my questions. The first one is: Your association believes, as I understand you, that the manufacturers of small personal-type aircraft either cannot or will not make the improvements that you feel are necessary without some kind of help. On what evidence do you base this conclusion? Mr. SNOW. Well, sir, I am glad you asked me that. In the report that I referred to in my statement, which I am leaving with you, we tell you about our entire study of this subject, and during it we contacted every manufacturer of light aircraft that we could find out about, and the number was 11, I think; and of those 11 manufacturers, 7 were in favor of some sort of Government assistance in research and development; 3 of them were more or less neutral, and only 1 of them was opposed to the idea, and that one, incidentally, was a manufacturer, a very successful manufacturer, of aircraft with the military services. So, he had nothing to worry about. But I have in this report some very interesting quotations from letters from manufacturers, which I would be glad to leave with you; or, if you are interested, I could read them to you now. I do not want to take your time. The CHAIRMAN. You can insert them in the record, if you want to make them a part of the record, if they are not too long. Mr. SNOW. No, sir. Here they are; they comprise 1 page. I think they are interesting. The CHAIRMAN. Let us put them in. (The documents referred to follow :) EXCERPTS FROM THE ANNUAL REPORT OF THE RESEARCH AND DEVELOPMENT COMMITTEE OF THE NATIONAL ASSOCIATIONS OF STATE AVIATION OFFICIALS, PRESENTED AT NEW ORLEANS OCTOBER 31, 1949. (Chairman, Crocker Snow, Massachusetts; W. L. Anderson, Pennsylvania; Herbert Fox, Tennessee; A. W. Meadows, Texas) Bollinger and Tully, in the Harvard Business School study, Personal Aircraft Business at Airports, say: "The basic weakness of the industry was found to be attributable not so much to the obvious inadequacies of capital and management employed in sales and service operations, as commonly supposed, but more to inherent limitations of the product itself." Delos Rentzel, Administrator of Civil Aeronautics, in a statement before the Senate Committee on Interstate and Foreign Commerce, comments that— "Small, personal-type aircraft in the United States number about 90,000. Although this total is impressive, sales of small planes have dropped off sharply in the past 2 years, and this potentially important segment of our economy shows signs of stagnation. A growing number of people believe that the natural expansion of private flying is being stifled by lack of utility in our present types of small aircraft. To some extent, this is a matter of engineering and design changes to bring increased usefulness and lower operating costs to the smallplane owner." William B. Stout, in a guest editorial in Aero Digest, soliloquizes in part: It is a debatable question whether the private-owner airplane industry has gone permanently into the doldrums, whether this is an autum or winter of privateairplane purchasing interest, or whether the loss of interest in present-type airplane is permanent. No matter which is true, the industry only can place the blame on itself. Except for betterments in engines and details, we are building the same old pre-first World War airplane whose usefulness and utility has been added to only by more reliable machinery for safety and more airports for terminals. Practically nothing has been done toward making a small air vehicle of wide usefulness. The basic fault of all private airplanes is lack of utility." Grover Loening, speaking before the Institute of the Aeronautical Science, complained that current private aircraft "actually do not go where the individual really wants to go." Second, and with some reluctance, we came to the conclusion that the Federal Government was the only agency, public or private, capable of providing the money necessary for the research and development that almost everyone seems to think is necessary and possible. We tested this thought on industry, various associations, and specialists in aviation, with illuminating results. The most representative industry association, the AIA, seems to be opposed to this idea, but we find that opinion in the industry itself is divided. Furthermore, we learned that industrial leaders were generally very conversant with the whole problem, and were willing to give us studied, frank, and useful opinions and suggestions. Of 11 manufacturers who commented, 7 were in favor of Government financial participation, with varying reservations as to method and details. Only one was strongly opposed, and three were more or less neutral. While all of the comments are pertinent, several seem especially to merit repetition. A manufacturer of light aircraft says in part: "We heartily favor any intelligently conceived program which will share the costs incident to the research, experimental and, development work involved in the eventual production of new models and types of aircraft. The producers of light aircraft have almost without exception borne these costs singlehandedly as an implicit part of their over-all cost of doing business, and this has, to a degree, made their approach to the development of new designs singularly conservative. Any such program must, however, maintain in full economic focus all of the multiple factors which extend before and beyond the mere creation of a single prototype aircraft of whatever design or intrinsic capabilities." Another manufacturer feels that "With the present tremendous cost of new aircraft development, it appears clear that some type of Federal aid must be provided. The two questions remaining are: What Government agency should undertake the work? and How can such a program be brought into being?" An aircraft accessory executive writes: "No one seems to deny that funds must be forthcoming if better and more useful aircraft are to be obtained. It also seems to be clear that if these developments are to be sponsored only from the corporate profits of manufacturing companies, radical or unusual developments must of necessity be tried out very slowly, and funds will not be too plentiful, particularly in periods when only a very small market is available." The representative of one aeronautical research organization says: "Although I deplore the lack of risk capital and competitive, free enterprise which in the past would have made such a proposal unnecessary, I do not foresee that any radical development, improvement, or increase of production of small aircraft can be assured or that a new type of personal aircraft can be widely tested for public acceptance without Government funds." TEXAS ENGINEERING & MANUFACTURING CO., INC., Mr. A. W. MEADOWS, DEAR MR. MEADOWS: I received your letter and copy of the bill being considered for introduction to Congress relative to the sponsoring of the design, development, testing and modification of prototypes of aircraft intended primarily for commercial or private use, but adaptable also for auxiliary military service, and am of the opinion that unless funds are provided for this purpose no appreciable gain will be accomplished in advancement of design and utility of private aircraft. None of the light plane manufacturers are in a position to spend the necessary money in this respect and consequently any changes now being made to existing aircraft are of a minor nature. The setting up of a yearly appropriation for the purpose of improving and developing the design of aircraft for private use would, I am sure, receive the full support of all aviation enthusiasts. Yours very truly, Mr. CROCKER SNOW, ROBERT MCCULLOCH. RYAN AERONAUTICAL CO., Chairman, Research and Development Committee, Massachusetts Aeronautics DEAR MR. SNOW: I appreciate your thoughtfulness in writing me as you did on September 23, concerning proposals of the research and development committee of the National Association of State Aviation Officials, to institute an aircraft development program financed by the Government but carried out by private industry. With the present tremendous costs of new aircraft development, it appears clear that some type of Federal aid must be provided. The two questions remaining are: what Government agency should undertake the work, and how can such a program be brought into being. As you know, we are members of the Personal Aircraft Council of the Aircraft Industries Association, and they coordinate common industry problems. We feel the matter of new aircraft development is an appropriate one for the Personal Aircraft Council and we believe it will be helpful if the National Association of State Aviation Officials made some contacts with the manager, Mr. Joseph T. Geuting (610 Shoreham Building, Washington, D. C.). As a matter of interest, it is our belief that the logical agency to set up such a program is the Army Field Forces because, more than any other aircraft user, their requirements are almost precisely parallel to those of the private owner or business corporation, where operation from small, short, unprepared fields, for example, is a major factor. You will be interested to know that Mr. Geuting has had a number of very interesting discussions with the top level of the Field Forces, and we believe he can give you some very interesting background. In closing, may I express our interest in your own ownership of a Navion plane and many ways in which you have found it valuable to you both personally and in your position as head of the Massachusetts Aeronautics Commission. I am sure that you can well realize the close parallel between your own operations and those of the Field Forces, and are proud of the fact that the Field Forces and National Guard are now operating several hundred Navions. Very truly yours, RYAN AERONAUTICAL CO., AIRCRAFT INDUSTRIES ASSOCIATION, OCTOBER 15, 1949. Washington, D. C. (Attention: Mr. Joseph T. Geuting, Jr.) GENTLEMEN: This letter is our answer to your letter of October 5 wherein you requested our considered comments upon a general proposal advanced by the research and development committee of the National Association of State Aviation Officials. |