3. Amend section 2 (a) of the bill to read as follows:

"Preparing broad operating and general utility characteristics and specifications for types of commercial transport aircraft which he finds are required in the public interest, and which represent substantial advances over existing equipment."

4. Amend the last sentence of section 6 of the bill to read as follows: "When so provided in the appropriation Act concerned, such appropriation may remain available until expended.'

If we can be of further assistance in this matter, please call on us.

Sincerely yours,

CHARLES SAWYER, Secretary of Commerce.

Mr. DAVIS. With these amendments, which have been suggested by the Bureau of the Budget, this measure has been determined to be in accord with the program of the President.

The Department of Commerce has further been advised by the Bureau of the Budget that the bills now pending before the Congress, which would authorize Federal financing of the actual design and development of prototype aircraft, would not be in accord with the program of the President.

Members of this committee will remember that with the cut-backs in military orders following the close of the war and the inability of the air-transport industry, along with the manufacturing industry, to finance the development costs of more advanced types of transport aircraft, the most serious consideration was given by Members of the Congress, the administration, and industry itself to the problem of maintaining a strong manufacturing and transport industry. Subsequently, the President's Air Policy Commission and the Congressional Aviation Policy Board listened to witness after witness testifying as to the problems then facing aviation in the United States. Both the President's Air Policy Commission and the Congressional Aviation Policy Board, recognizing that some concrete program should be put into action to assure the development of advanced types of transport aircraft, made strong recommendations seeking to accomplish this purpose.

That the proposals and legislation advanced as a result of this were not successful was due to many reasons, with which we are all familiar. In the meantime the aircraft-manufacturing and the air-transport industries have made a marked recovery from the low point reached shortly after the war. The fact remains, however, that today, as in 1947, when the President's Air Policy Commission and the Congressional Aviation Policy Board made their recommendations, we do not yet have even the prototype of either a turbine-powered passenger or cargo airplane, or a plane suitable for feeder-type operation. Since 1948 the entire question of Government assistance for prototype development has been reviewed with great thoroughness by all concerned. While economic conditions within the aviation industry generally have improved, it is quite apparent today that without some assistance from the Federal Government prototype development of the types of aircraft in question will be further delayed. In the meantime, two other countries have turbo-jet transport aircraft flying today.

Recognizing the continuing importance of this matter, the Air Coordinating Committee created an ad hoc committee composed of highly qualified representatives of certain of the aviation agencies of the Government to review this entire matter and report to the committee its conclusions with regard to the type of prototype program in

which the Government might best be engaged. Appointed to this ad hoc committee were: Mr. D. W. Rentzel, Administrator of Civil Aeronautics; Mr. Harold Jones, member of the Civil Aeronautics Board; Maj. Gen. Lawrence S. Kuter, commanding general of the Military Air Transport Service; and Mr. John Crowley, associate director of research of the National Advisory Committee for Aeronautics. This group reviewed very carefully, and thoughtfully, the entire question both within the frame work of the group and in discussions with many others, including representatives from the industries primarily involved. It was the conclusion of this ad hoc committee that a prototype program which would provide Government assistance in the testing phases of the development of new aircraft would best meet the requirements of the present-day conditions.

The Air Coordinating Committee gave unanimous approval to this suggested method of prototype development and at the same time requested the Department of Commerce to sponsor it in the form of a legislative proposal. As mentioned before, this basic program is in accord with the program of the President and is reflected in S. 3504 now under consideration.

The Department of Commerce believes that S. 3504 represents a thoroughly sound approach to the problem of prototype development. The program as visualized would leave to the manufacturers themselves the building of a specified airplane. I am sure you will agree that it would be a mistake to compromise in any way the personal initiative and ingenuity which has always characterized the aircraftmanufacturing industry of this country. It is an industry which from its very inception established itself in a position of world leadership for its ability to design and to mass produce aircraft of recognized superiority for either the purposes of war or peace.

We have today this same initiative, ingenuity, and ability. What is lacking is the catalytic agent of a few dollars, comparatively speaking, to start the tools working. We believe the answer to this problem is to be found in S. 3504.

In addition to the direct and obvious benefits which would accrue to civil aviation through the program embodied in S. 3504, there are most compelling reasons from the standpoint of national defense for engaging in such a program. The last war provided a conclusive demonstration of the contribution which a strong air-transport industry can make to our national defense.

It is generally conceded that should we find ourselves in another national emergency our presently combined military and civil airlift capacity would be inadequate to meet the emergency requirements of our industrial economy and, at the same time, provide direct support to the military effort. In the Civil Aeronautics Act of 1938 the Congress established a national policy of fostering and promoting an air transportation system which, among other things, would be properly adapted to the future needs of the national defense. It was a policy which provided its own rich reward in the contribution which our highly trained commercial air transportation personnel and our proved commercial air transports made to the military effort in the last war. I can think of no other practical method at the present time which would better serve to carry out this mandate of the Civil Aeronautics Act than to stimulate the production of new, modern transport aircraft under the terms of S. 3504.

It is, of course, not anticipated that the Government would become involved in a permanent program of assistance. On the contrary, the legislation which you are considering very properly specifies that the program would be terminated in 5 years after the date of its enactment. It is safe to say that neither the Government nor the industry would willingly embark upon a program which promised to be other than temporary, for it would inevitably lead to the very controls over private industry which the prototype proposal contained in S. 3504 so successfully avoids. With the industry engaged in an aircraft development program there should not be any doubt that the improvements in aircraft design which are so necessary to the fuller utilization of our air transport services would be realized within the prescribed period of the act.

May I state briefly the benefits which we fully expect to be realized from the prototype program as set forth in this legislation. This program visualizes the design and development of three principal aircraft types. First, the program would stimulate the production of a new modern passenger transport presumably powered with turbo-jet engines. This airplane would be capable of cruising at speeds in excess of 500 miles an hour by flying at altitudes considerably above the ceilings of today's aircraft. Its range would be such that it could provide high-speed, economical service for either international or long-distance domestic operations. While the operating cost and passenger capacity of this new plane would roughly correspond to those of today's passenger transports, its increased speed would greatly improve its utility, which means that the airplane's earning capacity would be substantially increased.

The second category of aircraft which the program embraced by S. 3504 would produce would be a high-capacity cargo aircraft capable of operating over long distances with great economy.

I believe that even with the tremendous gains which have been made in the carrying of air freight since the end of the war, this remains perhaps the greatest promise for long-range expansion for the air-transportation industry. But a fuller realization of air-freight movements which are potentially within the means of the air-transport industry to develop await an airplane which will operate at ton-mile costs well below those of today's aircraft and especially designed for rapid handling of air freight on the ground.

Finally, S. 3504 would provide assistance in the development of aircraft designed especially for the feeder or local service operator. An airplane designed for this purpose is sorely needed. At the present time local service operators, many of whom are operating on a trial or experimental basis, are flying equipment which is ill-adapted to their needs. A medium capacity airplane, capable of operating with economy over short distances with frequent stops and into small airports, must be provided before the feeder lines can demonstrate their real business potential and take their place successfully in our air transportation picture. I believe there is clearly a market for aircraft which would overcome the deficiencies of equipment now in use over local service routes. And I further believe that with the assistance which would be furnished through this legislation a genuine feederline airplane would be produced.

There are other benefits which we would begin to realize almost immediately upon enactment of S. 3504 which do not necessarily

involve the construction and testing of aircraft in any of the three categories just described. For example, the legislation would authorize the testing of available aircraft with turbine jet or turbine prop power units under conditions simulating scheduled operations. We are virtually without experience in the handling of these new aircraft on our airways system.

We can only guess how they will fit into our air traffic control procedures or what modifications we may have to make in our airsafety requirements for the operation and maintenance of turbinepowered transport aircraft. All of these problems can be dealt with under the authority which this legislation would grant. Simulating scheduled operations with turbine-powered aircraft would provide invaluable information to the Government, to the airlines, and to the aircraft manufacturers.

In the interest of time, I have covered only briefly some of the more important economic aspects inherent in a program of this kind. We believe the problem of designing and building new transport aircraft is basic both to the future economic well-being of our airline industry and to the capacity of that industry to provide strength to the Nation in peace or in war. We believe the legislation embodied in S. 3504 is sound in its approach to the solution of a perplexing problem, both for its practical effect and as a matter of public policy. We believe it will provide the necessary stimulus to the production of modern, more efficient, more economical passenger, cargo, and feeder transport aircraft without compromising the private initiative of the aircraft industry.

The Department of Commerce is wholeheartedly in favor of the program provided for in S. 3504 and strongly urges its enactment. during this session of the Eighty-first Congress.

Thank you gentlemen.

The CHAIRMAN. Mr. Davis, how accurate is the report that under this bill, S. 3504, you may test foreign jet aircraft as well as United States made equipment?

Mr. DAVIS. I heard, Senator, that that idea had been advanced. I cannot answer the question. I would assume that this would be limited to American aircraft.

The CHAIRMAN. I don't see anything in the bill which would answer that question.

Mr. DAVIS. I don't either.

The CHAIRMAN. We have been given some information, restricted, with regard to the budgetary requirements of operating tests on modification of jet transport cargo-type aircraft. Mr. Davis, of our professional staff, tells me that all of that information, although given to us restricted, has been published by American Aviation Daily. If that is so, it would be fine if we could have that information go into the record at this point.

Mr. DAVIS. Senator, I would like to say this

The CHAIRMAN (interposing). I am trying to find out whether it is restricted. It was given to us restricted.

Mr. DAVIS. It cannot be restricted to one and not to the other. The CHAIRMAN. I wanted to put it in this record if it is not restricted.

Mr. DAVIS. Well, I might say this about this study: This is the best thinking of the ad hoc committee as to what would be accomplished

specifically under this bill. Along with the legislative proposal that went to Budget, this study

Senator MCMAHON (interposing). Do you know that that has been published as restricted?

Mr. DAVIS. Not to my knowledge. I didn't know it was published in the American Aviation Daily.

Senator MCMAHON. Is it still restricted?

Mr. DAVIS. I assumed it was when I came up here.

Senator MCMAHON. You assumed it was?

Mr. DAVIS. Yes. I had no information that it was not.

The CHAIRMAN. I see Mr. Gerard B. Dobben of American Aviation Daily is here. Can you tell us, Mr. Dobben, whether that information has been published by the American Aviation Daily, the budget cost?

Mr. DOBBEN. It has been.

The CHAIRMAN. It has been published?

Mr. DOBBEN. Yes, sir.

Mr. DAVIS. It might well be that the restriction has been lifted on it, and word just didn't get out. That is all. But I have had this same document before me as a restricted document.

The CHAIRMAN. I wish you would explore that, and if it is information which the public is entitled to, we would like to put it in the record, otherwise we will get hold of the American Aviation Daily and put that in the record.

Mr. DAVIS. That is fair enough.

Senator MCMAHON. I would like to ask you, do you consider it as released when it is published?

Mr. DOBBEN. My understanding of it was that it was restricted during the period it was under consideration, and that when the bill came up here, the bill was marked "Restricted," but when it was introduced in Congress, we naturally assumed that the restriction had been removed.

Senator MCMAHON. Of course. Is it the bill you are talking about? The CHAIRMAN. No, the budget. It is the budget in connection with the bill.

Mr. DAVIS. The estimates of what will be accomplished under the bill, and how the money will be spent.

The CHAIRMAN. It is very pertinent information, Senator.

Senator McMAHON. I would like to know whether the restricted classification was removed before it was published. Will you please find that out and let us know?

Mr. DAVIS. Yes, I will do so. I can personally see no objection to this going into the record.

Senator MCMAHON. Perhaps it should not have been even marked "Restricted" in the very first place.

Mr. DOBBEN: That was our view point.

Mr. DAVIS. That might well be.

Senator MCMAHON. There is a lot of stuff marked by the Government even higher than "restricted" that should not have been marked at all. Just because some clerk stamps "Top Secret" on something doesn't make it that. On the other hand, it would be good to find out just how this came about, and I would like to know.

The CHAIRMAN. It makes it difficult for the Senate to intelligently proceed in an analysis and exploration of the bill if the information is