turbo-prop powered aircraft designed for commercial transport use. The only work of this kind that we know to be going on in the United States is the action of the Allison Division of the General Motors Corp and the Consolidated-Vultee Aircraft Corp. These two companies are engaged in preliminary work looking toward the conversion of the Convair 240 from conventional reciprocating engines to the use of jet engines.

The limited degree of development of ultramodern transport aircraft occurring in the United States stems primarily from the fact that the cost to the United States aircraft manufacturer of such development at this time is so high that there is little likelihood of recovery by the manufacturer of his original investment.

Before World War II, the aircraft manufacturing industry of the United States was able to undertake the cost of development of new types of aircraft with some assurance of recovering the necessary investment in research, design, construction and testing. The aircraft developed under such circumstances, such as the DC-3, DC-4, and Boeing 247, were considerably less complicated than are modern aircraft. Labor and material costs, and costs of engineering and development represented a much smaller proportion of the delivered cost, and were considerably lower. Thus the aircraft manufacturer was able to undertake the construction of new types of aircraft at his own expense. During World War II, development of certain types of aircraft primarily for military purposes assisted the manufacturer in bearing a portion of the costs of development of later models of transport aircraft. However, as of today, the high costs of labor and materials, the complexity of the modern transport category aircraft and the expense of necessary service-testing incident to the development of such aircraft into a safe, marketable condition, all operate to restrict the independent development of such aircraft by the manufacturing industry. These are the fundamental reasons why the design, development and construction of new types of transport aircraft has not been undertaken by the United States manufacturing industry. These are the problems which should be solved by the legislation being considered by this committee.

In my opinion, of the legislative proposals before the committee, the one which provides the most realistic solution of the problem I have just outlined is S. 3504. S. 3504 will provide an incentive for the development and construction of prototype aircraft by the United States manufacturing industry. It will substantially relieve the manufacturer of the costs of type certification, service testing, and minor modification. While the sum of 121⁄2 million dollars provided for this purpose is not large in comparison to the cost the manufacturer bears in developing new transport planes, I believe it will have far-reaching benefits.

The CHAIRMAN. Right there, Mr. Rentzel, is a glaring exposition of our program in this article. The British are spending $300,000,000, which I contend is our money, and yet in our own program, over a period of 5 years, we have only put up 121⁄2 million, 121⁄2 million against $300,000,000. It looks to me as though that is not very much money, relatively speaking.

Mr. RENTZEL. Mr. Chairman, I would agree that on the surface that would appear to be a small amount of money, and I would say that it may be that there will be some additional sums required as we

get into this program. I would like to point out, however, that the British went after it in quite a different way than we are talking about. They went into a contract, and engaged in contracts with a number of different manufacturers to provide duplicating types of designs. As a matter of fact, out of the 15 or some contracts that were awarded, from which two or three prototype aircraft were built, only one or two are considered to be successful, modern, futuristic at least, transport aircraft. I hope we will not make the same mistake.

The CHAIRMAN. Mistakes of exploration, do you mean?

Mr. RENTZEL. In the fashion that the British went at it. I think, Mr. Chairman, if I may disagree with the method, I believe that there are other ways of doing it. I believe that this proposal that we are putting forward here in S. 3504 will provide two things. It should be remembered that the British industry, in effect, is a nationalized industry, although it is considered to be private. It exists solely on contracts from the Government. I think that with the private initiative and private enterprise that we have in this country, and with the cooperative effort that is provided for in S. 3504, we can accomplish more with substantially less expenditure on the part of the Federal Government. We actually are asking and creating an incentive here for industry to spend a large sum of money.

The CHAIRMAN. I think we would all agree with that objective, and with that technique, but do you mean to say that we are going to get as much out of 121⁄2 million in this program of ours as the British got out of 300 million? They have really made progress, have they not?

Mr. RENTZEL. They have made progress in certain fields, yes, very definitely, Mr. Chairman. I do think, however, that there are quite a number of things which have not been solved by their expenditure, which will be solved by our proposal here in the bill that you have introduced. I do feel that there are many more things to be done than just the actual building of a prototype aircraft, and I do feel that with the initiative of private industry, we can accomplish more in this way than we could under the type of approach which the British have made. I am not being critical of the British. They have made progress.

The CHAIRMAN. Without regard to money, without regard to expenditure?

Mr. RENTZEL. Yes, sir.

The CHAIRMAN. We can make more progress with 121⁄2 million than we could with 300 million, proceeding the way they proceeded?

Mr. RENTZEL. That is correct. That is my opinion. I am not saying that additional money would not be helpful, Mr. Chairman, but I am saying that in my opinion this approach is a more logical, realistic approach and will provide us so many more points of information than just the actual construction of the prototype airplane; and, further, I believe that with the help of the industry we can achieve more results, using to the maximum extent the initiative and ability of the private industry, rather than getting the Government into the business of dictating the types of airplane which should be built.

I

The CHAIRMAN. Those observations certainly ought to be called to the attention of the State Department in charge of the British loan, and the ECA program, because they are startling in the extreme. don't see how anyone can dispute the observations that I have made, that this $300,000,000, after all, is United States money.

Mr. RENTZEL. Mr. Chairman, I do not wish to take issue with the way the British are doing their aircraft or other forms of business. I simply wish to point out that we have a somewhat different situation in the United States, that we may have benefited somewhat from their experience, and I believe this is a better program for the United States.

The CHAIRMAN. Thank you very much. Proceed with your

statement.

Mr. RENTZEL. In addition to the assistance in connection with type certification, service testing, and minor modification of prototype aircraft, S. 3504 would authorize the operation of presently available turbojet or turboprop powered aircraft under conditions simulating, to the greatest possible extent, scheduled airline operations. Experience could be thus obtained in the safety problems related to the operation of such aircraft. This would include information on such matters as the effect of gusts and turbulence, icing conditions, traffic control and ground handling probleins, and all phases of operational and service difficulties. The data thus obtained would be of material assistance to the manufacturers in the development of turboprop and turbojet aircraft, to the regulatory agencies in the preparation of regulations and the adaptation of air-navigation facilities for such aircraft, and to the air-transportation industry in evaluating the operational problems to be encountered by use of such aircraft.

The provision in S. 3504 for the service testing of prototype aircraft developed by the manufacturing industry would provide an opportunity for a prolonged period of in-service testing in which operations and maintenance experience could be obtained. Thus, the airlines will be able to buy with confidence a proven, safe aircraft whose operation, service, maintenance, and training requirements are known factors. To assure that we obtain as much information as possible, and assure the safest type of aircraft, it is contemplated that under this bill each new aircraft would receive in the neighborhood of 1,000 to 1,500 hours' service testing.

Under the program of roughly 5 years which would be authorized by S. 3504, the Federal Government would be able to stimulate the development of the three major types of commercial-transport aircraft most needed at this time.

First, the Federal Government could expedite the development of turbojet and turboprop powered commercial transport aircraft.

Secondly, we could afford an opportunity for the development of a commercial all-cargo-transport-category aircraft.

Lastly, the Federal Government could aid the development of a feeder airline aircraft essential to provide economic and efficient airtransport service to the smaller communities of this Nation.

Major development in the use of turboprop and turbojet propulsion for commercial-transport aircraft is required. I believe this development will in all probability follow this pattern: First, the conversion of existing commercial transports by the substitution of turbopropeller engines; second, design modification of existing jet-powered military aircraft for use as commercial-transport aircraft; and third, the design of completely new commercial-transport-category airplanes around turboprop or turbojet power plants. I have already reviewed the extent of our progress in this field to that already accomplished by the British and Canadians. The necessity for immediate and

intensive work in this field is obvious. S. 3504 will provide an inducement for private enterprise to undertake this task.

I cannot overemphasize to this committee the importance of developing a cargo commercial-transport aircraft. The field of air freight represents one of the major undeveloped areas of the airtransportation industry. In large part, it has lagged behind in development due to the fact that we do not have, as of today, an efficient, economic, commercial-cargo-transport aircraft. This is no doubt due to the fact that until the advent of World War II, the aircraft manufacturing industry of the United States had concentrated on the development of passenger-carrying transport aircraft. A large percentage of those factors which dictate the design and performance characteristics of passenger-carrying transport aircraft militate against the efficient and economic use of such aricraft for the transportation of cargo by air. Speed and its relation to wing load, fuselage design, and power-plant installations which are necessary for the efficient and economic operation of the passenger-carrying aircraft are, in many instances, inefficient and uneconomic when the same aircraft is used for transportation of cargo. The development of a commercial-transport aircraft designed for the lowest possible operating cost per ton-mile is a major requirement of the air-transportation industry of today.

Such a cargo aircraft is also at this time a major defense requirement. The existing deficit in the airlift needs of the military makes it essential that an efficient, proven cargo aircraft be available in time of national emergency to meet that need. The gap between the emergency airlift requirement, and the ability of the combined military and civil transport fleet to fill that gap, is too great. I do not believe that it is essential that all the aircraft necessary to close that gap need be in being. To do so would be to place too great a burden either on the air-transportation industry in the operation and support of unnecessary numbers of aircraft or on the Federal Government in the maintenance of a stand-by fleet.

However, we do need in peacetime an efficient, proven cargo aircraft in such numbers as the national economy will justify. The existence of these aircraft in service will obviously serve to meet some of the reserve airlift requirements of the military as well as to improve the Nation's commerce. We would thus have an aircraft ready for maximum production in time of need for which we have the required operational and maintenance experience for immediate use, and the tools and dies for swift quantity production. S. 3504, in my opinion, provides a means of obtaining such an aircraft.

As in the case of cargo aircraft, it is my opinion that a completely new design of a commercial-transport-category aircraft is required in order to produce the economy and efficiency necessary for the successful operation of feeder airline service. Today we have 17 feeder airlines serving 165 communities of the United States. In most of these instances, the service is being conducted by means of DC-3 aircraft. This aircraft was designed 15 years ago for a different type of passenger service. We cannot expect the air-transportation industry to furnish the air-transport and air-mail service that our smaller communities require unless they can secure at reasonable cost an aircraft which is efficient and economic for this type of operation. S. 3504 authorizes assistance in the development of this type of aircraft.

In my opinion, the desirability of S. 3504 as compared to the other legislation before this committee is demonstrated by the fact that it provides that which is needed at this time-a short-term program of 5 years designed to stimulate intensive development of safer, faster, and more economical aircraft which the aviation industry of the United States needs in order to retain its world leadership. It does this without undue cost to the Federal Government by providing Federal assistance only in those phases of service testing, type certification, and minor modifications necessary to convert a prototype into a marketable, certificated aircraft. Such action does not involve the Government in direct assistance in the development of the aircraft, with the consequent heavy burden of expense on the Federal Government, and minimizes to the greatest possible degree governmental supervision and control of the aviation industry.

As distinguished from the limited Government participation provided under S. 3504 and the maximum freedom thus afforded to the aviation industry, I wish to comment on certain features of S. 3507. S. 3507 provides for the creation of an Aircraft Development Corporation, with an authorized capitalization of $100,000,000. It authorizes the Corporation to initiate and support research and experiments toward the development of the most efficient types of transport aircraft. It authorizes the purchase by the Corporation of aircraft to the extent necessary to carry out the provisions of the act.

In addition, it authorizes the performance of functions which duplicate or conflict with responsibilities already vested in existing civil and military agencies.

Further, the close control provided over the construction of aircraft and over the operation of such aircraft while in the hands of private operators would require the maintenance of large administrative staffs to properly execute such supervision. This in turn would involve the Federal Government directly in the management and control of the aircraft-manufacturing and air-transportation industries.

opinion, the authorization of such functions in a corporation of this type is not only unnecessary, but the administrative expenses would be so costly they alone would amount to a substantial portion of the $100,000,000 authorized capitalization.

Under this bill, there would be far less room for private initiative, and the Government would be entering a field properly belonging to private industry. I do not believe that present circumstances warrant Federal participation in aircraft manufacture and air-carrier operation to the extent that S. 3507 would authorize.

S. 237 is similar to S. 3507 except that it confines the activitity of the proposed corporation to the development, purchase, lease, and operation of cargo aircraft only. It has the same major defect that does S. 3507 in that it calls for greater Federal contribution, participation, and supervision than is necessary at this time.

S. 426 and S. 2301 are similar bills which would provide for the development of prototype aircraft under the Secretary of the Air Force. As you know, the Bureau of the Budget has advised that proposals of this type are not in accord with the President's program.

S. 2984 authorizes the development of prototype aircraft designed for industrial or personal use. This is essentially a separate problem from the production of commercial transport aircraft and one which has not been completely explored.