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We don't know how much that reserve is supposed to be, because that testimony was made in secret; but 200 planes, certainly, would not fill it.

If the airlines should, on the basis of an operating-subsidy program of the kind we have been discussing, expand their fleets and divert sizable amounts of traffic now going by surface means, it would be impossible to withdraw those aircraft for use in military service in time of war without severely dislocating civilian economy and throwing a burden upon the other forms of transportation, for which they would not be prepared. Consequently, we strongly recommend that the committee give further consideration to the deficit program which we suggested above, and reject the two merchant air-fleet bills now under consideration.

Senator BREWSTER. In connection with S. 3504, the point was raised, yesterday, regarding testing foreign aircraft. Do you have any comment to make on that; do you wish to comment on it?

Mr. RAMSPECK. Our understanding of the bill, Mr. Chairman, is that it would permit the testing of foreign aircraft. If it does not, we think it should, because the foreign aircraft are in existence; they are flying, and I see no reason why we should not take advantage of that fact and find out what the operating problems are, without having to go to the expense of building a new prototype. We certainly could learn a lot from testing one of the existing jet planes, which could be done, I think, probably, by leasing it.

Senator BREWSTER. I notice the committee put in the record yesterday that it is estimated that the British have put $300,000,000 into developing their planes. I don't know what that is based on. They don't seem to itemize it; but, at any rate, they have spent a lot of money developing these various types of jet props and turbo jets.

Mr. RAMSPECK. That is certainly true.

Senator BREWSTER. Now, we are going to spend some money testing them, to establish whether or not they are very feasible to operate commercially. If we find they are, you have testified that you would buy them, if you do not have any comparable American types?

Mr. RAMSPECK. I think, certainly, the international American-flag operators would be forced to buy them.

Senator BREWSTER. Well, just where do we get off on this situation, if you are correct in your original premise that we ought to develop an airplane industry in this country?

Mr. RAMSPECK. I think we certainly should, and I think we should build jet airplanes and any improved-type airplane that the engineers could evolve. And they should be built in this country, because, if we got into a war, we would need those facilities to be expanded.

Senator BREWSTER. What would you estimate as the cost of testing one or more of these types? It is quite a proposition; is it not? You have got to fly them for a year or two, and modify the design to some extent?

Mr. RAMSPECK. Well, let me see if our engineer here can give me that answer. I cannot, Senator.

Mr. Chairman, in the Aviation Daily of Monday, May 1, 1950, there appears, beginning on page 1, a breakdown of the proposed expenditure of this money under a bill we are discussing. We have no independent study on what it would cost to do this testing. We

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presume that the Government has made a study, and that these figures represent their study of the subject.

Senator BREWSTER. The matter was discussed somewhat, yesterday. I was not here.

Mr. RAMSPECK. I understand there was some discussion about being restricted. All I know about it is, as Will Rogers would say, "what I read in the paper.” I do want to emphasize, however, Mr. Chairman, that we do not think this is the ideal bill, but we are afraid, if the committee does not report this bill, and it does not pass in this Congress, we will probably be another 2 years getting up to this point.

Senator BREWSTER. Well, the British have got six types right now; haven't they?

Mr. RAMSPECK. They have got six types that they are testing; yes, sir.

Senator BREWSTER. And so we would chip in $12,000,000 more to complete the tests and modify them and make them suitable for operations. It seems to me a rather curious coincidence that they provided for just about that number of purchases.

Mr. RAMSPECK. Well, that may be.

Senator BREWSTER. Just another way of getting American dollars abroad. That seems to be the major policy of the administration now.

Mr. RAMSPECK. Well, Mr. Chairman, I cannot answer that question, because, as you know, we were supporting wholeheartedly the idea of a prototype program which envisioned the development of a completely new plane.

Senator BREWSTER. Do you have any idea, or has anybody estimated, so far as you know, how long it would be before there might be an American plane ready for test?

Mr. RAMSPECK. No, sir; I have no information, except hearsay, on that. I would think that, if the money was provided, it would be at least 2 or 3 years before we could have a prototype ready for testing.

Senator BREWSTER. We could go ahead with the British planes at once?

Mr. RAMSPECK. Yes, sir.. · Senator BREWSTER. There is another question I want to ask you— and you ought to, I presume, from your associates, have the information. I was considerably disturbed, in the discussion of this jettransport problem with one of your highest and supposedly most competent military authorities in air, to see the ridicule which he heaped upon the development of the traffic-control problem-I think it is S. C. 31? Mr. RAMSPECK. Yes.

Senator BREWSTER. Now, you suggest that that should be expedited. His intimations were that it was ridiculous to think of being able to operate any of these craft on our airways for many years to come—the idea that it would be ready in 3 or 4 or 5 years was absurd. It disturbed me a good deal, in the light of other evidence which we had had before. Have you any comment to make on that?

Mr. RAMSPECK. Only this, Mr. Chairman-only yesterday, in a conversation with Mr. Rentzel, the Civil Aeronautics Administrator, I heard him say that he thought the program was making good headway, and it certainly has already improved the operation of the airlines.

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Senator BREWSTER. I think there is no doubt that it has done good. The question is whether we would be prepared-suppose, in 5 years from today, we had jet transports ready for domestic servicewhether we could possibly handle that traffic on our airways, or runways.

Mr. RAMSPECK. That is one of the things we hope to find out from this program that this bill provides for. We don't know what the operating problems for jets are. · Senator BREWSTER. Well, you know some of them. You know that they have got to land. Mr. RAMSPECK. Yes, sir. Senator BREWSTER. Land very promptly. Mr. RAMSPECK. We know there are problems, but there is some difference of opinion about the problems involved in that. No party has had any experience with it in a traffic situation like we have in the United States. I certainly do not agree with the gentleman you were talking with, who is in the military, that anyone can say at this time that we could not operate them in 3 or 4 or 5 years from now. We don't know. That is one of the things we want to find out.

Senator BREWSTER. Thank you, Mr. Ramspeck. We very much appreciate your statement. We will now hear Mr. C. R. Smith, president of American Airlines.

STATEMENT OF C. R. SMITH, PRESIDENT, AMERICAN AIRLINES,

INC.

Mr. Smith. Mr. Chairman, your committee will consider several bills which have the purpose of encouraging and aiding the development of new aircraft types. They are, I believe, S. 426, S. 2301, S. 2984, and S. 3504. I will not refer here to the specific sections of any of these bills but will, with your permission, discuss the general requirement for prototype legislation and the degree to which this requirement is met by S. 3504.

There is no need for me to dwell on the reasonable requirement, in the national interest, that we stimulate and accelerate the development of more efficient transport types. I have testified before the committee on that subject before. You have also had testimony from many others on the same subject; I take it that we agree on the need for such stimulus. If so, the principal part of our discussion today should center on the method of achieving that result.

A prototype program falls logically into three basic divisions:

1. A program which will permit the accumulation of experience in the operation of aircraft powered with true jet or turbine-propeller power plants. The purpose of this is to discover and endeavor to solve the problems of high-speed, high-altitude operation, to discover the true costs of operation and endeavor to provide greater relative economy, and to make provision for the operation of these high-speed aircraft in a traffic pattern which is familiar so far with aircraft of much lower over-all speed.

2. To design and manufacture prototypes in keeping with the requirements developed by the pioneer flight test program.

3. To test those prototypes for conformity with the requirements for scheduled transport operation; efficiency, economy, comfort, and safety.

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S. 3504 makes satisfactory provision for parts 1 and 3 of this threedivision program, in that it establishes the principle and potentially makes available funds for the testing programs advocated.

I am not sure that either the principles which you establish in these bills or the funds which you may provide will insure the fulfillment. of the second requirement of the three-point program; that we actually design, manufacture, and make available for further test the modern prototypes which we seek.

There is a belief that if you provide funds for the two testing programs, the aircraft manufacturers will produce prototypes with their own funds and at their own risk. I am not convinced that will result from this specific legislation. I have received no such assurance from any of the manufacturers with whom I am acquainted and I am not acquainted with any irrevocable assurances on that score which have been provided to this committee. I have all along taken the view that the urgency of the situation was such, and the degree of economic risk so high, that direct participation of the Government in the design and manufacturing program would be required and was justified. I believe that time and experience will reinforce that. viewpoint and that, ultimately, you will come to the same conclusion.

Senator BREWSTER. This committee came to that conclusion quite awhile ago.

Mr. Smith, I know, sir. I think you are completely right.

Notwithstanding a seeming deficiency in the program put forward by your legislation, I would advocate that you provide now for the test programs, in keeping with the general intent and detail of the legislation before you. We are not yet equipped to design and manufacture physical prototypes, and we will not be so equipped until after the completion of the pioneer test program. I am sure that we will not be ready for prototype construction during this year and it may be that we will not be ready during the coming year. In any event, we will later have time sufficient to call your attention to the second phase of the three-point program, the actual construction of prototypes, and your consideration of that part of the program need not delay passage of legislation dealing with the two phases of the test program, for both of them are essential in the over-all plan.

Senator BREWSTER. You contemplate, then, testing foreign types, I suppose? Mr. Smith. That is quite possible. I don't think it is sure.

Senator BREWSTER. You say, we are not ready to build our own and can't produce them, anyway, and you comment on our learning from these test types, which presumably would be with foreign types.

Mr. Smith. Not necessarily. You can learn a good deal with the military-type aircraft. We can fly military type and get a good deal of information.

Senator BREWSTER. It might encourage our manufacturers to move a little, if we did start testing a few foreign planes.

Mr. Smith. I have no objection to it, if it could be done advantageously and economically. We might learn something from it.

Senator BREWSTER. I think that it is unfortunate that they do not feel in a position to do it, themselves, but instead call for Government aid. That is a serious situation. Mr. Smith. Who is that?

Senator BREWSTER. The manufacturers, who have thus far been one of the important influences bucking this action.

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Mr. Smith. I don't think they have exhibited any great degree of statesmanship on the problem.

Senator BREWSTER. It might be that, if we started in with our British friends, they would decide that perhaps they had better begin to catch up, either by welcoming a little Government assistance or by going ahead themselves. I am thinking simply in terms of the practical problem we face, but I don't ask you to compare it to sources of supply, by any comments, yourself. I don't have to worry about that.

Mr. SMITH. Well, you and ourselves were in favor of the same basic form of aid, direct aid for the construction of airplanes that, in my opinion, has been required all along and will continue to be required, and if we build any prototypes, they will be built that way.

Senator BREWSTER. I don t think there is any doubt about that.

Mr. SMITH. I have taken the position before that this whole program of prototype development should be the responsibility of the air forces. That was in my previous testimony. I have been provided with no convincing reasons why that position should be changed. On the other hand, it is more important to get the program going than it is to differ about which agency of the Government shall have responsibility for it, and I am sure that if you conclude that it will be better directed by a civilian agency you will have the full cooperation of all parties, and the program which you approve will be effectively accomplished.

I am hopeful that the Congress will pass S. 3504 at this session. We are well behind, relatively, on the development of modern transporttype aircraft; no time should be lost in regaining a suitable position and this legislation will be salutary and constructive in achieving that purpose.

I have a separate statement, Senator, on S. 3507.

Senator BREWSTER. Before going to that, on this bill, S. 3504, you recognize that it does provide for the civilian testing of the Civil Aeronautics Administration. You have no objection to that?

Mr. SMITH. No objection.

Senator BREWSTER. Your comment on the military was in the development of prototypes, getting the benefit of their experience in military use, I presume?

Mr. SMITH. That is correct. It can be done either place. I would prefer the air force. Other people would prefer the civilian agency.

I would like to say a word that does not pertain to either one of these bills which Mr. Ramspeck touched on, and that is the division of air traffic between the airlines and the railroads from the Government. I had the opportunity to discuss that with some of our military people, several times, and I am sure that our position is that we are not asking for a larger piece of the Government business. We are asking for the opportunity to compete for it on an equal basis. Our position is that the Government should have the utmost freedom of choice in deciding what method of transportation they will utilize, based on its value to them, cost to them, and all the other factors which are taken into consideration.

Senator BREWSTER. What is the handicap that you have now?

Mr. SMITH. The contract between the National Defense Establishment and the railroads carries a definitely preferential clause. You can only use other forms of transportation after you have proven that the railroads cannot do the work.

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