Meanwhile, "friendly" tactical planes theoretically bombed and strafed railheads and other points from which the "aggressor" force must be resupplied. Maj. Gen. William H. Tunner, deputy commander to Lt. Gen. Luaris Norstad on the maneuver, said today that a new organization had been created within the command known as Swarmer Air Planning Agency. It will arrange priorities of equipment at depots.

He indicated that in the resupply operation the Air Force, handling more maneuverable cargoes, would step up the tonnage delivered daily. No acute shortages have developed, however, despite the early unloading difficulties and the fact that many planes traveled well below weight capacity because of the nature of the cargo.

The CHAIRMAN. As I understand it, you are going to submit to us some figures and statistics with respect to the accidents in national defense.

Mr. LARKIN. We will be glad to if you would like to have that. It is for these reasons and I am referring back to the ones I just mentioned before-that the Department of Defense, in its analysis of prototype aircraft plans, always conditioned its support of them on the clear understanding that Department of Defense funds cannot and would not be used.

Therefore, in the view of the Department of Defense, any prototype program was acceptable only if Department of Defense funds were not involved.

You will recall that former Secretary Symington informed this committee on January 30 that the Bureau of the Budget had decided "that legislation providing for the expenditure of Government funds for the development of prototype transport aircraft was not in accord with the program of the President." Mr. Symington further Isaid that, for this reason, the Department of Defense will not support any prototype bill which provides for the design and development at Government expense. I believe this position covers the following bills: S. 237, S. 426, S. 2301, S. 2984, and S. 3507.

The remaining bill before you for consideration is S. 3504. In principle, this bill is similar to a bill which is sponsored by the Department of Commerce and which was considered in the Air Coordinating Committee. I believe the representative of the Department of Commerce will explain to you the provisions of this bill and the manner in which it would be administered. I think it is sufficient for me to say that it concerns itself with civil aviation and places responsibility in the civil aviation agencies of the Government. It provides for a limited and temporary program of operation and service testing of commercial prototypes, present-day commercial planes. The Department of Defense is not given any obligations or responsibilities under the bill, and it is, therefore, outside the purview of our operations and jurisdiction.

The Department of Defense does not find anything in this bill which interferes with any military operations or plans, and, through our representation in the Air Coordinating Committee, we have agreed to endorse it.

That, Mr. Chairman, summarizes our views and position on the different bills before you.

I shall be glad to try to answer any questions.

The CHAIRMAN. Are there any questions by the committee? If not, we thank you very much, Mr. Larkin and General Kuter. We are glad to have you with us on this occasion.

We will now hear from Thomas W. S. Davis, Assistant Secretary of Commerce.

STATEMENT OF THOMAS W. S. DAVIS, ASSISTANT SECRETARY OF

COMMERCE

Mr. DAVIS. Mr. Chairman, I appreciate the privilege of appearing before your committee and presenting the views of the Department of Commerce on S. 3504 relative to Government assistance in the development and testing of new commercial aircraft.

The Department of Commerce very strongly supports S. 3504 with certain amendments as spelled out in the letter which the Secretary of Commerce sent to your committee under date of May 4.

The CHAIRMAN. I will insert that letter in the record at this point, unless you have some objection.

Mr. DAVIS. I wish you would, sir.

The CHAIRMAN. It will be placed in the record at this point. (The letter from the Secretary of Commerce, dated May 4, 1950, follows:)

Hon. EDWIN C. JOHNSON,

DEPARTMENT OF COMMERCE,
Washington, D. C., May 4, 1950.

Chairman, Committee on Interstate and Foreign Commerce,

United States Senate, Washington, D. C.

DEAR MR. CHAIRMAN: This letter is in further reply to your request dated April 29, 1950, for the views of the Department concerning S. 3504, a bill to promote the development of improved transport aircraft by rroviding for the operation, testing, and modification thereof.

For the past few years there has been a keen awareness in aviation circles that some form of Federal assistance to aircraft manufacturers is necessary if the Nation is to retain its leadership in aircraft design. This view was expressed by both the President's Air Policy Commission and the Congressional Aviation Policy Board. This need is strikingly illustrated by the fact that none of the aircraft manufacturers who have developed the newer commercial transport aircraft have recovered their investment. Recently, both the Air Coordinating Committee and the Civil Aeronautics Board, in their reports for the calendar year 1949, expressed concern over the lack of new prototype development. The Administrator of Civil Aeronautics, in his statement on February 27, 1950, before the Committe on Interstate and Foreign Commerce of the House of Representatives expressed similar views. We believe S. 3504, if amended in accordance with recommendations made later, would provide the stimulation necessary to bring about this development without directly involving the Federal Government in the actual development of such aircraft.

S. 3504, as amended, would authorize the Secretary of Commerce to bear certain costs incident to the development of improved commercial transport aircraft, particularly turbine-powered aircraft and aircraft suitable for feeder-line operation. The costs would be limited to those arising out of testing in connection with type certification, flight operations simulating scheduled air transportation, and undertaking minor modifications found to be necessary during such tests periods and operation.

Legislation providing for the development of prototype transport aircraft under Government sponsorship was introduced in the Eightieth Congress and has been introduced in the Eighty-first Congress. These bills provide, in substantial effect, for the payment by the United States Government of the costs incident to the development of new prototype aircraft. S. 3504 differs from previous proposals in that it would result in less financial participation by the Government in developing the aircraft and in the maximum degree of private initiative and competition among the aircraft manufacturers. The aircraft manufacturers would bear the cost of developing the prototype during the draftingboard stage and during the actual initial production as well as the cost of subsequent major factory modifications. The Federal Government, through the Department of Commerce, would bear the costs of putting the prototype through the various tests to establish data relative to the costs of operation. It would also bear the costs of minor modifications found to be necessary during the course of the tests. Finally, when the aircraft is ready for type certification, it would bear the costs necessary to determine whether the aircraft meets the airworthiness

standards established in the civil air regulations which would include thorough testing under actual operating conditions. The manufacturer will bear a substantial part of the cost burden as well as the problems of introducing the aircraft on the market and promoting its use.

On the basis of informal advice, we have reason to believe that the industry would, in fact, develop the types of aircraft covered by the legislation if the Federal Government would bear the expenses of the activities described in the bill and outlined above. In our judgment the undertaking of these activities by the Government under authority of the bill would be a substantial assistance to the manufacturer. We also believe that by participating in the testing of the aircraft during the various stages of development, the Civil Aeronautics Administration will be in a better position to make the determinations it must make in issuing type certificates, will know what changes in air-navigation aids and civil airports will be necessary to accommodate the new type aircraft, and will be in an excellent position to advise the Civil Aeronautics Board regarding necessary changes in air traffic rules and other civil air regulations.

The

There are two other provisions of S. 3504 which I believe warrant your consideration. First, the bill provides for the development and testing of feeder aircraft. We believe there is an urgent need for such a development. Providing adequate air transportation service between relatively small areas of population and points which are served by the major air carriers is one of the largest remaining areas of new development in the entire air transportation industry. Civil Aeronautics Board is currently fostering a program of feeder development through the use of single-engine aircraft under day-contact conditions. If this business develops larger and better equipped aircraft will be needed. The feeder type aircraft contemplated in our proposed program would be of the type suitable for all-weather operations and capable of carrying approximately 20 persons. Following the last war, several manufacturers initiated the design and development of feeder-type aircraft. However, these projects were dropped after considerable expenditure because of the expense of prosecuting the development work to conclusion. I feel that the initiation of a program leading to the development of feeder-type airplanes at this time will be of material benefit to the general public and to the aviation industry.

It is

Secondly, you will note that the proposed legislation, if enacted, would authorize appropriations thereunder to remain available for expenditure or obligation until such time as the appropriation is expended. The unpredictability of the completion of the testing and modification program, which this legislation would authorize, makes it extremely difficult to formulate an accurate estimate as to the time which will be required for final development of prototype aircraft. further complicated by the fact that no accurate estimate can be given at this time as to when manufacturers will be able to complete the initial construction of aircraft which may be tested by the Administrator. However, while appropriations for the purposes of this legislation should remain available until expended for the reasons stated, nevertheless, such action should not be considered as establishing a permanent program. This is in fact a temporary program designed for the purpose of affording immediate relief to aircraft manufacturers so that they may develop advanced transport-type aircraft. As previously explained, manufacturers are reluctant and in some cases financially unable to obligate themselves for all the costs incident to the development of modern aircraft. I believe that this program, although temporary, will afford United States manufacturers the opportunity to retain their leadership in this field which otherwise might become irrevocably lost.

In summary, we believe that enactment of this proposal would promote the development of commercial transport aircraft with a minimum expenditure by the Government and under conditions which would result in maximum freedom for the aircraft manufacturers.

This proposal has the approval of the membership of the Air Coordinating Committee. I have been advised by the Bureau of the Budget that its enactment, if amended in accordance with the recommendations made below, would be in accord with the program of the President.

We recommend the following amendments:

1. Insert the word "commercial" between the words "improved" and "transport" in both the title of the bill and its statement of policy.

2. In section 2 (a) of the bill change "Administrator of Civil Aeronautics" to "Secretary of Commerce" and make corresponding changes in other sections of the bill.

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.