Evening star., 1944-03-20
McCarran Proposes
.Bi||ion-Do|Iar Airline
Merger 10 Lead World
Bill Offered in Senate
Would Prevent Any
Carrier Toking Control
By ]. A. O'LEARY.

Merger OF the Nations COM
mercial air carriers into one ALL
American Flag Line to enable
the United States to achieve su-
|premacy in that field of world
commerce after the war was
proposed in the Senate today by
Senator McCarran, Democrat, OF
Nevada.
Creation of a Federal charter for
an all-AInerican line, with poten-
tial working capital in excess Of
81 ,000, ,000, 900, is the high light OF a
new civil aeronautics code intro
duced by the Nevada Senator and
referred to committee for hearings.
The line would be prohibited from
engaging in interstate air trans
|portation, but, according to Senator
lMcCarran, would have "active part
|ners operating throughout the
United States who will funnel inter-
national business into designated
points Of entry and departure" No
one carrier entering the pooled op-
Grafton could own a controlling in
|terest.
Would Re-establish CAA.
Creation Of this corporation will
effect pooling Of all the resources,
both domestic and foreign, Of the
lair transport industry" the Sena-
tor said, ito forge new agency
which will make the commerce Of
the United States first in the air
all over the world. This new agency
will have back of it all avail
able facilities of the Government
to enable it to carry out the pur-
lpose for which it is being created" t"
The bill also re-establishes a Civil
Aeronautic Authority Of seven mem
bers as an independent agency, abol-
ishing the existing Civil Aeronautics
Board and office Of administrator
OF civil aeronautics in the Com
merce Department., which were Gre
ated as part of the Government re-
organization program several years
ago.
This implies no criticism of the
splendid work of the Secretary Of
Commerce and his most able assist
ant for air" said Senator McCarran.
They have done much for aviation.
But it must be apparent that the
endless confusion and pickering
which indicated to the President
the necessity Of reorganizing the
original Civil Aeronautics Authority
and Air Safety Board by executive
order is a strong argument for q
single repository of power to head up
all governmental activity in this
field"
Provides for Safety Board.
The bill also sets up an inde-
pendent Air Safety Board, with the
sole function of investigating and
preventing accidents.
Meanwhile, the airlines informed
the Civil Aeronautics Board that
recommendations of two of its ex-
aminers for development of short
haul air travel violate sound trans
portation principles" threa te n
chances for an. efficient air system
and would waste public funds. The
airlines spoke through the Air
Transport Association of America
One recommendation was that
present air carriers be forbidden to
add to their lines cities under Is 900
population, in order to leave field
for feeder services. In picturing
postwar prospects, the airlines
warned the CAB that means of sur
face transportation will be speeded
up and that there will be an inevi-
table growth in private flying.
No Ban on Subsidiaries.
The proposed All-American Flag
Line would be empowered to acquire
or control subsidiaries without re-
gard to the antitrust laws. Capital
stock OF the corporation would be
divided into two classes. Glass A
stock, to be issued in the amount
of 5000 900, 900, would be the voting
stock. Glass B stock would be issued
only in exchange for assets owned
by class A stockholders and used
in foreign air transportation.
The CAA would have power to
require the corporation to extend
its service upon certification by the
Secretary of State that such action
is necessary either for the main
tenance Of cooperative relation
ships between the United States and
any foreign country. or in the
furtherance of national policy, or
for the performance OF a treaty
obligation"