Evening star., 1950-11-19

SIcSS Ill CllS COIIllIlS IIlOIlUIlS.
lr, President Truman, echoing an
age rate on airmail should be.
Until somebody determines what
We ought to pay the air carrier
for the service he performs for us
and what is the right rate of pay
we should pay him, then and only
then can you separate the subsidy
from the total payment" is the
Postmaster Generals very positive
thinking on this subject. He, like
the CAB and others, has to guess
at the airmail subsidy, but his
guess is around $40 million. (Some
others go as high as $50 millicu.D
Pending in the House and ready
to be taken up without further
procedure when Congress returns
on November 81. is the bill by
Representative John w. Heselton,
Republican. of Massachusetts,,
which the Interstate and Foreign
Commerce Committee favorably
supported by 15-to-2 vote short
ly before the recess and after
studying the subsidy separation
problem periodically since mid
February. It not only requires the
separation of subsidy from air.
mail pay but directs the CAB to
determine the fair and reasonable
rates for the airlines for carrying
the mail on a cost basis. 1t also
empowers the CAB on it's own in
itiative or upon the petition of a
certified airline to make subsidy
payments in amounts determined
by the board to be essential. The
rates of mail payments to the air.
lines are to be published by the
CAB and paid by the Postmaster
General from appropriations for
the transportation of airmail.
Payments of subsidies granted to
airlines by the board are to be
made from funds appropriated to
the board for that purpose and
published.
Airlines Aroused
The Heselton bill further re-
quires the airlines after July l.,
1851, to allocate their receipts and
expenditures among their four
principal sources of revenue, viz:
Passengers and their baggage, air
freight, air express and airmail.
This provision is aimed at getting
at the cost of the diversified pay
load which most airliners carry.
The CAB has not required these
statistics owing to alleged deflcien-
cies of cost ALLEGATION. The pros
and cons of determining actual
costs, fully distributed costs and
Joint costs for scheduled airliner
engaged in flying passengers and
baggage; freight, express and mail,
are almost interminable and will
furnish much ammunition for con-
greSsional debate if the HeseltonI
bill is going to be as vigorously
pushed in the lame-duck session
as it was in the closing hours be-
fore recess.
In committee, there was no real
opposition to the bill by the air.
line interests who now view it
with very grave concern. But this
was due more to the lack of uni
f1cation among the aviation peo-
pie, a chronic ailment that in
variably breaks out when legisla-
ton vital to their present and fu-
ture is being pressed for enact
ment. 1t is no secret now that
both the big and little airlines
(but for different reasons) see
their progress hampered if not
hamstrung by the bill.
On the Senate side of the Capt.
tol, there is legislation in the
making on the airmail subsidy
problem Of vastly different
nature. The Senate Interstate
and Foreign Commerce Commit
tee, which has been inquiring into
airline industry problems since
April of last year, has come up
with the thought that considera-
tion should first be given to find
ing a satisfactory method for es-
tablishing and justifying what
ever subsidies the airlines properly
require. The committees avia-
tion staff, headed by Edward C.
Sweeney, professor of law at
Northwestern University and edi-
tor of it's Journal of Air Law and
Commerce, has concluded from
studies to date that no matter how
the mail rate is fixed, the service
now being rendered to more than
600 cities by the SO trunk and
feeder airlines cannot continue
without substantial Federal sub
sides. This was perhaps unwit-
tingly" confirmed by airline au-
thorities and Government aviation
experts whose testimony is in
substantial agreement that:
Airlines carrying only long haul
business and serving high-density
cities could operate prof1tably
without Federal subsidy. But
Government route franchises re-
quiring an airline to serve large
number of small cities-milk-
wagon runs-result in much red
ink. Mr.. Sweeney and his staff
plunged deeper into existing air.
line statistics by communities and
verified that this was the basic
reason most subsidy is required:
That the need for a subsidy in
creases almost directly in pro-
portion to the number of poor
traffic cities the airline must serve
under its certificate of public con-
venience and necessity.
Senator Johnson's Views
While the Government has to
pay out this subsidy to the air.
line serving the improbable
routes or Improbable commune