Mr. MACLAY. That is Amendment C of March 23, 1955. Senator MONRONEY. I have already placed this amendment in the record so we have the amendment to which you are talking before us.

Mr. MACLAY. Our testimony will be confined to that particular amendment which we believe is the most important matter before this committee because that amendment has to do with the basic fundamental economic philosophy which shall control the future development of the entire air transport industry which, by the way, is probably the fastest growing industry in the United States today.

The legislative history of the Civil Aeronautics Act and the economic characteristics of the industry both, we believe, require that there be greater right of entry and more operators admitted into this business. With respect to the legislative intent, we submitted a memorandum prepared by Senator O'Mahoney, which went into the legislative history of the act and which came to the conclusion that there was to be much greater right of entry into this industry. That memorandum is already in the record in these hearings, and it states the position we take on right of entry so far as legislative intent is concerned, and we will have no testimony on that subject.

So that the testimony we give today will be confined to the economic characteristics of the industry and the requirement, we believe, that there be right of entry because of the economic and technological features of the air transport industry

First, it might just be well to mention the interests that are involved, the economic interests that are involved. There are the grandfather carriers who were admitted into air transportation under certificates in 1938. Their interest, of course, their own economic interest, is to maintain their own operations, expand as much as they can, and keep the market for themselves to the greatest extent possible, and that is a perfectly normal economic desire on the part of those who are in and operating.

Then there are those who are applicants before the Board, or who would be applicants, to get into this industry. The North American. group that I am representing here is among that group. Then there is the public, and, of course, the public is in itself rather inarticulate. It isn't here being represented, but the public is, of course, represented by the Civil Aeronautics Board and by the Congress.

I am sure that all the arguments that are presented on the part of the certificated carriers, the grandfather group, will be poised in terms of interest to the public. They will certainly show how their position is best in the interest of the public. We likewise will take the position that greater right of entry into this industry is not simply to our interest but to the interest of members of the public.

The Civil Aeronautics Board has the job of deciding who is to get in, and laying down pretty much the rules to get in. Their position has long been a rather difficult one. They have had a dual responsibility under the act. They have had the responsibility for the route pattern, that is giving extensions, and granting new routes. They have also had the responsibility for supporting the air transport industry with Government subsidy. That puts them in a difficult position and it has in the past many times.

They could well look at the matter something like this: Air transport-there is a certain amount of air transportation; that air transportation is now shared by the certificated airlines. If we let in a new

carrier, certain revenues will be taken away from those airlines. Those airlines we have to support with subsidy. If revenues are taken away from them it will be necessary to have more subsidy. Therefore, the conclusion is we will keep people out.

That is a very simple syllogistic sort of reasoning but in the Board's position they have these two responsibilities. They were responsible if subsidies went up. Consequently the natural reaction on the part of the Board was to keep people out and not run any risks or chances of increasing subsidy. We believe they have been too restrictive. Certainly the industry has changed to such extent that there is no validity whatever to that line of reasoning any more.

I will refer to a series of 20 charts in my testimony and I ask that copies of these charts which I have submitted to the committee be made a part of the record.

Senator MONRONEY. They will be made a part of the record and are as follows: