172. Letter From the Assistant Secretary of State for Congressional Relations (Morton) to the Chairman of the House Committee on Interstate and Foreign Commerce (Harris)1
Dear Mr. Harris : In accordance with the request which was made to Mr. J. Paul Barringer of this Department during Mr. Barringer’s appearance before the Subcommittee on Transportation and Communications on January 18, 1956, in connection with hearings on civil air policy and omnibus amendments (H.R. 4648 and H.R. 4677) to the Civil Aeronautics Act of 1938, as amended, the Department is pleased to offer its views on the suggested list of items for Subcommittee consideration submitted to your Subcommittee by Congressman Boggs.
Most of the subjects on the list concern matters within the primary responsibilities of agencies or departments other than the Department of State. The Department’s comments are restricted to those subjects (Items 1 and 6 of the list) which involve significant foreign relations aspects.
Item 1 pertains to an evaluation of present policy and laws. Since the Department’s prepared statement of January 18, 1956 included views on United States civil air policy as related to international aviation, it is believed that that aspect of Item 1 has already been covered.
With respect to the adequacy of present laws, the Department believes that experience under the Civil Aeronautics Act of 1938, as amended, has demonstrated that the Act in general provides an [Page 467] adequate framework for the encouragement and development of an air transportation system to meet the needs of the United States.
With appropriate amendments, such as the extension of Civil Aeronautics Board power over fares, rates, rules and practices in foreign air transportation, it is believed that there will be continued adequacy of laws to meet foreseeable future needs.
Item 6 pertains to the growth, in the world market, of the United States air transport industry. Although not in a position to compare such growth with the rate of domestic growth as suggested in Item 6, the Department invites the attention of the Subcommittee to the fact that United States flag carriers occupy a prominent place in the world market via-à-vis the flag carriers of other countries. The authority for United States airlines to discharge or pick up revenue traffic in most areas of the world is obtained by the United States Government through air transport agreements which the United States negotiates with the governments of each of the foreign countries involved. In order to obtain such rights, the United States must be prepared to grant, as required, comparable rights in the United States for services by the designated airline of the country concerned. Such was the situation in the case of the negotiation of an air transport agreement with Germany, to which reference was made in Item 6. It is the considered opinion of the Civil Aeronautics Board, fully shared by the Department, that the air transport agreement between the United States and Germany represents an equitable exchange of economic benefits.
Since the enactment of the Civil Aeronautics Act of 1938, the United States has negotiated forty-six air transport agreements. Most of those which have been concluded since 1946 reflect the principles embraced by the United States and the United Kingdom in an agreement which was signed at Bermuda on February 11, 1946. The principles and exchanges of traffic rights contained in these agreements provided favorable conditions for expansion of international operations by United States flag carriers. A continuation of such conditions, so long as accompanied by the continuation of other prevailing conditions such as a progressive aircraft manufacturing industry, expanding levels of travel and trade, and airline efficiency stimulated by reasonable competition, will assure the continued growth of United States airlines in the world market.
In addition to views on the list of subjects submitted by Congressman Boggs, you requested the Department’s comments on the suggestion that there should be closer collaboration between government and industry (particularly with reference to the negotiation with Mexico) in the negotiation of bilateral air transport agreements. Liaison with the carriers on air transport agreement negotiations is maintained by the Civil Aeronautics Board. The [Page 468] Department attends meetings between the Board and the carriers when such matters are discussed. The carriers’ views thereafter are considered by the Department and the Board in establishing a United States position for the negotiations. As a general practice, in addition to making known its views regarding negotiation of a specific agreement, the industry requests that a representative be placed on the United States delegation. Unless overriding reasons exist, the representative designated by the industry is attached to the United States delegation as an observer. Since the interests of individual carriers often are conflicting and irreconcilable, an official of the Air Transport Association usually is designated as the industry observer. The Department believes that existing procedures and practices, if fully utilized, provide adequate opportunity for industry representation in the governmental negotiations.
As stated at the hearing on January 18, 1956, it would be inadvisable to comment at this time on air transport relations with Mexico. However, the Department would be pleased to discuss this subject at the executive session, which, it is understood, is to be held in the near future.
The opportunity to express the Department’s views on the above matters is appreciated.