Senator MONRONEY. If you would care to put them in.

Mr. SCHNEIDER. All right.

(The list of applicants follows:)

LIST OF APPLICANTS, TRANSPACIFIC ROUTE INVESTIGATION (CAB DOCKET

16242)

(NOTE. All applicants seek passenger, cargo, and mail authority, except where otherwise specially indicated below.)

1. Airlift International, Inc. (cargo and mail).

2. Alaska Airlines, Inc.

3. American Airlines, Inc.

4. Braniff Airways, Incorporated.

5. Continental Air Lines, Inc.

6. Delta Air Lines, Inc.

7. Eastern Air Lines, Inc.

8. The Flying Tiger Line, Inc. (cargo and mail).
9. Hawaiian Airlines, Inc.

10. National Airlines, Inc.

11. Northeast Airlines, Inc.

12. Northern Consolidated Airlines, Inc.

13. Northwest Airlines, Inc.

14. Pacific Airlines, Inc.

15. Pacific Northern Airlines, Inc.

16. Pan American World Airways, Inc.

17. Seaboard World Airlines, Inc. (cargo and mail).

18. The Slick Corporation (cargo and mail).

19. Trans International Airlines, Inc.

20. Trans World Airlines, Inc.

21. United Air Lines, Inc.

22. Western Air Lines, Inc.

23. Wien Alaska Airlines, Inc.

24. World Airways, Inc.

Mr. LESLIE. As a result of the box the United States is in, not only do we have this balance-of-payments exposure, but from the viewpoint of certainly the carrier and certainly my company, also of the public who wish to travel and ship freely on American-flag carriers, we have a sort of a Chinese Wall. I would say we have a couple of balloons anchored offshore, off the Atlantic Coast and off the Pacific Coast, which today say, "For foreigners only." Obviously none of us want that. Nobody in this room would want that. The object of this exercise on everybody's part is to remedy that. And I can't overemphasize the importance that we in our company attach to it.

I think I would like to pass from there to what we do about it because a number of important questions were raised about how this S. 3197 would work.

I think the first thing to make clear, as we have in our written statement, is that in our view the criterion of competitive impact would clearly admit application for such exemptions by carriers directly exposed to that competitive impact, and we say in our statement that in our views this would apply to the transcontinental carriers-American, TWA, and United.

As to the procedure, the fairness, the equity that I think you were asking some questions about, Mr. Chairman, it seems to us it should go as follows: First, there would be a requirement by the CAB for a full and complete application, including all of the available supporting facts and statistics.

Secondly, that such an application for this new kind of exempti having been received, adequate notice will be given to all intereste parties.

Next, that there would be a full opportunity to file answers.

Senator MONRONEY. This would all be on briefs. It would not be oral presentations or reports?

Mr. LESLIE. I will come to the next point, sir, which in our opinion would require oral argument before the Board if requested by one of the properly interested parties.

In fact, that provides every step except the full evidentiary hearing It is the full evidentiary hearing which has to include, as we said this morning, the aspect of the doctrine that anybody interested must be entitled to a comparative hearing even purely on an application basis. That is the only difference, it seems to us. However, the practical difference is that many many years are eliminated and the procedure is reduced to the months that are required to match the issuance of a foreign air carrier permit to a foreign flag carrier.

Senator MONRONEY. What essential parts of a hearing, evidentiary hearing, would be eliminated or stricken from the process that you are now describing? Would it be the need for the service, the capability of the airline to extend it, the right of the airline to have it because of prior service in those areas, or what? What will it turn on if we have 24 applicants? What will be the evidence on which the CAB would grant an exemption to one of these 24?

Mr. LESLIE. If I may give you a layman's answer

Senator MONRONEY. You are not a layman, but you might give the layman something to think about.

Mr. LESLIE. I am not a lawyer, sir. What obviously has to be proved in the full hearing is the public convenience and necessity, first of all. Secondly, the fitness, the willingness and ability of the applicant to conduct the service for which he is applying.

And assuming that the public convenience and necessity have been proved, and assuming further that more than one applicant has proved that he is fit, willing and able, and it is obviously then a problem of the CAB to advise the President in this case which of the applicants, or plural, which of the several applicants, in various combinations best strengthen and promote the air transport system of the United States.

I would like to ask Mr. Schneider if he would change that summary or supplement it.

Mr. SCHNEIDER. I would like to supplement it. Basically what is eliminated are the protracted hearings before the examiner, the array of sworn witnesses and their testimony, and long cross-examination on the exhibits, and the preparation of the examiner's report, the filing of exceptions to an examiner's report, the filing of briefs in support of exceptions and so forth.

In the case of an exemption, as present exemptions under existing 416, would be in effect a written submission to the Board of your complete case. I would assume that the Board would put out rules and regulations stating exactly what you have to put in your application for an exemption under this particular authority, the type of economic data you would have to include, about your company.

The same thing you might produce at one of these hearings.

What would be eliminated is the cross-examination on all of that. ving in mind that the Board is giving an interim authority pending the outcome of a protracted hearing at the end of which they uld do it quite differently, but having protected the country in e meantime. I think that is the basic thing. Four, five, or six ars of hearings, and the many, many months you are in hearing, → many, many months in preparation of your briefs, of the record, year or more to prepare an examiner's report, all that is eliminated sed on this interim authority.

Senator MONRONEY. A protesting airline has been serving in the cific, foreign carriers from the west coast, for example, would they ve a right to be heard as to the loss of this volume of business, at part due to foreign competition, that part due to American erflights?

Mr. SCHNEIDER. Could I answer that?

Mr. LESLIE. Please do.

Mr. SCHNEIDER. In the CAB 401 cases I know really of no case here a foreign air carrier has sought to intervene in opposition or en permitted to. It is conceivable that in this type of situation, der this exemption, CAB might permit a foreign air carrier to file 1 answer, as might any other protesting party. I couldn't predict hat the CAB rules and regulations would be to implement this legistion.

Senator MONRONEY. I was thinking more in terms of American omestic air carriers who have served that point of arrival from the acific or departure from Los Angeles or San Francisco who may be rotesting against the loss of a certain volume of their business and ther carrying them on to New York from Los Angeles or carrying em to Los Angeles from New York to Chicago.

Mr. SCHNEIDER. There would be no doubt in my mind that the oard would and should grant them full opportunity to present all he points they could make in opposition, with all their facts and gures.

Senator MONRONEY. The question has been raised by some, I uppose, domestic carriers that are seeking route extensions beyond alifornia.

Mr. SCHNEIDER. Indeed they might be applicants for relief under his legislation and opposing someone else's application for relief. 'here might be cross applications filed.

SENATOR MONRONEY. You I believe envisioned multiple as well as ingle certificates of a temporary nature?

Mr. SCHNEIDER. If the CAB and the President should find that meets the statutory standards.

Senator MONRONEY. In other words, the bill is not so drafted that t would be limited to one exemption?

Mr. SCHNEIDER. We do not so consider it.

Mr. LESLIE. Mr. Chairman, just a few weeks ago I read a statement attributed to an experienced diplomat of the American Foreign Service, quoted in Newsweek magazine, to the effect that diplomacy vas like fencing. This is really the point that I would like to leave with emphasis today.

He went on to say that it may at one time be the quick stroke of the rapier, another time the clash of the saber. But the one thing certain was that you wouldn't stay long fencing if you had your shoes nailed to the floor.

I feel that we do have our shoes nailed to the floor by what has become an obsolete procedure.

When you are fencing you have a certain fence within a cer strip. When you box you box within a certain ring. I don't for moment suggest that this added flexibility should be outside close and carefully defined limits. For that reason, if I may comment one suggestion this morning, I would have considerable difficulty supp ing the very broad criterion suggested in Mr. Boyd's testimony page 5, simply because it would be too broad and would seriously our view undermine the regulatory framework to which we think industry should be kept.

Senator MONRONEY. Would you read it?

Mr. LESLIE. It reads, at the bottom of page 5 of Secretary Boy testimony:

On the basis of a finding that operation under such authority would be in national interest, and that absent such grant the development and promotion U.S.-flag international air transportation would be adversely affected.

That is the end of the quoted excerpt.

In our view that removes tangible criteria to the extent of bein something we would not be able to support frankly.

Something of the same kind, if I may continue in that vein. w touched upon in Chairman Murphy's statement, his item No.In that one we have to find ourselves a little bit in trouble because ambiguity. We are not sure what it means. We could welcome :: opportunity to consult further as to the exact meaning and intenti of that language.

As to all of the other proposals put forward by Chairman Murphy we would be quite in agreement.

Mr. Chairman, if I may say

Senator MONRONEY. This is No. 2, on page 7?

Mr. LESLIE. No. 2, page 7; yes, sir.

Senator MONRONEY. We raised the question I think when he w testifying. To quote:

Provided that the exemption authority may be exercised when the Un States and its air carriers collectively are placed at a competitive disadvantag

Mr. LESLIE. That is the statement to which I was referring, ye sir, which we find ambiguous.

Senator MONRONEY. As I read it it means that more than one came who would be disadvantaged.

Mr. LESLIE. I think we have several confusions about it. The W in which it couples the United States and its air carriers collective I at least don't quite know what that phrase means. I am remind that in the oral explanation of it, the chairman may have said United States or its air carriers, which compounds my difficultylittle bit. I think Mr. Schneider may wish to comment more on th

Mr. SCHNEIDER. Yes. I think in response to a question this mon ing Chairman Murphy said that this would cover a situation where a air carrier or air carriers might not be placed at a competitive disacvantage but the United States itself might be, and this was to co it. That led me to believe that perhaps he meant to use the phras the United States or its carriers. What we would like to do is consult with the Chairman and get a clarification and then submit the record our statement in support of it if we can support it.

Senator MONRONEY. We may, before we finish these hearings, ask him to return for clarification if necessary.

Mr. LESLIE. I should like to avoid any ambiguity on our part. We would sincerely oppose any criterion which simply leaves the field wide open to the individual judgment on the part of the Board and the President and remove the strict regulatory criteria that have governed and should govern such decisions on the part of the Board and the President.

Senator MONRONEY. Could you amplify that criterion in your statement as to how you feel it should be used?

Mr. LESLIE. Yes. In our statement basically we say that Senator Magnuson's statement sets forth the considerations very clearly and well, and we support them. The only thing that is modified in that respect is that certain additional proposals were made this morning which we also support.

Senator MONRONEY. S. 3197, you say eliminates the evidentiary hearings in the case, but also doesn't it eliminate the public interest which is written into the law on the granting of permanent certificates-that the Board should consider as it takes up the question of granting what will be at least a rather lengthy operating period for an individual airline?

Mr. LESLIE. Chairman Murphy read that into his statement, item 3, page 7, as an added factor that he included in the ultimate legislation and with that we agree.

Senator MONRONEY. That public interest should be in there, and evidence should be taken as to the public interest of each of the services of the competitors for the certificate.

Mr. LESLIE. If I could just amend that phrase slightly. I think in this case it would not be taking evidence; it would be accepting submissions, including oral arguments.

Senator MONRONEY. Could consideration be taken as to the impact on competing U.S. carriers?

Mr. LESLIE. Yes, sir.

Senator MONRONEY. Even though they would have the right to file answers?

Mr. LESLIE. Yes, sir.

Senator MONRONEY. How do you get the hearings short enough and still broad enough to prevent injustice to some of the carriers who are egitimately entitled to compete for route authority on a temporary Dasis?

Mr. LESLIE. We quite agree, because we might be concerned on both sides of that ledger.

Senator MONRONEY. And the right to file an answer would seem to be a proper one, would it not?

Mr. LESLIE. Yes, sir.

I departed from my prepared statement, so I did not speak briefly to S. 3198. I would like to say that Mr. Philion covered the subject very thoroughly this morning. From my own experience, which is ery largely in this area, I know that he is quite right in what he says. Ve strongly support it.

There is a need to clarify and remove any doubt of the U.S. Governnent's authority to act in the fashion required.

I think unless there are questions, I don't need to amplify that.