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LETTER OF THE DIRECTOR, BUREAU OF THE BUDGET

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LETTER OF THE DIRECTOR OF THE BUREAU OF

THE BUDGET CONSTRUING REORGANIZATION PLANS NO. III AND NO. IV

EXECUTIVE OFFICE OF THE PRESIDENT,

BUREAU OF THE BUDGET,

Washington, D. C., May 2, 1940. MY DEAR MR. HINCKLEY: If Congress takes no adverse action on Reorganization Plans III and IV, the effectuation of these plans will require that the Director of the Bureau of the Budget, subject to the approval of the President, determine the necessary transfers of funds. In view of the limited time available and because of certain questions arising out of the complexity of the Civil Aeronautics Act, the Bureau of the Budget has consulted with the Department of Justice in order to establish a sound basis for the distribution of the available appropriation balances of the Civil Aeronautics Authority. The Attorney General has agreed to the following inte

statements concerning the civil aeronautics provisions of the two plans:

1. Plan III centralizes in the Administrator, who is hereafter to be known as the Administrator of Civil Aeronautics, those functions that are essentially of an administrative character as distinguished from those relating to economic regulation; the prescription of safety standards, rules, and regulations; and the suspension and revocation of certificates after hearing. Thus, in addition to the functions now vested in the Administrator by the Civil Aeronautics Act of 1938, he will be responsible for the administration of the Civilian Pilot Training Act of 1939; the issuance and amendment of airman, aircraft, and air-carrier certificates; emergency suspension of certificates; the registration of aircraft, including the recordation of conveyances; the enforcement of safety rules, regulations, and standards; and the control of notification as to hazards to air commerce.

2. Plan III divests the Authority of all control it now has over the personnel and expenditures of the Administrator.

3. Plan III leaves the Authority with all the functions described in title 4 (Air Carrier Economic Regulation) of the Civil Aeronautics Act; such of those functions described in title 5 (Nationality and Ownership of Aircraft) and title 6 (Civil Aeronautics Safety Regulation) as relate to the prescription of safety standards, rules, and regulations, and the suspension and revocation of certificates after hearing; and the functions vested in the Authority by section 205 (a) and title 10. In connection with the suspension and revocation of certificates, it should be noted that a waiver of a hearing would not operate to deprive the Authority of its jurisdiction.

4. In performing air-safety work, the Administrator will be bound by the rules of the Authority and the extent of his administrative discretion will be entirely dependent upon the rules so prescribed.

5. While the Administrator may submit recommendations to the Board as to safety rules, regulations, and standards, it is anticipated that the Board will have adequate technical facilities for arriving at its own independent determination as to the soundness of such recommendations, and for developing such material on its own initiative.

6. In order to eliminate the existing confusion in terminology, plan IV provides that the present five-member Authority shall hereafter be known as the Civil Aeronautics Board, and employs the term Civil Aeronautics Authority merely as an over-all designation for the Administrator of Civil Aeronautics and the Civil Aeronautics Board.

7. Plan IV transfers to the Civil Aeronautics Board all functions now performed by the Air Safety Board.

8. In performing its functions, including those mentioned above, the Civil Aeronautics Board will be entirely independent of and in no way subject to control by the Department of Commerce or the Secretary thereof. This independence is specifically referred to in two separate paragraphs of plan IV.

9. The requirement in plan IV that the Board report to Congress and the President through the Secretary of Commerce provides for the routing of such documents through the Secretary so that he may have an opportunity to examine

them and append such comments as he may wish to make. This provision does not imply that the Secretary may in any way delete or revise the reports and recommendations of the Civil Aeronautics Board.

10. In providing that the routine management functions of the Board shall be performed under the direction and supervision of the Secretary of Commerce through such facilities as he shall designate or establish, plan IV is designed to prevent the uneconomical duplication of such facilities by the Board, the personnel of which will be relatively small. This provision is not intended to divest the Board of its authority to appoint and control all of its personnel, to authorize expenditures, or to determine and support the budget estimates that are submitted to the Bureau of the Budget. As stated in the President's message, its purpose is to make available to the Board, in the interest of efficiency, departmental services in connection with these functions.

11. The Board is left with full authority to make its contacts with other agencies of the Federal Government and with State and foreign governments. It is reasonable to assume that the Board will make the necessary arrangements with the Secretary of Commerce so as to coordinate such contacts with those made by the Administrator and thereby minimize duplication of effort.

12. Those functions of the Secretary of the Authority which relate to the maintenance of dockets and the keeping of minutes cannot be regarded as routine management functions and will, therefore, remain directly under the Board.

13. Plan IV obviously contemplates that the Board will have its own legal and other technical facilities. Any other interpretation would be in direct conflict with the independence which is to surround the Board's determinations.

14. In connection with the investigation of air accidents, the Board, pursuant to the statutory prescription of the duties of the present Air Safety Board, will furnish the Administrator of Civil Aeronautics with copies of any reports or recommendations that relate to the functions vested in the Administrator.

15. The compromise of civil penalties for violations of titles 5 and 6 becomes a function of the Administrator since it must be regarded as an integral part of the responsibility for the enforcement of these provisions. On the other hand, the Board will have the power to make compromises involving violations of title 7.

16. As contrasted with the Civil Aeronautics Board, the Administrator will he under the direction and supervision of the Secretary of Commerce.

I feel certain that this interpretation is in full accord with what was envisaged by the President in submitting the reorganization proposals to Congress. Identical copies of this letter are being sent to the Secretary of Commerce and the Administrator of the Civil Aeronautics Authority. Yours sincerely,

HAROLD D. SMITH, Director. Hon. ROBERT H. HINCKLEY,

Chairman, Civil Aeronautics Authority, Washington, D. C.

OFFICE OF THE ATTORNEY GENERAL,

Washington, D. C., May 2, 1940. Hon. HAROLD D. SMITH,

Director of the Bureau of the Budget, Washington, D. C. MY DEAR MR. DIRECTOR: I have examined your letter of this date to the Secretary of Commerce' in which you set forth your interpretation of the provisions of reorganization plans III and IV relating to the Civil Aeronautics Authority, and I agree with the conclusions reached by you. Respectfully.

ROBERT H. JACKSON, Attorney General.

1 Note the last sentence of the letter to the Chairman of the Civil Aeronautics Authority set forth above.

AIR COMMERCE ACT OF 1926 [Act of May 20, 1926, 44 Stat. 568; as amended by Act of February 28,

1929, 45 Stat. 1404; Acts of June 19, 1934, 48 Stat. 1113, 48 Štat. 1116; Act of June 23, 1938 (Civil Aeronautics Act of 1938), 52

Stat. 973; Act of July 1, 1944,58 Stat. 714.] An Act To encourage and regulate the use of aircraft in commerce, and for

other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled (49 U. S. C. 171], That as used in this Act, the term "air commerce” means transportation in whole or in part by aircraft of persons or property for hire, navigation of aircraft in furtherance of a business, or navigation of aircraft from one place to another for operation in the conduct of a business. As used in this Act, the term “interstate or foreign air commerce” means air commerce between any State, Territory, or possession, or the District of Columbia, and any place outside thereof; or between points within the same State, Territory, or possession, or the District of Columbia, but through the airspace over any place outside thereof; or wholly within the airspace over any Territory or possession or the District of Columbia

SEC. 2. [Repealed by section 1101 (k) of the Civil Aeronautics Act.]

Sec. 3. [Repealed by section 1107 (K) of the Civil Aeronautics Act.]

SEC. 3a. [Repealed by section 1107 (k) of the Civil Aeronautics Act.]

SEC. 4. [49 U.S.C.174]. AIRSPACE RESERVATIONS.—The President is authorized to provide by Executive order for the setting apart and the protection of airspace reservations in the United States for national defense or other governmental purposes and, in addition, in the District of Columbia for public safety purposes. The several States may set apart and provide for the protection of necessary airspace reservations in addition to and not in conflict either with airspace reservations established by the President under this section or with any civil or military airway designated under the provisions of this Act.

SEC. 5. [ 49 U.S. C. 175] AIDS TO AIR NAVIGATION.—(a) [Repealed by section 1107 (k) of the Civil Aeronautics Act.]

(b) [Repealed by section 1107 (k) of the Civil Aeronautics Act.]

(c) Air navigation facilities owned or operated by the United States may be made available for public use under such conditions and to such extent as the head of the department or other independent establishment having jurisdiction thereof deems advisable and may by regulation prescribe.

(d) The head of any Government department or other independent establishment having jurisdiction over any airport or emergency landing field owned or operated by the United States may provide for the sale to any aircraft of fuel, oil, equipment, and supplies, and the furnishing to it of mechanical service, temporary shelter, and other assistance under such regulations as the head of the department or establishment may prescribe, but only if such action is by reason of an emergency necessary to the continuance of such aircraft on its course to the nearest airport operated by private enterprise. All such articles shall be sold and such assistance furnished at the fair market value prevailing locally as ascertained by the head of such department or establishment. All amounts received under this subdivision shall be covered into the Treasury; but that part of such amounts which, in the judgment of the head of the department or establishment, is equivalent to the cost of the fuel, oil, equipment, supplies, services, shelter, or other assistance so sold or furnished shall be credited to the appropriation from which such cost was paid, and the balance, if any, shall be credited to miscellaneous receipts.

(e) [Repealed by section 1107 (k) of the Civil Aeronautics Act.]

(f) Nothing in this Act or the Civil Aeronautics Act of 1938 shali be construed to prevent the Secretary of War from designating routes in the navigable airspace as military airways and prescribing rules and regulations for the use thereof on routes which do not conform to civil airways established hereunder, or to prevent the Administrator in the Civil Aeronautics Authority from designating any military airway as a civil airway, and when so designated it shall thereupon become a civil airway within the meaning of this Act, and the Secretary of War is hereby authorized to continue the operation of air navigation facilities for any military airway so designated as a civil airway until such time as the Administrator in the Civil Aeronautics Authority can provide for the operation of such facilities. (As amended by section 1107 () (1) and section 1107 (c) (2) of the Civil Aeronautics Act.)

(g) [Repealed by section 1101 (k) of the Civil Aeronautics Act.] SEC. 6. [49 U.S.C.176] Foreign Aircraft.-(a) The United States of America is hereby declared to possess and exercise complete and exclusive national sovereignty in the air space above the United States, including the air space above all inland waters and the air space above those portions of the adjacent marginal high seas, bays, and lakes, over which by international law or treaty or convention the United States exercises national jurisdiction. Aircraft a part of the armed forces of any foreign nation shall not be navigated in the United States, including the Canal Zone, except in accordance with an authorization granted by the Secretary of State. (As amended by section 1107 (i) (3) of the Civil Aeronautics Act.)

(b) Foreign aircraft not a part of the armed forces of the foreign nation shall be navigated in the United States only if authorized as hereinafter in this section provided. (As amended by section 1107 (i) (4) of the Civil Aeronautics Act.)

(c) If a foreign nation grants a similar privilege in respect of aircraft of the United States, and/or airmen serving in connection therewith, the Civil Aeronautics Authority may authorize aircraft registered under the law of the foreign nation and not a part of the armed forces thereof to be navigated in the United States. No foreign aircraft shall engage in air commerce otherwise than between any State, Territory, or possession of the United States (including the Philippine Islands) or the District of Columbia, and a foreign country. (As amended by section 1107 (i) (1) and section 1107 (3) (5) of the Civil Aeronautics Act.)

Sec. 7 [49 U.S.C.179] APPLICATION OF EXISTING LAWS RELATING TO FOREIGN COMMERCE.(a) The navigation and shipping laws of the United States, including any definition of “vessel” or “vehicle” found therein and including the rules for the prevention of collisions, shall not be construed to apply to seaplanes or other aircraft or to the navigation of vessels in relation to seaplanes or other aircraft.

(b) The Secretary of the Treasury is authorized to (1) designate places in the United States as ports of entry for civil aircraft arriving in the United States from any place outside thereof and for merchandise carried on such aircraft, (2) detail to ports of entry for civil aircraft such officers and employees of the customs service as he may deem necessary, and to confer or impose upon any officer or employee of the United States stationed at any such port of entry (with the consent of the head of the Government department or other independent establishment under whose jurisdiction the officer or employee is serving) any of the powers, privileges, or duties conferred or imposed upon officers or employees of the customs service, and (3) by regulation to provide for the application to civil air navigation of the laws and regulations relating to the administration of the customs laws to such extent and upon such conditions as he deems necessary. (As amended July 1, 1944,58 Stat. 714.) (c) The Secretary

. of Commerce is authorized by regulation to provide for the application to civil aircraft of the laws and regulations relating to the entry and clearance of vessels to such extent and upon such conditions as he deems necessary.

(d) The Secretary of Labor is authorized to (1) designate any of the ports of entry for civil aircraft as ports of entry for aliens arriving by aircraft, (2) detail to such ports of entry such officers and employees of the immigration service as he may deem necessary, and to confer or impose upon any employee of the United States stationed at such port of entry (with the consent of the head of the Government department or other independent establishment under whose jurisdiction the officer or employee is serving) any of the powers, privileges, or duties conferred or imposed upon officers or employees of the immigration service, and (3) by regulation to provide for the application to civil air navigation of the laws and regulations relating to the administration of the immigration laws to such extent and upon such conditions as he deems necessary.3

SEC. 8 [5 U. S. c. 592a] Additional Assistant Secretary of Commerce. - To aid the Secretary of Commerce in fostering air com

1 See CFR, Title 19, Customs Duties, Part 4, Application of Customs laws to air commerce.

2 Functions of the Secretary of Commerce under subsection (c) were transferred to the Commissioner of Customs by 1946 Reorganization Plan No. 3, Secs. 101-104, effective July 16, 1946, 11 F. R. 7875.

See Immigration Rules and Regulations of the Department of Justice, title 8, Code of Federal Regulations, part 5. By the provisions of Reorganization Plan No. V, prepared by the President and transmitted to Congress on May 22, 1940, pursuant to the Reorganization Act of 1939, the functions of the Secretary of Labor relating to the administration of the immigration and naturalization laws are transferred to the Attorney General. Public Res. No. 75, approved June 4, 1940, provides that Reorganization Plan No. V shall take effect on the tenth day after the resolution's enactment, notwithstanding the provisions of the Reorganization Act of 1939.

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