Mr. MACDONALD. We did not attempt to cut the full slopes up the mountains. What we did was to build into the side of the mountain without cutting back to its natural slope, permitting the unstable slope to come down and then remove the slide.

That is, we probably didn't remove any more dirt in the end than we would have if we had been building to a section originally.

Senator MCCARRAN. Let me ask you a question there, Mr. MacDonald: Supposing a similar condition prevailed in my own State, just using that as an illustration, where you constructed a road, where these slides might occur. Would the road remain under construction by you for 2 years?

Mr. MACDONALD. No, sir. It remains under construction until the State accepts it.

Senator MCCARRAN. That would not be for 2 years, would it? Mr. MACDONALD. No, sir. But the forest highways in your State would be.

Senator MCCARRAN. The forest highways?

Mr. MACDONALD. Yes, sir.

Senator MCCARRAN. They would be under construction for 2 years? Mr. MACDONALD. Yes, sir.

Senator MCCARRAN. After that they are turned over?

Mr. MACDONALD. Yes, sir. They are not turned over for 2 years because most of the highways are in rugged terrain, as you know.

Senator MCCARRAN. What I am drawing your attention to is you apply a different rule in the southern countries than you apply in your own country.

Mr. MACDONALD. Not as far as forest highways are concerned. Senator FERGUSON. But these are not forest highways. Some of these highways go through cities. This is not all forest highway. This goes up through the mountains of Costa Rica and while there are forests there, there are very few trees. They are not what we call forests.

Mr. MACDONALD. Of course it is not fair, Senator, to talk about that 60- or 70-mile section at Costa Rica.

Senator FERGUSON. No, that is not a fair section; I agree with that. Mr. MACDONALD. That is unique in the world. It is the heaviest work that has ever been done in the world, so far as I know.

Senator FERGUSON. I think it is probably the highest highway. Senator MCCARRAN. Gentlemen, I want to be on the floor in a very few minutes.

We will recess at this time until 2 o'clock.

(Whereupon, at 12 noon, the hearing was recessed, to reconvene at 2 p. m. of the same day.)

AFTERNOON SESSION

The hearing reconvened at 2 p. m., upon the expiration of the recess.

CIVIL AERONAUTICS BOARD

STATEMENTS OF DELOS W. RENTZEL, CHAIRMAN OF THE BOARD; M. C. MULLIGAN, SECRETARY OF THE BOARD; JOHN B. RUSSELL, BUDGET AND FISCAL OFFICER, AND FRANCIS CAWLEY, BUDGET OFFICER, DEPARTMENT OF COMMERCE

AMOUNT REQUESTED

Senator MCCARRAN. The appropriation requested by the Civil Aeronautics Board will next be considered by the committee.

The CAB budget estimate is in the amount of $3,900,000, an increase of $400,000 over the current year appropriation.

PERSONNEL

With this additional $400,000 you expect to increase your staff to 664 from 577, an increase of 87 positions.

JUSTIFICATION

Pages 405 and 409 of the justifications will be placed in the record. (The material referred to is as follows:)

Summary comparison of personal services detail and total nonsalary expenses for the fiscal year 1950, 1951, and 1952

Senator MCCARRAN. This is a large increase and must be justified in detail.

Does this request contain any amount for studies of mail pay and subsidies?

Mr. RENTZEL. Not directly, Mr. Chairman. It does indirectly in that it involves an increase in the staff in the area which handles mailpay separation, or would handle mail-pay separation. That is covered in our prepared statement on mail-pay cases.

AIR-MAIL SUBSIDY STUDY

Senator MCCARRAN. The reason I raised the questions preliminarily is in considering the third supplemental there was an item of $25,000 which the committee eliminated because Senator Johnson appeared before the committee and testified that his report, which had been subject of a study for some time, would be ready, I think he said, in a week from the date he testified. I think probably it is ready now.

We eliminated the $25,000, so I am just raising the question now.

Mr. RENTZEL. We had intended to incorporate that into our overall budget which represents a reduction from what we had asked for in the way of people. It is pretty hard to separate these functions out. What we have been doing in trying to arrive at basic data, for separation purposes, is using a substantial portion of our mail staff to the detriment of mail-rate cases.

To that extent we were asking for additional people so we can put them to work on the separation.

I had a talk with Senator Johnson after he appeared here. I was rather surprised about his testimony at the time. We had been working together. We in the Board had been working on the actual separation by airlines; whereas, he had been working on the formula and the question of how much subsidy and whether it should be attributed to the individual cities or not.

We thought we were working on a complimentary basis. I still think so, and he does too.

I know the amount of $25,000 has been eliminated, but what we have done is to try to offset the terrific amount of workload that has been incurred in this separation by asking for some additional people. Senator MCCARRAN. You may handle your appropriation as you see fit, and make such statements as you see fit explanatory of it.

Mr. RENTZEL. I have a prepared statement here which is only nine pages long. It will present the request in a well-rounded way and will give the committee the benefit of it. I would like to read it.

BUDGET INCREASE

The estimates of the Civil Aeronautics Board for the fiscal year 1952, which are before you, total $3,900,000, which is $400,000 more than the Board's appropriation for the fiscal year 1951, and is $100,000 less than your committee allowed the Board last year. The House did. cut even deeper than that.

Mr. Chairman, it represents, in effect, approximately a 50-percent restoration of the money requested in 1951.

Of this increase $297,500 is for personal services and represents 87 new positions; the balance, or $102,500, would be distributed among the various categories of "other objects," travel, et cetera.

Before referring to the work areas where additional staff is needed, I should like to review briefly what we have done, and are doing, to enlarge our productive capacity and streamline our machinery.

REORGANIZATION

In the spring of 1950 the Board retained a firm of management consultants and the report of that firm, based on an over-all survey, proposed a number of changes in organization and procedures.

The President's Reorganization Plan No. 13, which became effective May 24, 1950, transferred the executive and administrative functions of the Board to the Chairman.

Against the background of these developments, the Board has been moving in recent months to take drastic steps to improve the efficiency of its operations.

First, implementation of Reorganization Plan No. 13 has been fully accomplished. The Chairman has assumed the responsibilities and is exercising the authority vested in him under that plan.

The position of executive director has been established, the incumbent of which serves as general manager of the Board's staff, with responsibility for planning, directing, and coordinating all staff activities.

As chairman, I have delegated to the executive director authority to perform any and all functions vested in the Chairman of the Board by plan No. 13, subject to such prior clearance with the Chairman as may be prescribed.

The principal proposal in the report of the firm of management consultants involved, in effect, consolidation of a number of functions performed in the Boards' Bureau of Law with the Bureau of Economic Regulation. This has been done.

Effective February 19, 1951, the two bureaus mentioned were abolished and in their stead were activated the Bureau of Air Operations and the Office of the General Counsel. Under this reorganization, day-to-day operating problems are no longer submitted to a separate legal staff for consideration and clearance, even in those areas or categories in which legal matters are involved. Instead, the attorneys concerned with such matters have been integrated with the rest of the operations staff.

The general counsel continues as the Board's principal legal adviser and will be able to fulfill that essential role more effectively under the new organization.

By transfer from the Bureau of Hearing Examiners, the function of opinion writing has been made a responsibility of the Office of the General Counsel. This is expected to result in allowing more time for examiners to devote to their primary function of conducting hearings and more promptly issuing their reports.

We have plans for further changes in organization. Relatively speaking, however, they are minor and secondary in priority to the task of revising our procedures to conform to the new organizational pattern described above.