turn, means a tremendous amount of employment to the citizens of the United States.

I don't think that we should build such an airplane purely as a matter of prestige. I think that the cost of doing that out weighs the prestige value that could come. I do feel, however, that building such a transport is going to have a lot of technological throw-off that we can utilize in other phases of our industrial society, which I cannot attempt to identify at the moment.

But I think the various space projects to date have had enough technological throw-off to be able to see the advantages that can come from going into new procedures with new materials.

The second part of your question, as to the role of the Government, my own view is that so far as the risk is concerned, the manufacturers cannot be expected to undertake the full risk that is involved because if an effort is made to develop one or two types of transport and neither of these proves to be economically feasible, then we are going to have a loss somewhere in the neighborhood of $2 billion, I would guess, and there is just not that type of strength in the manufacturing industry to support a loss of this magnitude, even viewed on an after-tax basis, where the loss would be reduced by only 50 percent. I think my own preference, as I see it to date, would be to have developed an organization which, for lack of a better example, I would call the Comsat type, whereby the Government could underwrite the cost of financing. I think the financing should be done privately, if it is at all possible, and I believe it will be possible, given some sort of Government backing.

We cannot escape the fact that we are in competition with the British and French operation to build a Concorde and it certainly is a factor in our approach to building a supersonic transport.

My own belief is that we can move faster in the development and construction of a supersonic transport if it is not done purely through Government operation. There may be the danger of a little more waste through a private or semiprivate company; I don't know.

I think my concern about pure Government operation is that there are so many safeguards which are built in, either by statute or by attitude of the Government employee to be sure that nothing goes wrong or nothing results in criticism of the agency, that this tends to slow down the process. And in this particular area. I question that slowdown is worthwhile. In fact, I think it is not.

It would be preferable to have the matter dealt with, the prototypes and production handled through the private or semiprivate company, such as the Comsat operation.

Senator BREWSTER. Thank you very much, sir, for a very careful

answer.

Mr. BOYD. Excuse me, sir. One more thing I wanted to say, I believe that the Government has got to be prepared to provide the bulk of the money for research without much thought of getting it back in terms of dollars. I think the benefits will flow back in many ways, but I would not say-I would feel it a mistake if a decision were made to say we will not go ahead unless we can guarantee that we can get our contribution for research back.

I don't think that should be a factor, a no-go factor in this operation. Senator BREWSTER. Thank you.

Thank you, Mr. Chairman.

Mr.

Senator MONRONEY. You would have no objection, would you, Boyd, if we did advance three-quarters of a billion dollars, we will say, for the research and the original development necessary to go in there, even in conjunction with a sort of corporate setup?

Mr. BOYD. No, sir.

Senator MONRONEY. Say, a continuing royalty tax on the planes? Mr. BOYD. I completely agree.

But my point was merely this: I think it would be a mistake to say we have got to have an ironclad commitment that we are going to get this money back; otherwise we don't go ahead. I think that would be a mistake.

Senator MONRONEY. It is too big a proposition to expect private industry to underwrite, as you mentioned, if it fails. It can be a $2 billion failure and there is no tax advantage that could occur to any corporation wealthy enough to take advantage of that where it could not be a catastrophic blow.

Mr. BOYD. That is correct, sir.

Senator MONRONEY. With reference to our speaking of supersonic speeds, I would like to get some of your ideas, if you have formulated them, as to improving the speed of the railroad trains.

For instance, the through train from Washington to New York to Boston, I think, would be of great interest to the committee and to those who follow this very critical railroad situation that we are in today, to do something to preserve the high-grade passenger service that apparently is becoming one of the forgotten, along with the dino

saur.

Mr. BOYD. I certainly agree with that, and expect to go to work on that matter and immediately, subject to confirmation, but at the moment, I have not formulated any ideas.

I don't have sufficient detailed information to make any intelligent statement on this, other than to express my agreement with your sentiment, that we have to make arrangements and soon, to improve the interurban transportation, in the Northeast particularly, to handle the problems, which are staring us in the face today and have been for

some years.

Senator MONRONEY. May I put it this way, then. You do feel that there is a place in the transportation picture that is still to be filled by surface transportation?

Mr. BoYD. Very definitely, yes, sir. There is no question in my mind about that.

Senator MONRONEY. You would have no objection if the proper planning and proper utilization of funds were found to be needed, to develop some of this as a matter of subsidy, at least on the research and original engineering?

Mr. BoYD. In fact, I certainly hope that the Congress will be willing to do that, because I don't think we will move very far without some Government money.

Senator MONRONEY. And probably, as Under Secretary of Commerce for Tranportation, this would be a big function of your office, to make the case for and to administer probably the utilization to the best advantage.

Mr. BOYD. Yes, sir.

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Senator MONRONEY. Of these research and development funds? Mr. BoYD. That is my understanding, that the northeast corridor project, for example, will come under the purview of my office.

Senator MONRONEY. This is a very important assignment. We think of transportation as a lot of the new things. But preserving of the benefits of the old with modernization will be very proper and there might be laws necessary to provide a certain umbrella against competitive cutthroat competition in servicing an area that would otherwise have no service.

So that a man making an investment in deluxe equipment might be protected for a certain number of years against this, in the same way the airlines are now protected on their runs.

Mr. BOYD. Yes, sir.

I think that, as I see this matter of transportation, the basic requirement that we have to keep in mind is to assure a strong defense posture for the United States, and that we also have to assure a free flow of traffic-both passenger and cargo-so that our standard of living can be maintained and improved.

Senator MONRONEY. Senator Hartke?

Senator HARTKE. Mr. Boyd, I want to congratulate you upon your change. I was wondering in this field, since you still are going to stay in the transportation field, what do you see in the future of the helicopter and so-called movements of this type, with the recent cutoff, as far as the big cities are concerned?

Mr. BoYD. Senator Hartke, I am thoroughly convinced that there is a role, a very important role for what are characterized as V/STOL aircraft. In order to reach their full flower, there must be some engineering breakthroughs. The Department of Defense is spending a great deal of money on research in this area for military usages of both vertical and short takeoff in landing equipment.

The big problem is in the powerplant, the thrust of rate ratio, and I am confident there will be a breakthrough. I am also firmly of the belief that the evolution with existing equipment on the helicopter will make it possible, given sufficient capital resources, to provide a very worthwhile service in today's time.

Senator HARTKE. Do you believe that the present termination of the subsidies for the helicopter service, which is now in existence, is serving the national interest?

Mr. BOYD. Well, the Board's position has been made, and I think pretty clear, Senator Hartke, and we have urged continuation of the subsidy, and I assure you we feel that all of our actions are taken in the national interest.

Senator HARTKE. Doesn't it make just as good commonsense to talk about the full development of the helicopter as it does the supersonic transport, especially with the problems you have now with concentration of population and traffic jams, and at this moment, at least, not a real development of a rail transit passenger service?

Mr. BOYD. I think the helicopter is a very necessary part of our transportation system, and I think it should be expanded rather than restricted. It is of a different magnitude than the supersonic transport.

Senator HARTKE. It is of a different magnitude in what regard, as far as expenditure of funds which will not be recaptured?

Mr. BOYD. In that regard, also

Senator HARTKE. Which way is the magnitude on the recapturing amount? Is the magnitude greater in the field of transport development there, or in the development of helicopters?

Mr. BOYD. If I understand your question

Senator HARTKE. In other words, you say that there is a difference in magnitude as far as funds are concerned.

Mr. BOYD. Yes, sir, because the funds to improve the helicopter, or to come up with a VTOL machine that can be used for urban or interurban transportation will not approach the magnitude of the funds to build a supersonic transport.

By the same token, I must say that neither will the helicopter, or VTŎL, in my judgment, earn as much in foreign exchange, or provide as much employment.

Senator HARTKE. Is there any more reason, as far as national interest is concerned, to spend this money for the transports than there is for relieving some of this tension which is presently existing in the field of movement of personnel on shorter hops, which can, to a great extent, alleviate the possibility by some type of vertical takeoff operation?

Mr. BoYD. I don't really know that I can answer that. I would have to think about it, Senator.

Senator HARTKE. Now that you have had time to think about itwhat I am trying to say, isn't there just as much reason and wouldn't you be willing to recommend the expenditure of Government funds, other than military funds, for the development in the breakthrough in the field of research for helicopters?

Mr. BOYD. Surely, I say I would, assuming that this turns out to be an administration position, I certainly would. Other than that, I don't think I would be a free agent, but

Senator HARTKE. I think I recognize that position.

Senator MONRONEY. Would the Senator yield?

Senator HARTKE. Yes, sir.

Senator MONRONEY. Isn't it a fact, as Chairman of the Civil Aeronautics Board, you have been the chief advocate of what I consider to be the greatest necessary research in the helicopter field, and that is, to run these lines and use the new equipment, and develop the transportation systems that would fit into the equipment that we have, or that we are soon to have, and there has been no greater champion of helicopters and the continuing service in the making of loans for the purchase of new turbine-powered equipment on the helicopter lines than as the distinguished Chairman of the Civil Aeronautics Board.

Senator HARTKE. Let me say to my distinguished chairman, I recognize and there has been no one more in the forefront than the distinguished Senator from Oklahoma, but I am trying to capture him in his last moment in the CAB and before he moves over to the other field, and firmly impress this upon other witnesses that appear, that we want that same type of devotion and dedication from them.

Mr. BOYD. We have tried very hard at the Civil Aeronautics Board, as the chairman has said, and you have said, Senator Hartke, to maintain the helicopter program because of our great belief in its efficacy. We have also tried, in conjunction with the Federal Aviation

Agency, to bring about and to stimulate some interest in building what we call compact air transport for short-haul operations without limiting it, and we haven't said it should be fixed wing, or rotor wing, but we really haven't been able to generate much interest in this area, and we have a very strong belief that this is essential to modern transportation.

Senator HARTKE. What I am really driving at, isn't there the possibility that if the Government would be willing to assume this financial obligation without any direct feeling that it has to recapture the investment in the field of research and development, isn't there just as much hope that this could really be a great breakthrough in this urban transportation problem that we have as any one single thing that is available to us today?

Mr. BOYD. I think so, yes, sir.

Senator HARTKE. And this, coupled with the development of smaller crafts, or smaller airport development, could really alleviate some of this difficulty, along with the new railroad line, if you want to build that, too? But the railroad line from New York to Boston doesn't help us in Indianapolis too much. Do you understand that?

Mr. BOYD. Yes, sir. I get that picture pretty clearly.

Senator HARTKE. In the same field, have you had a chance to examine the administration's excise tax policies?

Mr. BOYD. I read the President's message last night.

Senator HARTKE. I don't ask you to be in opposition to them. Do you feel that the continuation of the tax on domestic airplane tickets is justified in view of the fact that it is the only tax still levied on passenger transportation in the United States?

Mr. BOYD. At the Board, Senator, we have taken a position throughout the time I have been there, that the air carriers should be prepared to pay a reasonable user charge. We have not taken any position as to how that charge should be effected.

Senator HARTKE. Just a user charge, in substance, is not carried by the carrier, isn't that true?

Mr. BOYD. Yes, sir.

Senator HARTKE. It is passed on.

Mr. BOYD. That would be true of almost any user charge.

Senator HARTKE. We don't even charge on foreign travel, do we? Mr. BOYD. No, sir.

Senator HARTKE. Isn't it a sort of ridiculous situation, when we are trying to encourage travel in the United States, to pay an additional tax on domestic transportation, and not put it on foreign transportation? Pardon me, I will strike the word "ridiculous." Isn't it a sort of a conflict of purposes there?

Mr. BOYD. Well, of course, there are somewhat different considerations involved, but I think that at least, to me, Senator, there are a number of conflicting policies in the transportation field and with a nation as large as this, and a government as big as this, this is bound to happen.

Before I came to the Civil Aeronautics Board, I had the privilege of testifying before the Senate in 1958, in which I urged the elimination of all excise taxes on passenger travel and on cargo.

Senator HARTKE. I appreciate that, but the truth of it is, just to put the record straight, there is no tax at the present time on any other