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mated passenger revenue of $150,00, to 840,000 passengers carried 350,000,000 passenger miles in 1935, at an estimated passenger revenue of about $18,000,000.  The average length of the trip of a passenger by air has increased from approximately 225 miles in 1926 to over 400 miles in 1935.  In this interim of time, passenger fares have been reduced a little over 50%.  We cannot charge much less with our present equipment than our present rates which average about five and one-half cents a mile.  If we did, our losses would be more than they are now.  Average direct pperating cost of our airlines, not including sales expense, liability insurance, or other administration overhead, is between 28 and 38 cents a mile; this is for our present equipment of 10 to 14 passenger capacity.  We must recieve regularly about twice this 28- to 38-cent figure per mile in order to break even; therefore, rates for some time to come will not go down appreciably.
  There are two ways of counteracting the fear complex: One is not to have accidents.  We are wokring toward that end strenuously and with all means at out disposal.  Fundamentally (though some will disagree with this statement) the airliner, due to its use of an additional dimension not availiable to surface media, is now technically, and soon will be practicaly, safer than any other means of transportation.  It already exceeds in safetly, by about twofold, cross-country travel by one's own private motor car.  Life insurance actuaries are responsible for this statement and a more conservative and difficult to convince group of men never lived.  We have solved the technical problems of landing in fogs; the question is now one of getting the funds to purchase the necessary equipment and expand and improve our air terminals.  The airplane will, ere long, be the only method of transportation which can reach its destination on schedule under all conditions of weather.  At Pittsburgh during the recent flood, air transport, for a rather extended period, was not only the sole means of transportation but the sole means of communication until radio and telephone equipment was delivered by plane.  During the severe snowfalls in the Middle West this past winter the air transports arrived and departed on time and with comfort to the passengers, while the crack trains were hours late -- one in particular, for the first time in history, skipped a scheduled departure.  These statements are not made with braggadocio; they merely show what has happened under unusual circumstances and what, within the realms of technical practicability, the near future holds in store.  Financial realization is another thing.
The airlines are facing the need for additional capital.They are handicapped in this by four factors:(1)Unwarranted fear complex,the answer to which I have already mentioned.(2)Governmental policy.We need a definite,more permanent one, so there will not be the drastic upsets and setbacks experienced during the past several years.In this contribution made to the nation by the Federal Aviation Commission,of which our mutual friend and instructor,Dr.Jerome C.Hunsaker,'12, was a member.In 1934 this commission,appointed by the President,worked intelligently and diligently.Its report,although not as yet adopted in its entirety,is considered by thinking people to be a handbook or guide on American commercial aviation policy.Certain of its recommendations are being followed.I prophesy that,with certain modifications(not in principle,however),the commission's report will stand the test of time.(3)Limitation as to compensation which may be received by any one connected with the industry.This is contradictory to the American principle of fair play and honest reward,and undoubtedly will be corrected.(4)Need for airway aids and better landing facilities such as are provided by the Federal government to the water carriers and all others using harbors,rivers and seacoasts,whether or not they be in the commercial transport business.The air is an ocean which has no boundaries not coast lines.It is the only ocean or highway navigable to all points of the earth's surface.Oftentimes this fundamental is lost sight of.
The international phase should not be overlooked.Just as the railroad proved the most promising agency of the last century to handle the transportation needs of the American people,so in this century will the airplane prove the transport means of carrying our citizens to our far-flung frontiers.In the Nineteenth Century,our Federal government,out states,and our cities were most generous in the subsidies they granted for the construction of our railroads to,and beyond,our frontiers.So far,the present generation has not seen fit to encourage airway aids in our territories lying beyond our continental limits.The millions of square miles of virgin lands in territories such as Alaska,that invite the American pioneering spirit,would more quickly be opened to our people were our Federal government to do its duty and provide funds for aeronautical usage.  
In considering rules and regulations and in considering the installation of navigational aids,our government should realize that the air is this great ocean I have previously referred to,and should make provision for navigational aids which will make possible the accurate and safe navigation of this great ocean to all points in which this country is economically interested. Commercial aeronautics,as we know it today,was made possible by the tremendous technical advance that took place when billions of dollars were spent on the technical phases of aeronautics during the World War. Aviation does not stand alone in this respect for war-time energy likewise gave new growth to inland and foreign water transportation.
In studying the history of commercial air transport,the unbiased citizen cannot help but realize that the air transport industry owes to the Post Office Department a tremendous debt for their vision and the initial impetus given this struggling young industry.The Department of Commerce also has made valuable contributions. 
As one of our outstanding air law experts states the case there are three choices ahead of us as to the trend of future legislation:
1. Assume that the present Federal aviation policy is sound and leave it alone.
2. Assume that the present form of government control is basically unsound and seek to change it.
3. Assume that the present policy is unsound, yet seek to change it only after careful study, possibly during the next Congress.