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form of taxes paid by the carriers. Transportation taxes of $3 million or more were collected from local service carriers last year, and another $500,000 or more was generated in taxes on gasoline. Much has been said about the trunk lines' freedom from subsidy. It seems likely that the local service carriers contribute substantially to the self-sufficiency of the larger carriers. If the local service carriers were suddenly abolished and their routes assigned to truck lines, it seems quite likely that the carriers in that segment of air transportation which is mostly free of subsidy would be forced to seek higher subsidies or would require subsidy where none is now paid. (For the amount of subsidy paid to trunk lines see Exhibit F.) It has become an established policy in our complex civilization for the government to make payments of large sums of money to meet objectives that are deemed to be in the public interest, and the means by which these expenditures are made and controlled take many and varied forms. Sometimes it is difficult for the average citizen to view these expenditures in their proper perspective. Subsidies in transportation date back to the preceding century, when land grants and more direct forms of aid were of great assistance in building up the country's vast rail network. For many years the shipping industry has been heavily subsidized, and substantial subsidies continue. In fact, the amount of subsidy required by the steamship operators appears to be growing, rather than diminishing. Total subsidies to the shipping and shipbuilding industries during the past fiscal year amounted to $201,000,000. (Exhibit K) The federal support of agriculture has also become an established government policy in recent years. In 1953 net expenditures for the support of agricultural prices were in excess of two billion two hundred million dollars. In this instance, there is no painstaking determination as to the need for the products produced or the needs of the individual receiving the payments. The "agricultural subsidies" generally result in great over-production of the products in question and many payments are made to persons who have no demonstrated need whatsoever. Somehow the idea has become prevalent that the Government is doing the airlines a favor by providing them with enough money to keep operating. Actually it 21
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