“There can be little doubt,” stated the chairman of the Civil Aeronautics Board, “that if our airline system were today the same size as it was in 1941 in terms of routes, points served, and service provided, it would be completely independent of government support.” It was certain additions to the service, he further pointed out, and the fixing of certain “fair” compensations by the Board that slowed all airlines save Eastern down to stalling speed and all but put them into a flat spin. He shared his responsibility with the appropriation committees of Congress and thought that if funds were provided for an adequate staff the Board might do a competent job. However the fact that the Civil Aeronautics Authority and Civil Aeronautics Board already had 18,000 employees as compared with approximately 80,000 employees for all domestic and overseas scheduled airlines rather discounted this opinion. That the damage did not end with heavy losses imposed by arbitrary rates but was multiplied by the award of retroactive payments is evidenced in the testimony of Roger F. Murray, vice-president of the Bankers Trust Company of New York. “The Board’s thinking,” he said, “has apparently been that rates should be set so that _each_ carrier will break even and perhaps earn some so-called ‘fair’ rate of return on it’s ‘used and useful investment.’ Under these circumstances, enlarged payments have been made to rescue some airlines in difficulties or keep others going on a subsistence basis. While this may be reassuring to creditors of the airlines, it is the poorest kind of an appeal to potential purchasers of equity securities.” Translating this into lay language, the private investor or his agents just cannot be interested in buying stock in enterprises which are suffering economic regulation by political agencies. And once an enterprise is denied access to the highly competitive markets for risk capital, it is indeed on the verge of bankruptcy or about to crash into the abyss of nationalization. And if the government, after having reduced the market value of the airlines by its own mismanagement, then takes possession of them, it becomes guilty of expropriating the capital of private investors, some of whom had risked their savings in an enterprise they deemed secure because it was government regulated. Now mismanagement of the airlines was not necessarily the fault of wicked or even stupid men. As Speaker Sam Rayburn had pointed out to me in the case of Congressmen, government administrators are no smarter nor more stupid than the average. But they hold their jobs by knowing which side their bread is buttered on and making the correct estimate of what action will produce the most votes.