This paper is primarily a case study of the role of the Civil Aeronautics Board (CAB) in industrial relations. The CAB was created in 1938, when the Civil Aeronautics Act replaced earlier patchwork effects by Congress to foster the development of air transportation. The Act authorized this regulatory agency to determine the airline route structure through "certificates of public convenience and necessity," to subsidize airlines by air mail rates based upon need rather than service, to control all mergers, consolidations and interairline working agreements and to promote air safety by formulating appropriate Civil Air Regulations. The exercise of these broad discretionary powers has, because of their impact upon employee welfare, involved the CAB deeply and directly in many labor issues. Government assumes explicit responsibility for industrial performance whenever it establishes public control over privately owned enterprises or industries. Such responsibility makes of government, acting through its regulatory commissions, not only a manager but also at least in an ultimate sense an employer. Many commissions, it is true, have never entered into labor matters and circumstances permitting, may never do so. One may reasonably expect, however, that if labor problems endanger the public interest in a regulated industry, the commission will have to participate in the search for solutions and sometimes, when necessary and feasible, even impose them.