Mail Contracts

On Postmaster-General Walter Folger Brown's Washington desk is a shiny model airplane. It symbolizes to him the great progressiveness of his Department. Pioneering with and aiding the new means of transportation, the U. S. has established 28 air mail routes, now covering 25,735 miles daily. Last year the mail planes flew 7,026,600 mi., carried 3,542,074 Ibs. of mail. This year the mileage and poundage will be much greater.

The increase now pains Mr. Brown. He pays the operators $2 per pound on the average, and gets from the mail-sending public only 80-c- per pound (5-c- the ounce). In the extreme case of air mail between Boston and Los Angeles he pays $8.81 per pound, thus losing $8.01. Such differences explain why the Post Office Department will lose $3,000,000 on its air mail business this year. That prospective loss is why Mr. Brown called the chief air mail operators to Washington last fortnight to persuade them to reduce their carrying charges.

A glum dozen operators* gathered in one of Mr. Brown's conference rooms in the fusty Post Office Department Building. Warren Irving Glover, Second Assistant Postmaster General, and other Department officials were with them. A door opened and Postmaster General Brown appeared. The check-reined hostility which he expected filled the room. He tried to assuage it with sweet words--the Government wished to foster aviation; it was doing so by contributing $30,000,000 a year through Commerce, Agriculture and Post Office departments; but his Post Office Department was running too great a deficit; it was obliged to retrench; some air mail contractors, especially those early in the business, when nobody knew what fair carrying rates should be, were getting more per pound than others; he wanted them to figure out just how much they could, justly to themselves and to the Government, cut their rates; Mr. Glover would deal with them. Suavely he explained his position and then walked out, a bulky dignity whom the operators did not again see officially during the ensuing fortnight.

Mr. Glover, like Mr. Brown and President Hoover, has found that for successful agreement business conferences must be secret. So he forbade the operators to speak of their discussions until the rate situation was revised. Said he in effect: "If any news of these meetings gets out, I will know that one of you gentlemen talked indiscreetly." It was an effective intimidation. No operator dared relieve his vexation or try to stir up a lobby for present or higher rates.

Nonetheless cautious anonymity revealed that the operators took their account books to the conferences. Government accountants studied them during the fortnight, calling in the operators occasionally. They were impatient to get back to their own offices in different parts of the country. But exigency kept them irefully at Washington. The accountants discovered that some of the operators were making money on their mail business. Most were not. The money-makers argued that their present profits were just beginning to wipe out the losses which they had endured in previous years. A strong debating point was the fact that the Government needs a large and efficient air service to provide trained men and ready material in case of war. For that future possibility it is paying the mail carriers a virtual subsidy as are foreign governments. In Europe the subsidies average $1 a mile flown, with little return in the form of postage. In the U. S. the mock subsidy also averages $1 a flying mile. But 5-c- an ounce postage reduces Government expense to a mere $3,000,000 Post Office deficit.

Frank were the operators in opening their ledgers, potent were their pleas. Mr. Glover, acting for Mr. Brown, was not obdurate. A compromise on rates seemed certain to result.

The compromise may, however, entail the wiping out of some air mail routes. Mr. Brown himself indicated that last week. Said he to the Washington Advertising Club: "My own judgment is that the Federal Government should concentrate its exceptional aid on a few natural transportation routes which have been traveled by ox team, pony express, railroad, automobile and airplane, because people and commodities have naturally traveled over such routes since white men came to America."

That prognosis angered the operators. Cried one: "Mr. Brown does not seem to realize that, although it is true that transportation has always followed migration, which in this country has always been from east to west, the airplane is now opening up trade routes north and south. . . . The Post Office Department has never operated at a profit. Why should aviation transportation be discriminated against--reducing an inevitable deficit?" The fact that Mr. Brown's Toledo law firm, Brown, Hahn & Sanger, has represented certain railroads, made some of the airmen suspect, in their bitterness, that Mr. Brown was consciously or unconsciously keeping the mail business safe for the railroads.

*Including Harris M. Hanshue and James G. Woolley, Western Air Express; L. H. Mueller, Varney Air Lines; Col. M. H. Britten, Northwest Airways; Paul Henderson and Lester D. Seymour, National Air Transport; Phil Johnson, Boeing Air Transport; George Schierberg, Robertson Aircraft Corp.; Gen. John F. O'Ryan and James A. Walsh, Colonial Air Transport; Clifford Ball, Clifford Ball Air Lines; Hainer Hinshaw, Universal Air Lines; Alex H. Beard, Continental Air Lines.