Back to Bids

One of the last things President Roosevelt did before entraining for Florida and fun was to hold a White House Study conference with Postmaster General Farley, Attorney General Cummings and Secretary of Commerce Roper. By the time the President was well out to sea on the Nourmahal, announcement was made in Washington of one more change in the Administration's airmail policy.

After tortured weeks of criticism and recrimination, the Post Office Department was ready to hand the airmail back to private enterprise, thus relieving the Army of its ill-starred postal duties.* Pending permanent airmail legislation Postmaster General Farley invited private carriers to bid on three-month renewable contracts for 17 routes comprising some 18,000 miles of the 24,000 miles flown before the Feb. 9 cancellation order. Bids were to be submitted within 15 days by companies able to begin operations 30 days after obtaining contracts. Rates must be no higher than 45-c- per airplane mile.

But the specifications were so drawn that not one of the twelve airlines whose old contracts were annulled would be eligible for new ones. In line with the legislation pending in Congress, Mr. Farley declared that these companies must "reorganize" to have their bids considered. Beyond stating that mere change of name would not be sufficient, the Postmaster General did not specify what would constitute satisfactory reorganization. Sticking to his original contention that the annulled contracts were obtained by fraud & collusion, he agreed to accept briefs from carriers wishing to exculpate themselves. But he would not consent to hold open hearings, since in any case the companies, by losing their contracts, had legally disqualified themselves for five years from receiving new contracts under their old corporate setups.

Neither would any contract be awarded to any company, "reorganized" or not, which had in its employ any of the 32 officials named by Mr. Farley as having attended Walter Folger Brown's "spoils" conference on May 19--20, 1930.

Nobody was greatly pleased by the Administration's latest airmail plans unless it was the small independent operators who thought they saw their chance to get into the field. Democratic Senators O'Mahoney, Logan, McGill and Erickson decried it. Airline operators, rumbling concerted protest, argued that lines not now engaged in air transport could not get ready to carry mail 45 days hence. Most vociferous was President Richard W. Robbins of Transcontinental & Western Air ("The Lindbergh Line"). Using such words as "insane," "crazy quilt," "ghastly blunder," "gorgeous comedy of public error," Mr. Robbins described last week's call for temporary bids as the "eighth distinct and conflicting policy adopted by the Post Office Department within . . . six weeks."

Contrary to public suspicions, the U. S. aviation business is not a "trust." If it were an all-embracing giant like American Telephone & Telegraph, it could conceivably fold its hands and tell Mr. Farley it would either carry mail under favorable terms or carry no mail at all. But it was clear last week that, though the aviation industry might unite in a chorus of protest, its component parts were ready to scramble like barnyard fowl for airmail business. While the operators fired demands at Washington to clarify the reorganization requirement, each looked around suspiciously to see which way the others would jump.

Typical was the case of Transcontinental & Western Air. Owned entirely by three corporate stockholders and controlled by North American Aviation Inc. (General Motors subsidiary), TWA might find a shakeup preferable to giving up airmail hopes entirely. But no reorganization would satisfy Washington unless three men, all active in its management and all on the Farley blacklist, were ousted: able, acidulous President Robbins, Board Chairman Daniel Sheaffer, Vice President Jack Maddux.

What had rival airmail operators in a lather last week was the advantageous position in which Errett Lobban Cord's American Airways, found itself to bestride the whole industry. Though the Post Office Department vehemently denied that the new setup was designed to favor Mr. Cord's company, competitors pointed to the following:

1) American Airways' contracts were wiped out with the rest but it was more than two years after the fateful Brown conference that Mr. Cord stepped into control, and neither he nor any of his important men are on the Farley blacklist. Thus it could bid on the new contracts without any major personnel changes.

2) American Airways sprawls from Boston to Los Angeles, parallels many a mail route recently flown by other carriers. When Mr. Cord halted operations on his Century Air Lines after a squabble with striking pilots (TIME, Feb. 22, 1932) he let it cling to corporate existence. Nothing was to prevent him now from transferring American Airways routes, personnel & equipment, bag & baggage, to untarnished Century, which would then be free to bid for new airmail business.

3) Mr. Cord is credited with powerful friends in Washington. He was reported a substantial contributor to the 1932 Democratic campaign. Mr. Farley was pleased to fly by American Airways on his junket to the southwest (TIME, Oct. 30). Silliman Evans, onetime vice president of American Airways, is now fourth Assistant Postmaster General.

4) While other carriers have been retrenching since their contracts were snatched away, American Airways has engaged in what seems to be a bustle of preparation. Ten fast new twin-motored Douglases have been bought. Last week, after flight tests of the new Curtiss Condor "sleeper" with twelve berths, American Airways announced it would soon put six of them on its Dallas-Los Angeles run.

*Last week occurred the twelfth Army airmail fatality when Lieut. Thurman A. Wood set out after dark from Chicago for Omaha with clear weather reports, ran into heavy rain and low ceiling, rammed the nose of his small attack plane four feet into the ground.

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