Evening star. [volume] (Washington, D.C.) 1854-1972, 1932-12-18

investigate tIlc tIlIuc dlIIIldll SyS
DR.. Cranes report, which bears out
in striking fashion testimony submit
ted to the committee by scores of wit
nesses during the last session of Con-
gress. is submitted with seven recon-
mendations, which are to be the basis
for a legislative program now being
considered by a special subcommittee
appointed for the purpose during the
follow:
/. That the airmail appropriation for
the coming fiscal year be reduced by
81 900 .0CO.
2 That certain Of the extensions of
service authorized by the Post Once
Department before and since the pas
sage of the Watres- McNary act be can
celed.
g. That greater limitations be placed
upon the Postmaster Generals power to
grant extensions and to make rates.
4. That field audit Of the accounts
Of the airmail carriers be authorized
and the rates for airmail be determined
IN accordance with the costs revealed by
the audit.
S. That the cost balancing principle
Of rate-making be required and that the
administrative machinery in the Post
Office Department be enlarged to en-
able this policy to be carried out.
6. That If the formula system OF
rate-payment be continued, the Watres-
McNary ect be amended. reducing the
maximum rate Of pay per mile from
SIPS to IS cents.
z. That Pan-American Anyways be
included under the uniform system OF
accounts for airmail carriers.
inflated" Costs Alleged.
Dr. Crane declared that he is con-
WINGED by his investigation that many
airmal carriers are reporting inflated
cost accounts to the Post Once De-
partment. He urged that continuous
field audits of the accounts Of all con-
tract holders be made to check against
such imitation. When the extent OF the
imitation Of accounts becomes known,
he reported, further reductions in air
mail payments may be made without
il1juring the stability Of the industry.
"One large operator" he said. re
ported its operating expenses to the
Post Office Department last year to be
sum over 5000, 900 larger than the re-
port OF operating expenses for the same
wear which it submitted to its board
of directors"
In recommending the cancellation OF
existing extensions made by the Post
Office Department, without competition
or bidding, DR.. Crane submitted q long
list of smaller lines which he said
could be eliminated without seriously
impairing airmail service He suggested
that the Waitress McNary act be amend
ed to provide that no extensions be
granted unless certain specific MINI
mum amount of mail be available fol
carriage. and, if after six months or a
year this minimum is not realized, that
the extension be automatically can.
called. This. he pointed out, would
eliminate the political extensions
which have been made, In some cases
because Of pressure brought to bear by
members Of Congress directly interested
Representative Mead Of New York,
chairman Of the Post Ofdees Commit
him that no extensions be granted I'M
til the airmail revenues reach q total
Of 10000, 900. and that after this limit
is passed 25 per cent of all such rev.
enues be applied to expansion of the
airmail service. Such policy, 1t was
claimed, eventually would eliminate the
subsidy feature. which is Objectionable
to many members Of Congress.
Lines Face ELIMINATION.
Among the lines which probably will
be eliminated first are those between
Los Angeles and Salt Lake City and
between Columbia, 8. c., and Augusta,
Ca, the latter having been established
December !. Readjustment Of schedules
all through the country probably will
become necessary.
Not only will the domestic airmail
operators face q 81 100000 reduction in
the coming fiscal year, they also must
face the loss Of approximately $700, 200
which is to be cut from the airmail
payments before the close Of the cur
rent fiscal year.
Second Assistant Postmaster General
w. I. Glover has predicted that, al
though present reductions Of Federal
payments will hurt the airmail opera
tors, few Of whom are operating with.
out heavy loss, the time Is coming In
the not distant future when the car
riers will be able to reduce their air
mail rates because Of the growth Of
passenger business. He predicted that
the airmail poundage will continue to
grow; that the volume Of passenger
ment of safety in flying Is increasing al
the time. But for the recent increase
In the airmail postage rate, in Mr.
Glover'3 opinion. the airma1 business
would have been steady and there
would not have been much loss in
poundage. despite heavy losses in all
classes of postal business.
With q single exception, ire is. n
operating air transport company wh:s :,
ever has paid dividend. according t.
the records Of the Post Once Depart.
ment. There are two, and possibly q
third, which are just about breaking
even. All others are operating at q
loss. some Of them at q very heavy