Evening star., 1934-07-26

those attending the conference was
quoted as declaring that almost any
division Of the routes would be pre-
ferable TO competitive bidding for
them.
Now. the law plainly and unequi-
yocally required that all contracts
should be let by competitive bidding.
without real competitive bidding Mr.
Brown could and did allow excessively
high rates OF pay 10 the contractors.
Stock Promotion Profits.
1t may be Illuminating as well as
interesting to point out few Of the
instances OF the amazing profits re-
sulting from stock promotions during
the existence of the old airmail con-
tracts.
William z. Boeing has testified be-
fore the Senate Investigating Com
mittee that the Boeing Air Transport
Co. was organized with capital
stock of $3.50, and that its net income
for the year 1890 was approximately
81 500 600 made exclusively from an
airmail contract with the Post once
Department. This company paid
dividends of five and one-half million
dollars on this capital of $3.50 from
1928 to 1882. inclusive.
Mr. Boeing further claimed to have
invested S259i4 in the Boeing Air
| Transport Co. and said that he had
about S400, 900 in stock invested in
different aviation companies which
went into the United Aircraft and
Transport Co. The original company
was merged with United and Mr..
Boeing testified that in May. 1929,
stock which he had thus acquired had
a value Of approximately s51 SOC, 900
on the market.
The Pratt Whitney Aircraft Co
was organized with a capital stock
of 81 900 for the purpose of manu-
featuring aircraft engines and ma
terials. and went into the United
Aircraft and Transport system.
It made q profit of sl.07 per
cent on all engines sold to the Gov
ernment in 1880 and during the past
five years this concern paid dividends
of more than 1000, 900 on the orig
insl capital of 81 1000.
! Some of the promoters of these
aviation companies organized pools
for selling their stock to the public
and paid themselves enormous SAL
aries and stock dividends when they
had little or no capital invested and
knew nothing whatsoever about aNa-
| ton.
For instance. Fred B. Rentscheler
| testified that he invested S253 and
| that hts stock of the United Aircraft
and Transport Co. was worth $35,-
575.e4S in 1929 He actually received
in cash more than s9,500,o00 and still
had $4,000 shares of stock.
Millions From $3.50.
These millions were all made from
an investment of $253. From 1927 to
| 1888 Mr.. Rentscheler was paid more
than sl,500,000 additional as salary
and bonus. His associates all Jared as
we'll: George w. Mead invested s207,
securing stock of the value of s29,-
100000 in 1929 and actually cashed
out at approximately $7,500,000. He
then had left $4,000 shares Of stock
besides his fat salary and dividends.
An investment of $40 netted Charles
w. Deeds stock valued at ss,624,64o
| and he has actually received more
than 81 900, 900 in cash besides his
large salary and dividends.
I do not ask you TO take my word
| for the charge that the old contracts
we're illegal. for evidence has been
produced before the Senate nvesti-
eating Committee, and Is now in the
records of that committee, which
shows that some Of the participants
| in the 'rspoils" conferences themselves