Evening star., 1934-02-17
NEW AIRMAIL BILL
APPROVED; HALTS
CONTRACTS
House Committee Against
Farley Making Pacts With
Private Concerns.
CANCELLATION UPHELD
IN FIRST LEGAL TEST
Foreign Carriers Facing Official
Inquiry-Senator Black De-
fends Roosevelt Action.
BY the Associated Press.

BY the Associated Press.
The House Post once Committee,
in approving the emergency airnan
bill today, eliminated sections which
would have let the Postmaster Cen
eral negotiate contracts with private
carriers
Meanwhile, with the first legal
challenge Of its rights to annul do
mestic airmail contracts out of the
way. the administration pried into
foreign airmail agreements and per-
fected plans to have the Army take
over the mail service Monday.
1t was decided between the Army
and the Post ONCE Department that
the first Army mail fight would leave
Newark Airport at 3:45 pm. Monday
for Miami, where it is scheduled to
arrive at $40 am. Tuesday.
Limited to One Year.
At the Capitol the bill also limited
the temporary airmail service TO one
year.
said, make the mail carrying eXclu-
Sively an Army job until permanent
legislation can be enacted.
The bill will be brought before the
House Immediately after the tax bill
passes Tuesday. Then the committee
will start hearings on new basic and
permanent legislation.
The bill simply authorizes use of
Army planes for carrying the mail for
not more than year and permits the
transfer Of funds necessary to meet
expenses.
As originally introduced by Repre-
sentative Drummer. Democrat Of New
York. it also would have let the Post
master General make temporary pri-
vate contracts for not more than a
year.
Other Provisions Asked.
The Postmaster General also could
have negotiated. without competition.
. contracts for three months provided
the payment did not exceed 40 cents
per airplane mile.
These two sections were eliminated,
| the Post Office Department having
said that it would not insist upon
their inclusion.
4hEIC hCAE AuulCIOuS 1hlGdLAD4to
today that disputes over the Govern
ment's contract abrogation might con-
tinue for weeks, or longer.
Following dismissaf by New York
Federal Court, on grounds of no juris-
diction of an action by Transcon-
tinental & Western Air to restrain the
cancellation, counsel for the company
said he would at once appeal.
This is something that may go on
and on" said the attorney, John
Thomas Smith.
Another major chapter in the con-
troversy was looked for on Monday.
Walter F. Brown. former Postmaster
General, then will appear before the
Senate Airmail Investigating Commit
tee.
Condemned by Senator Black.
Chairman Black of the committee
last night stated publicly that the
1880 meetings Of airmail representa-
tives here. which Brown contends rep
resented no collusion, resulted in con-
tract ALLEGATIONS that were contrary
to law.
Upon investigations now in prog
resS, Post Office officials said, will
depend whether foreign airmail con-
tracts are Cancelled or retained.
Retention of a contract with the
Pan-American Line brought an at
tack from Representative Fish, Re-
publican, of New York, that it had
received a $6,0OO,0OO subsidy without
bidding and that prominent Demo-
Gratis" we're on its directorate.
Exchange Presses Inquiry.
Meanwhile the New York Stock
Exchange pressed its investigation
into aircraft stock transactions from
January 26 to February 9. Seven Is
sues were under inquiry, traders re-
calling that there was heavy trading
prior to the contract cancellation,
when all slumped badly.
Private aviation company protests
continued. Philip G. johnson, presi-
dent Of United Airlines, in letter
to Postmaster General Farley, as
serted his company had obtained its
contracts by competitive bidding and
without "collusive agreement"
Smith, counsel for T. w. A., Of
which Charles A. Lindbergh is an
adviser, announced during the New
York court case that his company
was still willing to carry the mails
for 30 days free and to suffer any
penalty that we might incur by so
doing"
In dismissing the action, Federal
Judge John c. Knox took care to
express no opinion for or against the
contract cancellation. He pointed
out that the restraining order was
an action against the United States,
and added:
In the absence Of its consent to
be sued, have no Jurisdiction.
Hits at Brown.
Senator Black in his radio address
last night, said that much of S58,-
100000 of air mail subsidy paid in
the last years of the Republican ed-
ministrations had gone to companies
favored" by former Postmaster Cen
eral Brown. These were the COM
panies, Black said, that figured in q
series Of meetings in Washington In
1880.
"'The expressed and definite object
of these meetings" Black said, was
to allocate certain air mail contracts
to certain companies participating in
the meetings. When the companies
could not, through their representa-
tives, agree upon a division, the then
Postmaster General was to act as
arbitrator and make the final de-
cision. The sense Of the meeting
was expressed to be against any kind
of competitive bidding, and in favor
of this method of agreement and al
location"
Black said the subsidized aviation
industry was greedily grabbed away