Evening star., 1934-10-01
Crowley Demands In Briei
Firms Be Held to Con-
tract Scales.
FORMER E. A. T. OFFICIAL
IS OPPOSING OPERATORS
Commission Conducts First of
Hearings-Cisler Is Called
for Technical Advice.

Fighting to preserve the competitive
bidding method of awarding airmail
contracts, the Post Office Department
challenged the right of the Interstate
Commerce Commission to take any
action which will affect The validity
of existing airmail contracts as the
first I. c. C. airmail rate hearings be-
gan today.
Before the representatives OF all
the airmail contractors, aviation lead
ers and officials of the Post Office De-
partment, Karl A. Crowley, solicitor
for the department, opened the fight
with a preliminary brief in which he
contended that airnlail lines which
obtained contracts by offering ex-
tremely low rates, in the hope that
the I. c. c. would increase their pay,
must be bound to the rates they bid.
Dolan Facing Operators.
The hearing took dramatic turn
at the outset when the airline oper-
ators found themselves confronted by
Carl Dolan, former vice president of
EdSIGIn All dIlSpOII III S1ld4 &c VI
operations, recognized expert on all
transport costs. Dolan, dismissed by
the airline when the airmail contracts
were Cancelled last February. has been
retained by the Post Office Department
as special counsel to Crowley. With
his intimate knowledge Of airline oper-
ating costs he is expected to prove
tower of strength for the Post Office
Department in its fight to prevent any
increase of payments to the present
airnail contractors.
Crowley, in his preliminary state
ment, argued before the special I. c. c.
airmail group, headed by Commission
er Frank McManamy, that the I. c. c.
could only fix maximum rates for
carrying airnail, but has not author
ity to fix minimum rates or to increase
existing contract pay. He gave notice
that the Post Office Department will
contend:
Il. That the present contracts are
validated by the airmail act Of 1884,
and are binding upon all parties until
the termination thereof.
%. That the act merely gives the
commission the right to fix maximum
rates of pay which may be paid by the
Post Office Department upon the
awarding of new contracts after the
same have been duly advertised.
Contract Rates Not Affected.
"3. That the maximum rates of pay
fixed by the commission as fair and
reasonable rate will not affect the
rates of pay provided for by the pres
ent contracts whenever the contract
rate is lower.
a. That the Postmaster General has
authority to extend the present con-
tracts or any of them for an indefinite
period at the rates now in effect or at
such lower rates than the present con-
tract rates and subject to such other
conditions and terms as the commits
sion may prescribe"
Postmaster General Farley. Second
Assistant Postmaster General Harllee
Branch. in charge of airmail and
other postal officials have been an
gered by reports that certain of the
present airmail contractors gained
their contracts by purposely submit
SAAA6 44AAo4A(AdAly ou4S1Odl UldS III
order to kill off competition, in the
belief that the l. c. c. would increase
their rates later.
Postal officials make no secret of
their belief that such practice is NOR
ally fraudulent, and that to increase
the low rates would be to perpetrate
gross injustice upon airlines which
submitted honest" bids but lost out.
Crowley in his statement pointed out
that airmail pay is limited by law to
40 cents per mile, and that the I. c. c.
Is given authority to review the con-
tracts annually only "in order to be
assured that no unreasonable profit is
resulting or ACQUIRING to the con-
tractor
Cisler Called Upon.
Stephen A. Cisler, superintendent of
railway and airmail service, was called
upon to give the commission the tech
nical background Of the Post Office
Departments airmail contract policy.
The Post Office Departments main
effort, however, is expected to be made
later by Mr.. Branch.
American Airlines, the Errett L.
Coro air transport line which enjoyed
a mushroom growth during the past
two years and which. submitted the
lowest of the new airmail bids, asked
the commission for two hours in
which to present arguments that an
increase of its airmail pay rates is
necessary. Decisions of the National
Labor Board and the N. R. A. have
caused unforeseen increases in its op-
Grating costs since its bids were SUBJ
mitted and accepted by the Post Office
Department, it was stated.
No~date has been set for termina-
tion of the hearings, but Commits
sioner McManamy served notice on
all prospective witnesses that the COM
mission expects to push the hearings
through without interruption. The
airlines were asked to submit esti-
a. l.