Evening star., 1935-03-17
FURTHER A|RMA|L
RATE BOOSTS SEEN
New Increases Expected to
Yield to Still Higher
Schedules Later.

Increased airmail rates ordered by
the Interstate Commerce Commission
In its surprise ruling announced Fri
day are expected to be merely pre-
liminary to further increases. 1t was
learned yesterday as the House Rules
Committee considered a special rule
to permit the calling up OF the new
airmail bill on the floor OF the House
tomorrow.
At least two members of the l. c. c.
who wrote the exhaustive report Gov
ering the airmail investigation OF
more than six months made by the
commission are agreed further IN
creases may have to be made to keep
the air transport industry alive.
The Post Office Department yeSter-
day afternoon completed estimates
which show that, on a basis of 95 per
cent perfect performance, the alrmall
companies will earn between $780,
900 and S1,350,0O0 more per year un-
der the new I. c. C. rates than at
present. This, the air transport oper-
ators say, will not be enough TO keep
them going. They estimate their 1883
losses at the present rates will total
nearly S5.OOO,000 and that. under the
new I. C. C. schedules, their losses
would exceed S3,500,000.
Miller Urges Higher Rates.
Commissioner William E. Lee, who
sat with Chairman McManamy in the
alrmail hearings, has expressed the
opinion that the newly ordered air
mail rates may not be proper for any
extended period" Commissioner Car
roll Miller, in a minority view. has
stated that the rates just ordered
should generally be higher.
In view of the divided opinion of
the I. C. C. as to the justice OF the
new rates and the claims OF the air
transport operators that they still face
dangerously large losses under the
new rates, it is anticipated still
further consideration of the whole
problem must be given by the COM
mission.
Commissioner Lee said that, in
view of the comparatively snort
period covered by the records sub
mitted to the commission on behaf
of the respondent airmail companies,
the absence of a financial audit OF
the accounts of the respondent COM
panies, and the changes which have
bcen occurring in airmall schedules
and other factors, the newly ordered
rates may have to be changed soon.
Lee Sees Need for Increase.
The maintenance for a reason
BILE period of time of a proper sys-
m of uniform accounts and the estab-
.ishment of reasonably permanent mail
schedules alone will, no doubt, in tu-
ture proceedings require material
changes in many if not all OF those
rates" Commissioner Lee said.
In explaining his belief that the
rates ordered by the commission have
been higher, Commissioner Miller
said greater weight should have been
given to the fact that the contract
ing companies as a whole are not
able to earn operating expenses un-
der the present rates and with the
present volume of traffic.
They clearly are in poor financial
condition" Miller said.
The finding of the I. C. G. that
some of the airmail companies are
ignoring both the law and their
promises to pay pilots, in accordance
with the scale fixed by the National
Labor Board is expected to result in
Federal action to compel their obed-
ience.
Rates Based on Board Wages.
The I. C. c., in fixing the new
rates, has in every case based them
upon the payment of Labor Board
wages to pilots, mechanics and la
borers of the airmail lines. The pay
ment of such wages is prescribed by
the existing airnail law as a condl-
ton upon the awarding or extending
and the holding of any airmail con-
tract
AS Congress prepared to act on
the new airmail law it appeared likely
that the airlines would win an amend
nent to the law permitting present
airlines to engage in competitive serv-
ices now existing. though establish
nent of future competitive services
is expected to be prohibited.
The Mead bill, as reported to the
House this week, would have for
hidden any airmail contractor to fly
a passenger or express service off
the line of his airmail contract route
in competition with any service of
another airmail contractor
This provision would have COM
PEELED Pennsylvania Airlines to aban-
don its Washington-Detroit service
and would have forced the abandon
ment of other important lines. A