Evening star., 1935-02-26
Low RATES CAUSE
CRISIS IN A|RMA|L
Bids Made on Cancellation
of Contracts Last Year
Work HardshipS.
BY DAVID LAWRENCE.

created by that step has not been
troned out.
The result is that some of the air
lines are being forced to consider
whether they can continue to carry
airmail at all.
The whole situation is one of rates.
The airmail companies say they cam
not survive on present allotments,
that all of them are losing money and
that some will have to 60 out OF
business within the next go days If
the situation isn't remedied.
The trouble arises out OF the low
bids made a year ago. Some OF the
lines, in order to protect themselves
from irresponsible competitors and
believing that the rates would later
be advanced, bid something like or
8 cents a mile. Even rural free de-
d. livery carriers get about twice that
amount.
Roosevelt Wants Action.
Not a single company has ordered
any large aircraft equipment since the
airmail cancellations year ago. and
many of the operating companies were
forced to honor contracts which they
bad made for airplanes prior to the
cancellations.
Every one of the operating COM
panies now has been completely di-
vorced from the manufacturing end,
so that all the reforms sought have
been accomplished.
President Roosevelt has taken a deep
interest in the plight of the airmail
companies and has asked the Post
Office Department, the Interstate
Commerce Commission and the COM
mittees of Congress to expedite action
. so that the airmail system will not
be disrupted.
The chief difficulty is one for which
the airmal companies are not re-
sponsible. It involves clash inside
the Government as to the control of
the airmail Naturally, the Post Office
Department wants to keep supervi-
sion. and the President has indicated
he wants the I. C. C. to take it over
Regulation Welcomed.
Private companies say they don't
care where the supervision comes
from so long as it is non-pohtical
and effective. They welcome Federal
regulation.
The criticism that the ailmail gets
a subsidy of 100000 a year is re-
garded as unfair by the companies
because, they say, the postage col
lected from the public means about
S7,000,000 in receipts. and because
the deficit in airmail operation arises
from the desire of the Government
to supply service to sections of the
country that never have been and
probably never will be self-suStaining.
The Aviation Commission, headed
by Clark Howell of Georgia, has just
filed its report, and its recommenda-
tions are in the main satisfactory to
the industry. The administration
has shown no signs as yet Of follow
ing the report. An appropriation
bill of S14,000,000 has been cut down
to S10,000000, notwithstanding the
fact that the reduction recently of
the postage to cents resulted in
81 per cent increase in the amount
of mail carried.
Harassed by Low Rate.
Approximately 215,000.000 pieces of
mail we're carried in the air during
1884, so that the possibilities of the
service are such that a scientifically
developed air system some day may
get along with very little public sup
port.
But at this juncture the airmail
companies cannot afford to run along
on 80 or 80 day basis and at rates
which prevent them from meeting ex-
penses. Within the last month three
OF the bidders who entered low bids
when the airmail contracts were can
Celed have gone out of business. Sew
eral Of the other small lines are
banging on because it might cost
them more if they forfeited their
bond for performance than If they
kept on carrying the mails in the hope
of relief.
This has resulted in the use of sim
gle-engine planes, which cannot, Of
course, carry passengers. since the
mail flying is done at night This
means that passenger service has been
suspended in different parts of the
country
One LOST All ltS Cdptal.
One airmail company had capital
of about 100000 and lost it all in the
first seven months of operation. An
other lost Is per cent of its capital.
Still another lost more than $4,000, 900
in 1884. The air lines are paying their
pilots out of capital put up by in
vestors. Only one company has paid
a dividend in eight years.
Those companies which did make a
profit in the last several years put the
money back into equipment and de-
cancellations come along and break
up their whole opportunity to realize
on their original investment.
Pilots Valuable as Reserves.
Americas air service in commercial
aviation is the envy of the rest of
the world. With the Importance of
the airplane in future wars, other
countries are pointing to the unexam-
pied opportunity the United States
has to train pilots as an indication
of how much stronger the American
Army and Navy will be when they
need reserves.
Last years experience showed how
difficult it was for the Army pilots to
endure the rigors of airmail flying
The expenditure of that $4,000, 900 or
S4,000,000 in excess of receipts. spent
largely to give service where favored
Representatives and Senators insist
1t shall be given. is not a large sum
in these days of billions, especially
when there is an airplane manufac-
turing industry which has been stag
nant for nearly year. It's another
case, however, of avoiding recovery
and avoiding unemployment as OIL
cials concentrate on the kind Of leaf
raking jobs that do not make for
permanent recovery.
,copyright. 1881
nnnN MANN ilAnnHD ntEc