Evening star., 1940-10-27
Air Cargo Situation
May Be Threshed
OUT at Hearing
RoiIwoy Express Agency
Has StronsIehoId on
Business, Is Charge
BY JOSEPH S. EDGERTON.

DN JOSEfh .. EDOLRAoN
Federal investigation of an al
legged stranglehold by Railway Ex-
press Agency, Inc, on the develop
ment of air express traffic in the
United States may result in public
hearings in the near future by the
Civil Aeronautics Board
With the National Aeronautic As
sociation and other national avia-
ton organizations prepared to act as
intervenors in behalf of the public,
efforts will be made during the hear
ings to determine whether existing
contracts between the Railway EX-
press Agency and "a air transport
lines constitute a restraint of trade
within the meaning of the anti
trust laws
The case is regarded as one of
the most important in the recent
history of domestic air transporta-
ton. Its final settlement concefv-
ably may affect materially the en-
tire future of air transportation, not
only in the United States but on
American flag airlines abroad.
Rates Called EXorbitant.
It has been charged that air eX-
press rates. which are said to be
controlled by the Railway Express
AGENCY, are "eXorbitantlv high -
so high as TO throttle artiflclally the
CARRYING of air cargo. There are
provisions in contracts between the
express agency and most. if not all.
of the airlines that air express rates
shall not be less than twice the rail
rates. Actually. they are at present
much more than double the ground
rates. ranging in some cases to as
much as 500 per cent higher. 1t Is
said. because of higher pickup and
other charges.
Aviation experts have estimated
that air cargo can be handled, IN
volume. with profit, at rates equal
to or less than current railway eX-
press rates. This, however, would
necessitate the construction Of great
numbers of specially designed cargo
airplanes and would require a
gradual development in accordance
with carefully prepared national
plan.
I'VE are prepared to intervene in
behalf of the public in the proposed
hearings" Capt. Gill Robb Wilson,
president of the National Aeronautic
Association and consultant to the
Civil Aeronautics Authority, said
yesterday.
Three Things to Prevent.
"There are three things which
must be prevented:
First, that the airlines of the
United States do not repeat the
mistake of the railroads in per-
mitting an outside agency to &C
tuallv gain control of air cargo
business by acting as the collection
and distribution agency for such
cargo on the ground
Second that the airlines do not
set up an octopus which in time will
become larger than any Of them,
and which eventually may destroy
them.
Third. that the airlines do not
sell out to an agency which is con-
trolled by the railroads which, in
turn, might control them"
The development of air trans
portation and increased facilities for
the rapid shipment of commodities,
hs we'll as passengers and mail, is
regarded as Of outstanding i'm
portance in connection with the cur
rent national defense program and
might become even more vital in
case of national war emergency.
Valuable Defense Background.
Adequate development of air cargo
business in the past probably would
have taken place naturally. in the
absence Of artificial barriers. as it
has in other countries. aviation au-
thorities are expected to testify.
Such development in recent years
IN the United States would have
provided a valuable BACKGROUND
for national defense. resulting in the
development of cargo aircraft of
types needed for movement of mill
tary supplies and personnel. the
training of air and ground person.
mel. and the development of air.
ports and other ground facilities on
much larger scale than has taken
place.
The former Civil Aeronautics Au-
thorlty before its transfer by Presi-
dent Roosevelt into the Commerce
Department, ordered an investiga-
ton OF contracts between the Rail-
way Express Agency and the air.
lines TO determine whether such
contracts are in the public interest
The reorganization, dividing the
former independent c. A. A. into
the present Civil Aeronautics Board
and Civil Aeronautics Administra-
ton, which together compose the
ClVll Aeronautics Authority, has de-
layed action under this order. which
was filed in October. 1899
Agency Requests Certificate.
In the meantime, the Railway
Express Agency has requested the
Civil Aeronautics Board to issue il
a certificate of public convenience
and necessity authorizing it to act
as the agent for all domestic air.
lines and foreign routes under the
United States flag under terms ol
existing contracts. Oral arguments
on this application have been helo
and the matter now is pending be-
fore the c. A. B. for final action
In the meantime temporary Or
DEnDEhTI0u p