Evening star., 1942-04-08
Far|ey's sCanceIIation
OF Airmai| Contracts
Defended al Trial
Government Opposes
Claims Of 5000, 900
By PIone Lines
"a the Assoc lated Press.

~ the Associated Press.
Government counsel told the
United States Court of Claims today
former Postmaster General Farley
had clear duty" to cancel the
domestic airmail contracts in 1884
when the evidence before him
Showed a combination to defeat
competitive bidding at its incep-
ton"
The Government is combati ting ef-
forts of big air transport firms to
collect nearly SO 600 900 damages al
legedly suffered as result OF the
contract cancellations
Mr. Farley's action came Febru-
ary l9. after several cOngreSSiOnal
investiga tions of ocean mail and
air mail contracts and the Army
thereafter flew the mail until May
81, 1884.
Explained His Actions.
The then Postmaster General ex-
planned his action to Chairman
Black, now Supreme Court Justice
Black. of the Senate Investigating
Committee. saving Congress did not
intend that air mail appropriations
be spent for the benefit of a few
favored corporations which could
use the funds as the basis of wild
stock promotions resulting in profits
of tens of millions of dollars to
promoters"
Assistant Attorney General Fran
chs NJ. Shea told the court it was
unnecessary for the Government to
show corruption" on the part of
Postmaster General Brown. Mr.
Farley's predecessor. who entered
into agreements with the air lines
extending their routes.
Under this route extension system
Mr.. Farley once explained to Mr.
Black. if one air line had a route
from Boston to New York 1t could
be extended from city to city until
it reached the Pacific Coast without
competitive bidding"
Farley" MI Shea told the court
had clear duty before him II he
found evidence of a combination Ia
defeat competitive bidding at its
inception. His duty was to annul
the route certificates. Therefore
the United States cannot be sub
jected to liability as the result of
the performance of that duty"
Government counsel further told
the court that Mr. Brown made 1t
perfectly clear to the air line opera =
tors that there was to be no COM
petitive bidding
He simply told them said Mr.
Shea, to get together and divide
this up and tell me who is to get the
business He bludgeoned the little
fellow who wanted to bid"
No Contracts Existed.
Mr.. Shea contended there were nc
contracts with the airlines anyway
but merely licenses to carry mail
He said there was no obligation OF
the Government to offer mail for
transportat ton, or any obligation OF
the lines to take it.
Pacific Air Transport. Inc: Boeing
Air Transport, Inc, and United Ali
Lines Transport Corp. however, told
the court they were entitled to 81
477,774 for breach of contract dam
ages and 1864 ,423, representing COM
pensation due at contract rates on
five mail routes in January and up
to February l9, 1884. the cancella
tion date
Counsel for the airiines said there
was mo resemblance to con-
spiracy," that Mr.. Brown made no
commitments to the companies, and
that it was necessary for him 10
discuss line operations with the
firms involved
The airlines based their claim in
part on the theory that the cost of
operating the planes was as great
whether they carried mail or not,
so long as the schedules of flights
were maintained.