Air Mail scandal The Air Mail scandal , also known as the Air Mail fiasco , is the name that the American press gave to the political scandal resulting from a congressional investigation of a 1930 meeting ( the so - called " Spoils Conference " ) , between Postmaster General Walter Folger Brown and the executives of the top airlines , and to the disastrous results of the steps taken by the administration of President Franklin D . Roosevelt to use the U . S . Army Air Corps to fly the mail in 1934 . The parties of the conference effectively divided among them the air mail routes , resulting in a Senate investigation . Although a public relations nightmare for both the administrations of President Herbert Hoover and Franklin Roosevelt , the scandal resulted in the growth of the airline industry and the modernization of the Air Corps . Roots of the scandal . Background . U . S . air mail operations began in August 1918 , after starting in the United States Army Air Service in May of the same year , with pilots and airplanes belonging to the United States Post Office . For nine years , using mostly war - surplus de Havilland DH . 4 biplanes , the Post Office built and flew a nationwide network . In the beginning the work was extremely dangerous ; of the initial 40 pilots , three died in crashes in 1919 and nine more in 1920 . It was 1922 before an entire year ensued without a fatal crash . As safety and capability grew , daytime - only operations gave way to flying at night , assisted by ground beacons and lighted emergency landing fields . Regular transcontinental air mail delivery began in 1924 . In 1925 , to encourage commercial aviation , the Kelly Act ( also known as the Contract Air Mail Act of 1925 ) authorized the Post Office Department to contract with private airlines for feeder routes into the main transcontinental system . The first commercial air mail flight was on the CAM ( Contract Air Mail ) Route No . 5 from Pasco , Washington , to Elko , Nevada , on April 6 , 1926 . By 1927 the transition had been completed to entirely commercial transport of mail , and by 1929 45 airlines were involved in mail delivery at a cost per mile of $ 1 . 10 . Most were small , under - capitalized companies flying short routes and old equipment . Subsidies for carrying mail exceeded the cost of the mail itself , and some carriers abused their contracts by flooding the system with junk mail at 100 % profit or hauling heavy freight as air mail . Historian Oliver E . Allen , in his book " The Airline Builders " , estimated that airlines would have had to charge a 150 - pound passenger $ 450 per ticket in lieu of carrying an equivalent amount of mail . William P . MacCracken , Jr . . William Petterson MacCracken , Jr . became the first federal regulator of commercial aviation when then - Secretary of Commerce Herbert Hoover named him the first Assistant Secretary of Commerce for Aeronautics in 1926 . During World War I he had served as a flight instructor , had served on the Chicago Aeronautical Commission , and was a member of the board of governors of the National Aeronautical Association when selected by Hoover . After helping to draft key safety standards and regulations that became part of the 1930 Air Mail Act , MacCracken returned to his private law practice , where he continued to be involved in the growth of commercial aviation by representing many major airlines . For that reason Postmaster General Walter F . Brown asked him to preside over what was later scandalized as the " Spoils Conference " , to work out an agreement between the carriers and the Post office to consolidate air mail routes into transcontinental networks operated by the best - equipped and financially stable companies . This relationship left both exposed to charges of favoritism . When MacCracken refused later to testify before Congress , he was declared a lobbyist and found in contempt of Congress . Air Mail Act of 1930 . Hoover appointed Brown as postmaster general in 1929 . In 1930 , Brown , citing inefficient and expensive air mail delivery , requested legislation from Congress granting him authority to change postal policy . The Air Mail Act of 1930 , passed on April 29 and known as the McNary - Watres Act after its chief sponsors , Sen . Charles L . McNary of Oregon and Rep . Laurence H . Watres of Pennsylvania , authorized the postmaster general to enter into longer - term airmail contracts with rates based on space or volume , rather than weight . The Act gave Brown strong authority ( some argued almost dictatorial powers ) over the nationwide air transportation system . The main provision of the Air Mail Act changed the manner in which payments were calculated . Air mail carriers would be paid for having sufficient cargo capacity on their planes , whether the planes carried mail or flew empty , a disincentive to carry mail since the carrier received a set fee for a plane of a certain size whether or not it carried mail . The purpose of the provision was to discourage the carrying of bulk junk mail to boost profits , particularly by the smaller and inefficient carriers , and to encourage the carrying of passengers . Airlines using larger planes designed to carry passengers would increase their revenues by carrying more passengers and less mail . Awards would be made to the “ lowest responsible bidder ” that had owned an airline operated on a daily schedule of at least 250 miles ( 402 kilometers ) for at least six months . A second provision allowed any airmail carrier with an existing contract of at least two years standing to exchange its contract for a “ route certificate ” giving it the right to haul mail for 10 additional years . The third and most controversial provision gave Brown authority to " extend or consolidate " routes in effect according to his own judgment . Less than two weeks after its passage , at the Spoils Conference , Brown invoked his authority under the third provision to consolidate the air mail routes to only three companies , forcing out their competitors . These three carriers later evolved into United Airlines ( the northern airmail route ) , TWA ( Transcontinental and Western Air , which had the mid - United States route ) and American Airlines ( American Airways , the southern route ) . Brown also extended the southern route to the West Coast . He awarded bonuses for carrying more passengers and purchasing multi - engined aircraft equipped with radios and navigation aids . Congressional investigation . In September 1933 , after a complaint was made to the Senate Committee on Ocean Mail and Air Mail by radio journalist Fulton Lewis , Jr . that air mail contracts had been awarded to companies that had not submitted the lowest bids , its chairman , Alabama Senator and later U . S . Supreme Court justice , Hugo Black , agreed to establish a special Senate committee to investigate alleged improprieties and gaming of the rate structure , such as carriers padlocking individual pieces of mail to increase weight . Despite showings that Brown ' s administration of the air mail had increased the efficiency of the service and lowered its costs from $ 1 . 10 to $ 0 . 54 per mile , and the obvious partisan politics involved in investigating what appeared to be a Republican scandal by a Democratic - controlled committee , the hearings raised serious questions regarding its legality and ethics . Black announced that he had found evidence of " fraud and collusion " between the Hoover Administration and the airlines and held public hearings in January 1934 , although these allegations were later found to be without basis . When MacCracken was called to testify , he refused to appear and allowed his clients to recover documents from his firm ' s files . The Senate judged him a lobbyist and voted to convict him for contempt . On February 7 , 1934 , Roosevelt ' s postmaster general , James A . Farley , announced that he and President Roosevelt were committed to protecting the public interest and that as a result of the investigation , President Roosevelt had ordered the cancellation of all domestic air mail contracts . However not stated to the public was that the decision had overridden Farley ' s recommendation that it be delayed until June 1 , by which time new bids could have been received and processed for continued civilian mail transport . Role of the U . S . Army Air Corps . Executive Order 6591 . At the time of the scandal , the Air Corps was in the midst of lobbying for a more centralized control of air operations in the form of an establishment of a General Headquarters ( GHQ ) Air Force . Without consulting either Army Chief of Staff Douglas MacArthur or Chief of the Air Corps Major General Benjamin Delahauf Foulois , Secretary of War George H . Dern at a cabinet meeting on the morning of February 9 , 1934 , assured President Roosevelt that the Air Corps could deliver the mail . That same morning , shortly after conclusion of the cabinet meeting , second assistant postmaster general Harllee Branch called Foulois to his office . A conference between members of the Air Corps , the Post Office , and the Aeronautics Branch of the Commerce Department ensued in which Foulois , asked if the Air Corps could deliver the mail in winter , casually assured Branch that the Air Corps could be ready in a week or ten days . At 4 o ' clock that afternoon President Roosevelt suspended the airmail contracts effective at midnight February 19 . He issued Executive Order 6591 ordering the War Department to place at the disposal of the Postmaster General " such air airplanes , landing fields , pilots and other employees and equipment of the Army of the United States needed or required for the transportation of mail during the present emergency , by air over routes and schedules prescribed by the Postmaster General . " Preparation and plans . In 1933 the airlines carried several million pounds of mail on 26 routes covering almost of airways . Transported mostly by night , the mail was carried in modern passenger planes equipped with modern flight instruments and radios , using ground - based beam transmitters as navigation aids . The airlines had a well - established system of maintenance facilities along their routes . Initial plans were made for coverage of 18 mail routes totalling nearly ; and 62 flights daily , 38 by night . On February 14 , five days before the Air Corps was to begin , General Foulois appeared before the House of Representatives Post Office Committee outlining the steps taken by the Air Corps in preparation . In his testimony he assured the committee that the Air Corps had selected its most experienced pilots and that it had the requisite experience at flying at night and in bad weather . In actuality , of the 262 pilots selected , 140 were Reserve junior officers with less than two years flying experience . The Air Corps had made a decision not to draw from its training schools , where most of its experienced pilots were assigned . Only 48 of those selected had logged at least 25 hours of flight time in bad weather , only 31 had 50 hours or more of night flying , and only 2 had 50 hours of instrument time . The Air Corps during the Great Depression , hampered by pay cuts and a reduction of flight time , operated almost entirely in daylight and good weather . Duty hours were limited and relaxed , usually with four hours or less of flight operations a day , and none on weekends . Experience levels were also limited by obsolete aircraft , most of them single - engine and open cockpit planes . Because of a high turnover - rate policy in the War Department , most pilots were Reserve officers unfamiliar with the civilian airmail routes . Regarding equipment , the Air Corps had in its inventory only 274 Directional gyro s and 460 Artificial horizon s , and very few of these were mounted in aircraft . It possessed 172 radio transceivers , almost all with a range of or less . Foulois ordered the available equipment to be installed in the 122 aircraft assigned to the task , but the instruments were not readily available and Air Corps mechanics unfamiliar with the equipment sometimes installed them incorrectly . The project , termed AACMO ( Army Air Corps Mail Operation ) , was placed under the supervision of Brig . Gen . Oscar Westover , assistant chief of the Air Corps . He created three geographic zones and appointed Lieutenant Colonel Henry H . Arnold to command the Western Zone , Lieutenant Colonel Horace Meek Hickam the Central Zone , and Major Byron Quinby Jones the Eastern Zone . Personnel and planes were immediately deployed , but problems began immediately with a lack of proper facilities ( and in some instances , no facilities at all ) for maintenance of aircraft and quartering of enlisted men , and a failure of tools to arrive where needed . Sixty Air Corps pilots took oaths as postal employees in preparation for the service and began training . On February 16 , three pilots on familiarization flights — Lieutenants Jean D . Grenier , Edwin D . White and James Eastman — were killed in crashes attributed to bad weather . This presaged some of the worst and most persistent late winter weather in history . AACMO . Blizzard conditions . On February 19 , a blizzard disrupted the initial day ' s operations east of the Rocky Mountains , where the first flight from Newark , New Jersey , was cancelled . The first flight of the operation left from Kansas City , Missouri , carrying 39 pounds of mail to St . Louis . Snow , rain , fog , and turbulent winds hampered flying operations for the remainder of the month over much of the United States . In the Western Zone , Arnold established his headquarters in Salt Lake City . In the winter of 1932 – 1933 , he and many of his pilots had gained winter flying experience flying food - drop missions to aid Indian reservation settlements throughout the American Southwest isolated by blizzards . As a result of this experience and direct supervision , Arnold ' s zone was the only one in which a pilot was not killed . The Western Zone ' s first flights were made using 18 Boeing P - 12 fighters , but these could carry a maximum of only 50 pounds of mail each , and even that amount made them tail - heavy . After one week they were replaced by Douglas O - 38 and Douglas O - 2 5C observation biplanes borrowed from the National Guard . In both the Western and Eastern zones , these became the aircraft of choice , modified to carry 160 pounds of mail in their rear cockpits . Better - suited planes such as the new Martin YB - 10 bomber and Curtiss A - 12 Shrike attack aircraft were in insufficient numbers to be of practical use . Two YB - 10s crashlanded when pilots unfamiliar with retractable landing gear forgot to lower it , and there were only enough A - 12s for a partial squadron in the Central Zone . On February 22 , 1934 , two fatal crashes occurred in Texas and Ohio , and a near - fatal crash in Virginia . The next day , a forced landing in the Atlantic Ocean resulted in a drowning . President Roosevelt , publicly embarrassed , ordered a meeting with Foulois that resulted in a reduction of routes and schedules ( which were already only 60 % of that flown by the airlines ) , and strict flight safety rules . On March 8 and 9 , 1934 , four more pilots died in crashes , totaling ten fatalities in less than one million miles of flying the mail . ( Ironically , the crash of an American Airlines airliner on March 9 , killing four , went virtually unnoticed in the press . ) World War I Air Service legend Eddie Rickenbacker was quoted as calling the program " legalized murder " , which became a catchphrase for criticism of the Roosevelt administration ' s handling of the crisis . Aviation icon Charles A . Lindbergh , a former air mail pilot himself , stated that using the Air Corps to carry mail was " unwarranted and contrary to American principles . " Even though both had close ties to the airline industry , their criticisms seriously stung the Roosevelt Administration . On March 10 , President Roosevelt called Foulois and Army Chief of Staff General Douglas MacArthur to the White House , asking them to fly only in completely safe conditions . Foulois replied that to ensure complete safety the Air Corps would have to end the flights , and Roosevelt suspended airmail service on March 11 , 1934 . Foulois wrote in his autobiography that he and MacArthur incurred " the worst tongue - lashing I ever received in all my military service " . Norman E . Borden , in " Air Mail Emergency of 1934 " , wrote : " To lessen the attacks on Roosevelt and Farley , Democratic leaders in both houses of Congress and Post Office officials placed the blame for all that had gone wrong on the shoulders of Foulois . " The Army resumed the program again on March 19 , 1934 , with limited schedules , in better weather , and after putting its pilots through a hastily - created course in instrument flying . It continued the service through May 8 , 1934 , when temporary contracts with private carriers were put into effect . Two additional Army pilots were killed before AACMO ' s last flight on June 6 , 1934 . Results . In all , 66 accidents resulted in 12 crew deaths , creating an intense public furor . Because of the air mail operation , accidental crash deaths suffered by the Air Corps in 1934 rose by 15 % to 54 , compared to 46 in 1933 and 47 in 1935 . In 78 days of operations and over 13 , 000 hours of logged flight time , completing 65 . 8 percent of their scheduled flights , the Army Air Corps had moved 777 , 389 pounds of mail over . Aircraft employed in carrying the mail were the Curtiss B - 2 Condor , Keystone B - 4 , Keystone B - 6 , Douglas Y1B - 7 and YB - 10 bombers ; the Boeing P - 12 fighter ; the Curtiss A - 12 Shrike ; Bellanca Aircruiser ( C - 27 ) transport ; and the Thomas - Morse O - 19 , Douglas O - 25 C , Curtiss Falcon ( O - 39 ) , and two models of Douglas O - 38 observation aircraft . Among the 262 Army pilots flying the mail were Ira C . Eaker , Frank A . Armstrong , Elwood R . Quesada , Robert L . Scott , Robert F . Travis , Harold H . George , and Beirne Lay , Jr . , all of whom would play important roles in air operations during the Second World War . Consequences and effects . Effects on the airline industry . The government had little choice but to return service to the commercial airlines , but did so with several punitive conditions . The Air Mail Act of June 12 , 1934 , drafted by Senator Black ( and known as the " Black - McKellar bill " ) , closely regulated the air mail business , dissolved the holding companies that brought together airlines and aircraft manufacturers , and prevented companies that held the old contracts from getting new ones . ( The industry ' s response to the last item was simply to change names ; for instance Northwest Airways became Northwest Airlines . ) United Aircraft and Transportation Company ( UATC ) appeared to be its particular target and broke up on September 26 , 1934 , into three companies : United Aircraft Manufacturing Company , United Air Lines Transportation Company , and Boeing Aircraft Company . The most punitive measure was to ban all former airline executives from further contracts . United Airlines ' president , Philip G . Johnson , for instance , chose to leave the United States and helped to form Trans - Canada Airlines . William Boeing resigned as UATC ' s chairman of the board on September 18 . The effect of the entire scandal was to guarantee that mail - carrying contracts remained unprofitable , and pushed the entire industry towards carrying passengers . With bidding for contracts more competitive and air mail revenue less attractive than before , the airlines placed a new emphasis on passenger transportation and development of modern airliners . Several airlines sued the government for revenues missed while the Air Corps flew the mail . The last claim was settled in 1942 . In 1941 the United States Court of Claims found that there had not been any fraud or collusion in the awarding of contracts pursuant to the Air Mail Act of 1930 . Changes in the Air Corps . The immediate results of the operation were disastrous for the image of the Air Corps . Speaker of the House Henry T . Rainey , echoing comments made by Gen . Billy Mitchell , criticized : “ If we are unfortunate enough to be drawn into another war , the Air Corps wouldn ’ t amount to much . If it is not equal to carrying the mail , I would like to know what it would do in carrying bombs . ” ( Congressional Record , 73rd Congress , 2nd Session , Vol . 78 , Pt . 3 , 3144 – 3145 . ) For the Air Corps , despite its public humiliation , the Air Mail Fiasco resulted in a number of improvements , bringing about changes that its previous publicity campaigns were unable to obtain . On April 17 , 1934 , well before AACMO ended , Secretary Dern convened the " War Department Special Committee on the Army Air Corps , " chaired by former Secretary of War Newton D . Baker , to closely examine the program and the overall condition of the Air Corps . Known as the Baker Board , it included all five military members of an earlier board chaired by General Hugh A . Drum , four of them senior Army ground force officers , who tightly controlled the agenda and scope of the board ' s investigation to prevent it from becoming a platform for advocating an independent air arm . Of the 11 members , only three were Air Corps advocates . The Baker Board endorsed earlier findings of the Drum Board , supporting the status quo that the Air Corps was an auxiliary force of the Army and opposed to the Air Corps being a separate service equal to the Army and Navy . It rejected the threat of air attack as a major threat to the national defense or the need of a large air force to defend against it . It opposed any expansion of the Air Corps until the needs of the Army as a whole had been addressed . It did repeat the Drum Board ' s recommendation for the immediate establishment of a GHQ Air Force , placing under it all air combat units within the continental United States . This provided another , limited step toward an autonomous air force , but also kept authority divided by maintaining control of supply , doctrine , training and recruitment under the Chief of the Air Corps , and airfields in the control of corps area commanders . Within the Air Corps itself , instrument training was upgraded , radio communications were greatly improved into a nationwide system that included navigation aid s , and budget appropriations were increased . The Air Corps acquired the first six Link Trainer flight simulators of a fleet that would ultimately number more than 10 , 000 . The president also appointed Clark Howell , newspaper editor of the " Atlanta Constitution , " to chair a five - person committee to investigate all aspects of U . S . aviation , resulting in the creation of the Federal Aviation Commission . Among the fallout of the scandal was the retirement under fire of Foulois as Chief of the Air Corps . He had been called to testify before the Rogers subcommittee on aviation of the House Committee of Military Affairs during the scandal . Chairman William N . Rogers of New Hampshire was suspicious of Foulois for negotiating aircraft contracts instead of assigning them to the lowest bidder , and during his testimony the Chief of Air Corps had been flamboyant and careless with hyperbole . In the wake of the mail fiasco , Rogers charged him with several violations of law and ethics , including making misleading statements to Congress and mismanagement of the air mail operation . Foulois demanded that Rogers release the evidence against him ( largely damning testimony from senior Army staff officers given during secret hearings ) and garnered the full support of the normally hostile Secretary of War , George Dern . The matter finally went before the Army ' s inspector general , whose findings in June 1935 exonerated Foulois of any criminal wrongdoing but did cite him for making misleading statements . He received a reprimand from Dern but throughout the summer of 1935 was publicly excoriated by Rogers . With his term as Chief expiring in December 1935 , he chose to retire concurrently and took terminal leave from the Air Corps beginning in September .