Show Ie- Ie Brown C n Answers Charges s sI I Of Mail Contract Fraud a Former Postmaster General Replies Replies' to Accusations Ac Ac- cus Brought by Far Farley le tr y i NEW YORK Feb 16 The The text of or former fonner Postmaster General Wal- Wal 1 r P. P Browns Brown's reply to charges of collusion In the awarding o of airmail Contracts follows Th There re is is absolutely no r. r if cation ul o for the charge that any of oft t r the airmail contracts were award award- td ed through collusion among coni con con- i tractors or by any other Illegal practice r he e facts about the meetings meeting cf of cf airmail and air passenger op op- orators held at the de- de 19 and June 4 1930 parL nen Ml are ire as follows follows' 1 he airmail act of April 30 1930 known mown as the McNary act when en it jt was introduced in the b boule contained a provision der de de- signed to assist air pa passenger enger carders carriers car car- r ders who wh had no mail contracts ts because ause it W was lS believed that the de development of air pl passenger traffic was essential to th the permanence per of the transport industry indus indus- try to The language to which reference reference reference refer refer- ence is made wasas was as follows Provided that when in his interests shall opinion the public r to 10 require he postmaster geni gen gen- i i era eral may award such contracts t i r by negotiation and without ad- ad 1 for or OJ considering bids In awarding airmail contracts the will give proper prop- prop 1 er r consi consideration era iop to the equities i airmail cf-airmail and other aircraft opt oper op- op t 1 er tors with ith f respect to the routes which they have been operating and the territories which thC they 1 have bave been serving Language Ordered Changed Chanced t f Opposition to the awarding of oft t contracts by negotiations developed devel o in the committee e on post post- fc offices offices and post roads to which this legislation was referred and the language above quoted was finally stricken from the b bill ll I v although the last cl clause use directing the postmaster general to give proper consideration to the equities of af airmail and other aircraft air air- f craft operators operators' was given api approval approval ap- ap i in the discussions of the bill in the committee and on the floor of the house 1 In lieu of the language above 1 quoted there was inserted in the act let Provided that where the airmail air air- mail moving between the designated points does docs not exceed 25 cubic feet feeL or 2 pounds per trip the the postmaster general may award to the lowest responsible bidder who has owned and operated oper- oper ate aled an aIr ar transportation service service ser sere vice on a fixed daily schedule over o a distance of not le less than miles and for a period of not less than six months prior to the advertisement for bids a c contract at a rate n not t to exceed 40 cents per mile for a weight space of 25 cubic feet or pounds Whenever Whenever Whenever When When- ever sulli sufficient air mal mail Is not available first class mail matter may be added to make up the maximum load specified In such contract Quotes Phrase In Bill When it was d decided to strike from the bill the authority to buy mail sp space in passenger er planes by negotiation believing that it would be impo impossible to develop commercial aviation through the theair theair theair air passenger lines that had no airmail contracts I succeeded in inserting in section 5 of the bill after the phrase Orders that may b be issued by bythe bythe bythe the postmaster general for meeting meeting meeting meet meet- ing the n needs ds of postal service and adjusting mail operations to the art of flying lying and the following fol tol lowing and passenger transportation transportation transportation tation having decided that passenger passenger pas pas- operations essential to permanence of the air transportation tion industry must be developed if at all b by compelling the airmail contractors to carry passengers The passenger carriers who had no a airmail contracts but who had been very ery active In urging the passage of the bill were greatly disappointed disappoint d that the proviso for their relief relic had been stricken from the bill A representative of one of them told me that some of the passenger carriers were complaining that I had not made madea a vigorous fight for the clause in which they were interested and suggested the propriety of Inviting inviting ing the passenger carriers who had no airmail contracts and the airmail contractors to meet together together together to to- gether with me for the purpose of ot advising them w with th respect to the departments department's effort to secure the passage of the bill in substantially substantially substantially sub sub- its iLs original form and further to see if it under the law lawas as it was enacted any relief could be afforded to the passenger carriers carriers carriers car car- who had no airmail contracts contracts con con- tracts through the cooperation of ot the airmail contractors and the postoffice department The suggestion suggestion suggestion sug sug- was made that relief might be afforded in one or both bothof bothof of ot two ways Sune Suggestions for Help Made First by giving additional daylight daylight day- day light mail mall schedules to airmail contractors and permitting permUting them to sublet the same to passenger operators who had no airmail contracts contract and whose operations paralleled airmail routes and Second by giving extensions extensions' under the provision of section of ot the act to airmail operators and authorizing the subletting of the same to passenger carriers that had no airmail contracts The air all transport opera operators tors who had no mail contracts and the airmail contractors were accordingly accord accord- accordingly invited to meet with the postmaster general on the of ot Ma May 1930 In op opening the meeting I traced in detail the various legislative proceedings conne connected ted with the introduction and passage of the McNary McNary- act stressing the departments departments department's departments department's depart depart- ments ment's efforts to preserve the provisions designed to prevent the abandonment of air p passenger passenger enger en- en ger operations I stated to the them m meeting ting the practical difficulties In the way of ot giving them relief under the provisions pro of law adopted in lieu Heu of the authority to buy mail space by negotiation although that language had been written into the act to assist the passenger carriers I repeated to the m meeting the suggestion made for tor their relief by the subletting of operations from the airmail contractors without approving the same however as I had serious seri serf ous mis misgiving iving with respect to i its practicability and soundness I I. Invited the judgment of the operators operators operators oper oper- with respect to the plan suggested suggested suggested sug sug- and told lold them in a general way our ideas so far as the they had been formulated for extending the airmail service throughout the J I country and invited their opinions opinIons opinions ions as to what airmail and oth other r aircraft operators in the language of the ori original inal proviso of the Mc Mr Nary bill had equities with respect c to any any of ot the rout routes then in existence or under consideration con con- sidera tion Attorneys J s Consulted I 1 then turned the meeting over overto overto overto to the operators Later in the day I was wa's was informed that they h had d recessed for the purpose of consulting consulting consulting con con- their counsel and executives tives ti Mr Earl Wadsworth superintendent superintendent Superintendent Su of airmail who was present at the meeting made a memorandum of the proceedings as follows The postmaster general invited invited invited ed representatives of passenger air lines to meet with him in conference conference conference con con- ference at t 2 p p. p m m. on May 19 for lor the purpose of discussing the provisions of the bill Inso in inso inso so far as s it offered aid to the passenger passenger pas pas- sener lines The following persons were pre present ent Russell Hanshue Hanshue Hanshue Han- Han shue Wooley and Bishon of Western Western West West- ern Air Express Mayo Mao and Patterson of Stout Air Lines Maddux Sheaffer Cuthel and Furlow of T. T A. A T T. M Maddux Air Lines Coburn and Hinshaw of Aviation Corpora Corporation corporation corporation corpora corpora- tion White and and Johnson of United i Aircraft corporation Doe and Elliott tt of Eastern Eastern Eastern East East- ern Air Transport Mr Henderson Headerson Hender Header son of National Air Transport M rs Mar Marshall hall and Denning Thompson Aeronautical corporation corporation corpora corpora- tion Robbins and Hahn of or Pittsburgh Aviation industry Mr Van Zant Mr Lou Holland of U. U S. S Air Transport Mr Ted Clark representing Earl HUH Hilli- burton and Lawrence King from Detroit Invites Suggestion The postmaster general opened the me mooting meeting ting by discussing the general general gen gen- eral provisions of the billand bill billand billand and invited suggestions from those present as to the ways and means of assisting the passenger operators inasmuch as it is understood understood understood un un- un- un none of the so so called strictly passenger lines is breaking breaking breaking break break- ing even and it is apparent that they will need some assistance if they are to continue The P P. P M M. G. G expressed the desire to know whether it is going to be possible for the so-called so pioneers to agree among themselves as to the territory territory territory terri terri- tory in which the they shall have the paramount interest He outlined certain prospective routes that were in contemplation somewhat as follows A southern transcontinental transcontinental transcontinental route from Los Angeles to San Diego thence to F Fort rt Worth and Dallas also a route from New NewYork NewYork NewYork York to 10 St. St Louis and Kansas City and Los Angeles from St. St Louis to Tulsa and Fort Worth from St. St Paul to Winnipeg possibly from St. St Paul and Minneapolis to Omaha possibly a route south from Cheyenne and possibly one from Albany to Boston He referred referred referred re re- re- re to the plan mentioned below be be- low Colonel Henderson said I belleve believe believe be be- lieve it is quite possible for this group to work out a plant He asked for instructions from the P. P M. M G G. as to some policy He mentioned extensions and then assigning assigning as as- signing such extensions to some operator who has no mail con con- tract He indicated the airmail contractors would be willing to agree to such a plan Mr Maddux feels eels that if the they do not receive an airmail contract contract con con- tract they could not live and he hoped the bill would take care of tills this He would rather see the plan worked out as mentioned above than competitive bidding He said slid That is the view of ofT T T. A. A T. T All AU Against Bidding Mr Mayor said I think the suggestion is a good one rather than to have competitive e bidding He thinks the routes we have worked out with the directors on their certificates are fair etc Mr Clark said I 1 would prefer the plan su suggested rather than com competitive bidding Mr Lou Holland said I think it should be worked out by agreement agreement agree agree- ment as I am afraid that tive live bidding will result in wild promotions Mr Hanshue We are willing willingto to do anything within reason to work out the plan rather rath-er than to togo togo go Into inlo competitive bidding Mr White I 1 feel sure that the entire group would be delighted to go into such a conference and work it out along the lines sug suI- est d. d Mr Coburn 1 Z believe there is isa isa isa a a community of interests among the operators and the department and they are ready to cooperate and find o out t how to todo do it The P P. P M M. G G. G asked everyone to 10 speak if it there were any objections to th the plan suggested an and said that this was the appropriate time tim timeto to express their opinions or objections ob ob- thereto No one rose in objection to the plan Suggest Grouping suggested Mr MacCracken grouping the representatives es together together to to- gether according to locality in order to work out the details of ot the plan or any other plan that might be gotten Up suggesting they m might even have four committees com om- committees com com- or or organ an eastern and a w western wet west t. t ern era committee Colonel Henderson t thinks h ink oS those who have airmail contracts should be organized into lath one committee com corn and those who have no airmail airmail airmail air air- mail contracts should be organized organIzed organ organ- into another committee Mr Cuthel suggested that certain certain tain Lain members of ot this group present present pre pre- sent to the postmaster general a grouping of companies to to deal with southern and transcontinental routes The P P. P M. M G G. decided to permit per per- mit the operators to use we the room in which the meeting was held for the purpose of organizing themselves into such groups as may be be- decided upon and to report report report re re- re- re port back to the P P. P M M. G G. G when they reached a conclusion i n with regard to the suggested plan He suggested that they stick to the routes outlined The department on Ma May 19 gave the following statement to the press i In order to acquaint themselves themselves themselves them them- selves with the provisions of the bill r recently made a law through the signature of President President dent Hoover representatives es of every large passenger and airmail carrying concern throughout the country conferred today with Postmaster General Brown Assistant Assistant As M- Postmaster General Glover Glover Glover Glo Glo- ver and other officials of the department department department de de- de- de in charge of the airmail service This Is the first time that operators of ot the large passenger passenger passenger pas pas- lines line have had an opportunity opportunity opportunity to talk with the postmaster general and exchange views with him since the measure became became became be be- came a law Explains Charges H A A general discussion of air air- nail and passenger carrying business business business busi busi- ness together with prospects for tor their future development took place at today's meeting The postmaster general explained to those who attended the conference conference confer conter- ence the limitations placed on him under the terms of the act which fixed the maximum maximum maximum maxi maxi- mum that can be paid for carrying carrying carry carry- ing the mails to a mile and anda a charge of 40 cents a mile for lor each passenger transported Before the close of today today's session it was agreed that the operators present should prepare a map of the United States which will show in detail plans for a network of ot passenger and airmail routes to cover the country and which will be determined at future fu- fu fu tu ture tune conferences with the postmaster postmaster postmaster post post- master general The companies represented at today's conference were Western Air Express Aviation Corporation Corpora Corpora- tion National Air Transport Thompson Aeronautical Corporation Corpora tion Pittsburgh Aviation Industries Industries Indus Indus- tries Ford Company U U. S S. S Air AirLines AirLines AirLines Lines Earl Haliburton United Aircraft Corporation Curtiss Curtiss- Wright Transcontinental Air Transport and Eastern Air All Express Ex Ex- press press Passenger Reports Given Ghen On the of June th the air lir passenger pas pas- operators had no mail contracts and |