Air mail route scandal
The Air Mail Route Scandal refers to the controversial actions taken during the late 1920s and early 1930s regarding the privatization and management of airmail services in the United States. Following the passage of the Air Mail Act of 1925, which aimed to introduce competitive bidding for airmail contracts, significant issues arose as many airlines relied heavily on government subsidies, showing little interest in expanding passenger services. In 1929, Postmaster General Walter Brown initiated a restructuring of the airmail system, leading to the enactment of the McNary-Watres Act in 1930. This amendment significantly increased Brown's authority, allowing him to dictate terms to the airline industry.
Brown's methods included consolidating routes and favoritism towards larger, financially stable airlines, effectively pushing many smaller operators out of business. The subsequent "spoils conference" solidified this control, resulting in a major shift towards a few dominant airlines. However, when a congressional investigation revealed potential collusion and misconduct, authorities moved to cancel the contracts and shift mail delivery to the military. This decision led to tragic consequences, including the loss of lives among Army pilots. Ultimately, despite Brown's controversial tactics, his actions laid the groundwork for a more efficient air transportation system that influenced future airline operations in the U.S.
Air mail route scandal
The Event In a series of meetings in Washington, D.C., the postmaster general divided routes and airmail contracts among four major airlines. His unilateral moves were later criticized for driving many smaller airlines out of business
Date May 15 to June 9, 1930
Postmaster General Walter Folger Brown used his power over airmail contracts to dramatically reshape the airline industry in the United States. During his tenure, transcontinental mail delivery and passenger service were greatly streamlined. Although the airmail contracts Brown awarded were later deemed illegal, the system he created had a major influence on mail delivery and air travel throughout the twentieth century.
In 1925, Congress passed the Air Mail Act, also known as the Kelly Act. This act mandated the privatization of airmail service through the process of competitive bidding. This goal was accomplished by 1927; however, it soon became apparent that many of the contract airmail operators existed only because of the government airmail subsidy and were unwilling to commit to the expense of developing passenger service. A major premise of the airmail service had been that it would demonstrate the feasibility of regularly scheduled, long-distance airline service, which would ultimately result in the establishment of passenger service throughout the country.
When President Herbert Hoover was elected in 1928, he appointed Brown as postmaster general. After studying the existing airmail system, Brown concluded that it had to be redesigned in order to be efficient. However, the Air Mail Act of 1925 limited the authority of the postmaster general to mandate changes in the system. Late in 1929, Brown began his effort to streamline the entire air-transportation network. First, he refused to renew the five airmail contracts that were scheduled to expire, electing to extend them for six months. Brown openly expressed his dissatisfaction with the existing patchwork of routes and companies involved in the industry.
On October 9, 1930, Congress passed the third amendment to the Air Mail Act. Called the McNary-Watres Act, the amendment was crafted by Brown himself with the assistance of William P. MacCracken, Jr., a former assistant secretary of commerce and airline-industry lobbyist. This act revised the manner in which airlines were paid for carrying mail and gave the postmaster general virtually dictatorial power over the industry. The postmaster general’s prerogative was to determine which bidders for airmail contracts were considered responsible and what actions would best serve the public interest. The act also included the provision that only airlines that had flown a daily schedule of at least 250 miles for six months were eligible to bid; this immediately eliminated many of the smaller airlines.
With his power firmly established, Brown called a meeting in May, 1930, with a select group of airline executives. At this meeting, called the “spoils conference,” Brown imposed his will on the industry and created three transcontinental routes operated by three large, well-financed airlines. Those who objected to his provisions were threatened with the denial of airmail contracts, the lifeblood of the industry. Brown forced a number of unwilling participants to merge, thus establishing American Airlines and Trans World Airlines (TWA), which in turn were awarded transcontinental mail routes. He used his authority to extend postal routes and adjust rates.
Brown also imposed a requirement that pilots have experience flying at night, a provision that was not part of the McNary-Watres Act but that Brown argued best served the public interest. In order to silence the objections of some smaller airlines such as Southwest Air Fast Express, Brown went so far as to encourage one of his favored airlines to buy out the troublemakers. In the case of Southwest Air Fast Express, the purchase price was twice the value of the airline.
The details of Brown’s meetings were uncovered by a Hearst newspaper reporter. Based on the reporter’s evidence, Democratic senator Hugo L. Black initiated a congressional investigation. Black and the Democratic administration elected in 1932 were certain that they had uncovered evidence of collusion and illegal activities under Brown. The new postmaster, James Farley, and Black persuaded President Franklin D. Roosevelt to cancel the contracts and use the Army Air Corps to fly the mail. This move was a disaster, as twelve Army pilots were killed in the seventy-eight days before the contracts were returned to the airlines.
Impact
Brown, in imposing his vision of the ideal air transportation system, favored large, well-financed corporations over smaller airlines. His methods were dictatorial and ultimately resulted in the bankruptcies or forced mergers of many smaller, pioneer operators. The big four airlines—United, TWA, American, and Eastern (or their subsidiaries)—were awarded nearly all of the available airmail contracts at the spoils conference. Regardless of Brown’s methods, however, he created an effective mail and passenger air-transportation system. Brown transformed the system, creating thirty-four subsidized mail routes that covered more than 27,000 miles and carried 474,000 passengers by 1932. The cost to the post office of delivering airmail decreased from $1.10 to $0.54 per mile. The airline industry was on the brink of self-sufficiency when the contracts were canceled. The air-transportation program developed by Brown became the model for the system used throughout the rest of the twentieth century.
Bibliography
Allen, Oliver E. The Airline Builders. Alexandria, Va.: Time-Life Books, 1981. Provides a basic history of the development of airlines in the United States.
Brady, Tim, ed. The American Aviation Experience: A History. Carbondale: Southern Illinois University Press, 2000. A well-written history of aviation in the United States; includes a number of interesting illustrations.
Christy, Joe, and Leroy Cook. American Aviation: An Illustrated History. New York: Tab Books, 1994. A detailed history of aviation in the United States with valuable treatment of the airmail situation in the 1930’s.
Ferrara, Ronald. “Legalized Murder: The Army Flies the Mail.” American Aviation Historical Society Journal 54, no. 1 (2009): 45-52. Describes the airmail scandal of the 1930’s, using primary sources from the Herbert Hoover Presidential Library.