More on Transcontinental Air Transport-А Novel but Unworkable Idea

Flying was not yet very appealing to travelers in the late 1920s. Forced landings, cancellations due to weather, and airsickness from the heat, noise, and sometimes-violent motion of the primitive aircraft combined to make the experience more of an adventure than a reliable mode of transport. The passenger service that was available was mostly short-haul, and there were parts of the country where there was no service at all, like between New York and Chicago, which was the heavily traveled train route through the Allegheny Mountains. The experience of the early airmail pilots over that route, as well as the subsequent trials of the contract airmail carriers, had con­vinced National Air Transport (Clement Keys), which flew the mails over the route, not to attempt passenger service. Still, Keys believed that airline service was destined to be a market­able and timesaving device for transcontinental passengers.

In 1928, Keys seized upon the idea of providing air transportation by day, then turning the passengers over to the trains for the standard luxurious Pullman service by night. He established a joint venture with the Pennsylvania Railroad in the East and the Santa Fe in the West to round out the full passage. The air carriage portion of the deal was carried out by the newly formed Transcontinental Air Transport (TAT), which had no airmail routes or subsidies, and it had to rely solely on passenger fares for its income. The westbound trip began in New York at Penn Station, where passengers boarded the Pennsylvania Railroad for the overnight run to Columbus, Ohio. Once beyond the Alleghenies, TAT took over at Columbus, flying passengers all day on the next leg to Waynoka, Oklahoma, where they again boarded a Santa Fe over­night train to Clovis, New Mexico. From there, they continued in Ford Trimotor discomfort to Los Angeles. The complete itinerary could be completed, at least on paper, in 48 hours, saving a full day over the fastest through train schedule then being operated. (See Figure 13-5.)

The operation, although highly touted by the railroads and accompanied with big-name fanfare (Charles Lindbergh himself was at the controls of the inaugural flight), was really only

a novelty. The Ford Trimotors held 10 to 14 seats, but the passenger load was usually only six or seven passengers, and sometimes just three. With no airmail subsidy, the airline lost money, $2.7 million in 18 months. The Wall Street crash of 1929 impoverished many of the potential passengers, and by 1930, TAT was barely hanging on.

Ш The Hoover Administration and Walter Folger Brown

Former Secretary of Commerce Herbert Hoover was elected President of the United States in November 1928, and took office in 1929. As we saw at the beginning of this chapter, in his testi­mony before the Morrow Commission Hoover strongly supported a robust aviation system for the country. As we also saw above, the state of commercial aviation after the passage of the

Airmail Act of 1925 was far from optimal, being perhaps better described as chaotic. It was clear, however, that the health of the emerging aviation industry at the time depended on airmail govern­ment contracts.

Hoover appointed Walter Folger Brown as his new Postmaster General in 1929. Brown, a lawyer, had served as Assistant Secretary of Commerce beginning in 1927 under Hoover. Brown had no particular affiliation with aviation prior to his appointment, but he took seriously the mandate that came with his job to “encourage commercial aviation.” The Postmaster General, since 1925, had the responsibility of making awards of airmail contracts, which under the Air­mail Act of 1925 were required to be made on a competitive bid basis.

Under the terms of the original Act, airmail carriers were paid 80 percent of the revenues derived from the postage charged. This had provided too little income for the CAM route
operators to survive, so the law was changed in 1926 to provide for CAM operators to be paid according to the weight of mail carried plus a factor for distance carried. As he immersed himself in his new duties, Brown noticed that sometimes smaller companies submitted unrealistically low bids in order to get the business, and then played games with the weights of mail carried in order to increase their income. Postage rates were not set to cover the actual cost of airmail delivery, but to encourage the use of airmail and to promote commercial aviation. The difference in revenue received by the Post Office and the amount paid to the CAM operators based on weight/distance of airmail carried was a subsidy. Unscrupulous operators were known to have mailed telephone books and machine parts to themselves, paying the upfront postage and then charging the Post Office the much higher contract rate based on weight.

Brown saw that the system in place encouraged fraud, was costly to the government, and did little to promote commercial aviation. He realized that the government subsidy for airmail was open-ended, subject to little government control. It was like an oil gusher that could not be capped.

Although the government controlled the award of CAM routes, it had little control over the operators after the award was made. Control of stock companies was subject to change and was beyond the control of the Post Office under the system in place. In fact, in 1929 a proxy fight for control of National Air Transport, which held the New York to Chicago portion of the transcontinental airmail route, had resulted in United Aircraft & Transport Corporation taking control of that company from the North Ameri­can Aviation group. This gave the United group monopolistic control of airmail carriage all the way across the nation, without Post Office approval, although the government was footing the bill.

Within a relatively short time after tak­ing office, Brown had formed well-researched and thought-out conclusions about what was wrong with the airmail service. Brown believed that the Post Office was paying too much for the carriage of mail, partly because the airline passenger business had not been developed. He believed that by developing passenger traffic, a new, untapped source of income would become available to the carriers. This new income would then be available to help offset the cost of airmail operations.

Brown thought that tying the mail contracts to the size of aircraft (bigger) and requiring on­board state-of-the-art communication equipment (radios) and instrumentation would have the effect of making airline flying safer and more acceptable to the potential flying public.

He noted that a system of illogical short routes had been created through the process of competitive bidding, and that competitive bidding had resulted in a nonsensical pay schedule to the airmail contractors with rates of pay varying from 62 1/2 cents to the maximum of $3.00 per pound. He believed that competitive bidding on airmail contracts was counterproductive and that a system of appointing qualified, well-financed, and experienced operators would render a more stable and efficient system. He felt that those operators who had “pioneered” airmail routes in certain parts of the country, and who had expended effort and money in promoting the airmail system, developing good will and encouraging aviation should be given preferred consideration in the award of airmail contracts. (See Figure 13-6.)