■ The Airmail Act of 1930. (McNary-Watres Act)
On December 9, 1929, Brown appeared before the Appropriations Committee of Congress and related his concerns and suggestions about the airmail system in place, and the lack of an efficient passenger service. Members of the committee were receptive to Brown’s ideas and
requested that he draft a bill and send it to them as soon as possible.
On February 4, 1930, Brown sent to Congress a proposed bill that contained the majority of his ideas about how to fix the system. The bill expressly allowed the Postmaster General to award contracts based on negotiated rates rather than competitive bidding. Although the bill was reported favorably out of committee, a minority report was filed containing objections by two members of the committee to the proviso allowing awarding contracts on other than a competitive bid. One of those was Representative Kelly, the sponsor of the Airmail Act of 1925 (Kelly Act).
The form of bill that was passed by Congress was substantially the same as the draft submitted by Brown, with the exception of the removal of the proviso allowing award of contracts based on negotiation, and the removal of provisions allowing consideration of “equities” or “pioneering rights” to carriers based on prior contributions. The bill became law when signed by President Hoover on April 29, 1930.
Accordingly, the main provisions of the act required that the carriers would no longer be paid on the basis of weight, but by the volume of the available space in the aircraft for the carriage of mail. This encouraged the carriers to invest in larger aircraft to earn more money. It further provided that bonuses would be paid if the aircraft were multiengined and had certain navigational devices installed.
Although the Act did not permit the award of contracts based on negotiation, as Brown had requested, it did amend the prior requirement of straight competitive bidding to a modified version of competitive bidding. The Postmaster was authorized to circumvent the actual low bidder in favor of the “lowest responsible bidder.” Precedent for awarding contracts on this basis can be found in the Foreign Airmail Act of 1928.10 A “responsible bidder” was defined in the Act as one that had flown daily scheduled service over a 250-mile route for a period of at least six months. In actual practice, Brown redefined the definition of “responsible bidder” to require that the applicant not only show that it had flown a daily scheduled route for six months, but that
it had been flown in both daylight hours and at night. This requirement favored the larger, more experienced airmail carriers.
The law also granted the Postmaster General the discretion to “extend or consolidate” routes then in effect and to grant carriers who had flown existing routes for at least 2 years extensions on their contracts for an additional 10 years. The law gave near dictatorial powers to the Postmaster General.