Walter Folger Brown is sworn in before testifying at a Senate committee hearing investigating airmail contracts in February 1934.
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Walter Folger Brown: The Postmaster General Who Built the U.S. Airline IndustryWalter Folger Brown helped Herbert Hoover become the Republican president in 1928. For his efforts, Hoover appointed Brown postmaster general. Brown is considered by some to be the person who built the airline industry in the United States. While that designation is an overstatement, Brown's role in engineering a series of airline mergers in 1929-1930 helped to create a systematic air transportation system that served for several years. Under the 1925 Kelly Act, and before Brown had been appointed, private airmail carriers received up to 80 percent of the revenue from airmail postage. However, the public did not send much airmail because it was expensive, and neither the Post Office nor the airmail carriers made money carrying the mail. When the Post Office reduced postage rates, use of airmail soared. In 1926, under an amendment to the Kelly Act, the Post Office changed how the airlines were paid from payment by the number of letters carried to payment by the pound of mail. Airlines immediately realized that they could increase their revenues by sending large quantities of airmail to themselves. They sent thousands of letters stuffed with large reports, telephone directories, and even mailed spare airplane or engine parts to their various branch offices. One airline contractor mailed itself two tons of lithographed material from New York to Los Angeles. The postage cost more than $6,000, but since the airline was paid by the pound, it received $25,000 from the Post Office. Beginning in February 1926, private airlines gradually took over carrying the mail from the government, and the last government Post Office airmail flight took place on September 9, 1927. The cost to the United States government for airmail service from 1918 until that date had been $17 million. During those nine years, the public had purchased about $5 million of airmail postage. In effect, the federal government had paid $12 million to establish the basic air transportation system in the United States. When Brown took office with the Hoover administration, there were 44 small airline companies. He saw that most lacked capital and the financial incentive to grow. Many depended entirely on government airmail contracts. He felt they were unwilling to invest in new equipment and were operating obsolete aircraft. Cost cutting led them to fly with questionable safety margins. To Brown, the immediate solution was to eliminate competitive bidding for airmail contracts and direct airmail contracts to large and sufficiently financed companies. Brown worked for two years to pass legislation that would allow him to do that. In 1930, the U.S. Congress gave the postmaster general nearly dictatorial powers over the airlines when it passed the McNary-Watres Act (the Airmail Act of 1930.) Under provisions of this act, the Post Office paid the airlines for available space on their aircraft rather than actual mail carried. This meant that the airlines purchased larger aircraft because they would receive more money. They then filled any empty space with passengers after loading on the mail, making still more money by selling tickets. The new system also paid extra for things such as flying over difficult terrain, in bad weather, and at night. It paid for radio equipment and safer multiengine aircraft. Brown believed in the large airlines and that one company should control the transcontinental airmail routes. The McNary-Watres Act allowed Brown to force smaller companies to merge or die. The ones that survived would become the corporate entities we know today—United Air Lines, American Airlines, and TWA. It also led to the creation of Eastern Air Lines, a carrier that was a mainstay of the national air traffic system for more than 60 years. While his opponents said Brown acted like a dictator and favored large companies, he felt that even they should be able to develop profitably without the help of airmail payments. He believed that competition was necessary in the airline industry to stimulate growth. He did not like reckless competition, but he also did not like monopolies. Brown's solution was a form of selective regulated competition. Brown chose and met with some of the contracting airlines and presented his plan for developing a national air transportation system. His goal was a system of three self-supporting transcontinental airline systems, and so he urged the airlines to form three large transcontinental companies. By the time Brown left his position in 1934, he had largely succeeded in bringing order to much of the airmail business. In 1934, a new Democratic president, Franklin D. Roosevelt, was elected. He appointed a new postmaster. Roosevelt's New Deal established many investigative committees. One, led by Senator Hugo Black (later a Supreme Court Justice), set out to examine mail contracts. The now-former postmaster, Walter Folger Brown, became the culprit. He was charged with favoritism and collusion with the larger airlines. Brown defended himself by saying that he had acted in the public interest. The members of Senator Black's committee refused to discuss how much growth and progress had taken place during Brown's handling of airmail contracts. They were not interested in improved passenger service, safety, and aircraft development. They pointed out that all but two of 20 contracts had gone to three large airlines. They revealed how some of the airlines used expense accounts to entertain government officials and how they gave jobs and loans to postal officials. They showed how airlines hired relatives of senators and congressmen as consultants. While no testimony or evidence was ever given that showed Walter Brown personally benefited, his career in national politics was at an end. Because he had used his power to get his own way, Brown became a most controversial figure. Even today, he is criticized or praised for the part he played in the development of the airlines. The question remains—would the airline industry in the United States have grown more slowly if it were not for his actions? When Brown entered office, the cost per mile of airmail was $1.10. When he left, it was 54 cents. In the late 1920s and early 1930s, airplanes were called mail planes even though they carried passengers. Today, when an airliner passes overhead, we think of it as a passenger airplane, even though it may also carry mail. —Rich Freeman References Christy, Joe. American Aviation, An Illustrated History. Blue Ridge Summit, Pa: Tab Books, 1987. Federal Aviation Administration, FAA Historical Chronology, 1926-1996, http://www.faa.gov/docs/A-INTRO.htm, http://www.faa.gov/docs/b-chron.htm. Gunston, Bill, Editor-in-Chief. Chronicle of Aviation. Paris, France: Jacques Legrand International Publishing s.a., 1992 Heppenheimer, T. A. Turbulent Skies, The History of Commercial Aviation. New York, N.Y.: John Wiley and Sons, Incorporated. 1995. Kane, Robert M., Vose, Allan D. Air Transportation, Seventh Edition. Dubuque, Iowa: Kendall/Hunt Publishing Company, 1979. Komons, Nick A. “William P. MacCracken, Jr., and the Regulation of Civil Aviation,” in Leary, William M. Aviation's Golden Age, Portraits From the 1920s and 1930s. Iowa City, Iowa: University of Iowa Press, 1989. Solberg, Carl. Conquest of the Skies, A History of Commercial Aviation in America. Boston, Mass. and Toronto: Little, Brown and Company, 1979.
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