Aeronautics: Bids Opened

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Up to a fifth-floor office in Washington's old Post Office Department Building all one day last week trooped hopeful airline operators with sealed bids for the nation's airmail. After a two-month cycle of fury and futility they thought they were about to get back what a nervous Government had snatched from them. When the deadline for receiving bids came and went, an underling scooped up 45 thick envelopes, tied them into a bundle, stuffed them into a vault.

Next day, just before noon, the precious package was carried downstairs to the large, unlovely office of the Superintendent of Airmail. There, tense and expectant, some 200 airline executives, newshawks and Government officials jammed around a long table. At the head sat baldish Postmaster General Farley slightly ill-at-ease, surrounded by a pack of assistants. Spectators mounted chairs and desks to see and hear better.

Promptly at noon a postal official slit open the first bid and read it aloud. Others followed, to the scratch of an accountant's pen writing down their contents. Most of the old-line companies blossomed out with a minor change in name—part of the Farley program for corporate reorganization. Eastern Air Transport became Eastern Air Lines. Transcontinental & Western Air put three new periods into its abbreviated title. American Airways switched to American Air Lines. Only Western Air Express made a major change by becoming General Air Lines. Because its previous contracts were held under the names of its operating subsidiaries, only United Air Lines bid under its old corporate title.

But altogether new was the character of bids offered by these oldtime operators for mail contracts. The crowd broke into a long whistle of surprise when bids of 17½¢ and 19¢ per airplane mile were read off for routes on which "General" Farley had specified a maximum of 45¢. The companies, it seemed, were ready to cut their throats and bleed to financial death rather than die of slow starvation without any airmail contracts.

Loudest whistles of all came from the crowd when the bids of American Air Lines' inscrutable Errett Lobban Cord were read off. On the set-up presented by Mr. Farley, Errett Cord had been expected to underbid the field, capture a virtual monopoly of U. S. airmail. Instead, he bid so close to the maximum on eight routes, that he was heavily underbid on all but the Newark-Boston run. He stood to lose even his old southern transcontinental route, having overbid his nearest competitor for half the run by 10¢. Obviously fear of Cord competition had caused other lines to hack down their rates to a level where they could not possibly make their operating expenses.

Likeliest explanations of Cord's high bids: 1) loud cries of "Wolf" had put him on his best behavior; 2) possibility that no contracts would be awarded under Mr. Farley's temporary (three-month) plan because of the imminence of legislation providing for one-year contracts (with an entirely new set of bids) as suggested by President Roosevelt and reported favorably by the House Post Office Committee last week.

Of all the major companies, United Air Lines* came out of the bidding most favorably. Uncontested was its 38¢ bid for its old northern transcontinental route. Likewise uncontested were the bids for its old Pacific Coast routes.