PIA – A History: The “Air Mail Fiasco”

(Originally posted at peoriastation.com on September 18, 2015)

Last time, we covered the development of the existing airfield, originally called “Peoria Airport Inc.” Next, we’ll explore how the Air Mail Act of 1930 prompted airlines to emphasize passenger business over air mail, but also led to the “Air Mail Fiasco.”

Commercial aviation got its start through government air mail contracts, so one could cynically, yet truthfully, expect corruption. Air mail operations began with Army Air Corps flyers in August 1918, but then the Contract Air Mail Act of 1925 authorized the use of private carriers. Subsidies were based on weight, and some of the carriers exploited this by handling junk mail and heavy freight as “air mail” and at one hundred percent profit. By 1929, some 45 carriers were involved. Naturally, the federal government discovered its patriotic duty to regulate private air mail services.

In 1926, then-Secretary of Commerce Herbert Hoover named William P. McCracken as his Assistant Secretary of Commerce for Aeronautics. McCracken helped develop standards and regulations for commercial air mail flying but then left government for the private law practice. McCracken’s work led to the Air Mail Act of 1930, signed into law by President Herbert Hoover.

The legislation was requested by newly-appointed (1929) Postmaster General Walter Brown so he could reform the air mail system into an efficient network. Under a new formula in which subsidies were paid by mileage instead of weight, long routes were given an advantage over short ones. Airlines were paid on the basis of aircraft capacity regardless of whether it carried air mail. This discouraged handling junk mail or other freight but also encouraged passenger service. As a result, airlines acquired bigger planes and became less dependent on air mail.

The Air Mail Act awarded contracts to carriers which had been flying for at least six months, operated at least 250 miles and provided daily service. The lowest bid won. Carriers with existing contracts for at least two years could exchange these for a route certificate extending their mail run for an additional ten years. The bill also gave the Postmaster General authority to extend or consolidate contracts at his discretion.

Two weeks after the Act’s passage, Postmaster Brown and William McCracken (who by then was representing airlines) met with a handful of airline executives. Brown used his authority to reduce the number of air mail contractors to four carriers which already existed (or would in time become) American Airlines, Eastern Air Lines, Transcontinental & Western Air (TWA) and United Air Lines.

Despite the worsening economy, these changes sparked rapid growth in commercial aviation. Between 1930 and 1932, air miles nearly doubled from 15,000 to 27,000 and passenger volume grew from 385,000 to 476,000 during the same period.

Unfortunately, the shift to larger planes caused Peoria to lose its air mail and passenger flights. American Airways’ Universal Division began accepting Ford Tri-Motors, which were larger than the tri-motored Fokker F-10-As they had been using at Big Hollow Airport. This airfield, also called “Radnor Airport,” "Airport of Peoria" or "the Municipal Airport," was too small for the Tri-Motors so air mail and passenger flights made their last stops there on April 30, 1931.

In September 1933, conservative radio journalist Fulton Lewis Jr. complained to a Senate Committee that air mail contracts awarded during the Hoover Administration did not go to the lowest bidder. Sen. Hugo Black (D-Alabama), Senate Committee on Air Mail and Ocean Mail Chairman, agreed to conduct a hearing.

Although the committee’s findings revealed Postmaster General Brown’s decisions had resulted in a more efficient and profitable air transportation network, Black claimed evidence of collusion between Brown and airline officials. Public hearings took place in January 1934. William McCracken refused to testify and was convicted of contempt.

On February 7, 1934, President Roosevelt announced the cancellation of all air mail contracts. Two days later, it was announced that the Army Air Corps would assume air mail routes. Existing contracts ended at midnight, February 19. As of February 20, Peoria lost its air mail stop for the second time in three years.

Air mail flights by the ill-equipped Army Air Corps proved disastrous. Obsolete, open-cockpit aircraft were to be used, and too few Air Corps pilots were experienced flying in bad weather or at night. Three pilots were killed in weather-related crashes on February 16 familiarization flights.

The Roosevelt Administration intended to re-bid air mail contracts to private carriers in June 1934. The Army Air Corps’ unsuccessful attempt to handle this business made it all the more urgent to return the business to them. That month, Congress passed the Air Mail Act of 1934, which heavily regulated the air mail business. It forced an end to holding companies, thus separating airlines and aircraft manufacturers. Carriers previously holding air mail contracts were forbidden to bid on new ones. Those carriers simply changed or modified their names as a way of skirting this ban.

As a result of the new bidding process, Peoria gained a second carrier, Pacific Seaboard Airlines. In the next installment, we’ll cover air service at the Peoria Airport from 1932 to 1937

- David P. Jordan