Scandalous: The Air Mail Crisis of 1934

AirSpace Season 11, Episode 8 - Scandalous

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Matt: By the way, this, this story is like a political historian's dream. It has regulatory acts, it has government subsidies, it has hearings and political scandals, and it has presidential administrations and elections. Right? Like this story is like, it would make a political historian salivate.

Emily: Prestige television right here, Matt

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Matt: Welcome to AirSpace from the Smithsonian's National Air and Space Museum. I'm Matt.

Emily: And I'm Emily. You may not know this, but every flight you've ever flown on, probably had some mail on it, traveling along with your baggage in the belly of the airplane. That's one way the mail gets around these days.

Matt: The system of mail being carried on passenger flights was built in the early days of airplanes by the post office and the first airlines who pioneered the infrastructure that moves mail and passengers around the country quickly and safely. But in 1934, a potent mix of money, politics, and jealousy turned into a full blown crisis.

Emily: The air mail crisis of 1934 changed the way America flies. We're learning the history, today on AirSpace sponsored by Lockheed Martin. 

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Emily: Matt, we don't know a lot about airplanes and we definitely don't know a lot about. The postal service, so what are we gonna do today

Matt: Yeah, you know, we're learning. We do these episodes and we learn a little bit each time, but we learn because we bring in the experts. And fortunately we've got someone in the museum who knows a lot about air mail.

Emily: and early aviation

Matt: That's right. And everything really.

Emily: and everything. Bob know, Bob knows things.

Bob: A brief history of the United States Air Mail? Well, um, that's my dissertation, so if, uh, I'll stop in about five or six hours.

Matt: That's Dr. Bob van der Linden.

Bob: I'm, uh, Bob van der Linden. I'm the, uh, curator of commercial aviation at the National Air and Space Museum. 

Emily: And Matt, I'm sure you could have actually talked to Bob for five or six hours, but you didn't talk to Bob for five or six hours. But now I'm really curious, have you emailed him for his dissertation?

Matt: laughs I haven't, maybe I should. Yeah. But, um, you know, in any case, to understand why the airmail scandal or crisis, and actually both names are used to talk about the same event. If you look in the history books. To understand why it happened, we need to start at the beginning. And so we had Bob take us back to the beginning when the air mail was first flown here in the United States.

Emily: Ok Matt, I'm gonna sound like a historian right now…

Matt: Go for it

Emily: …but it's because somebody gave me a cheat sheet. Air mail started around 1918, there was a couple of attempts to fly mail in the days sort of between when the Wright Brothers made their first flight and World War I.

1918 is really sort of the true beginning point when air mail service really got off the ground in the United States.

Bob: Air mail really truly got started May 15th, 1918, from the Polo Grounds in West Potomac Park when, uh, the post office flew the first official air mail on an old Curtis Jenny training plane from here to, uh, Philadelphia and from Philadelphia to New York.

And the same time at New York, they launched the service down to here. That's when it got started. Uh, it didn't get off to a great start. The pilot went in the wrong direction, ended up in Waldorf, Maryland, but they figured it out after a while.

What it did do it, it pioneered, uh, aviation routes all across the country and, uh, proved that it was possible to fly mail. More importantly, uh, have operate commercial service across the country and, and do it, uh, effectively. I won't necessarily say profitably, that took a while, but this was at a time when there was no air transportation of any kind, to speak of no airlines, none of that. 

Matt: Things start out small when it comes to air mail. The first flights are from Washington D.C. to Philadelphia and New York, and then back again. And you know, one of the reasons why it has to start out small in that way is that there aren't that many permanent air fields yet.

There aren't airports, there aren't air traffic control systems. There's not instruments in the airplanes, no radio contact or navigational aids, right? They're not working with the tools and the infrastructure that we have today, but kind of making it work with what little they do have in terms of ground support. 

Bob: One of the most important jobs the Post Office has ever done was, uh, help sponsor new transportation technologies, be they steamships or railroads, building roads, the old classic Boston Post Road and others. That's all about being able to get the mail to and from and around the country, quicker. Improve communications, which is extremely important. Especially in a democracy that was growing and you needed to be, uh, in touch with people and in touch with the government. And, and it's, it's absolutely critical for, um, for the economy. 

So when they, when the airplane came along right after the Wright Brothers, people started thinking like, ‘Hey, let's start air mail.’ 

Emily: And it's so hard to imagine for us, Matt, I think, at least for me, right? There's so much infrastructure surrounding commercial aviation all of the things that are going on in the airport to make sure that you as a passenger is safe and that those airplanes are safe to be flown and transport us around. 

And the navigation systems and the weather systems, none of that exists. It feels like it's just absolutely wild and it's hard to imagine that something as regulated as mail is kind of going through this process of being flown around a country where there's very limited infrastructure to support that kind of transportation.

Matt: Yeah, I mean, we're talking about a time when, you know, you've got pilots who are sitting in open cockpits, right? With the mail in the seat behind them. This is not the, you know, incredibly organized enterprise that we have today. But, this is how it starts, and we have air mail to thank with building those systems that we take for granted today, both with the mail, but also with how we ourselves fly around the country.

And before air mail, the fastest postage that you could buy was for mail carried on trains, and this was relatively cheap, but it took days, not just a day, but days to get mail across the country. Air mail was much faster. It whittled the time to send something across the country down from five days to just over one day, but it wasn't cheap.

Bob: They delivered high priority mail. The sort of mail that you would think would be delivered by, uh like Federal Express today. It was not cheap, but the banks used it to move bank notes, uh, across the country. And by 1924, they blazed trails, they could fly at night, they had navigation like that. And you could get a letter from New York to San Francisco, two major centers, uh, economic centers in 29 hours, which is remarkably fast.

And if you are in the finance world, uh, you can save an awful lot of money and interest on all not sending the bonds by rail, which would take about five days. You could get 'em there in just a little bit over a day. It is no coincidence that all the air mail routes initially connected cities that had federal reserve banks. 

Emily: It was the Kelly Air Mail Act of 1925 that officially turned over all the carrying of the mail from the post office to contractors, which were the airlines of the day. And this is where a lot of the airlines that we would recognize today as the pioneers of the 20th century got their starts.

Bob: The post office had no intention of staying in the air mail business. They realized that private contractors could deliver it more effectively and more efficiently. That's the origin of most of the major airlines in the United States that we, that we know of. Uh, Americans started that way, United, uh, parts of TWA, Western, Eastern, um, you name 'em, most of 'em got started in April, 1926 when the first mail was, uh, finally authorized and carried.

And that expanded and to help offset the cost of the air mail, the post office especially after 1930, greatly encouraged the, uh, air mail carriers to carry passengers. And they did. And that started the, um, airline industry in the United States.

Matt: The cost of all that was covered only partly by the postage and when they started carrying passengers, it was covered partly by that. But government subsidies were actually what sort of made up the difference between what people were paying for their mail or themselves to fly versus what it actually cost. 

Everybody loves a good government subsidy.

Emily: Everybody loves it. They don't say they do, but they do. Early air mail contractors were getting a lot of money from the federal government, but in exchange, they were building the basis for the passenger air service and mail transportation that we still use today.

Matt: And you know, it's not just money. The airlines had a big ally in the leadership of this country. The President at the time, and his Postmaster General. You wouldn't think of the Postmaster General as being a really important and powerful person, but in fact, he was.

Bob: In 1928, Hoover uh, became president. He put his campaign manager, Walter Brown, in charge of the Post Office. At that time, the most powerful person in the cabinet was the Postmaster General. For most people, they never encountered anybody from the federal government except the local Postmasters. 

Well, you have a new, um, administration, they would replace the postmasters with Democrats or Republicans, depending on their political persuasion. So it was a very powerful position and allowed the party in power to, um, get its word out across the country.

Brown was a very astute politician. But he also understood that for aviation or any new business to, uh, to develop and to grow, it needed, uh, resources. It needed a lot of money. This is at a time when aviation was just beginning to explode, starting, um, 1926 because that Air Mail Act, the Air Commerce Act set up regulations for everything.

Very quickly, three to four large holding companies were, were created, and those holding companies were very well financed from Wall Street. When the airlines started carrying, the airlines developed their own aircraft for the mail, usually same, similar to the DH-4, a single seater with a large, uh, cargo bin.

But the Post Office, especially under, uh, Herbert Hoover and his Postmaster General, uh, Walter Folger Brown encouraged the airlines to carry passengers to offset the cost offset. In fact, um, the air mail was subsidized by the government. You know, the cost of, uh, the stamps did not offset the cost of operation completely.

So there was a, a subsidy, they didn't call it that, uh, because Americans don't like to think that any industry in the United States has ever been subsidized, but they have been all the time. And this is the one, they just called them something else. But it encouraged 'em to develop, uh, aircraft that had, um, seats.

Emily: So at this point in 1930 and 1931, you have a federal government that's giving a lot of monetary support to a small number of airlines with air mail contracts and subsidies. But you also have the same handful of large airlines that are doing a lot of work to build and maintain and innovate around the infrastructure of flight.

Bob: And the Postmaster General Brown made sure that these companies that were very well financed got the air mail contracts. He knew they could survive the ups and downs of, of, of a new industry. 

Also very lucky for the country, uh, when the Great Depression hit the next year, 19, late 29 and early 30, these companies were able to survive because they had resources and smaller companies couldn't. But a lot of those smaller companies who had been bought out, they weren't forced out, they were bought out, resented it and wanted back in. They, they said they could make money on their own and then the Depression hit and they couldn't.

So they screamed that they were being treated unfairly, being forced out. Although they accepted the cash, uh, and while, uh, Hoover was in, was in power, while they were still complaining to Congress, Congress did some investigation, found out the contracts were awarded legally. May not have seemed fair, but they were legal.

Matt: In the midst of that kind of kerfuffle between the small and big airlines, this is when a new administration moves into the White House.

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Emily: In 1932, Franklin Delano Roosevelt beats President Herbert Hoover in a landslide. FDR takes office in January of 1933 and started what would be his landmark economic reform, the New Deal. 

Bob: Well, uh, the election of ‘32 of course turned all that on its head. And the independent airlines found a more willing ear with, uh, James Farley, the Postmaster General under Franklin Roosevelt. And through Senator Hugo Black of Alabama, instigated a whole series of investigations into all air mail. And that started in late 1933 and into 1934. 

Congress brought Mr. Boeing and most of the other investors  to a special investigation. And even though they had done nothing wrong, the appearance was you got, these were the equivalent of billionaires today. It's just, as we'd say today, the optics were very, very bad.

Got a lot of headlines, lot of blazing headlines with the inference of graft and corruption. That was not the case, but it made for really good headlines. Especially in the depression, when upwards of 25% of the population was unemployed. 

And James Farley, the Postmaster General under Roosevelt, did not know much about the system. He listened to Black and the other investigators and recommended to President Roosevelt to cancel the air mail contracts.

Matt: The big airlines with all of the experience were out and the Army Air Corps was in. But the problem was America was behind on outfitting and training its military flyers because… money. And February of 1934 saw some of the worst possible weather for flying, which did not help things.

Bob: And the Air Corps knew it was gonna be a tough job, but, uh, Benjamin Felois, who was the Chief of the Air Corps knew it was rough, but he said, you know, ‘yes sir, we'll do it.’

And the problem was February ‘34 had some of the worst snow storms in history, coldest weather, vicious weather. And during training 12 airmail pilots were killed in accidents, which reflected very poorly upon the administration.

And all of a sudden all this favorable public interest and, uh, publicity that, uh, the Roosevelt administration was getting for canceling these supposedly, quote-unquote, illegal contracts flipped. 'Cause now these pilots were getting killed in large part because they were flying obsolete equipment. Equipment that was much inferior to the airlines, which was a shock to most people. And pilots were not used to flying in the bad weather. Airline pilots were, they're flying better airplanes, much better airplanes than the military. 

It was a scandal for the airlines and then it turned into a big scandal for the Roosevelt administration.

Emily: Unsurprisingly, there was an overwhelming amount of public scrutiny and President Roosevelt was forced to return the contracts to the airlines.

Bob: And in fact it's widely considered that the whole air mail crisis was one of, Roosevelt's, was Roosevelt's first defeat of the New Deal. 'cause uh, um, he had to go back and they changed the laws around to make these holding companies illegal. But it was mostly an attempt to save face and by, um, April ‘34, they had the new Air Mail Act of 1934, turned all the air mail contracts back to the original holders.

Although there was some legal smokescreens. No airline that had flown the air mail during the earlier period could fly the new air mail. So they changed their names. Eastern Air Transport became Eastern Airlines. American Airways became American Airlines. United Airlines existed beforehand, but they reorganized the company, um, to make it, uh, an operating company that became United Airlines from, uh, from that period onwards. 

Basically the airlines that had the air routes beforehand got them back.  Roosevelt had quietly admitted that, oops, they'd made a mistake, wrote the new law, put these little caveats in that, you know, had to change the name and no airline had operated before it could operate again but that was face saving. 

The one thing about the law that was frankly illegal was it prohibited anybody who had operated any of those airlines as CEO was banned from operating an airline that had an air mail contract for five years. And these people were basically tried and convicted without due process. No charges were ever filed 'cause they did nothing illegal, but they were still banned from it. Most unconstitutional. 

But at that time, even the airlines, they were just so happy to get their contracts back. They were willing to sacrifice their former, you know, president just to get the contracts back. And things just quietly went, went away. 

Emily: By late spring of 1934, the airlines were back and would continue to fly the mail under very similar contracts until passenger airline deregulation completely upended the industry in 1978.

Bob: The, um, Air Mail Act of 1934 still affects us today in that no aircraft manufacturer is allowed to have any controlling interest in an airline. For the longest time, from 1938 until 1978 the airlines were closely regulated by the federal government through, um, economic regulation.

It's always been regulated for safety. That's since 1926 to this day. But between ‘38 and ‘78, the, the, the federal government, eventually through the Civil Aeronautics Board, regulated air travel and because the airline industry is, uh, so capital intensive, so expensive to operate industries like that tend to be oligopolistic by nature.

Which is why you only had, you know, a group of five or six large airlines and a group of five or six, medium size and all that. So the airlines that were formed in the early thirties by Walter Brown and Hoover, and that were quote-unquote reorganized by Roosevelt continued until after the Deregulation Act of 1978.

Some of 'em were still with us today. Many did not survive deregulation, but they were around for many, many years. 

Matt: So there are two big impacts from this air mail scandal or air mail crisis of 1934 that are still apparent in the systems that we have today. One civilian and the other is military. 

So on the civilian side, even though air mail is not a specific category of mail anymore, and that ended back in the early 1970s. All first class mail now, that's just a regular stamp, is flown on airliners, so all your first class mail is air mail. And contracts for flying the mail are still held by all of the major airlines and some of the smaller ones too. 

Bob: Well, I mean, air mail gave us the airlines plain and simple. And, um, through the work of the Post Office air mail and the Post Office gave us the modern airliner, which developed into, you know, the 247s, the DC-2, DC-3. You can trace that up to a modern airplanes today, a jetliner. 

They didn't subsidize jets, but they've definitely promoted the acquisition and implementation of new technologies in propulsion. Aerodynamics, airfoils, you name it, paid for all of this, you know, uh, helped pay for all of this. And worked very well with the airline industry, and the manufacturers. And it's, it's one of these cases where business and government relationship.

Uh, has worked out very well to the public's advantage, and, uh, still does in many different ways. I mean, no one…we don't send air mail anymore, but just about every airplane you see airliner, it's got mail on it. That's how your letter gets across the country so fast now.

Emily: And even though email has certainly curtailed the volume of regular letters carried on airplanes, e-commerce means that there's still a lot of packages that get flown every year along with your Mother's Day cards and notes to your kids at sleepaway camp. I don't know about you, Matt, I get a lot of things in the mail and it is not letters.

Matt: That's right. Yeah. And you know, those are the kind of specific things but in a more broad sense flying the mail and this history that we've just sort of briefly taken you through is how the airlines were created. And how the air infrastructure that we use today came to be.

So, you know, it's all a product of that earlier history.

Emily: Which I think is wild to think that it wasn't because people wanted to get around. It was because people wanted their mail to get around, and they hadn't yet conceived of the notion of moving themselves around the country as much as they were trying to move their messages around the country.

Matt: Yeah, and they didn't know about the internet yet, so they couldn’t use it. It hadn't been discovered underground wherever they discovered it, I don’t know

Emily: laughs

Matt: Anyway…

Emily: On the military side, the disastrous and deadly assignment the Air Corps undertook to fly the mail drew attention to the lack of equipment and training they were dealing with.

Bob: That whole crisis led to an investigation into the Army Air Corps, which the Army Air Corps did not resist because they knew they needed better aircraft, but Congress wasn't giving it to 'em. And the so-called Baker Board was formed. Um, they basically threw General Felois under the bus, blaming him for not having the, the latest equipment.

But it wasn't his fault. Congress wasn't, wasn't buying them. But they made it look like, like, Hey, it's all his fault, but we, if you get us new airplanes, we'll have a new organization. It was instrumental to getting them better aircraft, but more importantly, it was instrumental in getting the Air Corps, eventually, its independence from the Army, which didn't happen till 1947. But all of this kind of works, all things kind of connect rather interestingly.

Matt: Yeah. If you think about it, we're in the 1930s. It's been a while since the end of World War I and the government hasn't really wanted to put the money into improving anything about the Air Corps. It's not that the military hadn't asked for funds to improve their equipment or their training. It was that Congress didn't want to, you know, loosen the purse strings and give them that necessary money.

Emily: So with that, the Air Force exists in small part because of air mail and commercial aviation exists in large part because of air mail. Thanks air mail!

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Matt: AirSpace is from the National Air and Space Museum.

It's produced by Jennifer Weingart and mixed by Tarek Fouda. AirSpace is hosted by Dr. Emily Martin and me, Dr. Matt Shindell. Our managing producer is Erika Novak. Our production coordinator is Joe Gurr. Our social media manager is Amy Stamm. 

A big thank you to our guest in this episode, Dr. Bob van der Linden, commercial aviation curator at the National Air and Space Museum. 

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AirSpace is sponsored by Lockheed Martin and distributed by PRX.

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Emily: Well, I'm trying to say Air Mole and Air Moile because that's the other version

Matt: Yeah,

Emily: I'm channeling my, um, Mel Brooks.

Matt: yeah,

Emily: It feels like a Mel Brooks thing

Matt: yeah. It's like, yeah,

Emily: It is like the name of some kind of character he's invented. This is the Air Moile.

Matt: Yeah, I think it's like a Spaceballs-y, like, you know, um, it's something that the Yoda character would say.

Emily: Yes!