transporting by air all classes of mail wherever delivery would be speeded, and to propose a plan for accomplishing such transportation.

It is to be earnestly hoped that this proposal will be adopted. There can be no question but that the country will demand the fastest possible transportation of mail of all classes. And the use of air transportation wherever it will speed delivery has long been discussed.

In 1937 Senator Copeland for the Senate Committee on Commerce submitted Senate Report No. 185, Seventy-fifth Congress, in which a significant passage relating to this very matter appears, and which I believe your committee might wish to have inserted in the record of your hearings at this point.

The excerpt appears at pages 28 to 30 of the report and reads, in part, as follows:

OTHER ESSENTIALS-POST OFFICE DEPARTMENT TYPES OF AIR MAIL

The United States Post Office from the earliest days of our Republic has been a persistent pioneer in the encouragement of transport. Contracts for the transportation of mail by stagecoach, canal boat, pony express, railroads, ocean steamships, and finally, airplanes were designed, not merely to pay the cost of transportation of the mail but to share the cost of the construction and to encourage the operation of better vehicles to give faster service for the convenience of travelers and trade. This policy has been well sustained by successive Congresses for 80 years and should be continued. It imposes no great burden, because the revenue derived by the Government returns a substantial part of the cost.

The Post Office Department was selected as the chosen instrument of our Government and charged with the task of developing air transport on a commercial basis. In this connection the committee has studied the hearings before various Government agencies and boards, including the evidence and opinions furnished by competent experts and businessmen before the Federal Aviation Commission, of which the late Hon. Clark Howell was chairman.

Of course, it has always been the hope that every system of transporting the mail should strive to make itself economically self-sufficient. In the matter of air-mail transportation, our Government has three opinions:

1. It should allow civilian aviation to fend for itself;

2. It could instruct the Post Office to continue its interest in civil aviation, making necessary modification of existing practices to suit changing conditions of the time, but having as its basic policy the continuance of the arrangement whereby the airplane would be used for the transportation of mail, provided the sender wished to pay the additional charge for the stamps; or

3. The Government could decree that every community should be given the advantage of high-speed air transport for the transportation of all of its firstclass letter mail and without extra charge for the postage, a policy accepted as an axiom prior to the birth of air transportation.

Originally, and undoubtedly wisely, the second option was adopted. But it is the feeling of many that the United States, will, before long, be forced by public opinion to change to the third method. It is the guiding principle behind all the operations of our post-office system that every community is entitled to the fastest available means for the transportation of first-class letter mail. To give frequent, punctual, and quick communication and transportation of first-class mail, without the imposition of a surcharge, is regarded as one of the essential means Government has at its disposal to promote the common welfare.

The transportation of first-class letter mail by air, whenever and wherever time can be saved, will confer great benefits on all classes of citizens. As a result of the greatly increased and assured volume of such mail with the consequent revenue, larger aircraft, giving increased comfort and convenience, can be provided. Likewise, faster and more frequent service can be provided.

The world today can scarcely appreciate the numerous benefits which have resulted from the introductions by our Government years ago of the inexpensive postage stamp. A decision of the Government to carry letter mail by air with

out a surcharge will, in time, doubtless come to be regarded as of no less importance.

The transportation of mail without a surcharge by the fastest available mode of transport should benefit all classes. To the rich corporation, as to the less wealthy one and the small businessman, it will be pleasing, because of the vastly improved facilities it will offer for correspondence. To everybody it affords a rapid means of communication with distant friends and relatives, a privilege from which many are at present debarred by reason of the surcharge. Lower-cost air postage will give increased energy to trade and will confer many advantages which are in the public interest,

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In this report the Senate committee points out that it has been the traditional policy of our Post Office System

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that every community is entitled to the fastest available means for the transportation of first-class letter mail. The transportation of first-class letter mail by air, whenever and wherever time can be saved, will confer great benefits on all classes of citizens.

There seems to be no sound reason for distinguishing between what is now surcharged air mail and the various other classes of mail and parcel post so far as transportation by air is concerned at some reasonably early date.

Obviously at the present time, even if there were no war, it would be impossible, just as a physical matter, to transport all mail by air whenever delivery would be speeded. Moreover, even when it becomes physically impossible so to do, the transition to such a system should be worked out with care in order to avoid needless disruption and impairment of the Postal Service.

And, if I may say so, air mail makes a profit for the Post Office Department. Beginning about 1937 the Government received more dollars from the sale of postage stamps than it paid to the air carriers to carry the air mail. This last year I think the Government received around $10,000,000 more from postage than it paid for transporting the mail by air.

Mr. HALLECK. I have heard that statement, and I just want to inquire whether or not that contemplates the incidental expenses involved in the handling of air mail.

Colonel GORRELL. There is a large profit even after including all incidental expenses attributable to the handling of air mail. It does not contemplate, however, a portion of overhead such as the salary of the Postmaster General and things that you would have even if there were no air mail.

It takes in the clerks at the fields, and things of that nature which are employed solely in the handling of air mail.

Back in 1937 there was held what was called I. C. C. Docket No. 19. At that time, the amount received from stamps as compared to the payment to the carriers was hardly enough to cover the incidentals just mentioned, but today it is more than enough.

Mr. HALLECK. What is the comparative cost to the Government, per mile, for transporting mail by air carrier as against rail carriers? Colonel GORRELL. Congressman, I do not know the rail rates. I have often wondered, but I really do not know what the rail rates

are.

Mr. HALLECK. I was just wondering whether it cost the Government more, or less, to send a letter say from Washington to Chicago by air, as against sending it by rail; but that is something you say you cannot answer?

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Colonel GORRELL. I would have to check the figures to answer you accurately.

The CHAIRMAN. I think when the Post Office Department's representative is here that that information can be given.

Colonel GORRELL. If I may say so, sir, the carriage of mails by air is a new thing. You can liken it to a new development in a factory. Suppose that you had a factory, we will say, making tables, and you were running at a profit in that factory making tables and somebody suggested that you go into the business of making globes. If you started to put the full overhead, or a large proportion of the overhead, on the first globes you built and included that in the unit sales price, you would never get your money back or your building of globes started.

Again, in the manufacture of automobiles, we used to change models every January at the New York show. The first new model cars that came off our lines used to cost about a quarter of a million dollars apiece, maybe more. When the production rose and the volume got larger, then each car could bear an appropriate part of the overhead of a large and profitable business.

In Michigan, the Detroit Gear & Machine Co. manufactured transmissions. Över in a corner of its factory men were working on an experimental refrigerator called the Norge. When they got the Norge worked out, had they changed a portion of the overhead of all that tremendous factory on that original production of Norge refrigerators, they would have had to sell each for many thousands of dollars apiece. Their manufacture of refrigerators would never have gotten started. They put a proper price on it, and the business has now grown to the point where today it is bigger than the transmission business and carries its full share of the total overhead. It could not have done so in its earlier days.

The air mail today does not return its full share of all forms of overhead. It does not return revenue sufficient to carry if you get down to the point where you are charging forms of overhead on items which would exist anyhow even if America had no air mail.

Mr. HALLECK. Well, I am not quarreling with the proposition or the promotion of the carriage of mails by air, but I do think probably when we get down to the final decision of the question about which you are talking, we might want to know something about the comparative costs, because even as between the different methods of shipping now, shippers are sending some by express and some by freight. Freight goes slower, but costs less, and if they are not in a particular hurry, they say, let it go by freight. But, if you want it to go much more rapidly, you pay more and send it by express.

Colonel GORRELL. Generally speaking, the costs of transporting things by air today exceed the cost of surface transportation. I am one of those who believe that some day in the future the cost by air will be reduced until it is lower than our present day surface costs, except for bulk cargo.

Mr. BOREN. Mr. Chairman.

The CHAIRMAN. Mr. Boren.

Mr. BOREN. Of course the present classification of mail as first class was done on the principle of providing a speedier service to the public at large and the element that has always interested me with reference

to air mail is that it seems to me that there is a specialized class of users, because of the added expense or added cost of the stamps.

I wonder if the cost of air mail would not be greatly reduced if this idea of speedier service were so utilized as to send all first-class mail by air or all of the additional mail load that the lines could carry. Would it have anything like the effect of bringing the cost of air mail down? Colonel GORRELL. It would have an enormous effect, because your ground costs would be shared by the increased number of schedules that you then would fly.

Mr. BOREN. If 6 cents per letter will actually pay the transportation costs on a letter now by air mail, perhaps if all first-class mail were carried by air, that would extend the principle of speedy service down to the poorest farmer in the Nation, I wonder if there is any way to analyze and see if it would bring it down to make it a 2- or 3-cent rate for everybody.

Colonel GORRELL. That, I imagine, is one of the things that you would learn from the study if you adopted section 1 (a) of your bill. Mr. WOLVERTON. Mr. Chairman.

The CHAIRMAN. Mr. Wolverton.

Mr. WOLVERTON. Colonel, I think we are all interested in the point you are making as to the future possibilities of the use of the air for the carriage of mail.

I merely want to call to your attention and call it to the attention of the new members on our committee who may not be familiar with what this committee has already done in that respect. Two years ago an act was passed as a result of legislation that originated in this committee that provided for experimental air-mail service to develop safety, efficiency, and economy, and for other purposes, and under that legislation which we passed 2 years ago, the Postmaster General was given authority to utilize certain services that were then in existence, and such others as he might wish, to determine the practicability of the very matter that you are now speaking of. I mention that in order that it may be understood that this committee is forward looking in the suggestions that it makes in matters of aviation. Colonel GORRELL. I thank you, sir.

It will not be long after the close of the war, if we plan wisely, before the air transport industry is physically able to transport all, or a large share, of mail by air wherever delivery would be speeded. And there is surely no reason that our citizens should be denied the benefits of such speedy transportation when it becomes feasible. Air mail has long since passed the experimental stage. It has been abundantly proved that the transportation of mail by air contributes immeasurable value to the users of the Postal Service. But unless someone starts soon definitely to survey the possibilities and to work out a plan, the ultimate accomplishment of an admittedly desirable objective may be needlessly and too long delayed. And we may be sure that other nations are not overlooking the desirability of accomplishing this advance in their postal service, both for the purpose of promoting their internal economy and for the purpose of furthering their international interests. Indeed, as you know, even before the war Great Britain had taken positive steps toward achieving air transportation of all letter mail throughout the Empire without surcharge. And I understand they had planned in the future, when the war broke out, to expand it further than simply letter mail.

Mr. BOREN. The House is now considering the Treasury-Post Office appropriation bill, and in reading that bill I was surprised to notice that the amount appropriated for air mail, domestic air mail, was reduced by about 214 million dollars. I am just talking about the domestic figures. There was a comparable reduction in the appropriation for offshore mail; but I can understand why the situation in the world at large might affect the loads and so forth on the offshore problem, but on the domestic problem, I was terribly surprised even in view of the probable decrease in the cost, when this committee and the Congress heretofore had established a policy of building the Air Mail Service, projecting it on an ever-increasing scale, to notice that decrease in the appropriation, and I wonder if the industry or you representing the industry have given thought to the effect of this appropriation bill and care to make a comment on that particular subject.

Colonel GORRELL. Mr. Congressman, I presume that those who pass upon the appropriations thought that the lines were becoming more self-supporting. On the other hand, this is no time for the Government to start cutting things in an industry that is so vital now in national defense and is going to be so vital to us for travel and trade when this war is over and for prevention of other wards.

Mr. BOREN. Well, if we reduce it 214 million dollars, the effect of it is to maintain static the present Air Mail Service, so to speak, and if they can save 24 million dollars on the basis of present cost of maintenance, in that appropriation, could not that actually be utilized in expanding services?

Colonel GORRELL. I think you can well afford to maintain the current appropriation because you are going to need it anyhow. The mail loads are growing by leaps and bounds. The volume is getting larger and larger every month. Mail is taking up so much space that when given priority, which will probably happen soon, you will have to be throwing off other things and carrying mail, and you will then need that money which you are taking out of the bill now.

Mr. BULWINKLE. Did you not say a little while ago, Colonel, that some of the lines were abolishing, temporarily, the carriage of air mail?

Colonel GORRELL. No, sir. What I said is this. We are throwing off mail from time to time and putting on priority materials as established by the War Department, because we do not have enough planes to carry all of the mail at all times.

Later on we try to pick up that mail on another schedule or sometimes it goes on by train.

But, to answer Mr. Boren, I think the sooner America gets itself in shape to fight the battle that it is going to face for commerce and for other purposes when this war is over, the better off we are going to be. Other people are not asleep. You cannot fight the post-war battle by making your air lines financially weaker. You are going to need bigger and better planes. You are going to carry larger cargoes. You are going to fly faster and you are going to fly longer distances. One of the planes we have now, for example

Mr. BOREN. Can we now fly planes nonstop across the ocean? Colonel GORRELL. The latest experimental plane of our industry which was flown a fortnight or so ago, will go across nonstop.