Word: airmail
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Meantime Publisher Tichenor's Tale No. 2 was hardly touched by the press which presumably regarded it as too risky to print. This tale related that at the same time the other venture was going on, just prior to and after the cancelation of the airmail contracts, Elliott Roosevelt and Anthony Fokker had a scheme afoot, supposedly encouraged by the President, to form a great U. S. air transport combine, in which Elliott was to have received 5% of the stock for his efforts; that Herbert Reed went to Manhattan to discuss it with Basil O'Connor...
Under the heading, "Wrong Righted," TIME, July 6, your conclusion that the settlement out of court of the $9,000,000 damage suits for cancelation of airmail contracts was a tacit admission on the part of the Government ''that its 1934 action had been wrongful is wholly unjustified and appears to be an intentional distortion of the relations between the parties involved...
...fact that the carriers withdrew their claims for damages in toto; the fact that the Government paid not one cent in reparation for the cancelation; the fact that nearly 20 top men of the airline companies had to be summarily ousted before the Government would consider proposals for new airmail contracts; and the fact that the canceled contracts were not reinstated, but new contracts were placed on a strictly competitive basis in accordance with the law; are conclusive evidence of the justice of the Government's position, and of the unfair, political bias of your conclusion...
Drawing no conclusion as to the larger aspects of the airmail cancellation case, TIME said: "The Government . . . thus tacitly admitted that, in part at least, its 1934 action had been wrongful and un-warranted." Rather than risk its whole case in the courts, the Government, on the Attorney General's recommendation, compromised with the airlines for sums earned but withheld for two years, decided not to make good its threat of criminally prosecuting the airlines...
First New Deal act to provoke widespread U. S. criticism was the abrupt cancellation by President Roosevelt and Postmaster General Farley in 1934 of every U. S. airmail contract because of alleged collusion. For two months the Army flew the mails, at a cost of 13 lives (TIME, Feb. 19, 1934 et seq.). When this fiasco forced the Government to back down, return the airmail to the commercial lines after ousting nearly 20 top men in the industry, all the airlines involved brought suits totaling some $15,000,000 against the Post Office Department. Last week the Government settled...