The Bismarck Tribune Newspaper, February 19, 1934, Page 2

Blame Big In Airmail Muddle Bankers BRIDG: {industry Was on Sound Basis) Until Stock Manipulators Put in Their Hand “THREE FIRMS RULED ROOST Independents Squeezed Out by Brown's Actions Under Ex- tension Power | saat ! Editor's Note—This story is the third of a scries of four on the history of the airmail, its romance, Its amazing progress, and its scan- dals, revelation of which threat- ens a great setback to the in- dustry. * k * BY E. T. PYLE Washington, Feb. 19—In 1928, air- mail planes were flying some 8.000,- 000 miles a year over 24 routes total- ing about 12,000 miles (about half of; today’s total) and carrying about 3,- 600,000 pounds of mail yearly. But little passenger service was be- ing offered and the year’s total of air- line passengers was only 60,000. | The operators preferred the much easier method of making their money strictly from airmail, and not bother- ing with passengers. ‘The companies which had received | the 24 airmail contracts awarded be- tween 1926 and 1928 were, on the whole, financed by private individuals, | or by capital local to the cities through which the routes ran. There was little “big money” in the airlines then. But when public enthusiasm toce | aviation to its breast following Lind- bergh's Paris flight, the big invest- ment houses saw that here was a po- tentially rich field. STOCK BOOM LAUNCHED ‘The first big financing was with the airplane manufacturing companies. Investment houses put out millions of shaers of stock, and sold them to an aviation-hungry public at prices far beyond what they could ever be worth in actual earning power. Many of these original stocks are now as worthless as a sheet of sec- ond-hand carbon paper. But the aviation boom was on. Next “big money” started to get; into the airlines. Holding companies were formed and they bought up and merged airmail lines all over the, country. The financing was so intricate, so) intertwined and duplicated that even! Senator Hugo Black's astute airmail! investigators can't sit down and take you step by step through all the air- line financing from 1928 until today. RULED BY HUGE COMPANIES But gradually the whole airmail system shook itself down into the hands of three huge companies, and a half dozen or so smaller ones. ‘When the cancellation order was issued, the picture was something like this: American Airways ... 11 routes «+. Controlled by E. L. Cord... Leh-; man Brothers and Chase National Bank money in it. United Airlines ... six lines ...! controlled by Frederick B. Rentschler | ... National City Bank identified with it. General Aviation ... three routes, all very long ... controlled by Gen- eral Motors. Six so-called independent lines, nearly all of which have stock held by the “Big Three.” Ninety-five per cent of all the airmail mileage is flown by the “Big Three.” BROWN ENTERS PICTURE So the events upon which the can- cellation was based have been taking place during the last five years, large- | dy during the administration of former Postmaster General Walter Brown. After Brown took office congress Passed the Watres bill, which: 1—Changed the method of pay for carrying the mail from a pound basis (so much a pound, regardless of dis- tance) to a space-mileage basis (so much a mile for a fixed allotment of cargo space). 2—Provided that new routes should be awarded under competitive bidding (this to give non-mail carrying air- lines a chance to get airmail). Authorized the postoffice to give ftensions to lines already holding contracts (this to protect the equity | of contractors who had thousands of Gollars tied up in equipment). SPOILS ARE SPLIT It was under this law that it is| charged Brown and the airmail opera- | tors carried on their abuses. By this/ time, you see, big money had come into the industry, and lines already; were being drawn under the control of two or three big companies, ‘And here is what happened: i Brown called the operators in, and | they sat down to divide up the new routes among themselves. But they didn’t agree on. what they wanted, so Brown took charge and built his own airmail “map.” ressmen say that it was their intention that extensions literally should be extensions, that is, small additions to routes already existing. But Brown gave out huge exten- sions, some far longer than the orig- inal line, some jutting off at angles, sometimes a second extension on the end of a first extension. NO BIDDING ON ‘EXTENSIONS’ The result was that out of the 12,000 miles of airmail routes added during Brown's regime, nearly 8,000 were “ex- tensions,” on which there was no bid- Ging whatever. Congress intended that non-mail j On the foregoing are based the mit a bid they would lose the con- tracts they already had. Solution to Previous Contract Problem | AWARDS CUT AND DRIED When the bids were opened, there was only one bid on each line (except |for a brave independent, whose bid] Watch for the key card of a hand. was thrown out), Gossip had fore-|Success or failure of today's entire told that the routes would go to cer-|hand depends upon when the king of tain companies, and they did. diamonds ts played. By WM. E. MCKENNEY Secretary, American Bridge League charges of fraud and collusion, on |!s going to split, or that a hand is which all contracts were cancelled. | 80ing to break favorably for you. Al- And the case of the airmail operato-s | Ways figure on the worst possible dis- wasn’t helped any by revelations of | tribution and try to provide against it. nigantic salaries and bonuses paid to} The worst distribution that Officers of companies receiving sub- | declarer can get in today’s hand, and |sidies, and of vast riches run up in /Still make his contract, is to find four Don’t take it for granted that trump | the| | | fand there was an | the stock market on shares of subsidy- collecting companies. With that background, here are the two sides to the question of whether Roosevelt did right or wrong, first the arguments for complete cancellation: There was a “spoils conference,” at which the operators trjed to divide the airmail map to suit themselves, “understanding” among operators that only certain ones would bid on those two transcon- tinentals, MONOPOLY IS EFFECTED A monopoly on airmail has grown up and outsiders have been kept away from the trough. On the strength of their government, contracts, many companies have put out vast issues of stock and skyrocket- ed it into millions for the lucky hold- ers, The administration is said to feel that fraud has been shown clearly, and that every operator who attend- ed the “spoils conference” was equal- ly guilty. Arguments against complete can- cellation follow: That many of the operators are guiltless in that they did not ask for or receive any extensions or new con- tracts under Brown's regime. That many of those who knew of the “understanding” to restrict bid- ding on the transcontinentals did not take part in it. That cancellation of all contracts punishes some 5,000 innocent em- Ployes. That, despite abuses, the airmail operators had built up the greatest air transport system in the world, and that complete cancellation perils the industry. That the same effect could have been gained by salvaging what was good about the industry, and scrap- ping only what was bad. NEXT: are possible. CONTINUE Monarch Is Killed By Accidental Fall To Foot of Cliff ing the period of mourning. which will continue until after the funeral, will be removal of the body to the royal palace in Brussels Monday night. The body will lie in state at the palace until Thursday, when it will be taken to the Saint Gudele Cathedral. Interment will be in the royal crypt at Laeken. Only the second son, Prince Charles, was with the queen until last mid- night when Prince Leopold and his wife arrived from Switzerland. Their sorrowful meeting took place in the queen's private apartments in the palace at Laeken. Prince Leopold will take the oath of fidelity to the constitution before a Joint meeting of the chamber and the senate Friday. Afterward, he will be proclaimed king and, with completion of that act, Princess Astrid automa- tically will become queen. In the castle, awaiting removal to Brussels, the body of the king lay Monday in a bed of rosewood, strewn with white lilacs, a heavy bandage around the head. Face Slightly Marked The face was unmiarked, except for two cuts over the right eye. The lips were parted slightly. The light mus- tache was trimmed neatly. The body was dressed in the olive uniform of a general. An official report, issued by the minister of justice, Paul-Emile Jan- son, “confirmed the story that the king left early Saturday afternoon with his valet for the Marche-Les- Dames, where he had been on climb- ing parties previously, He left his valet in the royal auto- mobile. Hours passed. The monarch said he would return by 4. When it grew later, the frightened attendant notified officials. Even then, however, with soldiers and peasants joining in a desperate search, it was two o'clock Sunday morning before the body, clad in a corduroy suit, was found in a deep What future courses \ravine. It was ascertained from an investi- gation of the face of the precipitate cliff that a frost-bitten rock crum- bled when he grasped it and he plunged 36 feet. The skull was crushed, The grief of the working classes was heightened by recollections of his many kindnesses. Laborers recalled how he had visited their houses when touring the country or inspecting fac- tories and mines. Both the future rulers are popular with the people of Belgium. When he was only 14, the prinae, Duke of Brabant, volunteered as a common soldier in the World War. xpecting the birth of a third child this spring, has been well liked by all since their mar- D spades to the jack in the West hand against him. Yet the contract should be made. The Play The king of hearts is the opening mediately. South can see that the aKQ 91087 ok @KI76532 Duplicate—All yvul. | Opening lead—y K. | [South West North, East a Pass 2a Pass @ ~~ Pass Pass a Pass Pass a Pass Pass hand should have been played in clubs. But if he can make six spades, he will get top on the board. However, were he now to lead a lead and the declarer must ruff im-j} 19 | | South was exhausted of clubs and now ‘CONTRACT | =" CXPERTS PLAY IT Today’s Contract Problem South has the contract for three no trump. West opens the five of spades, East wins with the queen, and returns the deuce of spades. You.can see that the only way to make the contract is to find the cards where you want them. Therefore, how should the hand: be played? (Blind) (Blind) Solution in next fesue. 10 diamond to dummy’s king, his contract | | eventually would be defeated. To make | ‘his contract, declarer immediately | should cash dummy’s king and queen | of spades, return a club, lay down the ace of spades and discard a heart from | ; dummy. |. He then should lead clubs until West is forced to ruff with his jack, and| West is helpless. If he returns a heart, the declarer will ruff with the eight |of spades and will have a diamond to! | get into dummy and make all the good ‘clubs—he never needs his ace of dia- | monds. | If the declarer were to lead a dia- | mond at trick two, West would not ruff with his jack of spades until |the declarer would have no way of getting into dummy to make all the good clubs. Thus his contract would be defeated. (Copyright, 1934, NEA Service, Inc.) and other friends who had known and loved him for years. | Public men of many lands regarded | Albert as one of the world’s foremost figures. Virtually all referred to the loss to Europe which his death causes. President Roosevelt was “shocked beyond expression” at the “loss of a ruler so universally beloved and whose | energy and wisdom were so devoted to! the ideals of peace and justice.” | Former President Hoover praised the king as “one of the outstanding figures of the war by virtue not only of his military courage but also for his great moral courage.” David Lloyd George, war-time prime minister of England, said he was a “wise monarch and a fine man.” Those who were his enemies dur- | jward the meeting, which was held at I elected three delegates who will pres- ent credentials to the county conven- tion. The anti-Langer delegates elect- ed are Homer Ritchey, A. F. Andrist and Wm. Zabel, none of them pay- rollers, Anti’s Rule in Third In the second precinct of the third the high school, was controlled by forces opposed to Seeser. O. E. John- son was elected chairman, Dagmar Rickert, secretary, and O. E. Johnson, John Danroth and George Holta, del- legates to the county convention. The Langer forces held a meeting of their own and elected precinct officers and delegates. In the second precinct of the sixth ward the following delegates were elected: Mrs. W. E. Berwman, Anton ing the war joined in the tributes to | King Albert, the ruler, and Eg Al- bert, the man. President Paul von Hindenburg of jGermany expressed deep sympathy for Queen Elizabeth and the Belgian nation, and other German officers in the World War were equally shocked. BRITISH EMPIRE IS IN OFFICIAL MOURNING London, Feb. 19.—(#)—The British empire is in official mourning Mon- day for Albert, king of the Belgians. Flags are at half-mast everywhere. The newspapers treated news of his death as they would that of a mem- ber of the British royal family. C ONTINUE Precinct Meetings from page ons’ Battles Develop at group. Mrs. Boise was the candidate of the Langer forces for chairman and Paul Cook opposed Miss Parsons. The vote was 46 to 44 for chairman’ and 50 to 44 for secretary. After the elec- tion of delegates the following reso- lution was adopted by those opposed to Langer, by a vote of 36 to 29, when many of those taking part in the meeting had left. Text of Resolution “We reaffirm our allegiance to the Nonpartisan League. We commend our two senators and two congress- men for their untiring efforts in con- gress in support of the common peo- ple. “We commend the work done by the state executive committee for the manner in which they conducted the affairs of the Nonpartisan League during the past two years and for their continuous striving to uphold the principles of our organization. “We commend and compliment all those state. officials who have con- tinuously worked for the best inter- ests of the people and the upbuilding of the Nonpartisan League. “We vigorously condemn the tac: tics of persons who are taking advan- tage of the confidence placed in them ing to reorganize and rebuild the Non- partisan League to further their own personal interests to the extent that they are forcing state employees to travel throughout the state to “fix” delegates favorable to their course, and thereby violating the by-laws and. principles of the Nonpartisan League. “We recommend that the delegates selected to the state convention be not affiliated with the state payroll as only by not permitting such del- egates to have a voice can the farm- ers and workers of North Dakota voice their true ideas as to what might be and the people of the state of North Dakota.” * : + Ducky’ in Hot Water Seeing themselves outnumbered in the preliminary vote, the Langerites, led by Harold “Ducky” McDonald, got busy and feverishly called on the re- serves, 8, 8. McDonald, Harold's father, left his own precinct to take care of itself and hurried to the scene of battle. He made a speech and chal- lenged all comers to mortal combat in in their official capacity who are try-| Normal, this of best interest to our organization |Chicago, Fisher, Ed Erbe and Ted Beitz. Mrs. C. G. Boise, secretary of the lcounty Nonpartisan League executive committee, said Monday morning that it would be several days before returns from country precincts would be received and some of them might wait to file the names of their dele- gates with her at the county conven- tion Feb, 27. | ——————— t Weather Report |. ‘AST \ EC. For Bismarck and vicinity: Increas- | ing cloudiness and warmer tonight; Tuesday Thly cloudy ‘and ¢ = what colder. For North WARMER: Portion. For Montana: Generally fair to- night and Tuesday, except unsettled southwest portion; no decided change in pea pesetiice, For Minnesota: Increasing cloudi- ness and not so cold tonight; Tuesday unsettled, light snow in northeast, ‘warmer in south and extreme east GENERAL CONDITIONS ene extensive ie rear area is tered _ over ‘Missouri Valley (Kansas cit 30.52) Another high pressure area is center- ed over the western Canadian Prov- inces (Kamloops 30.26). A low pres-/ sure area overlies the Pacific coast region (Roseburg 29.84). Tempera- tures are above the seasonal normal over the northwest. pa itation has oce Normal, January 1st to dat Accumulated deficiency to dat NORTH DAKOTA POINTS A m. est. Pet. Grand Forks, clear ae Jamestown, clear Valley City, clear WEATHER IN THE NATION SROMEB Zante SE 8S sheyneebeeesysessrssusessaesssssssenee: sBbebebeneesereseasssnssssslesseeeset ea bs BSSSOSeBaso’. “4 2 54 6 38) issued this week by Postmaster Gen- 2 eral James Farley. The places to be 00 tilled are at Binford, Dazey, Havana, Lawton, Medina, New England, Wil- low City and Zeeland. Competitors for any office must take the examinations at Bismarck, Bottineau, Mott, Lidgerwood, Coapers- town, Devils Lake, Jamestown or Val- ley City, the postmaster general said. Full information and application blanks may be obtained at the, post Toledo, Ohio, cldy...... 10 Williston, N. D., clear... Wnt th Nev., rain 38 Winnipeg, Man., peldy. Will Choose Officials For Eight Postoffices Examinations will be held soon for Postmasterships in eight North Da- kota towns, according to a statement. os Xl > e\ "RONDO’ PRINTS Here's Surprise Value for These Times! “AVENUE” PRINTS 15° Yera - Splendid vat-dyed, fast color percale that has earned its popularity! Dandy new Spring patterns! Plain, too. Unparalleled Savings! QUALITY SHEERS 19° Special Purchase! Fine cottoas that sold for more than this a! the low! Batistes, dimities, voiles, fancies, organdies! Fast color, 36 in. 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