Airline Expansion and Innovation (1927 - 1941)

The Air Mail "Scandal"

Charges of corruption in the air mail system led President Roosevelt to cancel all air mail contracts. The Army resumed carrying the mail.

Federal reforms enacted in 1930 gave most routes and air mail contracts to big airline holding companies. Small, independent airlines complained this was unfair, even though most had sold their own contracts and some did not even exist when the law was passed.

The independents fought to break the holding companies' power. Their efforts led to congressional hearings and unfounded charges of corruption and conspiracy to monopolize the air mail. Responding to political pressure, President Franklin Roosevelt canceled all domestic air mail contracts on February 9, 1934. The Army Air Corps was again called upon to carry the mail.

Aero Digest Roosevelt Cartoon
Aero Digest

In February 1934, the Air Corps again began carrying the mail. Flying in the worst winter in decades, in ill-equipped aircraft, Air Corps pilots suffered a series of well-publicized accidents, mostly during training. Several pilots died. Public outcry caused President Roosevelt to suspend the Air Corps' mail service until improvements could be made.

Thomas Braniff
National Air and Space Museum Archives

Thomas Braniff led the fight by independent airlines to break the power of the airline holding companies that dominated air transportation in the 1930s.

Edward Rickenbacker
National Air and Space Museum Archives

War hero and American Airways vice president Eddie Rickenbacker condemned the air mail crisis as "legalized murder" after several Air Corps pilots died while flying the mail. Charles Lindbergh, testifying before Congress, criticized President Roosevelt for hastily canceling the air mail contracts and punishing the airlines without due process.

American Airlines Baggage Label

The Air Mail Act of 1934

Four months after the air mail crisis began, Congress passed the Air Mail Act. It cut payment rates to airlines, returned most air mail routes to the major airlines, and gave some routes to smaller airlines. It divided regulation among the Post Office, Commerce Department, and Interstate Commerce Commission.
Aviation holding companies were dissolved and airlines separated from aircraft manufacturers. Previous air mail contractors had to change their names or restructure. American Airways became American Airlines. Eastern Air Transport became Eastern Air Lines.

Philp Johnson
National Air and Space Museum Archives

Punished Without a Trial

The Air Mail Act of 1934 broke up the large airline holding companies and forced the firing of airline executives wrongfully accused of conspiring to monopolize the air mail. One victim was Philip G. Johnson of United Air Lines.
Like many others, Johnson had attended Walter Brown's operators conferences in 1930, in which air mail contracts and routes had been legally awarded. Ironically, United received no contracts during these so-called "Spoils Conferences."
Nevertheless, Johnson and many others were wrongfully-and unconstitutionally-barred from the airline industry without the benefit of a trial.