CONTENTS SCHEDULE OF EXHIBITS Page on page- 378 List of directors of the Railway Express Agency, showing the direc- torships each holds with railroads and air lines and his industrial 380 Comparison of rail express and air express charges for representa- tive weights between representative airport cities. 381 Letter, dated November 2, 1942, from L. Welch Pogue, Chairman, Civil Aeronautics Board, to H. S. Marx, Railway Express Agency, Agency and operating air carriers__ 382 Memorandum of agreement between the Railway Express Agency and operating air carriers, February 24, 1943.. 383 Air express agreement, between the Railway Express Agency and operating air carriers, amended Feb. 24, 1943 (appears as ex- Express Agency and operating air carriers, Mar. 4, 1943. 385 List, dated May 10, 1944, of air lines with which the Railway Ex- SCIENTIFIC AND TECHNICAL MOBILIZATION FRIDAY, MAY 19, 1944 UNITED STATES SENATE, COMMITTEE ON MILITARY AFFAIRS, SUBCOMMITTEE ON WAR MOBILIZATION, Washington, D. C.. The subcommittee met at 10:40 a. m., pursuant to the call of the chairman, in room 104-B, Senate Office Building, Senator Harley M. Kilgore, West Virginia (chairman) presiding. Present: Senator Harley M. Kilgore, West Virginia. The primary concern of this subcommittee in these hearings on scientific and technical mobilization is to ascertain what factors are advancing and retarding new technical developments. This is important to our country, both in wartime and in peacetime. Transportation by air is one of the most important technical developments of the present century. Certainly its advancement prior to this war has a bearing on our ability to wage the present war effectively. The advancement of cargo-carrying capacity and of troop-carrying capacity is a vital part of our war effort in the East and is in the present invasion. In this hearing we are concerned as to whether it has advanced as rapidly as it could have. As we know, during the present war millions of dollars have been spent in the design and construction of planes, including cargo planes. It is important for the Congress to determine whether the technical progress made during this war will be carried forward and fully applied to create higher standards of living. We have spent millions of dollars in experimental work during the war in the matter of cargo planes. It is my hope that these hearings on technological problems will stimulate measures, legislative and other, that will promote the most rapid introduction of the new technologies being made available through scientific and engineering advances in such a manner as to benefit business, labor, agriculture, the consuming public-in fact, all sections of the public. I hope that today we will have testimony on Some of these problems and perhaps some suggestions as to how this industrial progress may best be accomplished. On February 10 Wendell Berge, Assistant Attorney General in charge of the Anti-trust Division of the Department of Justice, testified that monopolistic practices had been hindering the development of air express in this country. His testimony referred specifically to the exclusive contracts of the Railway Express Agency with American airlines and railroads. Today Calvin A. Frey, vice president of the Agency, is appearing pursuant to the request of the Railway Express Agency that it be afforded a hearing before this subcommittee. This is in conformity with the committee's practice always to hear both sides of every question which it considers. In preparation for this hearing I addressed a series of questions, in response to which the railway Express Agency prepared a statement and a series of exhibits. I would like at this point to insert the 16 questions in the record. (The questions referred to were marked "Exhibit No. 375" and appear on p. 1677.) The CHAIRMAN. Mr. Frey I would appreciate it if you would briefly summarize the views of your organization, which are covered more fully in the materials which will be printed in the record. After you have completed your summary, I would like to go over a number of points raised by the material submitted. TESTIMONY OF C. A. FREY, VICE PRESIDENT, RAILWAY EXPRESS AGENCY Mr. FREY. In the first place, Railway Express Agency, as you know, is a transportation organization handling merchandise traffic of all kinds, but largely of the lower weight brackets on passenger trains, special express trains, many motor routes, steamship routes and, since 1927, by air. The express company also, as is well known, has always used the fastest means of transportation available. That has been true throughout its 105 years of existence, and when airplanes were first flown, naturally the first thing the express company did was to endeavor to find some way to use that vehicle as a means of transportation in its business and provide a still faster mode of transportation for its customers who, as you may know, are all of the people and not certain industries and certain localities. The express business is a Nation-wide business like the Post Office, and since it handles largely the smaller shipments its customers comprise practically all of the people, almost like the Post Office. The CHAIRMAN. Mr. Frey, I believe the public generally understands express as differing from freight in that it gives speed and personal supervision of delivery; isn't that so? Mr. FREY. That is correct. The express business includes complete service including pick-up and delivery service at the customer's place of business and care in transit by express messengers on the trains. Up to the present time there has been no opportunity to have the same type of transit care on airplanes. They have not as yet been built to where messengers are required, but we hope sooner or later the business will grow to where exclusive cargo planes may be used in the care of messengers to handle the traffic en route. The express company, as I say, has been in this transportation business long enough to know just about what the public requires in the way of transportation for its merchandise traffic, and we have kept up to date with the program of aviation development at all times to determine just where we are going. Our contracts with the airlines are more or less along the same lines as express contracts in general. They provide that the express company shall do the serving of the shipper and the consignee and the rates thus far |