country. The allegation by Assistant Attorney General Berge and others that the present air-express agreement has retarded the development of air cargo is absurd. On the contrary, the rate of growth of air-cargo traffic in the United States has greatly exceeded the rate of growth of other air traffic. To promote air-express shipping American Railway Express Co., prior to March 1, 1929, and Railway Express Agency thereafter, have constantly maintained an intensive solicitation, advertising, and educational program designed to acquaint both the shipping public and express employees with the advantages of shipping by air. Many users of air express have also joined in promoting air express as a part of their service to their patrons. Department stores and specialty shops in many cities have featured air express in their window displays to indicate their ability to have the latest styles available within a few hours from the time such new products were designed. Manufacturers of machinery, tools, parts, etc., have included air-express information in their catalogs to indicate immediate availability of such articles in emergencies. Advertising agencies, newsphoto organizations, and the printing trades feature air-express delivery as a part of their services in meeting deadlines for publication, etc. Railway Express Agency cooperates with such users in promoting fastest possible service by use of air express. Photographs of some of the uses of air-express data in departmentstore windows as air-express service was established at different cities throughout the country will be made available to your committee. Railway Express Agency also advertises the several branches of its services by means of posters on its 15,000 vehicles which are constantly moving through the streets of all cities and principal towns in the country and air-express service is among the services advertised thereon. The air-express service is also included in the permanent signs on windows of express offices and in special window displays therein. A photograph of the current poster, the subject of which is Serving America in Peace and War, and which refers to both air and rail express, will also be made available to the committee. As requested by the committee, a detailed statement outlining the steps taken to promote shipments by air express and the amounts spent in advertising, research, etc., has been prepared and is submitted herewith as appendix No. 10. I have been closely connected with the air-express operations of the express companies from the time the service was inaugurated in 1927 and I am in position to know that the management and personnel of the express companies have been unstinting in their efforts to provide the public with the fastest possible service at the lowest possible rates and to develop for the air lines the greatest possible volume of air cargo. Without these efforts the commercial air lines could not have developed the air-cargo business to its present standards and volume. Unlike the individual railroads, air lines, and motor carriers, which individually directly serve only certain territories, the express company, like the Post Office, is a national institution operating over all railroads and all commercial air lines, and dealing directly with all shippers and consignees with its own organization and services. Railway Express Agency maintains express service in all cities and principal towns throughout the United States and with its fleet of 15,000 motor vehicles it deals with its customers at their own places of business providing free pick-up and delivery of traffic entrusted to its care. While special airexpress vehicles are used in the larger cities, a recent check disclosed that in a single month air-express shipments were handled on approximately 4,000 of these 15.000 vehicles. The advantages to the shipping public of this Nation-wide coordinated express service over all railroads and over all air lines is obvious, and it is especially valuable to the air lines which individually serve only a relatively few points. Approximately 30 percent of the present air-express traffic originates at or is destined to cities or towns not served by any air lines and is transported by rail express to or from an airport city. Past experiments of individual air lines or groups of air lines, of conducting air-express operations in connection with the ground service of telegraph companies or others have not been successful principally because of the obvious necessity for a single completely equipped and experienced surface carrier organization serving all the shipping public. There has been constant improvement in the air-express service from year to year both in respect to those services performed by the express company and those performed by the air lines. The air lines have officials and personnel charged with the responsibility of proper handling of air cargo at airports and on airplanes and Railway Express Agency's organization cooperates at all times with these air-line representatives on matters relating to air-express service. Under the terms of the present Air Express Agreement the airport handling of air-express traffic, including the loading, stowing, and unloading of airplanes, is performed by air-line personnel with air-line equipment and facilities. The Express Agency delivers the traffic to and receives the traffic from the air lines at the air lines' airport stations and not at planeside. The express company has experimented extensively with several types of motor vehicles for air-express pick-up, delivery, and transfer, including motorcycles, especially built 3-wheel trucks, and bantam trucks of its own design, but after extensive operation of various types it has been found that the paneled delivery truck of one-half ton or greater capacity is best suited to the present type of air-express traffic. The Express Agency has developed many improved handling methods and timesaving equipment of various kinds in its rail-express operations and these methods and equipment are available to and used wherever practicable in handling air-express shipments at its terminals, in express offices, and on express vehicles. Photographs of these special vehicles and terminal and portable equipment have been made available to the committee. Sections of the lightweight roller conveyors, of which the Express Agency now has over 27,000 feet in use, have been loaned for service trial to the Air Transport Services of the Army, Navy, United Air Lines, Transcontinental and Western Air, American Airlines, Northwest Airlines and others, and data concerning them has been furnished to the principal manufacturers of cargo planes. It is understood that the Air Forces purchased thousands of feet of these light alloy roller conveyors as a result of these tests. At the request of the Air Service Command of the Army, Railway Express Agency engineers studied the problems involved in elevating heavy cargo to the level of cargo plane doors, and specifications were prepared and given to the Air Service Command covering a high-lift truck which has been adopted and 100 or more of such lift trucks are now in use by the Army. Developments in lightweight air-borne containers and lightweight roller conveyors by Railway Express Agency for expediting the handling of air cargo is shown in photographs also furnished the committee. This equipment has been demonstrated to several of the air lines and has been service tested by the Army and Navy. Railway Express has also outlined specifications for buildings at airports for handling air cargo, in response to requests of the Army Air Forces, civic organizations and architects and engineers engaged in designing such facilities. Copy of a diagram of an air-transport distribution, storage, and loading center at airports, prepared by the Agency's San Francisco organization for submission to the Army Air Forces has also been made available to your committee. The Agency is also performing certain ground services for the Navy Air Transport Service and its experience in the handling of merchandise traffic and its engineering know-how has been put to practical use by both the Army and Navy. While operations into, out of, and on the commercial airplanes is now the work of the air lines, Railway Express' Agency is also prepared to take over these handling operations if and when the air lines so desire. Improvements have also been accomplished in the system for handling air express traffic to and from airports, many of which are situated several miles from the business districts of the cities which they serve. When air express was inaugurated in September 1927, the air-express agreement provided that the handling to and from the airport would be performed by the express company and necessary schedules were set up and maintained to provide direct connection at airports with outgoing and incoming planes. The airport serving New York City, for example, was Hadley Field, near New Brunswick, N. J.. over 30 miles from New York, and the air-express traffic was handled by truck between the airport and New Brunswick or Stelton, and by Pennsylvania Railroad to and from Pennsylvania Station in New York City. Pick-up and delivery of the traffic in New York was to and from the express company's Thirty-first Street terminal. Airports in other cities were served direct by vehicle and, where delays would not result, pick-ups and deliveries were made on the way to and from the airport to provide the fastest possible service to and from shipper's place of business. In the larger cities special type vehicles were assigned to air-express work. Photograph of such a vehicle placed in use at Chicago on September 1, 1927, is among those furnished to your committee. With the development of pasenger-carrying airplanes, the air lines found it necessary to provide scheduled passenger-carrying service between the airports and the business districts of airport cities, and experiments were made for the handling of air express in the passenger vehicles. The air-express agreement of January 1, 1932, provided that air-express shipments would be handled by the individual air lines between the airports and centrally located offices of the express company as mutually agreed upon. During the period of this agreement some of the air lines found that the air-express traffic could not be adequately accommodated in their passenger vehicles operating to and from the airports without undue inconvenience to their passengers and, therefore, arranged with the express company to handle the traffic for them. The air-express agreement of February 1, 1936, again placed this part of the air-express service with the express company, and since that time the express company has performed the city-to-airport hauls principally in its own vehicles but at some of the smaller offices through arrangement with motor carriers having contracts for post-officeto-airport handling of air mail. At many airports Railway Express Agency handles the air mail in its city-to-airport vehicles. The schedules of the city-toairport vehicles are set up and maintained to conform to the airplane schedules and operate to and from centrally located offices or terminals of the express agency to and from which regular or special pick-ups or deliveries of air-express shipments are made. The entire service is coordinated to provide the latest possible pick-up from shipper before plane departure and the earliest possible delivery to consignee after plane arrival, the time involved varying with the conditions in the various airport cities, including time involved in airport handling by the air lines, distance of airport from city, highway- and street-traffic conditions and regulations, and shipper or consignee location or business hours. Recent tests indicate an average of 71 minutes consumed in these shipper-toairplane hauls and airplane-to-consignee hauls. Deliveries from night, Sunday, and holiday plane arrivals are made immediately upon arrival to industries and institutions able to receive such deliveries. Air-express rates are published by Railway Express Agency's air express division, in tariffs filed with the Civil Aeronautics Board between all of the airports named in the certificates of all of the domestic commercial air lines, and in addition thereto, cities and towns in the immediate vicinity of such airports, for example, New York City air-express rates apply also to Jersey City, Hoboken, and Weehawken, which are reached by Railway Express vehicles by ferry or tunnel from New York City. Davenport, Iowa, Rock Island, Ill., Moline, Ill., and East Moline, Ill., are air-express offices served by the Moline, Ill., airport although only Moline is named in the air-line certificate. The suburban cities in the Los Angeles area are included as air-express offices served by the Burbank Airport, none of which, including Burbank, are named in the air-lines certificates. The Philadelphia air-express rates are applicable to Camden, N. J., across the Delaware River, etc. The present air-express rates apply between 578 airport offices, of which 351 are specifically named in the air lines' certificates. Express shipments to and from points not named as air-express offices in the air-express tariff are assessed the combination of the rail-express and air-express charges to and from the airports between which handled. A statement setting forth the accounting methods used in dividing expenses and revenues between surface and air transportation is submitted herewith, as requested, as appendix No. 11. As heretofore indicated, Railway Express Agency is not operating airplanes nor air lines but is conducting an air-express business thereon through contractual relations with air-line operators. The terms of the agreement between the express company and the individual air lines are patterned somewhat after the fashion of express company contracts with individual rail lines which have evolved from over 100 years of successful express operations. They contemplate a Nation-wide coordinated air express service for all shippers and consignees wherever located through the utilization by the express company of all the scheduled flights of the several air lines the same as if they were operated by but one company. The air lines serve directly only 351 cities at present, but through Railway Express Agency rail-express service this limited air-line service is made available to all the 23,000 express offices. The end product is the fastest possible service from consignor to consignee under one receipt or bill of lading and under but one carrier responsibility. This is express service as developed only in the United States. To duplicate Railway Express Agency's ground services, management and personnel, would involve a cost greatly in excess of the existing costs and would, therefore, require the maintenance of air-cargo rates substantially higher than the existing air-express rates. I know of no other organization able to provide the shipping public and the air lines with anything remotely approaching the Nation-wide expeditious and efficient transportation service which Railway Express Agency is contributing to air-cargo transportation. Air express has aided materially in the development of the present commercial air-transport system, the most efficient air-transport system in the world. Airexpress rates, like air-passenger fares, have been reduced from time to time as development of the industry made possible but have been maintained at a level intended to cover the costs of the service. The air-express business has not been subsidized in any manner but its growth along with the growth of air-passenger volume has permitted substantial reduction in the rates covering air-mail payments to the air lines by the Government. From what I have said I think it will be seen that air-cargo development in the United States has not been retarded but on the contrary has more than kept pace with the development of air-mail and air-passenger traffic and that existing air-express rates bear an appropriate relationship to the existing costs of the commercial air-cargo service. To date the much-talked-of ton-mile costs of 20 cents, 15 cents, 10 cents, and even lower are only fractions of the present actual ton-mile costs of the commercial air lines and, therefore, in the absence of a very high Government subsidy these below cost figures cannot be used as factors for air-cargo rates to be paid by the shipping public. If and when the air-line costs are substantially reduced the air-express rates will be reduced to reflect such reduced costs, probably voluntarily by the air carriers and, if not, by the regulatory body having jurisdiction over such rates. EXHIBIT No. 377 Stockholders of Railway Express Agency, Inc. EASTERN DISTRICT Alton R. R. Co. (The). Baltimore & Ohio R. R. Co. (The). Bangor & Aroostook R. R. Co---. Boston & Maine R. R.. Canadian National Realties, Ltd., in trust_. Chesapeake & Ohio Ry. Co. (The) Chicago & Eastern Illinois R. R. Co--. Chicago, Indianapolis & Louisville Ry. Co‒‒‒‒‒ New Jersey & New York R. R. Co. (The). Lehigh Valley R. R. Co‒‒‒‒‒. Maine Central R. R. Co‒‒‒‒‒ New York Central R. R. Co. (The) Cleveland, Cincinnati, Chicago & St. Louis Ry. Co. (The) - New York, Chicago & St. Louis R. R. Co. (The) New York, New Haven & Hartford R. R. Co. (The). Total 530 Lake Superior & Ishpeming R. R. Co---. 27 4 26 22 3 5 1 1 Kansas City Southern Ry. Co. (The) Minneapolis & St. Louis R. R. Co. (The) Minneapolis, St. Paul & Sault Ste. Marie Ry. Co--- Missouri-Kansas-Texas R. R. Co., N. A. Phillips, trustee_. Missouri Pacific R. R. Co‒‒‒‒‒ Nevada Northern Ry. Co‒‒‒‒‒ Northern Pacific Ry. Co--- St. Louis-San Francisco Ry. Co-. St. Louis Southwestern Ry. Co- St. Louis Southwestern Ry. Co. of Texas_. Southern Pacific Co-‒‒‒ Spokane, Portland & Seattle Ry. Co Texas & Pacific Ry. Co. (The) Union Pacific R. R. Co-‒‒‒‒ Western Pacific R. R. Co. (The)_. 15 Total__. 341 SOUTHERN DISTRICT Atlantic Coast Line R. R. Co.‒‒‒‒‒ 20 Central of Georgia Ry. Co‒‒‒‒‒ 6 Clinchfield Railroad Co‒‒‒ Florida East Coast Ry. Co---- Illinois Central R. R. Co.. Louisville & Nashville R. R. Co. Nashville, Chattanooga & St. Louis Ry. (The). Norfolk Southern Ry. Co‒‒‒‒ Seaboard Air Line Ry. Co Southern Ry. Co---- Alabama Great Southern R. R. Co. (The) Cincinnati, New Orleans & Texas Pacific Ry. Co. (The). Western Ry. of Alabama (The). Total 24 1 129 EXHIBIT No. 378 LIST SHOWING AS OF APRIL 1, 1944, THE NAMES OF DIRECTORS OF RAILWAY EXPRESS AGENCY, INC., THE DIRECTORSHIPS EACH HOLDS WITH RAILROADS AND AIR LINES AND ALSO HIS INDUSTRIAL CONNECTIONS |