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 con¬ ditions 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. Cleveland, Cincinnati, Chicago & St. Louis Ry. Co. (The). 31 142 New York, Chicago & St. Louis R. R. Co. (The). 4 44 WESTERN DISTRICT Atchison, Topeka & Santa Fe Ry. Co. (The). Burlington-Rock Island R. R. Co‒‒‒‒‒ Chicago & North Western Ry. Co--- Chicago, Burlington & Quincy R. R. Co- Chicago, Milwaukee, St. Paul & Pacific R. R. Co_. Denver & Rio Grande Western R. R. Co. (The)- Duluth, South Shore & Atlantic Ry. Co. (The). Kansas City Southern Ry. Co. (The). Lake Superior & Ishpeming R. R. Co‒‒‒‒‒ 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.. Nevada Northern 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). Total-. 341 SOUTHERN DISTRICT Atlantic Coast Line 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 New Orleans & Lower Coast R. R. Co.... Rio Grande Junction Ry. Co. (The) Sugar Land Ry. Co....... Terminal Railroad Association of St. Louis___ Do. Do. Do. Do. Do. Do. Do. Do. Do. Do. Do. Do. Do. Do. Do. Weatherford, Mineral Wells & Northwestern Ry. Co. (The). Do. |