Moderators: richierich, ua900, PanAm_DC10, hOMSaR
In late 1933, Senator Hugo L. Black launched an investigation into the air mail contracts held by the nation’s airlines. These contracts, which meant life or death for an airline, had been organized and controlled by Postmaster General Walter Brown. Brown was a very aeronautical minded man and had made great, and sometimes unpopular, efforts to nurture the United States’ fledgling air transportation system. The end result of Senator Black’s investigation was that President Roosevelt cancelled all existing air mail contracts on February 9, 1934 and handed over air mail service to the U.S. Army Air Corps.
[The new] rules stipulated that no company bidding for an airmail contract could be affiliated with an aircraft manufacturing company ... furthermore, the new regulations on bidding for airmail contracts stated that no airline which had held an airmail contract during the Walter Brown era could bid for a new contract.
http://www.crsmithmuseum.org/AAhistory/origin.htm