Air Mail Act of 1925 (Kelly Act)

On February 2, 1925, he sponsored H.R. 7064: the Contract Air Mail Bill, which, when enacted, became the Air Mail Act of 1925 or the Kelly Act. The act authorized the postmaster general to contract for domestic airmail service with commercial air carriers. It also set airmail rates and the level of cash subsidies to be paid to companies that carried the mail. As Kelly explained: The act “permits the expansion of the air mail service without burden upon the taxpayers….” By transferring airmail operations to private companies, the government effectively would help create the commercial aviation industry.

The first sign of commercial interest came on April 3, 1925, when the automaker Henry Ford opened a private air freight service between Detroit and Chicago. Soon after, when bids were solicited for the first contract routes, there was no shortage of interested companies submitting bids stating how much they would charge the government.

Eighty percent of the stamp money received by the Post Office was to be paid to the airmail carriers. The quantity of stamps needed depended on the weight of the mail and also on how many of the three zones the mail had to cross. (The country had been divided into three air zones on July 1, 1924.) Companies saw that they would make more money if they carried smaller but heavier pieces of mail. Also, since they would receive the same amount of money no matter how many miles they flew within a zone, they preferred to fly shorter distances within a single zone and save some operating costs.


The Air Mail Act of 1925 (Kelly Act)


		This was the first major piece of legislation created by Congress in 1925 that would effect the aviation industry. In essence, this Act authorized the awarding of government mail contracts to private carries, established the rates for transporting mail and it set the airmail rates. Contracts were awarded through the United States Postal Service, and contracts were awarded through a bidding process. There were many flaws in this Act. As airmail began crossing the country successfully in the mid-1920s, railroad owners started complaining that this government-sponsored enterprise was cutting into their business. They found a friendly ear in Congressman Clyde Kelly of Pennsylvania, chairman of the House Post Office Committee, who largely represented railroad interests.

On February 2, 1925, he sponsored H.R. 7064: the Contract Air Mail Bill, which, when enacted, became the Air Mail Act of 1925 or the Kelly Act. The act authorized the postmaster general to contract for domestic airmail service with commercial air carriers. It also set airmail rates and the level of cash subsidies to be paid to companies that carried the mail. As Kelly explained: The act “permits the expansion of the air mail service without burden upon the taxpayers….” By transferring airmail operations to private companies, the government effectively would help create the commercial aviation industry. The first sign of commercial interest came on April 3, 1925, when the automaker Henry Ford opened a private air freight service between Detroit and Chicago. Soon after, when bids were solicited for the first contract routes, there was no shortage of interested companies submitting bids stating how much they would charge the government. Eighty percent of the stamp money received by the Post Office was to be paid to the airmail carriers. The quantity of stamps needed depended on the weight of the mail and also on how many of the three zones the mail had to cross. (The country had been divided into three air zones on July 1, 1924.) Companies saw that they would make more money if they carried smaller but heavier pieces of mail. Also, since they would receive the same amount of money no matter how many miles they flew within a zone, they preferred to fly shorter distances within a single zone and save some operating costs.