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The Air Mail Scandal, also known as the Air Mail Fiasco, is the name that the American press of the 1930s gave to the political scandal resulting from a congressional investigation of a meeting (the so-called Spoils Conference) between Postmaster General Walter Folger Brown and the executives of the top airlines, and to the disastrous results of the steps taken by the administration of President Franklin D. Roosevelt to use the U.S. Army Air Corps to fly the mail. The parties of the conference effectively divided among them the air mail routes, resulting in a Senate investigation.
Although a public relations nightmare for both the administrations of President Herbert Hoover and Franklin Roosevelt, the scandal resulted in the growth of the airline industry and the modernization of the Air Corps.
Brown invoked his authority under the third provision of the Air Mail Act of 1930, passed on April 29 and known as the McNary-Watres Act after its chief sponsors, that gave authority to "extend or consolidate" routes in effect according to his own judgment. He consolidated the air mail routes to only three companies, forcing out their competitors. These three carriers later evolved into United Airlines (the northern airmail route), TWA (Transcontinental and Western Air, which had the mid-United States route) and American Airlines (American Airways, the southern route). Brown also extended the southern route to the West Coast. He awarded bonuses for carrying more passengers and purchasing multi-engined aircraft equipped with radios and navigation aids.