Postmaster General Donaldson agreed with the Board chairman and stated that the Post Office had long held the opinion that the mail rate, if shorn of its subsidy elements, should not in any case be greater than the passenger rate. On this basis the Post Office Department would have been credited with approximately one-half its present transportation expenditures inasmuch as passengers were paying approximately 50 cents per ton mile, while the Post Office was paying more than double that amount. This over-all figure, of course, obscured the wide variations between the compensations paid airlines thought to be self-sufficient and the much larger payments to those known to be heavily subsidized. In the absence of even the most elementary data it is difficult to see how any regulation could be called reasonable or how the government could support any subsidy charge either against the industry as a whole or against any segment of it. The situation was further obscured by the Postmaster General’s estimate of the total domestic and foreign air-mail subsidy for this year. Using the excess of the cost of the service to the Post Office Department over the department’s air-mail revenues, he arrived at the figure of $35,000,000. The cost to the department included of course all expenses allocated to air mail including department overhead, but it did not substantiate the reasonableness of any allocation. Under questioning by one of the senators of the Committee, this all inclusive definition of “subsidy” was discounted. Under business accounting principles the figure might have been labeled “deficit” and would have been charged against the Post Office rather than pinned on the airlines as a “subsidy.” After all, the Post Office Department overhead, an item perhaps more political than economic in character, was not subject to airline control and was therefore the responsibility of the department. A subsidy is a public grant or subvention to aid an enterprise for the public convenience and not the deficit of a government department. In the face of such fuzzy accounting the figure is interesting chiefly because of its small size. The Postmaster General, after referring to statistical exhibits, reported the total deficit incurred from the inauguration of the first air-mail service in 1918 up to 1948 as a little over three and one-half million dollars per year for the thirty-year period and added, “Probably no investment made by this government ever returned greater national benefits in commercial and cultural progress, and national security. The over-all value of air transportation system to the nation, particularly as an arm of defense, has been incalculable.”