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during the existing fiscal year will be so large as to justify an expenditure of approximately $13,435,400. The $15,389,640, which I estimate as required for the fiscal year 1937-38, certainly is in line with conservatism and reason. 
For the immediate future: First, as shown on the chart, we are quite certain that by the end of the current fiscal year, June 30, 1937, there will have been required in the 12-month period 40 million plane-miles of service. That will be necessitate by the volume now confronting the Post Office, but its realization is dependent on a deficiency appropriation yet to be made, early in this Congress, of enough dollars to permit continuing without reduction, through next June, the necessary mail schedules. For the next year, the year for which you are now appropriating, which is to start July 1, 1937, and continue through June 30, 1938, may I be privileged to suggest the necessity of an appropriation which will provide for a volume of air mail service of approximately 47.5 million plan miles. Such an increase, of less than 20%, or at a rate less rapid than between 1934-35 and 1935-36, and much less than between successive earlier years which I might cite, would be modest indeed.
Incidentally, may I point out that we are currently flying about 98% of our schedule miles. The margin, indicated on the chart, by which the number of plane-miles actually flown falls below the number scheduled may never be zero, but it will tend to some day shrink almost to zero with properly improved and extended provision for airway aids. On that subject the Air Transport Association has much information which I hope we may be privileged to lay before Congressional Committees at some early date. At this moment it is to another consideration that I wish, if I may, to direct your notice before passing to a second chart. This consideration is a highly important and practical one; namely, that as plane-miles of service have increased, and bigger and better airplanes have been built, the plane-mile cost to the Government has gone down. At present the Government's payments to the mail-carrying air lines are at rates which average but 31 cents per plane-mile or 1.2 mills per pound-mile. This very favorable course of your cost is of such great importance,