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We all know that Colonial is even now completely outdated with regard to equipment on its competitive routes. We know that we are faced with competition by Viscounts on our Montreal to New York route, and Super-Connies and DC-6B's or Boeing Strato-Cruisers on our New York to Bermuda route. Yet we have been rendered powerless to deal with this threatened competition.

2. If the acquisition of Colonial by Eastern is disapproved, we have concluded that Colonial could embark on a program that would make it a non-subsidized and self-sufficient airline. For many years prior to 1952, Colonial in our opinion has suffered both internally and externally as a result of its management. Not only was administrative overhead unconscionably high in this period but well-merited extensions of Colonial's route structure were denied to it by the CAB. Since 1952, the "merger" desire has dominated the minds of Colonial's management. The year 1952 thus opened a period of stagnation for Colonial Airlines. Despite that fact, there is enough evidence available to indicate that Colonial relieve of these handicaps could make real and substantial progress. New life, new vision in our Board of Directors would instill faith on the part of the CAB in our future. We believe further that there are many stockholders of Colonial Airlines who share this opinion.

3. We, not only as stockholders by also as investors of our future careers in Colonial, have much at stake on this issue. We believe that Colonial without Colonial's morale is merely routes and equipment. Colonial's great assets are not only its routes but its record, certainly not its outmoded equipment. We have maintained morale over these trying years. We wish to continue to do so. The proposed acquisition of Colonial's assets endangers the continuance of this. What we want is continued encouragement to maintain this morale--that pride that we have in Colonial. The proposed acquisition offers us no incentive to do so, either from a stockholder's or employee's point of view. There are alternatives that we believe are sounder in our interest as well as that of the public.

Your directors believe that an informal meeting of all stockholders and "subscription participants" would be most helpful and very much in order at this time in order to determine whether the views of the Directors correctly represents those of the stockholders. It will be held at the Sanford Hotel, Flushing, New York, at 7:30 P.M., April 5, 1955. You will please note an information card is attached to this letter. It will be appreciated if all stockholders and "subscription participants" will please execute this card and return it not later than April 6th, the day after our meeting. Any stockholder or "subscription participant" can, of course, record his views at the meeting on April 5th.

Very truly yours,
COLONIAL EMPLOYEES MUTUAL FUND, INC.

By
Robert B. Silver, President