The Contract Air Mail Act of 1925 set out the gradual privatization of the Post Office's Air Mail routes. Both passenger entry doors, one for each of the two-seat rows, are on the left side of the fuselage. Although the prototype was purchased by the US Post Office, the production order went to the Douglas M-2. The Model 40 made its first flight on July 7, 1925. The wings and tail were of wooden construction, and the Model 40 had a fixed conventional landing gear. Up to 1,000 lb (450 kg) of mail was carried in two compartments in the forward fuselage, while the single pilot sat in an open cockpit in the rear fuselage. The aircraft's fuselage had a steel tube structure, with an aluminum and laminated wood covering. The resultant aircraft, the Boeing Model 40, was a conventional tractor biplane, with the required Liberty engine housed in a streamlined cowling with an underslung radiator. The new aircraft was required to use the same water-cooled Liberty V12 engine as used by the DH-4, of which large stocks of war-built engines were available.
In 1925, the US Post Office issued a requirement for a mailplane to replace the ex-military DH-4s then in use.
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