Index: src/economy.cpp
===================================================================
--- src/economy.cpp	(revision 10369)
+++ src/economy.cpp	(working copy)
@@ -947,22 +947,29 @@
 	void *to;
 };
 
-static void FindSubsidyPassengerRoute(FoundRoute *fr)
+/* Pick 2 random towns, a random cargo, and check if the result is eligible for a subsidy */
+static void FindSubsidyInterCityRoute(FoundRoute *fr)
 {
 	Town *from,*to;
 
 	fr->distance = (uint)-1;
 
 	fr->from = from = GetRandomTown();
-	if (from == NULL || from->population < 400) return;
-
 	fr->to = to = GetRandomTown();
-	if (from == to || to == NULL || to->population < 400 || to->pct_pass_transported > 42)
-		return;
+	
+	if (from == NULL || from == to || to == NULL) return; ///< reject invalid or identical picks.
 
-	fr->distance = DistanceManhattan(from->xy, to->xy);
+	fr->cargo = (
+		(HASBIT(Random(), 0)) ///< are we picking pass or mail?
+		? (((to->pct_pass_transported > 42) && (to->population < 400)) ? CT_INVALID : CT_PASSENGERS) ///< too many pass transported to be eligible?
+		: (((to->pct_mail_transported > 42) && (to->population < 600)) ? CT_INVALID : CT_MAIL)       ///< too much mail transported to be eligible?
+	);                        ///< returns CT_INVALID if the route doesn't pass.
+	
+	if (fr->cargo == CT_INVALID) return; ///< failed to find an acceptable route.
+	fr->distance = DistanceManhattan(from->xy, to->xy); ///< found an acceptable route.
 }
 
+/* Pick a random industry, destination, and cargo, and check if the result is eligible for a subsidy */
 static void FindSubsidyCargoRoute(FoundRoute *fr)
 {
 	Industry *i;
@@ -988,17 +995,18 @@
 	}
 
 	/* Quit if no production in this industry
-	 * or if the cargo type is passengers
-	 * or if the pct transported is already large enough */
+	 * or if the cargo type is passengers or mail
+	 * or if the pct transported is already large enough
+	 */
 	if (total == 0 || trans > 42 || cargo == CT_INVALID) return;
 
 	const CargoSpec *cs = GetCargo(cargo);
-	if (cs->town_effect == TE_PASSENGERS) return;
+	if (cs->town_effect == TE_PASSENGERS || cs->town_effect == TE_MAIL) return;
 
 	fr->cargo = cargo;
 
 	if (cs->town_effect == TE_GOODS || cs->town_effect == TE_FOOD) {
-		/*  The destination is a town */
+		/* The destination is a town */
 		Town *t = GetRandomTown();
 
 		/* Only want big towns */
@@ -1076,18 +1084,18 @@
 
 	/* 25% chance to go on */
 	if (CHANCE16(1,4)) {
-		/*  Find a free slot*/
+		/* Find a free slot */
 		s = _subsidies;
 		while (s->cargo_type != CT_INVALID) {
 			if (++s == endof(_subsidies))
 				goto no_add;
 		}
-
-		n = 1000;
+		/* loop n times trying to find an eligible subsidy */
+		n = 1024;
 		do {
-			FindSubsidyPassengerRoute(&fr);
-			if (fr.distance <= 70) {
-				s->cargo_type = CT_PASSENGERS;
+			FindSubsidyInterCityRoute(&fr);
+			if (fr.distance <= 70 && fr.cargo != CT_INVALID) {
+				s->cargo_type = fr.cargo;
 				s->from = ((Town*)fr.from)->index;
 				s->to = ((Town*)fr.to)->index;
 				goto add_subsidy;