aviation comes of age
the creation of NACA
the development of air power
advocates of strategic bombing
Billy Mitchell and the bomber
the U.S. Air Corps
the start of air mail
the growth of airlines
Imperial Airways
the flying boats
the clipper ships
  a Russian experiment


The Rise of Airlines

It remained for a Postmaster General even stronger than New to shape the commercial aviation industry. Stepping forth to fill this role, with a degree of ruthlessness that took the entire industry by surprise, was President Hoover’s new Postmaster General, Walter Folger Brown, for many the quintessential Hoover Republican. Brown had been an attorney in Toledo, Ohio, and was a minor figure in Republican Party politics. Hoover’s disinclination to regulate business led people to anticipate that at most Brown would continue the policies developed under the Kelly Act. Brown got Congress to pass the McNary Waters Act in 1 930, giving him virtually dictatorial power over how air mail contracts were to be awarded and how the industry should be developed “in the public interest.”

This act provided for carriers to be paid, not on the basis of how much mail they carried, hut on the basis of the capacity of their aircraft, whether it was filled with mail or not. This was calculated to encourage (or force) the CAM carriers to use larger aircraft. Requiring larger planes to turn a profit made it even more difficult for smaller companies to compete for the lucrative CAM routes. Brown used his office to force smaller companies to merge into larger ones by holding the CAM contracts over their heads. In a series of meetings that critics called the “Spoils Conferences,” Brown manipulated the airlines like toy soldiers on a map, creating merged companies and shaping four major carriers that accounted for twenty-four of the twenty-seven — CAM contracts.

Even the aviation people who benefited resented Brown’s autocratic dealings. Soon, however, four major companies were created that covered nearly the entire country—these became known as the Big Four. The easiest merger was combining Boeing Air — Transport, Varney, National, Stout, and Pacific into United Air Lines, since all these companies were con- trolled by Boeing in any case. More troublesome was forcing the sizable companies operating in the East and the Midwest—Robertson, Embry-Riddle, Colonial, Texas Air; and Thompson—to merge into American Airways.

Still more difficult was forcing Transcontinental Air Transport (TAT)—known as the “Lindy Line” because it was backed by Lindbergh, and which was the only carrier devoted specifically to the transport of passengers— to merge with Western Air Express and other mail carriers to become Transcontinental and Western Air, or TWA.

The rockiest road was that of the airlines that were merged to form Eastern Air Transport, because not only were there pressures from the  government, but the company was tossed from crisis to crisis by a very active management led by the company president, the flamboyant Eddie Rickenbacker. When Roosevelt took office in 1933, he addressed the issue of the airlines with typical New Deal zeal. A Senate committee headed by Senator Hugo L. Black (later to be appointed by FDR to the Supreme Court) conducted an investigation of Brown and the Post Office.

Brown proudly claimed that he had acted in the public’s best interest and had, in a very short time, turned an industry that in the early 1920s was little more than a barnstorming curiosity into a full-fledged, technologically sophisticated (profit-yielding and job-providing) American industry. The Black Committee’s final report offered a mild rebuke of Brown and recommended that the entire CAM system he dissolved, and that the mail he flown by the U.S. Army. Postmaster General James A. Farlev accepted the Black Committee’s recommendation and in an instant, on February 9, 1934, private carriers were out of the air mail business.

The army was ill-prepared to carry out air mail flights. In the first six months of the program, sixteen crashes resulted in eleven deaths, and only fourteen of the twenty-six main lines could be flown with any regularity. Although the record of the army fliers improved, the damage had been done and public opinion called for a return to the old system. Eddie Rickenbacker, a wartime hero (and later to become president and owner of Eastern Airlines) characterized the government’s scheme as “legalized murder.”

The deadly beginnings of the Air Mail Service a decade earlier were forgotten by 1934, and the private airline people, many of whom despised Postmaster General Brown, now saw what the alternative might look like and banded together. In returning to the CAM system, Farley, attempting to save face, decreed that none of the participants in the 1930 Spoils Conferences could he awarded contracts.

In the I 930s, cross-country flying became popular because of the Curtiss Condor, the first plane to feature sleeper berths. It was the determination to provide overnight coast-to-coast service that prompted America's Airlines to approach Donald Douglas about building the magnificent DC-3

The prevailing attitude was that this restriction would never hold up in court, so the government simply turned a blind eye when the same companies submitted bids under very mildly altered names. Eastern Air Transport became Eastern Airlines; Transcontinental and Western Air became Trans-World Airlines, retaining its TWA logo; and American Airways became American Airlines. The only one of the Big Four that did not change its name was United Air Lines, partly because Bill Boeing refused to he a part of the charade, but also because by then Boeing had undergone the most radical changes resulting from the New Deal “Trust-Busters.”

Taking a page out of the lumber industry notebook, Boeing assembled a series of companies that today is known as a “vertically integrated corporation.” Boeing enterprises were manufacturing engines for aircraft being built by another Boeing company, which were then flown by a Boeing-owned airline. Antitrust laws like the Black- McKellar Act, passed as part of the New Deal, made such arrangements illegal and Boeing had to sever all connections between the manufacture of aircraft equipment and the delivery of air transportation services.

Thus, Boeing Air Transport, and the layers of holding companies that served as umbrella corporations for diverse enterprises, were all dissolved, and no individual was affected as much as Bill Boeing. It was with no small measure of disgust that he suddenly announced his retirement from aviation in September of 1934, just a few days before the breakup of his various companies was to take place.

The same sort of government manipulation and conglomeration occurred in other countries. In France, Latecoere was forced by the government to sell his air transport operation in 1927 to industrialist Marcel Bouilloux-Lafont, who renamed it Aéropostale and embarked on an ambitious plan of international aviation. The French had hoped the operation might at least break even, but it ran in the red for four consecutive years. In spite of a glamorous run with celebrated flights that momentarily revived French enthusiasm for aviation, Aéropostale shut down in 1931. France created a nationalized airline out of the remnants of Aéropostale and a union of four small operating airlines in 1933 and called it Air France.

In 1926 the Germans, free from the antitrust restrictions of the United States and taking much more modest (and thus more reasonable) steps in building a commercial air industry, created Deutsche LuftHansa (which became one word—Lufthansa—in 1934). Supplied with the latest aircraft produced in the Junkers factories, and making the first serious attempt to cater to the needs of the passenger, LuftHansa established a  strong market over all of Europe. The company wasted no time establishing a subsidiary in South America, VARIG, which supplanted Aéropostale as the major carrier between Europe and South America.

Unlike the French, who insisted that control of all Aéropostale operations remain in the hands of the home office, LuftHansa encouraged the creation of locally managed airlines that were tied to the parent company to varying degrees. As a result, Germany, which was not overtly attempting to establish diplomatic footholds in South America, did just that to a far greater extent than any other European country.