Transcontinental Air Transport, Inc.

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It was midsummer of 1929, and all seemed right with the world. Herbert Hoover was in the White House, riding high on a tide of prosperity and popularity. A few critics muttered that stocks were dangerously overpriced, but to most Americans such foreboding seemed no more worrisome than a small cloud on a distant horizon.

To the businessman in a hurry, time was money. He needed to get there quick, and while trains in that day were marvels of speed and luxury, the best they could do for the businessman travelling from New York to Los Angeles was about seventy-two hours, and that involved a change of trains in Chicago. For the truly busy man all this constituted an intolerable delay when urgent affairs beckoned him from one coast to the other. Consequently it wasn’t long before rudimentary airlines began to blossom in the late 1920*5, eager to cater to these men on the go. But for the most part these early airlines were local affairs, suitable only for passengers who were both brave and hardy. It was inevitable that somebody would attempt a transcontinental air-passenger service as soon as developments in aircraft technology made such coastto-coast service seem possible. Lockheed, Stinson, and Boeing already manufactured quality aircraft by 1929, but for the average American nothing attracted attention like Henry Ford’s magnificent Trimotor, popularly known as the Tin Goose.

Given the euphoric sense of limitless possibility that characterized the New Era (as businessmen liked to call the 1920’s), industries such as electronics, petrochemicals, and aviation attracted investors and entrepreneurs in record numbers, at least $550 million being invested in aircraft and related companies between 1927 and 1929. Moreover, the benign policies of the business-oriented administrations of Harding, Coolidge, and Hoover, attuned as they were to the subtle nuances of tax advantage and hidden subsidy, made the climate for “pioneering” as risk-free as it could possibly be.

It was obvious to many businessmen that the large bombing planes developed both here and abroad late in World War 1, which were capable of dropping heavy loads of explosives on distant enemy cities, might as easily carry commercial cargoes. With the Armistice, schemes sprang up simultaneously in many nations to do just that; but aside from mail service, commercial ventures in aviation foundered when no governmental subsidies were available, and even air-mail services relied heavily on governmental support. Legislation, notably the McNary-Watres Act of 1930, changed the method of compensating the air-mail contractors from the “pound-mile” method to the “space-mile” method. That is, instead of paying the contractors for the actual number of pounds of mail they carried, the Hoover administration agreed to compensate them according to the amount of cargo space they made available for carrying mail, regardless of whether they carried any or not.

Obviously the McNary-Watres Act was a tremendous boon to the larger aeronautical enterprises, vastly encouraging the construction and operation of large trimotored aircraft. While this might seem like a rather straight-forward denial of the 1920’s ideal of unfettered, self-reliant free enterprise, in fact there was a certain harmonious consistency between these notions and the government’s policy. The man in charge of it all was Hoover’s Postmaster General, Walter Folger Brown. Brown feared that the nation’s air-transportation network might develop in the same inefficient, messy, illogical way that the railroads had, and he determined to use the financial clout of the federal government, through the hidden subsidy of air-mail payments, to force the nation’s airlines into cooperating with one another to form an integrated, effective nationwide service. He reasoned that as long as the Post Office paid merely for efficiency, in the form of low-cost open-cockpit single-engine planes designed solely for carrying mail, the contractors would remain content to live on governmental subsidy and would never bestir themselves to purchase the large multiengine aircraft that could lead to the profitable and safe transportation of passengers. Lines that geared their operations to passenger service would someday become independent of governmental subsidy, Brown believed, while small lines operating merely as mail carriers would never leave the federal dole. Of course Brown would have preferred that well-financed major experiments in passenger transportation succeed on their own, in classic laissez-faire fashion, but such was not to be the case, as the first transcontinental service would prove.